Reputation capital can make brands rise

Published in Philippine Daily Inquirer, November 14, 2003

Global free trade, evidenced by the GATT, Nafta, Afta trade legislations and emboldened by the WTO policy that extends free trade from physical goods to agriculture, banking, intellectual property rights, investments, telecommunications and an entire spectrum of the services sector is a real threat to many Filipino and Asian entrepreneurs.

With globalization and the lifting of protectionist trade legislations, SMEs realize that competition is by default no longer limited to local players but include foreign brands exploring the opportunities of the local market.

Traditional businessmen respond to this threat with severe cutbacks in manpower and training; absence of marketing activities and improvements in technology, research and development; lack of after-sales service and support; and low or subsidized pricing not realizing that while these may work in the short term, the same can only lessen the life-years of a business. It does not help that these cost-cutting measures create the perception of inferior products or services.

A business strategy that creates brand value in the minds of the target market remains the most sensible strategy. Commodity products, while an alternative in the short term, cannot survive in the long-term without efforts at building loyalty and reputation. The only advantage of a generic product is its price, undoubtedly fluid and relative in the face of global competition and technology. Faced with a multitude of products and services, the value-driven consumer regardless of economic status will strive to own and consume reputable value for money products and services, ever fearful of the perceived greater costs associated with disreputable or unknown brands.

Despite the looming threats, here are some ways by which Pinoy and Asian brands can build brand value and create reputation capital.

Own unique dimensions of the local culture. Building brand value can be best established by understanding the uniqueness of your target market. Knowledge of the market is affirmed by advertising copy and other promotions that communicate behavior and expressions unique to the culture of the target market. This creates empathy between the brand and the target market that ironically transcends geographical barriers.

Goldilocks, from the time it sold its first baked products 36 years ago, has since institutionalized its name among many Filipino homes here and abroad. One of its strongest marketing campaigns remains to be Bitbit Pinoy anchoring on a unique consumer insight that recognizes the Filipinos’ penchant for bringing home pasalubong to their family. Having entrenched themselves in the Filipinos’ way of life has provided opportunities for a global market as it continues to build outlets in several countries in Northern and Southern California and Canada, where there is a big Filipino population.

Another Asian brand that capitalizes its marketing strategy on culture is the Singaporean Tiger Balm. Tiger Balm, first sold in the 1800s is now marketed in 100 countries across five continents including the United States and the United Kingdom. This topical analgesic, best for the symptomatic relief of body and muscular aches and pains, is a product borne out of the practice of Chinese herbalists and healers of rubbing natural herbal remedies on their patients. Tiger Balm’s unique herbal formulation is made from camphor, menthol, cajuput and clove oil. Its trademark name was derived from the name of one of its founders, Aw Boon Haw, which means gentle tiger.

Today, Tiger Balm’s single largest market outside of Asia is the United States where it is present in over 40,000 outlets and where it enjoys huge patronage from one of its biggest minority groups.

Not to be missed when one speaks of brands that have created reputation out of owning a unique cultural value is the Philippines’ pride, San Miguel Beer, now marketed in North and South Asia, Australia, Middle East, Africa and the United States. It cannot be denied that this brand first sold in 1890 built reputation capital by recognizing the very distinct and unique trait of Filipino camaraderie and spirit best captured in the selling line “Iba ang may pinagsamahan,” now modified by the creative expression “Itaas Mo’, a fresh attempt to encourage Filipino pride.

Capitalize on place of origin and maximize share of voice. Much has been written about Thailand’s one product, one village marketing strategy. Ironically, quite a number of Pinoy brands have been using this approach long before Thailand did. Unfortunately, unlike Thailand, most Pinoy brands have little share of voice or share of media expenditure. Yet, because these brands are known to originate from a place highly regarded for a particular product, a halo effect transcends to the brand easing their entry to the global market.

Bulacan has always been known for best tasting native delicacies and preserved sweets. No wonder that Bulacan sweets first marketed in 1970 easily became a widely accepted local brand. Among its best seller products are pastilles de leche, yema, taba ng talangka or fat crab paste, ube and candied fruits. Today, the brand Bulacan Sweets is found in many parts of the world where Filipino communities abound and Asian stores flourish. With adequate share of media that should help establish initial local presence, the potential is huge for the forward thinking brands willing to invest in strong branding efforts to link a commodity product to a reputable place of origin. Notwithstanding, there are quite a number of products and places of origins waiting in the wings, among them, Davao’s durian and tuna delicacies, Cebu’s dried mangoes and otap, Bacolod’s piyaya, Baguio’s peanut brittle, etc.

Local presence, a window for global opportunities. One of the constraints of many Asian brands is the failure to realize that with the right branding efforts comes the creation of unique, positive and meaningful associations that can help prolong the profitable life of a brand. Related to this, many entrepreneurs do not see the value behind brand building efforts and concentrate simply on the absolute costs that come with the promotions efforts. The same entrepreneurs fail to realize that by creating local brand awareness, they build reputation capital and loyalty, which over time can transcend generations of users and geographical barriers.

Bench was first marketed in 1987. Since then, the brand has gained national recognition when in 1988 it first featured Philippine cinema’s hottest new face then, Richard Gomez, as its first image model in a television commercial that depicted a “rowing” scene. Today, Bench has franchise outlets in Saudi Arabia, Kuwait, Guam, Canada, United Arab Emirates and China counting among its overseas patrons countless Filipinos who have come to know the brand since 1988.

The Lee Kum Kee oyster sauce was first sold in 1988 in Guangdong province in China where oysters are in abundance. Today, the brand is being used in many East Asian and Chinese homes and in Chinese restaurants worldwide. Lee Kum Kee is sold in over 80 countries in five continents and is now offering a wide breadth of product line that helps push Chinese food culture globally with the availability of Chinese sauce flavors that include different types of oyster flavored sauces, black bean garlic sauce, spicy tofu, sweet and sour fish, chili sauce, hoisin sauce and seafood sauce.

Explore non-traditional distribution channels. Focus efforts on nontraditional channels. Pinoy stores, linking up with Pinoy restaurants (if you are in food and related products) and online distribution are good avenues for distribution globally.

With reputation capital, local entrepreneurs can gain easy access to Pinoy stores and Pinoy communities worldwide. While many Filipinos overseas enjoy material comfort, they hunger emotionally for anything that reminds them about home including Pinoy brands that remind them of good times and their cultural heritage. Blessed with financial comfort, they are not likely to compromise their hard-earned money with unknown Philippine-sourced brands but prefer those that they are familiar with.

The migration of Filipino workers and families is not only a source of dollar inflows but as they move into a new social milieu they help provide a showcase for Filipino products and services.

In this day and age where pricing remains volatile, brought about by constant changes in technology, globalization and the proliferation of products and services, entrepreneurs have no choice but to start building local reputation capital.