In the third in a four-part series of interviews with Retail in Asia, industry thought leader Martin Roll tells us his 10 steps for building an Asian brand. Roll is the author of the international bestseller Asian Brand Strategy.
RIA: What do you say to an Asian brand that wants to go global?
MR: Asian brands aspiring to go global need to start with the basics and get the foundation right. The rest will follow.
A strong global brand is characterised by a unique brand promise (the customer focus) and an outstanding brand delivery (the organisational system and performance behind the promise). Brand promise and delivery must be consistently balanced in order to build and sustain strong brand equity. The modern brand-driven organisation is characterised by three distinct characteristics that set it apart from less brand-focused organisations:
• the right boardroom mindset towards and beliefs about branding;
• the right skill sets to build and manage brands; and
• the right allocation of organisational and financial resources to achieve various business objectives and build sustainable brand equity.
Everyone in the company must be properly aligned with the brand values. The entire company and all its multiple, cross-functional activities should be channelled towards this goal.
The primary objective of boardrooms is to build and sustain shareholder value, and deliver competitive returns to shareholders. Branding is a very effective catalyst for better leadership and helps the boardroom drive a shared vision through the organisation.
The boardroom must manage by metrics, and balance short- and long-term perspectives and performance. The growing emphasis on brand strategy to drive shareholder value and competitiveness will move up the boardroom agenda and become one of the most prominent value drivers in this century.
RIA: Some brands in Asia are not overly concerned about branding. What advice do you have for these brands?
MR: Many Asian companies have traditionally been focused on asset-intensive industries. But several studies suggest that the most profitable Asian companies focus on intangibles such as human capital, exploiting network effects, and creating synergies based on brands or reputation, rather than investing in tangible assets.
In other words, intangible assets like brands play a significant role in value creation and can become an important driver of shareholder value for many more Asian companies than is the case today.
Short-term survival is always a challenge, but short- and long-term perspectives must be balanced as there is no short cut to iconic branding – it takes time, patience and money.
A McKinsey study found that expectations of future performance are the main driver of shareholder returns. Across industries and stock exchanges, up to 80 percent of a company’s market value can be explained by expectations for cash flow over the next three years. These expectations are driven by judgements about growth potential and long-term profitability.
RIA: In your book, Asian Brand Strategy, you talk about 10 steps for building an Asian brand. What are these steps, briefly?
MR: The 10 steps are:
1. Have your CEO lead the company’s brand strategy.
2. Build your own model, as not every model suits everyone.
3. Involve your stakeholders, including customers.
4. Advance the corporate vision.
5. Exploit new technologies.
6. Empower people to become brand ambassadors.
7. Create the right delivery system.
8. Communicate!
9. Measure your brand’s performance.
10. Constantly make adjustments, and be ready to raise the bar at all times.
RIA: What do you see as the future of marketing?
MR: The marketing function has come under increasing pressure to demonstrate financial results. Boardrooms must recognise this development and act accordingly.
The first change I foresee is related to the role of marketing. As marketing is increasingly taking place along the entire value chain, marketing is no longer going to be solely the responsibility of the marketing function. Instead, everyone in the organisation will be involved. This requires a more cross-functional orientation, with a solid understanding of all the elements in the value chain including skills within engineering, purchasing, manufacturing, logistics, and finance and accounting. It might require an upgrade of skill sets and ongoing training of marketing personnel.
The second change required is related to the outcome of marketing. For the marketing function to become an integral part of the boardroom agenda, the key issue for the future is to focus on demonstrating the financial consequences of marketing expenditures.
Martin Roll is the opening keynote speaker and guest of honour at the 19th National Retail Conference & Stores Asia Expo (19th NRCE), taking place on 11-12 August in Manila.
Talking Shop is the Retail in Asia section devoted to interviews with experts from the retail industry.