Unbranding the competition – How Asian brands become successful in established markets
By Stefan Pertz, Consultant, StrategiCom
20 Jul 2008

1. Asian Brands are on the rise
Clearly, Asian brands are on the rise. Out of the 100 most valuable brands in 2007, 11 are from Asia. Toyota has improved in 2007, now occupying 6th place, one up from 2006, while Nintendo is the top performer, rising 7 places. In 2004, 8 Asian brands in the ranking. Long established brands are now challenged by companies from the east as they shed their image as OEM manufacturers and start building their own brands.  This article will be a discussion on how a number of Asian brands became successful in already crowded markets. This paper will utilise the notion of “unbranding the competition” in this context. By branding their products, Asian companies are now claiming value space in the minds of buyers. As very few monopolies exist, each brand has to be seen interconnected and competing with other brands. This interconnectedness is allowing brands to unbrand their competition.

This paper will first introduce the mechanics at work in “unbranding”, and then discuss exemplarily how Asian brands utilise this to outpace competition. Lastly, it will address the threats that these brands face in order to sustain their growth and value.

I have attempted to place this article into a B2B context; however, certain B2C brands and products are being used for clearer illustration.

2. Branding is a war fought in the minds of buyers
Everyone is talking about the power of a strong brand, branding and brand equity. It is of importance to clarify what the term “brand” means and how this concept works. We will see how Asian brands are in line with global trends and how they unbrand their competition. The following concepts lay the foundation for the discussion of Asian brands that successfully unbranded their competitors.

A BMW is a BMW is a BMW – Not a Mercedes! Unbranding at work

Humans use communication, verbal and non-verbal, to transmit concepts, ideas and knowledge. This framework will enable us to clearly identify items, products and even brands.

A word, logo or brand is a signifier, as it identifies something specific. It clearly defines any object or activity as what it is. Here I introduce the postmodernism thought of Differance. Derrida describes thatany signifier clearly identifies the mentioned item. Differance describes that such signifier accurately describes exactly what it is, simultaneously identifying exactly what it is not. In postmodernism this is called a trace that leads to what is not there.

When we hear or read a word, we instinctively know what it does not mean either; however, we would have an idea of what is not signified. An example: When we read the word “Male”, we all know what a male is and looks like and also know what the term does not mean: Female. Yet, we all have a clear image of what a female looks like when we read “male”. As a result, we only require one signifier to actually describe both.

As explained above, any signifier automatically points at any other aspect that is absent or opposite. Differance was initially applied to writing. Later, the idea of Differance was applied to “concepts”. Because of this evolution I argue that Differance can also be applied to brands. If any company is branding their ownproducts, Differancewill describe that at the same time this company unbrands products from all other manufacturers. Another way of depicting unbranding is the notion that marketing is an attempt to decommoditize the companies offer. We are living in a global and interconnected world and every local action has a world-wide reaction. Another example for the notion of Differance, as we can not detach local from global.
           
The meaning of the prefix "un-" can refer to being:
- not something (e.g. unequal);
- the opposite of something (e.g. unnecessary);
- the reverse of something (e.g. uncool);
- to deprive of something (e.g. unsubstantiated);
- or to release from something (e.g. undo).
In my discussion I use these meanings to elaborate on how Asian brands unbrand their competition.

The Free Lexicon uses describes unbranded as a adjective, meaning something is not marked. Mobile phone users have the possibility to unbrand their handsets, you can unbrand your Internet Browser. Muji is described as a “Un-Brand” that pro-actively undrands its product by not labelling them. Some people actually want to unbrand America. However, in this context the term means to fight against consumerism. All of the above describe processes. The adjective unbranded describes the state of an item after this process. Therefore, there will be a verb, to unbrand. In the present tense, this will identify the process of something being unbranded.

Branding is an idea in the minds of people

A brand is an intangible concept. The term branding stems from a procedure to mark cattle. Each owner had a distinct mark to be branded into the skin of their cows. This way, owners could differentiate their cattle from those that belonged to other owners.

