Brands build profits


  • Business
  • Saturday, 05 Apr 2003

By M. HAFIDZ MAHPAR

 

THE responsibility for branding must lie with the company’s top management, not relegated to the marketing department – this is an idea that Asia has yet to fully embrace, according to Mike Murphy, Ogilvy & Mather Asia-Pacific's chief executive officer (new networks). 

“Brands shouldn’t sit in the marketing departments,” Murphy tells BizWeek. “That is currently where it does sit in Asia, and that is wrong. Brands should sit at the top of companies because the contention is: brands build business and brands build profits. 

“Across the world, brand is back at the boardroom. There is no longer a debate about the importance of branding. I’m not sure that’s been embraced as fully in the Asian region as in the other parts of the world.” 

Brand, says Murphy, isn’t a function of just something that’s important to marketing communications. “Brand is at the heart of everything.” 

Mike Murphy

“Product quality drives brand, distribution issues drive brand, image issues drive brand, and customer service issues drive brand. So everything drives brand. Brands are made at every point of contact, or as (Starbucks' senior vice-president) Dave Olsen said: ‘Everything matters’,” he says. 

Olsen had answered “Everything matters” when asked by his new chief marketing officer what was the single most important thing to Starbucks’ success –whether it was the coffee, the stores or the baristas working behind the counter. 

Murphy, who was group managing director of Ogilvy & Mather Malaysia in the early 1990s, says there are not enough skilled marketing people in Asia. “One reason is that brand thinking isn’t at the top of the agenda in many countries. There’s still a very strong trading/selling mentality in the region that is part of the heritage of the region. 

“That is more of a distribution-led mentality than marketing-led one. In that environment, the amount of efforts – the kind of a desire – to build marketing expertise is not as strong as I think it should be,” he says. 

Since advertising agencies claim to be marketing partners to the companies, why haven’t they persuaded the latter to be more marketing-driven? “Maybe we haven’t done a good enough job,” Murphy admits, adding, however, that it is not just the responsibility of the communications business. 

Singapore-based Murphy was in Kuala Lumpur last month to promote 360 Degree Brand in Asia, a book he co-authored with Ogilvy & Mather Japan's managing director Mark Blair and regional planning director (Asia-Pacific) Richard Armstrong. 

The book describes Ogilvy & Mather’s approach to marketing communications – called “360 Degree Brand Stewardship” – that involves establishing a series of collaborative partnerships for the brand.  

360 Degree Brand in Asia lists four stages to achieving full 360-degree brand implementation:  

·The company embraces the concept of “brand” and “marketing” in general and uses conventional advertising channels; 

Development of a brand’s marketing output into a dynamic and integrated communication programme involving adverting, public relations, e-commerce and others; 

·The brand is internalised within a corporate culture, with brand message aimed at the company’s own employees; and 

·The brand begins to influence the entire suite of corporate operations, from new product development to training. 

Murphy thinks Asian businesses generally are somewhere in steps one and two. “The majority of the companies in this region are probably at step one level. In the US, most are probably in step two,” he says. 

“I don’t think many in the Asian region have embraced step three. I don’t think enough around the world – but there are more of them elsewhere around the world – that have embraced step three.” 

He cites Cerebos Pacific Ltd (maker of Brand’s Essence of Chicken) as an example of a step-three company that is committed to putting the brand at the centre of the organisation. 

Murphy names British Petroleum as a step-four organisation. “At every board meeting, each of the directors is asked what they’ve done against the company's four core values,” he says. 

Ogilvy & Mather, which previously promoted the concept of integration, has practised the 360-degree philosophy for four to five years now. An example of the difference between the two philosophies is that under the new thinking, communication messages should be flexible to suit the communication medium instead of just being consistent throughout. 

“Are we good enough at it (the 360 degree approach)?” Murphy asks rhetorically. “No. Occasionally, we get it right. This is not just a philosophy. This is not just a thinking issue. This is a doing issue.  

“I think we have some advantages because of the mix of businesses we have that allow us to potentially get it right more often (compared to other marketing communication groups).” 

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