Use brands to disrupt markets
Originally posted on LinkedIn
Brands have more power than you imagine.
Now, more than ever, we’re seeing a shift in global brand leaders as the Asian brand engines go supersonic.
Today, Asian economies offer eager consumers (and less-eager competitors alike) brands that combine value, affordability, product functionality, reliability and, in many cases, real innovation. Thirty years ago, Asian economies, led by China, started to carve their global niche as the world’s manufacturers. (In this scenario, Japan sat already firmly established in the western manufacturing and economic hemisphere, with its own collection of global brand leaders.)
The current drive is fuelled by expansive and vibrant domestic markets, growing middle-classes, and still-low relative manufacturing costs. All combine to provide scale and sales growth to kick-start exports, and to provide some degree of safety should those exports underperform.
But this new Asian success is built on the foundation of brands now valued for what they deliver, combining qualitative aspirational attributes and the technological excellence of what they offer.
Five of the 20 technology brands in a recent list published by marketing company Millward Brown via the Statisa statistics portal are Asian. More people are happy to be seen owning and using brands such as Huawei, Oppo, Samsung – dare I say Lenovo?
As the other 15 companies in that same top-20 list will testify, this combination of brand, function, home market, technological differentiation and innovation are disrupting markets with new challenges and new competitors.
This disruption strategy is clearly not unique to Asia. It is, though easier, for newcomers to disrupt, because incumbents have much more invested in their brand positions and in their technology.
The key to using your brand to disrupt any market is to connect consumer experience, brand image and product functionality in a way that makes it very hard for the consumer to be tempted to switch – except of course in your favour.
We’ve done that at Lenovo in Australia and New Zealand and Asia Pacific, by creating new technology for our consumer products, retaining our IP by doing much of our own manufacturing in-house, and focusing hard on delivery and service.
We’ve seen this ourselves in our own consumer marketing. Three years ago Lenovo had leadership in enterprise PCs, laptops and services with our ThinkPad and ThinkCentre product ranges. But, we were relatively unknown in the consumer market with a market share at under 5% outside of China.
What we did have was a disruptive mindset backed-up by some great products and had real innovation built into them. Our Yoga laptops and tablets led the charge on new 2-in1’s & convertible multi-mode products. Just about everyone has a competitive offering now (with one notable exception!) and the category continues to grow >70% last year (who said the PC industry is dead?). But in two years we have grown brand share in convertibles from less than 5% to nearly 40% in Asia Pacific.
What’s more, the “PC company based in China” is making its mark.
OK, it’s a story about ourselves. But we were able to make this impact because we identified a real user preference and need, and we had the in-house operations to be able to create something to fulfil those needs, and do so quickly. In our market, both were unexpected.
Of course, brand disruption is nothing new. We forget that a disruptor brand called Google came on to the scene some 20 or so years ago and systematically disrupted two early Internet companies by the names of AOL and Yahoo. Both those former leaders are now owned (as of 25 July) by Verizon (as TechCrunch notes, Verizon seemingly acquires Internet legacy companies). We forget that, 15-20 years ago, Yahoo was the dominant Internet portal and Internet advertising company, which itself disrupted AOL.
The market forces, the laws of the brand jungle, seem clear: disrupt or be disrupted.
No organization is immune from disruption.
Retain what makes sense in your organization’s operations portfolio to be able to disrupt, at the very least to react.
Develop and innovate (not just supply) products or services that are different, and that actually do offer something new to customers. Create function and value, not just the appearance of value.
Be great at marketing, but never submit to marketing hype. Actually deliver to user expectations.
Are our competitors now snapping at our heels? Of course.