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Branding is about how to Define Products

Wednesday, February 12th, 2014



First of all please tell us how important branding is in the marketing strategy of any product.

Companies need to engage in marketing through differentiating their product in price, retailing, and promotion. These days, however, the technology gap between companies is narrowing, which makes it difficult for companies to make their product significant and different. Quality-wise products are almost the same. Almost everyone is doing great in price, retailing, and, advertisement. Big companies and SMEs all are good at marketing. Thus, it is difficult to differentiate their products through marketing alone. Inevitably, companies seek brand management to stand out. Marketing is about how to sell, but branding is about how to define products. When companies engage in marketing, they think about how to make marketing outstanding. This is brand marketing. Marketing raises real value, while branding raises perceived value. Despite the high quality of the product, if the perceived valueis low, the product cannot be appreciated properly. As differentiated marketing is required, businesses are seeking brand management, which puts emphasis on brand. Therefore, branding is becoming a trend.
What are the important factors in developing a successful brand strategy?
Three factors are commonly cited in successful brand strategy. Firstly, in order to succeed in brand strategy, the most important thing is coherence in strategy. Many companies establish their strategy and keep changing it. Brand strategy should be established with a long-term view, let us say over a minimum of at least 3 years, and maintain its coherence. Secondly, consistency is very important. Nike is a good example of consistency. This company seeks professional sportsmanship just as it did 20 years ago. The core value that Nike pursues has never changed, even though its advertisements, or its slogan ‘Just do it’ might change. But professional sportsmanship has never changed. Highprofile athletes and teams are wearing Nike sportswear and using its sports equipment. In that fashion, their strategy remains consistent, and this leads to the success of the brand. Thirdly, marketing is more about sales management, while brand management is about image. That’s why brand management needs long-term strategy. A single new brand couldn’t improve a company’s image out of the blue. Take Samsung as an example. The company started its first brand strategy in 1995. The second strategy started in 2003. The company has managed its brand for about 20 years. Now the company takes third place among the 100 most valuable brands. Samsung is a relatively new brand, but the reason why it can stand shoulder to shoulder with other global brands is that it has tried to manage, apply and consist of brand strategies with a longterm perspective. I can say that coherence, consistence, and long-term perspective matter the most to succeed in brand strategy.
What are different types of branding?
Brand strategy includes brand identity to establish image, brand architecture to decide a role, and management system to manage a brand. Branding strategy is more about activities including brand communication, brand naming, and advertisement. There are two main brand strategies, and therefore, branding also has two ways--extension strategy and new-branding strategy. One is the single-brand strategy. General Electric shows a good example. It arranges multiple brands under one name of GE, such as GE appliances, GE Capital, GE Plastic, GE Aerospace, and GE Energy. This is an example of an extension branding strategy. The other is the individual-brand strategy. P&G could be a good example, as it takes a strategy, applying different brands to individual products. It is a new-branding strategy.
How can you know what kind of branding strategy is best for you?
Effective branding requires differentiation. Most important is how to define our products on today’s cluttered retail shelf. This is basic. Success of the strategy depends on the differentiation of the brand. To do this, products should be remarkable with ingenuity and visibility, just as ‘Purple Cow’, a best-selling marketing book, said.
What kind of role does a logo play in branding?
New products should attract people’s attention to win customers’ hearts, just as you have to be notable when you want to attract attention from the opposite sex. One role of a logo is to catch people’s eyes. How important visibility is can be explained with Nike’s swoosh logo. This logo is easy to draw even for little children. Compared to this, the logo of Lecaf, a Korean sportswear brand, is difficult even for professional designers. A survey found that people thought that there are more Nike stores than Lecaf stores in Korea. The finding suggests the importance of visibility. Actually, Lecaf has ten times more stores than Nike because becoming a Lecaf retailer is easier. But its low visibility makes people think it has fewer stores. In other words, the Lecaf logo
exposed ten times has the same effect with Nike logo displayed once. One thing that we should keep in mind is that a logo should adapt to changes over time. A brand logo should reflect new trends and customers’ experience and emotions
How do you protect your brand against competition? What is good brand management?
Many have said that brand is an effective way to create companies’ competitiveness, which means differentiation matters in brand management. Despite well-prepared marketing and quality products, companiescan hardly protect their brands from competition. Competitors also have ability to make similar products. But unique image that a brand contains is difficult to modify. Therefore, we effectively establish brand image, and apply and develop brand stories, which can never be copied. Take Psy, a Korean singer, as a brand. If other singers modify his story, they will be ignored by people. That’s why brand image is important to arise among other competitors and have a competitive edge. The core of brand value is our own unique stories that others can never emulate.
How about branding in Korea?
When it comes to branding, Korea has a similar nature to America. In Europe, brand is not something that can be developed, but is rather traded, because tradition is important for Europeans. If you open a new shop there with a sign that says since 2013, you will find your business in trouble. That’s why one basically has to buy an old brand. When Europeans talk about brand power it
is usually about a long history. But in the US, when the Puritans came to a new continent, they didn’t have brands that had old tradition; therefore they had to make new brands. The US, Korean, and Japanese markets are branding markets where new brandscan be created. Koreans especially put more emphasis on newness. Here new products should be released with new brands. No one will buy a newly released car with an old brand. Koreans’ consumption patterns have been changing fast. Korean brands always reflect their newness. Consumers always ask what’s new. This country has experienced a variety of hardships through its turbulent history. The Koreans have a dynamic nature, as they call themselves dynamic Korea. This makes people love new things. If something is not new, they are not interested in it. It is a brand that can tell them this product is different from the old one. Korea has some good brandswhich are known all over the world.
Please tell us something about corporate branding in Korea.
