How Does Branding Work in Asia?

Many retailers consider branding the most important part of an online marketing strategy. This is because on the Web profit margins decrease dramatically as prices become competitive for the same products and services. With the Internet, retailers compete with each other in real time. Customers have the power to search for and choose the best places to purchase goods and services. Often, the result is price wars and a deteriorating market on the Web.

However, with brand equity, you as an online advertiser or retailer can maintain price and remain competitive as a result of your established brand image. A brand is not just a word, logo, or symbol; it is the perceived value and perceived quality — an otherwise invisible asset. Once you build your brand image, your loyal customers will likely revisit your site and continue to make buys. Of course, you need to maintain the brand image.

Online branding is as important as traditional branding. In a sense, it also offers advantages: You can better track your ad performance online and evaluate the effectiveness of each online ad campaign.

Now, the question is: Are there differences between branding techniques in North America and Asia?

Obviously, online users from different cultures will behave differently when making purchasing decisions, and they will navigate differently when visiting Web sites. Their online and offline buying behaviors will in part depend on their cultural and individual value systems.

For example, North American customers associate brand with well-known company names, logos, and symbols, including those of Coca-Cola, IBM, Microsoft, and McDonald’s. In Asia, however, customers tend more to associate brand with celebrities. Very often, pop stars become spokespersons for large corporations. They represent beauty products, soft drinks, credit cards, and high-tech products, developing a strong brand association between person and product.

In Asia, music and television companies create well-recognized idols and get them to sign marketing contracts with large corporations that would like to use the “idol effect” to persuade fans to buy. These fans also serve as viral-marketing tools, passing on the positive message by word of mouth. This is a powerful branding technique. Many non-Asian companies have learned to use this idol effect to successfully market their products or services in various Asian markets.

These fans are willing to spend tremendous amounts of money to purchase what their idols suggest. Why? In part because these fans want to associate themselves with the idol’s perceived level of taste.

Branding in North America is relatively straightforward, based mostly on words and visual images, whereas branding in Asia relies heavily on the idol effect, or the human touch. Asians love to do business with people. I mean real people with real feelings and in face-to-face meetings. If you would like to launch a new business in Asia, you’d better fly over and meet with all the key executives rather than meet through an online video conference. This is a trust issue. Asians are not as cyber-addicted as North Americans — yet. Internet penetration is still low. Perhaps soon, when the Internet becomes more popular and widely accessible, Asians will feel a little more comfortable doing business solely online.

Many American companies lack a global outlook, as noted in a January 2001 Jupiter Media Metrix study. Yet the market forecasts are that one-third of the online population will be in Asia-Pacific by 2005.

If your company has no plans to expand to Asia, perhaps it’s time to rethink your global marketing strategies. If you have a Web site but no global initiatives, perhaps you’re missing many new business opportunities. If your company is already global and has a Web site to market products to Asia, perhaps this is the perfect time to rethink your online and offline marketing strategies. If you don’t go global, your competitors will.

Are you ready for the global race?

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