Martin Roll on Business, Branding and Strategy
Martin Roll, a Singapore-based branding consultant, is one of the preeminent thought leaders on Asian markets. By focusing on building iconic brands, Roll helps boardrooms to enhance shareholder value and create sustainable competitive advantage. He is the author of the ground-breaking book Asian Brand Strategy. Roll offers surprising and seemingly counter-intuitive insights on how to improve global positioning through localization.
What are some of the misconceptions about Asian brands?
Probably one of the biggest misconceptions has been that Western brands have assumed (based on prior success in their home markets) that Asian consumers are ready and willing to pay higher prices when the products are of higher quality.
This assumption seems very sensible.
But apart from a handful of highly developed Asian markets such as Singapore, South Korea and Japan, which more resemble Western markets than being typical Asian markets, the majority of Asian markets have rejected this assumption. Consumers in China, India, Indonesia, Malaysia, Philippines, Thailand and Vietnam demand both high quality and affordable prices. Such a fundamental shift in consumer behavior has forced many companies to be innovative, at times take a hit on their margins in favor of developing a firm footing in the market and co-opt consumers in co-creative value.
Another misconception has been that Western brands can merely export their products and businesses to Asian markets and consumers would lap them up. This has proven wrong. Examples abound ranging from Disneyland in Hong Kong to McDonald’s non-beef menu in India. Western brands have been forced to respect the local cultures and practices of consumers and to customize their offerings to meet the local needs.
This new perspective must be steeped into a more acute perspective on the consumer behavior patterns. Asia is not a homogenous entity. Even more importantly, Asian countries are more and more traversed by cultural flows permeating the region: cinema, music and fashion trends that are present extend beyond national borders to capture the imagination of millions. Branding and brands do not operate in vacuum, but are closely linked to developments in society, to people and to cultures.
Therefore, Western managers wanting to succeed in Asia need to abandon the idea of the Oriental Asia of the past. Asian consumers are all vying for an Asian type of modernity that has nothing to do with colonial imagery.
With consideration for some of much talked about toxic imports coming out of China, how has this affected the Western view of Asian brands?
We have to be careful here not to equate Asia with China alone. No doubt that China is probably the biggest Asian player in the global market, but there are other well established Asian economies (South Korea, Singapore, Taiwan, India, and Japan) that for long have had a very positive image not only in Asia but also in the West.
Furthermore, China’s image problems did not start with its toxic exports off late. The "Made in China" negative image has been there for a long time. China’s callous attitude toward sweatshops, its disrespect for protecting intellectual property, its preferential treatment of home grown companies and its somehow unreliable regulatory structures have all contributed to the negative of China in the West. These latest reports of toxic exports surely will have a very strong negative impact on China, but not necessarily on all of Asian brands.
In China’s case, the cumulative negative seems to overshadow all that is positive for the moment. As such, even today, "Made in China" seems to carry a relatively negative connotation. But with changing global market dynamics, the increasing visibility of Chinese brands and the global strides of certain Chinese companies such as Lenovo, Haier and others will facilitate in China overcoming its inherent negative "Made in China" effect. Changing long held perceptions is indeed a Herculean task. But China is bound to challenge this current state and alter its country of origin effect in a very positive direction over the next 10-15 years as Chinese manufacturers are slowly but steadily embracing branding as they primary driver of financial value.
Let’s talk about Green branding. Do you see a renewed focus on green initiatives by Asian brands?
The problem, not just with Asian brands but also with brands in the West, has been that this whole "green" movement has hardly been an initiative—it is still early. Companies have given in to external pressures and have declared themselves green without understanding the mechanisms in truly becoming a green company.
As such, it will take time for this to become a real initiative wherein companies realize the fundamental changes that they have to incorporate to go green. Time will tell whether Asian brands will achieve that. Samsung, SONY, Toyota, HSBC and many other Asian firms have been very active in this field, and it is my impression that green will become one of the hottest topics in Asia too.
You have written about Nokia and their successes in the Indian market. In your writings you discuss a case study from Nokia including a phone with a dust-resistant keypad, anti-slip grip and a built in flash light which appealed to a specific target of truck drivers and then became a hit with rural consumers.
