Corporate and Brand Identities in the Asia-Pacific Region: Theoretical and Applied Perspectives

ABSTRACT - This session summary provides an overview of corporate-identity and brand-equity related issues in the Asia-Pacific Region as well as a review of the papers presented by consumer researchers and practitioners in the session. Participants in the session discussed several unique features of corporate and brand identities and how consumers respond to corporate and brand identities in the Asia-Pacific Region. In addition, cross-cultural differences in corporate and brand perceptions, brand name attitudes, brand extensions and aesthetic preferences were identified and explanations for these differences, focusing on linguistic factors, categorization processes and cultural values, were provided. Future research issues and the need for a broader theoretical framework are discussed.

Citation:

Bernd H. Schmitt (1994) ,"Corporate and Brand Identities in the Asia-Pacific Region: Theoretical and Applied Perspectives", in AP - Asia Pacific Advances in Consumer Research Volume 1, eds. Joseph A. Cote and Siew Meng Leong, Provo, UT : Association for Consumer Research, Pages: 1-3.

Asia Pacific Advances in Consumer Research Volume 1, 1994      Pages 1-3

CORPORATE AND BRAND IDENTITIES IN THE ASIA-PACIFIC REGION: THEORETICAL AND APPLIED PERSPECTIVES

Bernd H. Schmitt, Columbia Business School

ABSTRACT -

This session summary provides an overview of corporate-identity and brand-equity related issues in the Asia-Pacific Region as well as a review of the papers presented by consumer researchers and practitioners in the session. Participants in the session discussed several unique features of corporate and brand identities and how consumers respond to corporate and brand identities in the Asia-Pacific Region. In addition, cross-cultural differences in corporate and brand perceptions, brand name attitudes, brand extensions and aesthetic preferences were identified and explanations for these differences, focusing on linguistic factors, categorization processes and cultural values, were provided. Future research issues and the need for a broader theoretical framework are discussed.

INTRODUCTION

Asian markets have grown spectacularly over the past few decades and still offer opportunities for solid future growth. For example, the four Asian Dragons (Hong Kong, Singapore, South Korea and Taiwan) have enjoyed growth rates between 5 per cent and 10 per cent over the last decade, and the per capita GDP of Hong Kong and Singapore is now higher than that of Canada, Australia, and New Zealand. The percentage of people living below the poverty line in the Region has decreased from 33 per cent to 10 per cent, even though the region's population has surged by 40 per cent since 1970. The People's Republic of China-with its 1.3 billion consumers is in the process of a radical transformation toward a consumer society. Finally, the number of non-Japanese Asian households earning US$18,000 annually is expected to increase fourfold to 75 million by the year 2000.

Much of the future growth in the Region will occur in the domain of consumer goods, from soft drinks and computers to discretionary goods and services. As in other consumer markets in the world, establishing and managing attractive and appropriate corporate and brand identities is one of the key challenges in the Asia-Pacific Region. As Fortune magazine observed, "brand equity may be buffeted at home," i.e., in the US, but the Asia-Pacific Region is the place "where the big brands are blooming" (Fortune 1993).

CORPORATE IDENTITY AND BRAND EQUITY

Corporate identity is concerned with the impressions, the image, and the personality projected by an organization (Olins 1988; Nakanishi 1993). The task of creating a corporate identity begins with the selection of an appropriate corporate name. Other factors that contribute to corporate identity include the logo of the organization, marketing communications, and the image projected by various corporate activities.

Brand equity has been defined as "a set of brand assets and liabilities linked to a brand, its name and symbol, that add to or subtract from the value provided by a product or service to a firm and/or to that firm's customers" (Aaker 1991, p. 15). Brand equity thus refers to the differential effect of brand knowledge as a result of the marketing of the brand (Keller 1993). Brand knowledge, in turn, consists of brand awareness (brand recall and recognition) and brand image/associations. Brand management thus includes the key tasks of selecting a viable brand name, and surrounding the brand with appropriate symbolism and associations.

The concepts of corporate identity and brand equity are related to some degree. Corporate identity may be viewed as branding at the corporate level, and in many service industries (e.g., airlines, hotels, car rentals and financial services), branding activities are almost synonymous with corporate-identity activities. However, the determinants and components of corporate identity and brand equity are often quite different, and in cases in which viable identities have been built around both the corporation (e.g., P&G) and its brands (e.g., Tide), the question arises how the two identities may be used-jointly or separately-to leverage the company and/or its products.