Today, branding still exists and it works in the same manner. A brand is a sign, logo or emotional feeling that will tell the products of one manufacturer apart from another. Brands even go beyond to separate products from manufacturer A and B, but they also differentiate products from the same manufacturer (e.g. Toyota and Lexus). When mentioning these two brand names, every reader will actually have a personalised image of the brand in mind.

Complex as the human mind is, in the context of branding it is only able to grasp one idea per brand. Any brand can only stand for one idea or concept. This is why companies launch additional brands. Such practice will ensure that the target audience will understand what the brand stands for; and what it does not. However, what a brand stands for is subject to the individual interpretation and is influenced by many factors, such as cultural background, social status, education and disturbances in the communication.

It takes a lot to create a successful brand. So far only an inside-out inside-out perspective has been presented. However, one needs to look at other stakeholders in the branding process. Two in particular: Customers and competitors. Branding is about finding the right position in the mind of people, delivering value according to expectations, staying relevant and excelling at the benefits delivered.

The more distinct the brand position, the lesser the chance that customers will chose another brand as a substitute. In certain markets it is crucial to look at the brand position very careful as many positions may already been taken. Some even argue that finding the right position is the prerequisite to branding itself. Blockbuster is trying to re-brand itself. The statement that customers should stop calling it Blockbuster video (now Blockbuster Media) shows where a brand really resides: In the minds of the customers. The company also had the opportunity to launch a new brand, finding another position for their services.

Competitors must be observed carefully, before and after finding a suitable position. Once a brand position is found, it needs to be defended. This is not an easy task as competitors will counter strike and respond the brand’s moves.

Branding, as in positioning or occupying a space in the mind of the consumers seems to be a simple concept. Companies and brands are subject to competition, micro and macro environments and perceptions of consumers. Therefore branding, and with that un-branding, is not an easy task.

Global trends: Information Revolution, Post Materialism, Emotions not Possessions

Consumers today are much better informed. Modern technology has pushed the horizon of awareness beyond local frontiers. We are now able to research any product category on a global basis. Purchasing B2B products is now a well thought through process. The accessibility of information is the first global trend essential for this discussion. The multitude of channels used to communicate will also pose the threat of the message being amidst the noise.

Another global trend is the movement towards post materialism. Self actualisation and participation in shaping today’s world are becoming more and more important. Luxury has become available for many and we are now striving for other means of self actualisation. If everyone has all the material goods, one needs to find ways to express the own ability to afford luxury. Experiences are the answer and brands have embraced this in their offering. Some argue that “affordable luxury” is bad for a prestigious brand. For my discussion it is important to know that there is such phenomenon called “affordable luxury, however, its impact on brands will not be discussed.

3. How Asian companies unbrand their competitors
The following examples show how Asian companies have unbranded their competition. There are three generic differentiation strategies: cost leadership, differentiation and focus. Differentiation can be broken down further by utilizing a finer framework. The applied framework used has 13 different strategies companies can adopt; herein only a selected few of these will be used to illustrate how brands unbranded their competition.

a. Osim – Specialisation, offering luxury at home
Unlike other Asian companies, Osim has decided to focus on marketing their product in order to become successful. Neither does Osim manufacture any of their products- they are contracted out – nor do they own their shops. OSIM's history dates back to November 1980 when Ron Sim’s business of retailing an array of household goods such as knives, knife-sharpeners and mobile drying foods under R. Sim Trading Co. Their first health-care related products were hand-held massagers and foot reflexology rollers.

What made the company famous is the specialisation in a very small niche market: Healthcare products for your home. Luxury you can enjoy in the privacy of your own place. Osim gained fame for one group of products, the massage chair, which has since become a must-have item in households of affluent Asians.

With their massage chairs, Osim hit the mark, in-line with global trends for personal luxury and the trend towards post materialism. Surly, one needs to obtain a massage chair first, however it is the experience that people are after.

