There is no question that China now has most of the pieces in place to become a leader in the global marketplace. Competitive, ambitious companies fuel its strong and rapidly growing economy, and a qualified workforce supports what has emerged as a world-class manufacturing base.

Yet Terence Oliver, president and representative director of Interbrand Asia-Pacific, says that there is still a piece missing from the picture: Strong global brands have yet to materialize.

Interbrand is an internationally known branding consulting company based in London.

A recent article in the Financial Times that ranked China's top 10 brands included several powerful corporations. Some have the potential to become major global players.

Oliver says that the problem is that the average Western consumer would be hard-pressed to identify even five Chinese brands, however.

"I suspect many would not be able to, because Chinese brands yet to form that vital emotional connection with consumers that makes certain brands an intrinsic part of our lives," he says.

"Chinese companies urgently need to begin the long and occasionally difficult process of building powerful brands that will help them compete on an equal footing with other major global players."

Many people take it for granted that they know what a brand is.

"But they often do not really understand the number of different ways that brands touch our lives," Oliver says.

A brand is not simply a product that can be made and duplicated in a factory.

Many people confuse brands with names, logotype designs, and advertising campaigns.

"That's just the visible surface of brand communication, the tangible evidence of brands in our lives," Oliver says.

Brands promise an experience, and they stand for something that people can rely on. They are embedded in the collective consciousness, he says.

"If managed properly, brands can last forever and actually grow stronger over time."

Of course, brands can be products, but the concept can also be extended beyond consumer goods.

BMW, a brand that Interbrand has helped manage for the past 20 years, is a famous product that promises "the ultimate driving experience."

It doesn't stop there, however. Many other kinds of experiences are possible through brands, Oliver says.

Cities, for example, can be brands with distinctive identities and ways of communicating. So if cities can be brands, then countries can, too.

A strong national brand can help win mega-projects such as the Olympics. These events can promote the country to millions of visitors, he says.

Brands are also an integral part of the world of sports, from equipment to endorsements, even corporate sponsorships. The events themselves are even brands.

The FIFA 2002 World Cup soccer event, jointly hosted by South Korea and Japan, was based on a brand strategy and identity developed by Interbrand.

There are therefore many different kinds of "brands" that we encounter in our everyday lives. Strong brands provide greater financial security for a company by helping it win the trust and loyalty of consumers.

"That is why consumers prefer one product or service over others. People are often willing to pay a premium for that," Oliver says.

"Brands are (a company's) most valuable asset, and they should be managed carefully. They should command the full attention of the most senior people in a company," Oliver says.

Interbrand has always committed itself to promoting the concept of brand value. It develops accurate ways to measure this, and has become an industry leader.

Every year the company works with Business Week magazine to compile a list of the world's top 100 brands using its proprietary methodology.

This always causes great concern among Chinese companies at all levels. They all seem primarily concerned with the same issue. They are unable to identify the gap between Chinese brands and international heavyweights such as Coca-Cola and Samsung.

In response to this concern, Interbrand started an investigation into 100 large Chinese companies this past summer. The effort covered information technology (IT) firms, retailers, medical developers, property enterprises, and food suppliers.

Interbrand expects this approach to reveal a generalized snapshot of domestic companies' branding initiatives. It should present a clearer picture of their motivation, understanding, and achievements, Oliver says.

Three months of hard work yielded positive results. Most companies are beginning to focus more attention on branding than they were even two years ago, according to the survey.

The motivation to develop their brands, however, has mainly come from the pressure to respond to fierce competition.

"Most of them simply expect to sharpen their competitive edge through branding, but they can achieve so much more than this. Branding can lead to overseas expansion, financing, and mergers and acquisitions," Oliver says.

Most companies have also taken quality and reputation for granted, instead of establishing a solid relationship with consumers.

"It's a shame that they have ignored the importance of this relationship. The strong bond that consumers develop with brands can bring long-term benefits," Oliver says.

Many companies instead focus on marketing, advertising, trademark protection, and culture building, rather than working to establish their brand identities.

Brand identity covers names, logos and packaging. It symbolizes an experience that tells customers what to expect, and it represents many aspects of a complex experience, Oliver says.

Starbucks provides a particularly insightful example. The actual Starbucks experience is relatively simple: coffee and other beverages, the flavour, the aroma, and the pleasant atmosphere.

The company's product is brewed, prepared, and packaged for the customer. Customers make direct contact with the brand through its products, but the packaging is more than functional; it also offers the consumer an opportunity to identify the experience they are about to enjoy, Oliver says.

"Brands also create an atmosphere, an environment, and it is here that Starbucks really excels."

The smell of fresh coffee and the second of jazz quietly playing in the background relaxes customers. This is all a part of the Starbucks experience, and it is consistent, regardless of where in the world one encounters it.

The company has become so adept at creating and recreating this experience, Oliver says, that it barely needs to advertise.

Many people think that companies have to advertise to build a strong brand, but over the past decade, Starbucks has spent less than US$20 million on advertising. That's almost nothing for a company of its size and stature, yet today the company is ranked 99th in Interbrand's ranking of the world's top 100 brands. That's fairly impressive for a company that started as a single coffee shop in Seattle less than 20 years ago.

Fortunately, most Chinese companies interviewed realize that they haven't done enough to develop their brands. The survey shows that domestic enterprises understand the need to focus on systematic marketing and brand-building programs.

Nine per cent of the companies surveyed have since established branding management teams to co-ordinate inter-departmental branding initiatives.

"Chinese companies still have a long way to go, but these goals are attainable," Oliver says.

Interbrand has set the de facto standard for measuring brand value over the past 15 years, and has also created useful methods for developing branding strategies, brand licensing, and mergers and acquisitions.

(China Daily 11/21/2005 page9)