- Emerging market brands play a more and more important role in the transformation of the global market situation
- The management consultancy globeone has conducted an in-depth study of the images of brands from the emerging markets China, Brazil, Russia, India, and South Korea in Germany
- One-third of German consumers can spontaneously name brands from the emerging markets
- South Korean brands are the leaders among those studied, whereas Brasilian brands show great potential thanks to the their increased degree of attention through mega events
- Untapped market potential for many BRIC champions – market-driven brand positioning brings opportunities
Cologne, January 15th, 2014 – At the World Economic Forum in Davos-Klosters on January 22nd – 25th global top decision-makers are once again gathering to discuss the consequences of new market realities under this year’s motto „Reshaping of the World“. As in previous years, a focus will be on key growth markets, since they play a great role in the transformation of the global market situation. Beyond the extensive expansion opportunities that e.g. BRIC countries offer Western companies, talks such as „China takes Center Stage“ and „The India Outlook“ shift the attention to the rising relevance and power of emerging market companies and their brands.
The international marketing and strategy consultancy globeone based in Cologne, Germany, has conducted an in-depth study of the images of brands from the emerging markets China, Brazil, Russia, India, and South Korea in Germany.
Overall the survey indicated that BRIC companies show a lot of untapped potential. One-third of German consumers can spontaneously name a brand from one of the emerging markets studied. Most of the brands fight with the negative perception of deficiencies in quality, reliability and trustworthiness. While the general country image negatively affects the perception of products and brands. 32% of those surveyed indicated that they do not like Chinese brands whereas 24% dislike Russian brands. For the majority of German consumers (86%) particularly Brazilian brands are not relevant yet, partly caused by their low brand awareness due to very limited availability.
“Brazil holds the biggest positioning potential” comments Carina Hauswald, Managing Director at globeone Cologne. “Besides the very positive COO-image, the country profits from national mega events like the Football Word-Cup this year. This potential is still neither adequately acknowledged nor effectively used.”
Different business approaches exist to overcome barriers in Western markets. So far brand acquisitions of traditional brands are the most successful way to enter new markets quickly and effectively. While in traditional brand acquisitions synergies and cost reduction effects are most important, the BRIC brands profit mainly from the strong customer base, technological know-how, high awareness and the positive brand image of Western brands. Thus heritage brands, such as Volvo, Jaguar, and Land Rover, which have been taken over by companies from China or India, achieve very high brand recognition levels (96%-94%).
The Chinese brand Lenovo also profited from the acquisition of an established brand: The company took over IBM’s computer division in 2005 and the original name disappeared from the computers, while Lenovo successfully build an own internationally accepted brand identity.
In 2013 the brand became the world’s largest computer manufacturer and announced at the WEF its intentions to buy the smartphone giant Blackberry. Examining the global smartphone market, the power shift becomes even clearer: Apple has become an exotic player within the top ranks. Since in addition to Lenovo only original Asian brands like Samsung, LG, ZTE and Huawai are attacking Apple’s position.
It is no surprise that with Samsung a Korean brand leads the smartphone market. Samsung achieved an aided awareness of 98% among German consumers. In general South Korean brands have built up a more positive image than other BRIC brands. 24% of those surveyed like brands from South Korea and associate especially the attribute “excellent quality” with its products (25%). Over 90% of German consumers know Kia, Hyundai and LG. Interestingly, these brands generally forego a direct reference to their country of origin, and instead choose to communicate as global brands. For that reason, many consumers mistakenly think South Korean brands are Japanese.
Chinese brands are also attacking Western brands in other innovative sectors. The Chinese instant messaging provider WeChat invested a huge budget for its testimonial Lionel Messi to score outside of China and seriously challenge the established US service WhatsApp.
“Uprising brand giants from emerging markets significantly contribute to the “Reshaping of the World”. Even if they currently have to catch up with Western markets regarding their brand building,
they are expected to be the global brands of tomorrow and will contribute to the power shift. The Koreans already showed how to capture market shares even in mature markets” emphasizes Dr. Niklas Schaffmeister, Managing Partner at globeone.
“For future success in the most powerful country of the EU the new champions have to improve their perceived product quality and develop a relevant positioning which has to be communicated convincingly”, says Schaffmeister.
The representative study investigated for the first time the images of brands from Brazil, Russia, India, China, and South Korea in Germany. The data were collected by an independent market research institute contracted by globeone. The results are based on a survey of 1,000 consumers in Germany. The 65 brands studied in the survey were selected by means of a pre-test.
Read more and download the survey here: