Martin Roll: Kia Shows the Way For Brands in Asia
Two countries have come to epitomize the miracle of the modern industrial revolution, especially the wonders of modern capitalism: the United States, representing the West, and Japan, representing the East.
Indeed, given the economic marvel of Japan following World War II, the country has rightfully come to capture the world’s imagination. So much so that even amid its challenging economic conditions, Japanese brands are the most dominant in Asia when it comes to world brand rankings. Among all the Asian economies, Japan has long lead the way in innovation. Aided by its rapid industrialization, world-class companies emerged offering user-friendly, high-quality innovative products to customers in Japan and around the world. Despite Japan’s model of investing in world-class quality and innovation, other Asian countries have not necessarily followed in Japan’s path.
Indeed, the Asian landscape is quite diverse, ranging from highly developed and affluent countries such as Japan, Singapore and South Korea to relatively poor, developing countries such as Philippines, Indonesia and Vietnam. As global business has gradually shifted from the erstwhile centers of Western Europe and the United States to Asia, Asian companies have been increasingly choosing the branding path to create and capture value.
Of all the Asian countries, the one that has come the closest to adapting Japan’s vision of investing in innovation, high technology and branding is South Korea. Following the Asian financial crisis of the 1990s, the South Korean government intervened in downsizing and disciplining the chaebols (business groups) in order to rein in rampant diversification, enforce focus and implement financial austerity measures. As a result, two of the leading Korean businesses, Samsung and LG, have emerged from the crisis stronger and more competitive in the global business landscape.
In two key industries, South Korean brands are doing extremely well in emulating and at times even overtaking their Japanese counterparts. While Sony ruled the roost in consumer electronics for more than three decades, it has lost its way recently with frequent management changes, a lack of any blockbuster products and a rampant hierarchical structure that stifles innovation.
On the other hand, Samsung has become a darling of the technology sector with its focus on quality in consumer electronics products. Similarly, Kia, a South Korean car brand, while still not on par with the Japanese bigwigs such as Honda and Toyota, or South Korea’s Hyundai, has made impressive strides across the world. Especially in the United States, the world’s largest car market, the rise of Kia is an inspirational brand story.
As is evident from scores of global brands, there is no one best way to build a brand that resonates with customers and stakeholders alike. Despite the inherent variance in strategies adapted by brands, three factors remain central. These become even more important in the highly competitive US market, especially for brands such as Kia that have to overcome their liability of origin and compete in an industry with a high level of rivalry.
Embed the brand in the local environment
An important element of building a successful brand that most global firms ignore is the need to embed the brand in the local environment. When most Western brands enter Asian markets, they operate on the assumption that the customers aspire to own the brand and as such fail to take the extra steps to embed the brands. However, Kia was very strategic on this front. It built a brand new manufacturing and assembly plant in the United States, employed Americans and very aggressively communicated the “Made in the USA” message.
Offer an irresistible value proposition
The car industry is clearly bifurcated between mass market cars — such as Toyota’s Corolla and Camry, Honda’s Civic and Accord, Nissan’s Versa, Sentra and Altima — on the one hand, and Lexus, Audi, Accura, Infinity and others offering luxury features on the other. Kia very cleverly offered high-end features on its models at prices that beat those by the mass market brands. In so doing, it created an irresistible value proposition.
Invest in appealing visual elements
Finally, Kia invested heavily in launching contemporary designs for its cars, updated the interior electronic options, seating and color schemes and a very wide selection of accessories, all at a highly competitive price point. With these visual e nhancements backed by top notch certifications for safety, quality and warranty, Kia became successful in establishing the brand appeal.
Martin Roll is a global business and brand strategist. His website is at www.martinroll.com.