Fri, Dec 06, 2002 page10

• Help needed to build global brands

  NAME GAME While Taiwan is known for its ability to create products for other firms, its ability to develop its own internationally recognized brands is almost nonexistent

  • By Bill Heaney / STAFF REPORTER
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  Information-technology companies here need to focus on creating global brands, and they need foreign expertise to do it, a leading researcher said yesterday.

  "One of the biggest challenges for Taiwan is developing an understanding of marketing and branding," Martin Reynolds, vice-president at Gartner Dataquest, said yesterday.

  "I think [the situation] is desperate enough that they're going to need to bring in outsiders."

  Reynolds was in Taipei yesterday to present Gartner's forecast for global economic growth next year and gather information from local companies for future research. He said Taiwan is doing "wonderful work" in designing and producing products, but with manufacturers increasingly locating to China -- where labor and overhead costs are much cheaper -- the need to join forces with foreign professionals should be a priority.

  "If there's one piece of advice I'd give to major Taiwanese companies, it's go invest -- probably with US-based consultants -- on building some brand equity," Reynolds said. "[Taiwan's] engineers don't do well with branding and marketing."

  While the technology sector in Taiwan has succeeded in the past by manufacturing products for global brand names such as International Business Machines, Dell Computer and Hewlett-Packard, these companies are increasingly turning to factories in China that are often operated by Taiwanese to produce their wares.

  Reynolds said the trend needs to change.

  "Taiwan can't afford to continue to just manufacture. It has to be able to build its own brands," he said.

  Acer and Giant have received some recognition overseas, but have failed to dominate on a global level, Reynolds said.

  Regionally speaking, Singapore Airlines has built a strong brand, as have Hong Kong's banks and financial services, but Taiwanese brands are rarely visible.

  "There's some appeal for Acer, but it's not strong," Reynolds said. "The BenQ people seem to have a better understanding of the brand issue."

  Taiwan has failed miserably at brand building according to one advertising executive.

  "It is a disaster that such a successful economy has not been able to create a successful brand," said Magnus Brehmer, director of international client services at Ogilvy & Mather Advertising in Taipei, whose clients include FarEasTone.

  Global brand recognition should translate into higher profits, Brehmer said.

  "Sony and Ikea are more profitable and successful because of their strong brands," he said.

  The quickest way to create a brand is to work with an international agency, he added.

  Other small nations have had impressive success creating global brands.

  Sweden, for example, has produced at least half a dozen global brands despite having a population of only 9 million, Brehmer said. Taiwan has 22.5 million people.

  Absolut vodka, Electrolux, Ericsson, Ikea, Saab and Volvo are all Swedish brands.

  "In many ways, Taiwan is more impressive than Sweden, especially in financial terms," he said. "It is therefore surprising that the Taiwanese have not managed to produce any global brands."
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