In a recent column for the New York Times, David Brooks posited that the U.S. has one clear advantage over Chinese competition: branding. He notes that U.S. firms are powered by “eccentric failed novelists” (presumably from agencies and consulting firms that are gifted at brand positioning and execution) and “visionary founders” (think Steve Jobs) who have created exceptional brands. This talent is lacking in the Chinese market where “executives tend to see business deals in transactional, not in relationship terms,” as Brooks says. This observation is important because there are Chinese firms that seem to have everything to win globally except for branding and marketing.
Speaking as a long-time observer of brands and brand strategy, I believe that Brooks is correct but his analysis is incomplete. China’s lack of people with brand instincts is not the only or even the main brand challenge of Chinese firms. Further, he does not address the big questions: How, and when, will they overcome this deficiency?
How Hubris Killed Nokia by Colvin Shaw (Beyond Philosophy.)
So what happened to the mobile phone giant [Nokia]? They had great phones. They had market share. They were perched atop the mobile phone world for nearly 10 years. How did it unravel so quickly, in just six short years?
A large part of the answer is they did not build any emotional loyalty to their product.
Emotional loyalty is key to branding. It helps you weather competition and hang on to your market share. It is the reason that when faced with a decision, consumers will choose your product without even fully understanding why they did it. Emotional loyalty is the difference between being a mobile phone juggernaut and being the featured brand on a segment of a TV show called ‘Where are they now?’