OBJECTIVE OF THE SESSION

The objective of the session was to bring together consumer researchers and practitioners to explore corporate-identity and branding issues in the Asia-Pacific Region. While corporate identity and brand equity have received much attention in the business and academic communities in the West, little is known about how Asian consumers respond to corporate identities of Asian companies and brand identities of Asian products and how their perceptions and behaviors may differ from those of Western consumers. One of the prime outcomes of the session is the view that Asian consumers respond to brand names and logos, to corporate advertising and branding communications quite differently than consumers in the West (Schmitt and Pan, 1994).

CROSS-CULTURAL DIFFERENCES IN CONSUMER PERCEPTIONS OF CORPORATE AND BRAND IDENTITIES

Corporate and brand names-key assets of a corporation and its brands-provide a good starting point for discussing differences between the West and the Asia-Pacific Region. What is a good brand name? Research in the West has shown that a brand name should be unique, short, indicative of the product's functions, and distinctive (Collins 1977; Robertson 1989). Yet, in the first paper presented in the session, Pan and Schmitt provided empirical evidence from a comparative study conducted in the US and China that the characteristics that determine attitudes toward brand names for consumer products (bicycles, non-prescription drugs, refrigerators and shampoo) are not equally important for Chinese and American consumers. In one of their regression analyses, for example, the spelling/writing of the brand name and whether or not it is considered a "lucky name" are significant predictors of brand name attitudes for Chinese but not for Americans. Moreover, the two predictors differ significantly in their weight between the two samples. In sum, Chinese consumers seem to use other criteria than Americans in judging what constitutes a good name for a consumer product.

The importance of brand name spelling/writing was further explored in the second paper of the session, a paper co-authored by Schmitt and Tavassoli, on the influence of the writing system on brand perceptions in Japan. Modern Japanese uses four writing systems: kanji, an old writing system consisting of Chinese ideographs; two phonemic scripts called hiragana and katakana; and romaji, the Western alphabet. The authors provided numerous examples of how each writing system influences corporate and brand perceptions in a subtle way. They also provided data from an experimental study conducted in Japan that demonstrated that kanji has a traditional and somewhat old-fashioned image, that hiragana has a soft and feminine image and that katakana and romaji have a contemporary image.

Han's paper examined the role of company reputation on the evaluations of Asian brands in an experimental study. Han showed that companies in Asia focus less on brands and put more emphasis on the companies behind them. For example, television commercials for Japanese, Korean and Chinese commercial-goods giants such as Shiseido, Samsung, and Whampoa flash the company logo at the end, whereas in the United States people may know the brand name without knowing the company behind the products. The implication is that key findings from brand-extension research may apply to Asia only in a modified way. Specifically, the success of the new product may not depend primarily on the the perceived fit between the original brand and the new product classes but on the company's reputation.

If Asian consumers respond differently from Westerners to corporations and brands, then the management of corporate and brand identities must be approached in a unique way in the Asia-Pacific Region. James Gillespie of Landor Associates illustrated how this can be accomplished by providing examples from corporate-identity campaigns done by Landor throughout the Region. Schmitt, Simonson and Marcus, focusing on the management of a corporation's aesthetics, showed how the aesthetic output of a firm should be fine-tuned to the aesthetic preferences of target consumers in the Region. For example, companies should be sensitive to Asians' preferences for certain aesthetic styles (e.g., Chinese culture loves "ornamentalist realism") and aesthetic themes (e.g., "a classy aesthetic," "a traditional aesthetic focusing on cultural legacy").

EXPLANATIONS OF CROSS-CULTURAL DIFFERENCES

How can we explain the observed differences in brand name perceptions, in attitudes toward corporations and their brands, and in aesthetic preferences between Asians and Westerners? Why do Asians pay more attention to the writing system? Why do Asians weigh the image of the corporation so heavily when they judge a brand extension, and why do they find a certain aesthetic particularly appealing?

In addition to describing and recording differences in perceptions of corporate and brand identities, participants in the session also discussed, in each presentation, the reasons why differences between Asian and Western cultures may occur. Participants in the session had been asked by the session organizer to focus on differences that hold for the Region as a whole compared to Western culture rather than describing national differences within Asian societies. Thus, conceptually, the challenge was to identify pertinent theoretical constructs that may serve as explanations for the differences observed in corporate and brand perceptions between Asian and Western consumers. Three sets of explanatory factors emerged from the presentations: (1) differences in the processing of linguistic information due to the structures of languages used in the West and in the Region; (2) differences in how corporate and branding information is categorized; and (3) differences in value structures resulting from broader socio-cultural characteristics.