In doing so, Osim has not only unbranded any other chair into non-relaxing and uncomfortable ones, but also unbranded Spas and other institutions as being non-luxury, materialistic and less of an experience than they used to be.

b. Emirates – Preferred by business travellers
People travel for leisure or business. Depending on the purpose of the journey, they may select different carriers.

Emirates airlines have entered the market in 1985. In this short period of time they have managed to occupy the position of being the preferred airline for business travellers. Other airlines would now have to find other differentiators. Malaysian Airlines for instance stands for the best cabin crew. Oasis offered budget long haul flights.

Emirates’ branding, based on punctuality and other factors important to business travellers has, in my view based on the notion of unbranding, positioned all other airlines into non-business airlines. To occupy the minds of buyers, they need to find other spaces that they can occupy. These spaces need to be specific. Etihad is aiming at “being the best in its class”. However, as it has been unbranded by Emirates already, Etihad cannot claim preference from business travellers.

c. Burj El Arab – Attribute ownership redefining luxury hotels
The sail shaped hotel has made an impact when it opened in 1999. Build with components that were available to any other developer as well, it has claimed the attribute of being “The first seven star hotel in the World”. The star rating indicates the quality of the hotel and until now, there are no other seven stars being completed.

By definition, the star rating for hotels indicates the quality of any hotel, even though, the services provided are largely intangible and may vary as they are performed by humans. Automatically, the seven star rating will give way for a perception to be created in the minds of the public. The conclusion from comparing hotels is that the Burj El Arab must be the absolute best hotel as there are no other seven star rated hotels.

Room rates start from USD 1600 per night, yet this hotel is in line with the global trend for luxury for everyone as the occupancy rate is about 90%.

By branding itself as the most luxurious and first seven star hotel, it is simultaneously unbranding the competition. If this particular hotel is the epitome for luxury, no other hotel will be able to claim this attribute. These are only 5 star hotels. In my view, applying Difference and unbranding, all other hotels have now been unbranded as being non-luxury, their beds commodities.

d. Sepang – First in SEA, first from scratch
Formula 1 has been in existence for many decades. In 1998 the race series came to South East Asia for the first time. Unlike other European tracks, which have evolved from existing roads or runways (Monaco – Brands Hatch), this race track was built from scratch. Not only has Sepang International Circuit managed to claim the attribute of being the first F1 Track in South East Asia, but the current perception is that Sepang is the benchmark for other tracks that followed and those that will be built in the future. It is also the first Formula 1 race track being designed by Architekturbuero Herman Tielke, who repeated his success in Shanghai, Bahrain and Istanbul. 

Sepang International Circuit has unbranded all other tracks in South East Asia as me-too’s and latecomers. In addition, Wikipedia’s entry on the track states that the Sepang International Circuit is said to be the benchmark. This is important for the discussion herein as Wikipedia is user generated content, reflecting the perception prevailing in the minds of the consumers. Therefore, all other tracks have now been unbranded by people into second tier race tracks.

e. Petronas – The oil company that grew up with Malaysians
The brand of this Fortune 500 is built on the “Heritage” differentiator strategy. Everything the company does is based on the idea that Malaysians grew up alongside the company and that they will prosper together.

Already in 1882 oil was extracted from Malaysian soil. Malaysia became independent in 1963 and in 1974 Petronas was formed to ensure the nation has enough oil resources. With the majority of Malaysians being aged between 15 and 64 years and a media age of 24.6 years, most Malaysians have grown up alongside Petronas.

The iconic symbol of Petronas, the Petronas Twin Towers, was built in 1992 with more than 60% of the construction material being local. The architects view on the towers as stated on the official Twin Towers website reads: 'I tried to express what I thought were the essence of Malaysia, its richness in culture and its extraordinary vision for the future. The building is rooted in tradition and about Malaysia's aspiration and ambition.'

