Introduced over 220 successful new brands over the last three decades
Executive brand background at Kimberly-Clark, Bristol-Myers-Squibb, Rhone-Poulenc-Rorer and the Iams Company
Professor of Integrated Marketing in U.S. (UT) and China (UIC)
Just about every business owner I meet in China, would love to have a brand. Maybe a brand like Nike, that in 2017 had $34.4 billion sales and was valued at nearly $30 billion. After all, these business owners have companies that make quality products that are priced fairly. And, a lot of them have engaged Ad Agencies and Consultants to help them pick names, design logos, create "brand image" ads, and buy millions of RMB of media.
After all this investment it would seem that hundreds of successful domestic brands would be appearing on the market in China. And it would seem that instead of struggling with declining profit margins, and higher costs, these factory owners would be awash in the money and wealth that brands create. But, that doesn't seem to be the case.
I think there are two main reasons why brands are on hold in China. The first reason is what I call a "crisis of talent."
There simply aren't enough well-trained brand builders in China. Brand education at Chinese universities is still developing. I teach branding as a University Professor and I routinely speak at universities across the country. China is just now graduating brand talent. These young people are beginning to move into marketing positions, but it will take time before they can influence the direction of business.
Because of this crisis of talent, business owners have been at the mercy of Ad Agencies and self-proclaimed Brand Consultants, many of whom have never sold anything, much less built a brand that delivers sustaining sales. These agencies and consultants are what I like to call "fee-farmers". They generate fees based on selling a dream of creating a brand quickly. They have some skills in digital marketing, some creative ability, and often play to the ego of the owners, putting them on outdoor advertising and on videos and liberally using a term I particularly dislike, "Brand Image." "Brand Image" in my experience is a code word for "we don't know what we are doing". What these agencies and consultants are missing is strategic ability. Without strategy, creativity, and execution working in perfect concert brands will sub-optimize. This isn't an opinion I hold, it's a fact I hold built upon launching 220 authentic and successful brands.
The Nike brand wasn't an overnight success. It took decades for Nike to become a powerhouse brand, and the process to get there was painstaking. It also took a stroke of strategic genius brought about by having a deep understanding of the human condition, to recognize the universal insight that "creating champions", not "producing shoes" was the business Nike was in. Nike is not an image brand, it offers an aspirational benefit that is felt every time someone puts on a pair of Nike shoes or wears any of the athletic wear that the brand markets.
There a no overnight sensations in the branding business. It takes patience and fortitude to build a brand. If someone sells you the dream that you can build a brand simply by picking a name, designing a logo, doing some SEO/SEM and launching you onto the internet, at least know what to expect. You will sell some more products under a fancy new name, but you won't have a brand.
A second reason brand building is stalled in China is because brand-equity theft is still going on, but enforcement of copyright and patent laws is getting better.
Imagine if your business competitor simply walked into your factory and took your machines and started producing products right across the street from your now empty building. You would be outraged, the police would come make arrests, and lock your competitor up. After all they stole the assets you use to make money. No society in the civilized world would put up with this behavior.
But here's a different twist to that story.
Nike is headquartered in Beaverton, Oregon and manufacturers products across the world. The Nike brand has been good to China. A lot of Nike factories were located here.
One of the most famous shoe production places in China is in Putian, Fujian. For many years Putian was the shoe OEM capital of the world… including producing for Nike. With all that know-how to produce shoes you would think that some of these factories would have developed their own brands. But that didn't happen. Instead Putian took a different route. It became the "fake shoe brand" capital of the world. A $200 Nike Shoe suddenly sold for 200 RMB. Nothing magical happened. These factories simply ripped off Nike… they stole their brand producing asset.
Chinese authorities are taking broad action to stop this unethical and shameful behavior, particularly lately. But, it's easy to understand why business owners are hesitant to move into brands. They need time to regain their confidence that once they expend time and treasure to build a brand it will be protected from thieves.
As China moves to a consumer-driven economy, and as Chinese consumers continue to develop into sophisticated brand shoppers, companies that don't have a brand, will be losing out big time. Recently I spoke to a successful factory owner who said to me, "The brands take 95% of the profit and leave us the rest." This was from a man who had tried to do everything right, including moving from an OEM to an ODM offering research and development and design capabilities to the brands he services. Not surprisingly, the brands he manufactured for said "thank you very much for giving us new designs and products", and then still took 95% of the profit and even demanded lower prices from his factory. The brands knew they were in the driver's seat because they owned the most important asset… the brand name that people loved and trusted.
In China I have found that people like to study cases. So, Nike's marketing and branding strategy are worth a look. Nike's advertising is a good example of how emotional benefit branding example works well.
Nike presents itself in a way that provokes their clients to achieve greatness and to feel what it is like to be their own personal champion. The slogan ‘just do it’ is what most people remember, but it is the visual and audio messages that come before that cements a relationship with the consumer.
And, relationships built on an emotional benefit, the most powerful kind of benefit, is what builds brands and builds brand loyalty. Nike doesn't sell shoes or sports clothing, they sell the idea of reaching your personal best, becoming your own champion…. So, just do it.
Nike didn't start off as a brand, they started off as a shoe manufacturer who had the patience and fortitude to build a brand. They took a deep dive into the minds of their consumer and recognized an insight and then they capitalized on this insight by building a strong positioning. And, none of this was easy. It took experts and genius to arrive at Nike's positioning.
For the last 27 years my company, CenterBrain Partners, has helped over 220 global brands find the emotional benefit, key features, and insights to create an authentic, well-positioned brand. We use our approach - The Triad Process™ to do this.
Our Triad Process™ is proprietary, is expensive, and is reserved for only the most serious brand-building companies. We have an opening for two Chinese brands in 2018. You can learn more at OUR PRODUCTS/The Triad Process or click What's wrong with most market research?
Employ our Triad Process™ if you meet any of these conditions:
You want to transition your business from a low-margin OEM to a high margin OBM.
You have developed a technical product advantage to meet a consumer need and want to protect it long-term with a brand and brand positioning.
You have a brand that has had some success on the market, but has hit a plateau in sales.
Your advertising budget is small or nonexistent and you want to achieve maximum impact.
You have a product or marketing idea that will require major capital or advertising investment.
You have a product that is failing in the marketplace, but you believe the core idea is good.
If you are interested in building a long-term asset that will provide sales and profits for decades we want to work with you through our Triad Process. This is a sophisticated brand building approach that only the most successful global brands undertake. We look forward to working with serious brand-building companies in 2018.
Build your own, authentic, brand and enjoy the 95% profit you may have been giving away.
Contact CenterBrain Today.