In Korea, it was big companies that took initiative in brand management. So-called group brands like Samsung, LG, Hyundai Motors, and SK lead the brand market. Let us take Samsung and LG as examples. Samsung, which has engaged in brand strategies for about 20 years, adopted the single-brand strategy, like GE, to begin with. Samsung took the single-brand strategy to make its company world-best. For the most part for Samsung then, it was hard to enhance the value of the brand ‘Samsung’ alone. If the company had tried to promote each brand like Anycall (cellphones), Pavv (TV sets), Hausen (refrigerators) individually, this could have cost a lot and blurred the image. Therefore, the company used onlyone brand, Samsung, for overseas markets. Samsung could be said to represent Korea’s brands, hence, the slogan of Samsung, “Korea’s leading brand”. To achieve that kind of brand image, the company took three steps with the single-brand strategy— to improve quality, to emotionally sympathize, and then to reflect experiences. Samsung engaged in an intensive investment and effort to enhance its brand power so that the value of its product could be recognized by clients the world over. Now let’s look at LG. Its watchword is to become “the best global company”, but earlier on LG was better known as Gold Star to many people. The urgent mission for the company was to switch its name from Gold Star to LG. The company put much effort into switching brand positioning from a value brand - Gold Star - to a premium brand with LG.In South America, Gold Star had high brand value, even higher than Sony. They applied step-by-step switching strategy to soft land the new brand, LG. They planned monthly and annual exposure schedule. First they showed Gold Star 80 percent and LG 20 percent. And gradually they switched the rates. Also in Russia they installed flags along the Yeltsin Bridge starting from Gold Star and gradually evolving to LG at the end of the bridge. In other words, the company elaborately implemented its switching programs. When LG made inroads into the European market, LG introduced itself with Flatron, the company’s flagship product. Thus, LG could raise its brand power. Earlier it had a 40 percent price gap with Sony. Now the price gap between the two companies is almost closed. The company has also used effective local strategy. In China and other Asian countries, the company awards scholarships to improve corporate image as well as brand image. LG is the first Korean company to adopt the global brand strategy.
In your view what should be the right approach for Korean companies to promote themselves worldwide?
The hardship that big companies in Korea faced in the 1990s was the low-end image of Korean products. When Samsung tried to export side-by-side refrigerators, retailers and dealers asked the company to use another brand. Because Samsung was an underdog back then, consumers didn’t want to buy such cheaply priced refrigerators with the Samsung brand name. Toyota was once in a similar situation. When the company prepared a new sedan, they realized no one wanted to buy a Toyota sedan because of the perception that the company produced only small cars. Therefore Toyota launched a new brand, Lexus. In the dire situation Samsung faced, however, it managed to use its own name. One of the company‘s efforts to overcome the difficulty was a dealer promotion. Due to the low-end image of Korean products, what they desperately needed was to create a premium brand image. Quality of Korean products was as good as other products from global competitors, but perceived quality was set too low. So the product could not be appreciated as it was.
What we had to do was to raise the perceived quality.
The urgent mission was to change the perception of the market. First, they tried to change the perception of retailers and dealers. And then they could change consumers’ perception. There is no point to put effort to persuade consumers in the first place. The real value is important, but perceived value is often more important. Therefore it is necessary to raise perceived value. To do this, we use a step-by-step approach. The first step is to grow retail power, and turn this into buying power. Persuading end-users with the first step will not work.Please tell us something more about branding in Asia. Branding in Asia is not as strong as it is in Europe.
Why do you think Asian companies do not give as much priority to brand promotion as in Europe?
Like the US, Asia lacks two factors on which brand power depends.time and stories. Because Asian brands don’t have stories and tradition, what we have to do is develop elaborate stories and apply it to brands. Generally speaking, a weak point of Asia brand is poor branding--the visibility is low and the packaging is crude. Compared to products with the same quality from European countries, it looks cheaper. We should break away from the low-end image and give people a reason why they have to buy this product. We have to raise visibility to attract people’s attention and match stories with the product. If the storytelling doesn’t match with the product, people don’t want to possess it, no matter how great the package is. As consumers choose brands that go with their own image, branding and storytellingshould be carefully developed to upgrade consumers’ image.
Please tell us something about Brand Academy. When was it established?
Though Brand Academy was founded last year, we have already accumulated large content and long experience for brand education. Most clients who have consulted us wanted us to find solutions suitable for their companies; we have been providing education to all of their staff. We have been teaching them everything from what the brand is, to how to raise brand power, to how to carry out internal branding. That is what brand education is all about. We don’t use brochures to promote Brand & Company. Though we handed out brochures to clients, they didn’t understand our message. So we began to give clients a book about branding. In the last part of the book, we introduce this company. As word about the book came to spread, companies started coming to consult us.
What are the main objectives and future plans of Brand Academy?
My ultimate goal is to develop Brand Academy into a University. Just as McDonald’s has its own hamburger university, Brand and Company will have a ‘Branding University’. Korean colleges still have no courses for branding, and only some graduate schools offer a branding major. When business management depended more on marketing, companies needed product managers and marketing managers, but nowadays they are seeking brand management, and so they need brand managers. Many previous employees of Brand & Company are working as brand managers in many big companies. Brand Academy is aiming to nurture professional brand managers. What brand managers have to do is to make a happy brand world, which will lead to consumers’ happiness. To do this, we need more socially responsible brands, brands which don’t try to deceive but, rather, which make people happy. The biggest objective of Brand Academy is to nurture happy brand managers making the happy brand world. After all, they should be happy to make the happy brand world.
What are the main courses taught at Brand Academy?
Brand Academy has online and off-line courses. Online courses consists of beginner, intermediate, and advanced courses. Off-line courses comprise three different tracks: brand strategy courses for executives, brand specialist courses, and brand manager courses.