In 2008, the Petronas commercial entitled Tan Hong Ming, won at the 2008 AdFest. It is a heart-warming insight into children's innocence in the country's multi-cultural society.

With this approach, Petronas is able to unbrand other petroleum companies into non-family members and non-Malaysian. By sharing the same cultural values and being omnipresent, Petronas managed to occupy the position of Heritage, despite being a very young company compared to the competition.

International oil companies continue to suffer from their 1980s and 1990s reputation as haughty and patronising business partners. Petronas  Malcolm Brinded, head of Shell’s exploration and production, acknowledges this when he says international oil companies need to ask themselves, “How are we going to make this marriage work?” He describes Shell and other international oil companies as “much less paternalistic than in the partnerships of 20 years ago”.

4. Opportunities and threats for Asian brands
The examples used herein show that opportunities and threats exist for Asian companies to unbrand their competition. What they have in common is that these are product innovations, either in the form of new ways of doing business or new products. Asian companies can no longer rely on low cost as guarantor of success. Branding their products can be used to ward off fierce competition in the region. Brands can best described as promises. To be successful in branding, the provision of the service or product provided has to exceed the expected service. In addition, companies need to anticipate and pre-empt the moves of their competition to formulate a sound brand strategy to unbrand their competition. Next, I will elaborate on the opportunities and threats that these Asian brands are faced with.

In the case of Osim we have seen how a small company can grow into a multi-million and global organisation within a short period of time. However, as early as 2005 scholars started to worry about the company having lost it’s focus. More and more products were added to the portfolio, diluting the image of the health care specialist.

Emirates is now faced with competition from Etihad, a carrier from the same region and poised to “become the best in its class”. This approach is unlikely to unbrand Emirates as the leading business travel provider and Emirates should be able to defend its brand against the new player.

The success of the Burj El Arab has attracted other players to enter into the 7 star hotel market. Burj El Arab though will always be the first 7 star hotel to come into existence. Unbranding the luxury attribute may only be possible by creating an 8 or 9 star hotel.

Sepang International Circuit’s brand could be overthrown by inventing something bigger, the occupation of another white space. Singapore’s upcoming Grand Prix can be successful by claiming a white space that no other race track currently occupies: There are four components in this a) street circuit in b) in a major city c) at night and d) in Asia. As of May 8, 82% of the tickets have been sold for the inaugural Singapore Formula 1 race, 4 month ahead of the event.

Petronas has achieved a lot in its relatively short period of existence. The company has successfully unbranded the competition into untrustworthy players and non-family members. The company is now faced with issues beyond their control: e.g. Rising oil prices and the notion of the Malaysian government to forbid foreigners to purchase petrol along their borders. Petronas now has to deliver on the promise that they are part of the family.

Both, internal and external factors can pose threats or opportunities to any brand. After successfully unbranding the competition, the company must defend its position and counteract the moves of their competitor’s brands.

5. Conclusion
The purpose of this article is to demonstrate how successful branding affects existing brands when a new player enters into an already contested market, unbranding its competition. It was demonstrated that Asian companies are able to find white spaces which can be utilised to their advantage. Usually, companies will talk about branding their products and services in isolation. It was shown that such activity is not isolated, but has to be seen as having an impact onto other brands and businesses. When branding, one should not only look at what brand its own product or service should be. Companies should also find ways in unbranding their competition.

To make unbranding work, a brand needs to find a white space in the mind of buyers that is not occupied by any other brand, yet impactful enough to stand up against the competition.

An advantage gained could be lost as unbranded brands may counter the activities of the new brand. Both, opportunities and threats arise from the notion of unbranding. Unbranding is very powerful as it supports and underlines the brand and it can help to speed up the branding process.

With these examples it demonstrates that it is possible to create powerful brands from the east within a short period of time. This should encourage more and more Asian brands to compete in the global market as there are still white spaces available to be claimed. Unbranding, or decommoditizing, can work for Asian companies as many used to be manufacturers of commodities. Now the task at hand is to turn these commodities into brands.