Brand building is a long and winding process that involves huge financial investments and continuous efforts to fine-tune marketing strategies in a bid to attract public attention.
Although most companies know about the importance of building brand value, only a handful succeed in becoming international brands. Some people even say it takes a bit of luck.
Whether Lady Luck smiled upon them or not is unknown, but Cheng Shin Rubber Industry Co (
The power of the Cheng Shin and Giant brands again received recognition on this year's list of Taiwan's Top 10 Global Brands unveiled by the Taiwan External Trade Development Council (外貿協會), ranking sixth and seventh with brand values of US$264 million and US$253 million, respectively.
To most Taiwanese, Cheng Shin may sound a bit unfamiliar, but its tires marketed under the Maxxis brand have made their way into the US, European and Japanese markets, with sponsorships offered to popular athletes and sports teams to strengthen customer loyalty.
"Seventy to 80 percent of American kids are aware of our Maxxis brand because it's everywhere -- from bicycles, motorcycles, karts, to all-terrain vehicles and automotives," said Wally Chen (陳榮華), president of Cheng Shin, in the company headquarters at Tatsun Township (大村) in Changhwa County.
Spending its money wisely, the company invests 70 percent of its marketing budget on sponsoring tire-related activities such as car racing and another 30 percent on public exposure, Chen said.
"We view the brand as an intangible asset that also requires branding technology to flourish," he stressed.
Established in 1967 as a contract tire manufacturer, Cheng Shin set up Maxxis International in Atlanta, Georgia, in 1989, marking its intention to target high-end markets with own-brand products.
"If you become No. 1 in the US, the most competitive market with strong rivals against which to hone your expertise, naturally you're No. 1 around the world, be it in sports or finance," Chen said.
Cheng Shin's export destinations have expanded to include 120 nations with research and development (R&D) centers spread throughout the US, the Netherlands, China and, soon, Taiwan.
"Branding and R&D are the two wheels for corporate development. A good brand needs good products to back it up and a brand cannot be built in one day," Chen said.
Therefore, the company has sponsored a wide array of sports events as it sees racetracks as fast-paced laboratories, which allow companies to rapidly upgrade technology and boost publicity, he said.
Chen stressed that building an own-brand helps companies gain full control over their business operations and strengthen employees' loyalty because there is a clear and definite goal to work for.
Currently, Cheng Shin devotes more than 70 percent of its production lines to manufacturing own-brand products.
Citing an elevator philosophy, Chen said that if a company only targets the low-end market -- like, for example, the discount giant Wal-Mart Stores Inc -- there is little room to maneuver, let alone make profits. But if a company develops a brand with added value, it's like taking an elevator upward -- the sky is the limit.
Hence, although the price of crude rubber has skyrocketed from US$600 per tonne to over US$1,600 per tonne over the past two years, seriously eroding its profits, Cheng Shin remains confident of recording a 20 percent increase in sales this year, which Chen said is quite unusual in traditional sectors.