Brands, Asia, Sony, Evian and Apple

Over the years, we have often reported in Display Monitor on the surveys from Interbrand and especially the firm’s ‘league table‘ of the top brands. I was struck by a comment in the FT a couple of weeks ago, that there are only eight Asian names in the latest ranking of the top 100 brands. Toyota, Honda, Canon, Nintendo, Panasonic and Sony are from Japan and Samsung and Hyundai are from South Korea. By contrast, Germany alone has ten top brands and France has nine. The UK and Switzerland have five each.

It’s slightly strange that there are not more, as Asia has 60% of the population of the world and 30% of its economy but part of this is probably a matter of timing. Very strong global brands take many, many years to build. The top brands, such as Coca Cola, have been strong and global for a long time and the US normally has over 50% of the list (although it is 49% this year). The only brand from a developing country that gets in the list is Corona beer from Mexico.

There is also a question of scale. To have a global brand, you need global scale and here the outward-looking US economy has clearly been put in a great position by the desire of US businesses to cover the world in the same way that its government has been extending its power and influence.

China and India are on the rise and are, increasingly, looking outside their own regions for growth and development, but this has not really got going yet. As we have reported, Lenovo is doing well in Asia and this year is growing well in Europe. Although the company bought the IBM PC business, and had the rights to the brand including the iconic ThinkPad brand, it has done a good job of developing its own Lenovo brand and has relied much less on the IBM name than we had expected when the deal was done. Acer is also doing well in building its brand awareness, as is HTC in the mobile phone space. Benq would probably be doing better without the disaster that was Benq Siemens.

In the case of Acer and Lenovo, much of the senior management was from the developed world (Europe and the US respectively) and that has probably helped as the Interbrand result seems to indicate that brand building skills are stronger in the developed world.

It’s fascinating that France has such a strong position in global brands, when its own brand does not have a great reputation for being business-centric. However, branding is about people and many aspects of French culture are very sensitive to emotion in a way that some other cultures are not.

As I travel globally, I’m always struck by the success of Evian and the desire for the product that exists in places like California and Taiwan. Evian comes from the Alps and is seen as being very pure and clean, but, for heaven’s sake, it is just water! (In looking for a link to a quote, I spotted the comment that Evian spelled backwards is Naive!)

Don’t California and Taiwan have natural and high quality water in some beautiful mountains? (that is, of course, a rhetorical question – I’ve been to Yosemite and to Taipei during the rainy season!). Although it is ‘just water’, Evian is very successful on a global scale and these days beats the historically successful ‘Perrier’ brand. But it’s just water. (I remember during a row over the pricing of petrol/gas in the US, a Texan oilman pointing out that the fuel, which has to be distilled and is difficult to store and transport, was still much cheaper than the Evian for sale in Texan supermarkets!).

I was reminded of the survey and topic this week by a rumour that Apple might be about to buy Sony, a rumour that caused shares in Sony to rise. Apple has around $51 billion in the bank and doesn’t pay dividends as it likes to have cash in case there are ‘strategic opportunities’. (Personally, I think Steve Jobs understands enough about the power of company culture to understand that such an acquisition would be very, very difficult to pull off successfully). Jobs was always a fan of Sony in the early days of Apple and the company loved to use the Trinitron displays from Sony.

However, I was reminded that, when Sony was buying Columbia to create Sony’s movie division in around 1989, there were lots of stories that the acquistion that Sony planned was not of Columbia, but of Apple, which was at that time relatively weak. It had the Mac (the IIcx came out that year), but it still sold Apple 2s and was very much a niche product. But Columbia became available (being sold by Coca Cola) and Sony jumped on the idea of having content as well as hardware. The rest, as they say, is history. Apple outflanked Sony on mobile music and portable computing, mobile phones and now on tablets. The case for owning the content and the electronics is yet to be proved by Sony (and will be the subject of a future article).

Now, Apple has a market capitalisation that is eight times or so bigger than Sony’s (at $34 billion, it’s less than Apple’s cash pile).

It’s not logical for Apple (or Steve Jobs) to buy Sony, but I can imagine a certain satisfaction that Jobs would get from such a deal. And it would immediately give Apple scale in the TV business. Stranger things have happened.

Just as big brands are built on an understanding of human emotion, big businesses also depend on emotional humans and as we say at Meko, “Don’t forget the people”. Mr Jobs may yet surprise us again.


Related Posts