It’s not a secret that many of the big tech companies are struggling today. This question is two-fold: Why do you think products such as the Nokia phone are successful? Do you think being able to provide more tailored localized products will keep these juggernaut tech companies in business?
Answering the second question, yes, I think being able to provide more tailored localized products will help these companies to be successful, as I have also discussed in answering one of your earlier questions. The important question then is why? Consumers do not like to be taken for granted. When Disneyland opened its park in Paris, there were high expectations. Here was a global icon opening its first park in the romantic city of Paris. But soon those expectations had crashed and the park was declared a failure. Disney exported its standard games, rules and menus to Paris. Of course French people rejected this high handedness of an American brand that did not study what appeals to the French.
Similar was the case when Honda cars first entered the Indian market. In spite of its superior technology and features, Honda cars took years to take off the ground. Customers did not want to spend a fortune on buying a good looking car that could not endure the pot-holes and traffic jams on the Indian road. Honda, apparently, had not done its homework well.
These examples demonstrate how companies that can understand the unique demands of both the markets and customers in different countries would not only be able to appeal to the unique sensibilities of the consumers but also compete well with the many entrenched local players in most of the Asian markets.
You mention that too many brands rely on too much data. You've said that if Steve Jobs from Apple had asked consumers back in the mid '90s what they really wanted, none would have been able to articulate a need for a gadget with simplistic design—the iPod brand. What does the Apple example tell us and how can companies take a more holistic approach to collecting and analyzing customer feedback?
The story of Apple tells us that industries and brands do not always operate in the extremes, that it is not always an either-or game. A quick scan at the many business books and sermons given by the self-proclaimed gurus reveals that the emphasis is either on companies taking all the initiative or companies taking in everything that customers say and shaping their strategies on customer feedback.
There is a very strategic middle ground—a middle ground of value co-creation. Here, companies do not sacrifice their vision but at the same time institute structures that allow them to always have a feel of consumers’ pulse. This combination always works well.
Although Apple revolutionized the mobile phone market with its now iconic iPhone, it was companies like Samsung, LG and RIM that ran with the idea and developed so many exciting touch screen smart phones. Had these companies solely focused on what their customers said, they would have lost a great opportunity. As such, a holistic approach would be to three things well simultaneously:
- Have a constant channel with core customers to gain their first hand reaction and feedback to the products.
- Have a very strong market scanning and market intelligence apparatus that can keep tab of the competitor’s actions.
- Create an exciting, nurturing and challenging environment that attracts pioneers and visionaries to work for the company, who can innovate new products and create customer demand.
Why do you think technology consumers in the East were much earlier adopters of mobile content and mobile applications, which are only now really prevalent in the States?
We have to be careful when we talk about East. Not all countries were early adopters. Specifically Japan, South Korea, Taiwan and Singapore were the lead markets in Asia. The main reason is the existence of the fundamental infrastructure in terms of 3G networks, Wi-Fi hot spots, broadband network and so on. To add to this, all these countries were relatively small (compared to the U.S.) and highly developed.
Furthermore, customers in these countries were not new to mobile applications, given the gradual and consistent product introductions by the likes of Sony, Samsung and LG. All these factors together helped these countries become early adopters. The Asian consumer is also very gadget savvy and curious about anything new. The New factor is an important issue to incorporate for marketers in Asia.
What advice do you have for brands that are looking to become more culturally relevant and localized?
My two main suggestions are:
- Understand the local fabric of markets, of practices and of customers. Such an understanding would enable companies to appeal strongly to the very core of customers and also to design products that more effectively satisfy customer needs.
- Actively collaborate with local partners ranging from suppliers, data providers, lead customers, governmental agencies and the larger community. Given the over emphasis on profitability, many companies tend to forget that they are trying to become a part of the community (and society at large). Active collaboration with the many constituents would allow companies not only to create a positive perception but also to establish deep rooted and long lasting relationships.
Martin Roll was interviewed by Call Center IQ's Blake Landau via podcast 1/27/09.