Dr. T.R. Lee Ph.D. Lectures CENS Staff on Branding

Own-brand manufacturing helps local companies compete with emerging rivals

The China Economic News Service (CENS) has come a long way during its more than 38 years of proactively promoting Taiwanese exports, and has consistently made the most of every chance to sharpen its competitive edge in the field.

Knowing that knowledge is power, CENS invited T.R. Lee, Ph.D., to deliver a lecture on branding to staff members at its head office in Taipei, with the aim of enriching the knowledge it needs to help traditional Taiwanese small and medium-sized manufacturers shift from build-to-order production to OBM (original branding manufacturing) and thus become better able to contend with underselling by emerging rivals in the global market.

Lee is a professor in National Chung Hsing University's Electronic Commerce Department, and in 2005 was listed by the International Biographical Center at Cambridge, England, as one of the 2,000 most outstanding intellectuals of the 21st century in the field of marketing and logistics. His background and experience in assisting Taiwanese enterprises in their marketing efforts have made him one of the island's best-known branding consultants.

Essence of Branding
Lee began his lecture by citing American Marketing Association's definition of a brand: “A brand is a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and service of one seller or group of sellers and to differentiate them from those of competition.”

Branding also covers the management of an enterprise's goodwill, products, organizational culture, and overall operations; so a brand does not just serve as an enterprise's symbolic image, but also represents its overall performance, Lee added.

Lee said that in his observations, he has discovered a common problem among Taiwanese traditional manufacturers in developing their own brands: “In many cases Taiwanese enterprises are initially revved up with OBM, spend money, blindly follow existing globally-leading brands, design featureless logos as brands, then flounder in marketing, and finally flop.”

Branding is not merely the labeling of products with trademarks, Lee stressed; it involves a whole series of procedures that differentiate a company and its brand in a segment, including decision-making, conveying of corporate essence and ideas, production, quality and logistics management, marketing strategies, brand management, and brand value creation.

Quite a few Taiwan makers confuse registered trademarks with brands, Lee continued. A trademark is merely a distinctive sign or indicator used by a company to allow buyers to easily identify its unique name as a source of products or services. In comparison, a brand, which can be a name, logo, slogan, or design scheme, symbolizes a corporate image, as well as associates itself, among consumers, with specific products or services. A brand can create value for a company, but not a trademark.

Why Branding Is Significant
A good brand, Lee went on to say, can create mutual benefit for both its owner and consumers, which makes branding significant to the sustainable development of an enterprise.

Lee explained that a successful registered brand assures an enterprise legal protection of its featured products by preventing copying, and represents the source of its owner's competitiveness. Besides, it can help its owner to effectively build emotional connections between branded products and consumers, which is a surefire way to generate profits.

From the consumer's viewpoint, a reliable, premium brand can help with understanding the origin of needed products and, indirectly, have the supplier's commitment quality minimize post-purchase risk, lower search costs, and show off social class and individual styling, stated Lee. “Today,” he said, “consumers evaluate a brand not merely through the quality of branded products; the more important thing for enterprises is that they should have consumers involved in brand-related activities and stories that create experiences and interest in their brands.”

How to Develop a Brand
As branding is often easier said than done, Lee emphasized, enterprises should develop their owned brands rationally and reasonably in line with several guidelines.

Firstly, it is absolutely important for an enterprise to have its brand positioned well in its target market, which can be achieved through preliminary analysis of consumers' mindsets and of the sameness and difference between its products and those of its competitors, as well as the building of a good brand association through the use of impressive mantras.

After preliminary analysis for a distinct positioning strategy, Lee continued, the brand-developing process should move forward to establishing identity, personality, resonance, and relationship in order to develop brand equity. This calls for a combination of attractive functional and exterior design of branded products, impressive commercial advertisements, and purposefully arranged promotional activities. In addition, developers should take value-added services into account when creating brand equity.

To better promote a brand, its owner will have to determine what elements are built into it; these can be an interesting brand name, easy-to-remember Internet address, recognizable trademark, influential endorser, eye-catching packaging, and a famous advertising slogan. Applying Eastern elements, like concepts of Buddhist and Tai Chi, in a brand is a good means for Taiwanese companies to try, Lee said, partly because they are mysterious and attractive to western consumers.

Continuous assessment of brand equity and of whether promotional activities are creating value is also part of the brand development cycle, Lee noted. This can be carried out through value chain and product portfolio matrix analysis. Promotional activities should center on a brand. “Enterprises can consider broadening their product lineups or developing sub-brands to fuel brand sales after their brands gain ground in the market,” he said.

Suggestions for Hand-tool Makers
Lee suggested that Taiwanese hand-tool makers develop their own brands by engaging in SPT (Segmentation, Targeting, and Positioning) analysis, database construction, CRM (Customer Relationship Management), consumer demand analysis, consumer behavior research, and product R&D. This is a time-consuming and costly process, but it is necessary.

The industrial cluster in Taichung, central Taiwan, can also provide hand tool makers with a basis for developing brands, Lee indicated: “In fact, clustering enables them to form a full supply chain for hand tools in the area, thanks mostly to close relations and business ties with each other. That makes collective marketing and branding feasible.”

Lee went on to say that collective marketing and branding are a concept of resource integration, which can help them overcome resource limitations when competing against big international brands. “This strategy can work very well as long as Taiwanese makers can work hard together to build a sound production and marketing network,” he commented.

Lee also pointed out that government subsidies and open seminars hosted by colleges are also useful resources for Taiwanese hand tool makers to use in developing brands.

Lee suggested that manufacturers should try to build up different, themed product families to expand their product mix. This requires efforts to retrain and reorganize their R&D staff, along with effective coordination between designers and production line operators, but it helps to boost the image of their brands. In addition, he said, manufacturers should set up standards for R&D work to make sure that new products are developed using the colors or exterior styles that they employ most frequently, since this can assure the consistency of brand images that have formed in consumers' minds.

Using the Internet to promote brands is highly recommended for Taiwanese makers; this is an economical strategy in view of the fact that e-commerce technology has been well-developed in Taiwan, according to Lee.

He concluded by stressing that developing a globally competitive brand is not an impossible dream for Taiwanese hand tool makers, especially since a number of Taiwanese brands, including Acer, Asus, HTC, and Giant, have already proven themselves strong players in the global market.