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Branding and Promotion Strategy for Leather Product document sample
WORLD INTELLECTUAL PROPERTY ORGANIZATION EXECUTIVE FORUM CONSULTATIVE CYCLE 2006 INNOVATIONS IN EXPORT STRATEGY Changing Perceptions: National Branding – Implications for Strategy 14-16 June 2006 Bucharest, Romania “BUILDING A REPUTATION AS A CREDIBLE EXPORTER - IS BRANDING ENOUGH?” A paper prepared by Dr. Shyam S. Agrawal Resident Director India Trade Promotion Organization 1 “BUILDING A REPUTATION AS A CREDIBLE EXPORTER - IS BRANDING ENOUGH” By: Dr. Shyam S. Agrawal PREAMBLE The strategy formulation for the credible and competitive export sector in today’s more integrated and homogenized world has become far too complicated and competitive. The Globalization, which has become a buzzword for the present century, has not only transformed the economic, political, cultural and social fabric of the world but has also smoothened much of the volatility in world markets by creating tighter links between economies and enforcing rule based ‘Multilateral Trading System’. Information and money, today, flow more quickly than ever. Goods and services produced in one part are increasingly available in other parts of the world. International travel has become more frequent and communication very fast. The economic polarization between countries with unimaginable wealth on one hand and rampant poverty on the other is clearly visible. However, the process of Globalization which is expected to contain the element of full reciprocity and non discrimination is, at times, being grossly affected by narrow national interests, protectionist minds and geopolitical considerations. The some of the countries visibly are practicing the policy of “Globalization a la carte” – profiting from globalization while resisting others” which inter alia means that what is mine is mine and what’s yours is open for negotiations. The delay in conclusion of Doha Round of Negotiation, resistance from European Union and USA in reduction of support to agriculture sector and insistence of developing countries for providing expanded market access for agricultural products, intermittent application of safeguard clauses particularly in the textiles despite removal of all quotas and such other well known reasons have raised concern among the nations and the trading community specially in developing countries about the future of liberalized and rule based trading regime under the auspices of World Trade Organisation. Against the backdrop of fears and hopes, the export strategy requires integration of basic elements of export marketing in to value chain management, competitive advantage, strategic communication, public- private partnership and above all image building centering around brand formulation and management so as to address emerging business environment. The branding strategy can be developed at national, sectoral and enterprise level. THE QUESTION HOWEVER IS WHETHER BRANDING CAN BE ADOPTED AS STAND ALONE TOOL FOR BUILDING A REPUTATION OF CREDIBLE EXPORTER. BRANDING CONCEPT “Brand is normally defined as a name, sign or a symbol to identify a product or service of a seller and differentiate them from goods and services of the competitor” The brand is an intangible asset and exists in the minds of the people. It can in fact be treated as authentication of product or service and a pledge made to ensure quality and consumer satisfaction. Branding is mostly used as an image-building tool on the basis of positive values and perceptions of the product, enterprise and the country and to effectively communicate the same for the development of exports, investment and tourism. In the overall process of branding, the brand positioning, management and brand loyalty are most vital. The branding is the process of building trust that requires the fuller involvement of oftenly ignored segment in the value chain, the people, including employees, suppliers, distributors, market professionals, agents and finally the consumers for which an effective internal and external 2 communication strategy is essential. The brand image cannot be developed unless a sense of pride is associated with the country/product/ and or enterprise. It is believed that branding can only be taken as a part of overall process and definitely not as an exclusive solution for export development. ESSENTIALS OF BRANDING It would be a grave mistake and wastage of resources if countries feel that they can develop a credible export sector by designing impressive logos, slogans and mounting an international advertising campaign without addressing the basic principles of marketing including product, quality, price, positioning and distribution channels besides reputation of the country and its people. They are first required to ask the following basic questions to themselves for venturing in to and resource allocation for brand creation. Whether the companies and products of the country have adequate strength for product branding and management. Whether the company managements are committed to product branding. Whether there is strong public-private partnership in place. Whether the country has a required image and its people a national pride. Whether corporate management is free from political and bureaucratic activism Whether quality control and trade dispute settlement mechanism in place. Whether economic growth and other parameters amply justifies investment in brand equity. Whether consultation mechanism among politicians, civil servants, industry representatives, media, educators , professionals, economists etc is in place to assess national perception and values. SUCCESS OF BRANDING There is no dearth of information on the success of brand equity associated with the products and the countries. It is not uncommon where the whole industry is associated with the country such as when you talk of machinery and technology, the name of Germany automatically comes to the minds of the people. Similarly, optical glasses and watches from Switzerland, fashion goods from Italy and feature films from US and INDIA, Darjeeling Tea from India, electronics from Japan are well known in the world. In the same way, Mercedes, BMW, Toyota, and Honda for passenger cars, Sony and Panasonic for electronics, Microsoft and IBM for computers are well established brands. There are enumerous such examples for brand success associated with various products from pharmaceuticals to consumer goods in the world. The question however is whether these brands have been developed overnight by investing huge amount of money in advertisement campaign or over the years by finding place in the minds of people with quality assurance and after sales service. BRANDING IN DEVELOPING COUNTRIES As already mentioned, the positive national image is very important for brand strategy. The developing countries mostly start from the negative image and unwisely spend their brand equity fund under the naïve impression that they can quickly build their reputation by investing money in global advertising campaign. It would simply not happen unless the companies get committed for 3 brand promotion. The developing countries are normally dominated by small and medium enterprises which neither have interest in creating their own brands nor they have the funds and required competence for the same. It has generally been observed that these companies have created adequate production capacity of required quality but feel more comfortable in producing for established brands of developed counties. The outsourcing therefore has become one of the accepted sources of revenue for these countries and its companies. This is also true in the countries like India particularly in the sectors like garments, home textiles and leather goods. It gives a feeling that branding for the products manufactured by the small and medium enterprises would require intermediary preferably in the private sector by establishing forward and backward linkages as has been done by the trading houses in JAPAN. Nevertheless, the countries focusing on brand equity are experiencing the expanded flow of investment, trade and tourists however the major beneficiary of such exercise remains to be the large enterprises in the government and private sector. SME’s might however be driving some benefit due to general awareness about country’s credibility. There is therefore a case that the governments in developing countries should concentrate on establishing quality standards and in improving marketability of products and services. The branding strategy should be followed only for carefully selected objectives by involving all segments of population to avoid wastage of resources. CONCLUSION In conclusion, it can be asserted that branding is not enough for building a credible exporter as national exports are required to be built on encouraging investments in technology and quality control, flow of information and applications of ICT’s to reduce transaction costs, market research and product promotion. The first requirement for building a credible export sector might be to concentrate on generating and maintaining competitive advantage as national prosperity is created and not inherited. The creation of the culture of innovations, application and sharing of thoughts is essentially required for the success in the global market. THE DEVELOPMENT OF NATIONAL BRAND cannot be considered a primary requirement for exports as it is not only a long-term phenomenon but also has a wider ramification and impacts all sectors of the economy. The change in mindset at all levels, professionalism in management, building of national pride and involvement of every segment of the society are essential ingredients for the success of brand equity. It requires integration of vision with country’s history, geography and culture for positioning country’s products, services, credibility and its people in the global market place. It cannot be developed overnight or in a closed office room. It requires a credible and visionary leadership, which has the power to take all segments of population with him. The export sector can definitely be benefited by creating a brand image for the country but it can not wait for the same.
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