Linguistic factors

Corporate and brand names are linguistic labels for a company and its products. As a result, they should be subject to linguistic differences between Asian and Western languages and the resulting differences in consumer memory and information processing (Schmitt, Pan and Tavassoli, in press). The way linguistic information is processed by Asians and Westerners may thus serve, for example, as an explanation for the finding, reported by Pan and Schmitt and by Schmitt and Tavassoli, that the spelling and writing of names is crucial for creating attractive and appropriate corporate and brand identities in the Region.

Specifically, many languages in the Region, e.g., Chinese (Cantonese, which is spoken in Hong Kong and in Southern China, and Mandarin, the official Chinese dialect), Japanese, Korean and Vietnamese are ideographic in origin and largely based on Chinese characters. Chinese characters are sign-symbols composed of strokes. In contrast to letters in an alphabet, characters are very visual in nature and inherently meaningful linguistic units. Visual rather than auditory processing may thus be the primary mode for remembering information of an ideographic system (Schmitt, Pan, and Tavassoli, in press). As a result, consumers pay close attention to the writing/spelling of a name and are strongly affected by the writing system in which a name appears.

Categorization processes

Han's paper on the role of corporate image in brand extensions illustrates how psychological processes related to categorization may be used to explain some of the differences reported in the session.

Categorization theories have been used prominently over the years to explain how consumers determine the membership of a brand in a product category and how consumers perceive and process brand extensions (DubT, Schmitt and Bridges 1991; Schmitt and DubT 1992). Han argues that one of the key findings of this research, namely that category fit in terms of attributes or concepts is the crucial determinant of the success of an extension, may not hold in Asia. He argues for a much simpler process-consumers use the company image as a heuristic for judging the extension due to differences between Asians and Westerners in the perceived abstraction between the company name and the brand name.

Cultural attitudes and values

Differences in cultural attitudes and values have been used in prior research as prime explanations for differences between cultures and nations. Prominent examples include explanatory concepts such as individualism vs. collectivism, attitudes toward risk-taking, gender roles, and time perceptions (Hofstede 1980). While some of these theoretical constructs may also prove useful for understanding some of the differences reported in the present session, I will discuss briefly two explanatory concepts which have received less attention in previous research but have been used by participants in the present session to explain their results: aesthetic values (Schmitt, Simonson and Marcus in press) and mystical beliefs (McDonald and Roberts 1990).

Schmitt, Simonson and Marcus, in the final paper, used aesthetic values resulting from cultural traditions as an explanation for the observed differences in aesthetic preferences. As the authors observed, although a general concern for aesthetics seems to be universal, the degree to which consumers value, appreciate and create beautiful things differs vastly across cultures. Also, whether or not consumers find a minimalist/essentialist or a decorative/ornamentalist approach in buildings, offices, products, packaging and communications most appealing is probably subject to tastes resulting from aesthetic values which have been developed over centuries in each culture. The authors argue that Confucian ideals and other religious backgrounds seem to have instilled in Asia an aesthetic of naturalism which values the expression and portrayal of nature and its objects (mountains, gardens and animals) to a degree that is not found in the West.

Mystic beliefs and attitudes were used by Pan and Schmitt to explain their finding that corporate and brand names are judged by Asians in terms of whether they are "lucky names." As the authors discussed, the concept of "luck" forms a wide net of associations and has been applied to colors, numbers, geometrical positions, and to names (e.g., the number of strokes, stroke-number combinations in different words etc.). "Luck" is derived from "feng shui," the complex Chinese system of geomancy, which has also been used in Japan and Vietnam (Lip 1989). Asians grow up with mystical systems such as "feng shui" (and hundreds of "namology" books applying "feng shui"). As a result, "feng shui" beliefs significantly affect their corporate and brand perceptions.

FUTURE RESEARCH AND THE NEED FOR A GENERAL FRAMEWORK

One of the major insights of the session was that each explanation or even type of explanation (e.g., by language, categorization or cultural values) seems to have an alternative, competing explanation. This situation was not due to methodological flaws in the research presented. Rather, it attested to the complexity of the phenomena under investigation (and perhaps the complexity of Asian culture). To illustrate my point, let me briefly return to Pan and Schmitt's finding of the importance of the writing/spelling of a name , which I used earlier as an example of a "linguistic explanation" based on Asians' tendency toward visual processing.