Please tell us about students’ profiles of Brand Academy. What kinds of people take the course?
The first group of students is seniors in college and job seekers who just graduated from college. There are also those who want to jump ship. After people land their first job, for about three years they wonder if it is the right job that they can continue with. For example, some people working in the financial industry or car sales think that those jobs are not suitable for them and they want to find a new job. They make up a big portion of our students.The second group is companies. When they seek brand management, they want to inject a brand awareness mindset into their staff. For example, for the Hotel Shilla, we made a five-level education program. In the past, our company training session included leadership and service education, but now it also has brand education. Even hoteliers, who serve on the floor, have to get education about branding. Our education program for companies encompasses internal branding, the value of its brand, the image that companies seeks, and how the company approaches its customers. It is their employees who are interacting with customers on the front line of those branding strategies. Company training includes the development of brand mindset and brand managing skills that can be immediately applied in the actual field. The third group is executives. They have difficulties in making time to study in college or abroad. Through our education program we give them insight with our long-accumulated cases and best practices
Does Brand Academy also have branches outside Korea?  Please tell us about the worldwide partnership of Brand Academy.
Brand Academy is planning to open local branches in Busan and Kwang-ju in Korea and will expand abroad to China, India, Indonesia, Malaysia, and Singapore. In particular, we are entering into a partnership with UC Berkeley. Asians have difficulties in accessing the school, so we can effectively connect people to it. At the same time we can adopt an advanced education system and impart it to Asian countries. We have more demand from Asia, but many of our European partners have also asked us to educate their management. Clients I meet in conferences abroad often ask for knowledge management on brand, as it is difficult to find a place to learn in Europe as well as in Asia. Now we have enough materials to implement education programs for brand management at a global level. There are many possibilities because brand management is still in an initial stage in local and international markets

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