An alternative explanation, discussed by the authors, is the '"cultural- value" explanation which states that calligraphy has had a long tradition all over Asia and is a respected art form. A name should therefore "look good" and be rendered in appealing writing, and consumers pay attention to it.

Alternative theory testing is rare in international marketing and in international consumer research. In my opinion, it is vital for understanding cross-cultural empirical findings. Methodologically this means selecting meaningful and theoretically relevant cultures (or nations) for comparison and isolating pertinent explanatory constructs. In some cases, this may even imply that we need to decontextualize a culture in order to unconfound variables and thus understand the components of a culture better.

Future research should integrate the findings presented in this session and similar findings from past research in a broader conceptual framework. From a practical perspective, the framework by Schmitt, Simonson and Marcus, presented in the last paper of the session, attempted to provided such an integration for the practical management of corporate and brand identities.

This consumer-oriented framework consists of four interrelated stages: (1) Situation Analysis; (2) Designing the Aesthetics Strategy; (3) Building the Collection of Design Elements and (4) Aesthetics Quality Control. From the manager's perspective, Situation Analysis includes a thorough analysis of the strengths and weaknesses of a corporation's current aesthetic output. Corporate expressions are linked to consumers' impressions, thereby identifying potential perceptual gaps. Designing the Aesthetics Strategy includes the task of associating a company (or brand) with certain aesthetic styles and themes that best reflect the company's values and appeal to consumers. For example, drawing from concepts in the arts and based on prior research, the authors distinguish two bipolar dimensions ("minimalism" vs. "ornamentalism" and "realism" vs. "abstraction") as well as three time-related themes ("classical/traditional," "modern/contemporary," or "futuristic/avant-garde"). Building the Collection of Design Elements entails implementation via what the authors call the three principles of aesthetic balance: (1) expansion vs. concentration; (2) essence vs. allusion; and (3) consistency vs. variety. Aesthetics Quality Control includes the task of monitoring and tracking a corporation's aesthetics over time in order to update and upgrade the selected Styles and Themes.

A similar integration should be undertaken for the research issues identified in the earlier part of the session. One direction that this research may take could be to relate linguistic processing explanations, categorization research and research on cultural values and to specify under what conditions which type of explanation takes primacy over another type.

REFERENCES

Aaker, David (1991), Managing Brand Equity. New York: The Free Press.

Collins, Leslie (1977), "A Name to Conjure With," European Journal of Marketing, 11, 339-362.

DubT, Laurette, Bernd H. Schmitt, and Sherri Bridges (1991), "Categorization Research and Brand extensions," Advances in Consumer Research, 19, 255-259.

Fortune (1993), "Asia, Where the Big Brands are Blooming," August, 35.

Hofstede, Geert (1980), Culture's Consequences: National Differences in Thinking and Organizing. Beverley Hills, CA: Sage Press.

Keller, Kevin Lane (1993), "Conceptualizing, Measuring, and Managing Customer-Based Brand Equity," Journal of Marketing, 57, 1-22.

Lip, Evelyn (1989), Feng Shui for Business. Singapore: Times Books International.

McDonald, Gael M. and C. J. Roberts (1990), "The Brand-Naming Enigma in the Asia Pacific Context," European Journal of Marketing, 24 (8), 6-19.

Nakanishi, Motoo (1993), Building a New Form of Corporate Identity: Japan's CI Revolution. Tokyo: PAOS Books.

Napoles, Veronica (1988), Corporate Identity Design. New York: Van Nostrand Reinhold.

Olins, Wallis (1989), Corporate Identity: Making Business Strategy Visible Through Design. Cambridge, MA: Harvard University Press.

Robertson,Kim R. (1977), "Strategically Desirable Brand Name Characteristics," Journal of Consumer Marketing, 6 (Fall), 61-71.

Schmitt, Bernd H. and Laurette DubT, L. (1992), "Contextualized Representations of Brand Extensions: Are Feature Lists or Frames the Basic Components of Consumer Cognition?" Marketing Letters, 3, 115-126.

Schmitt, Bernd H. and Yigang Pan (1994), "Managing Corporate and Brand Identities in the Asia-Pacific Region," California Management Review, Summer 1994, 32-48.

Schmitt, Bernd H., Yigang Pan and Nader Tavassoli (in press), "Language and Consumer Memory: The Impact of Linguistic Differences between Chinese and English," Journal of Consumer Research.

Schmitt, Bernd, Alex Simonson and Joshua Marcus (in press), Corporate Aesthetics: Managing Your Image and Identity. Long Range Planning.

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