mini传媒

Published on December 24, 2019
Job titles and other details are as of the time of publication.
(The interview was conducted in Japanese and was thereafter translated into English.)

Branding is about differentiation—every company, every product has a brand

My area of specialization is marketing. My research focuses on understanding and illuminating how cultural values and ways of thinking influence business management. Now, I am developing a brand management framework that fits Japanese companies.

I feel that Japanese companies have a low awareness of branding. There are so many wonderful brands in Japan that are not yet known around the world. This is evident in the various ranking lists of best global brands as well. The only Japanese brands that appear in the top 100 are manufacturers like Toyota and Sony. When it comes to the service industry, it is virtually nonexistent. This is truly a shame. Why are Japanese brands so weak? It’s certainly not because their product quality or technological capabilities are inferior. In my opinion, it’s simply due to a lack of awareness about branding and the inability to take a strategic approach to it.

One reason brand management is perceived as difficult is that the concept of “brand” itself is complex. In fact, the definition of “brand” is inconsistent even among researchers and practitioners. However, by referring to the definition provided by the American Marketing Association, the world’s largest marketing association, as well as the etymology of the word “brand,” a common theme emerges: “distinguishing one thing from another.”

When applied to companies or products, it can be described as “what differentiates one company or product from another.” In other words, a brand is differentiation, and every company or product has a brand. However, it is also true that a deliberate intent to make it a “strong” brand is essential for it to become one.

A brand grows when the founder’s vision and values are passed down within the organization

A brand is often born from the founder’s vision and values. However, companies with histories spanning 100 or 200 years have not continued solely because of the founder’s vision. It is through internalizing the question “How do we want our brand to be?” and passing down this vision as a core principle within the organization that the brand continues to grow and evolve.

Disney, as is well known, is a top brand in the entertainment business. Walt Disney, the co-founder of Disney, was one of the business leaders who understood the importance of organizational capabilities in branding. Walt focused on developing the abilities of “cast members” (i.e., Disneyland employees) and instilled his vision of “creating an overwhelming entertainment experience” into their hearts. He understood that lasting success required boosting employee motivation and continuously building upon daily reforms. In 1966, when Walt passed away, Disney’s profits were less than $12 million. Today, The Walt Disney Company’s operating profit stands at $13 billion (for the fiscal year 2018). Even after Walt’s death, the Disney brand has continued to grow. The current state of Disney likely far exceeds what Walt had envisioned. Brands are nurtured by the power of the organization. This is the core strength of the Disney brand. In other words, for a brand to remain strong, organizational capability is essential.

Conveying the importance of branding to Japanese companies

Needless to say, branding is important not only for the product but also for the company. At that level, the key to branding is communication from the top management. However, some Japanese executives have a sense of discomfort when it comes to the word “brand.” Even when I conduct research, it’s not uncommon to hear responses like, “We don’t do brands.” This tendency is particularly evident in local small and medium-sized enterprises (SMEs). Perhaps they associate brands with high-end products like luxury fashion or luxury cars. However, as I explained earlier, that is not true.

Recently, non-top-down management styles are being advocated; however, the mindset of the leaders is still crucial. And yet, many Japanese executives misunderstand branding or feel uncomfortable with it. Consequently, the awareness to strengthen the brand doesn’t develop in the company. That’s why I feel it is important to help them understand the significance of branding more deeply.

Re-examining the company’s purpose is essential for global expansion

As mentioned earlier, the presence of Japanese brands is not very strong in the global market. One reason for this is that they have primarily focused on the domestic market. But in light of the declining birth rate and aging population, the domestic market is expected to continue shrinking. Moving forward, it will be difficult to succeed without considering global markets.

In global competition, assertiveness and originality are essential. In an environment with a significantly larger number of competitors and a diverse range of consumers from various cultural backgrounds, simply staying silent will not lead to sales. It is necessary to clearly promote one’s products. Furthermore, to survive in global competition, a unique value that sets the company apart from others is required.

Now is the time for Japanese companies to reexamine their purpose and give careful thought to the reason for their existence, the value that they aim to deliver to society. This is essentially what it means to think about branding. Moreover, it is not enough for the leadership to simply think about it; a major part of their role is to communicate the company’s direction both internally and externally.

An investment in branding is worthwhile

To strengthen a brand, two key components are important: “internal branding,” which involves clarifying the company’s purpose, vision, mission, and values, and sharing and embedding them within the organization, and “external branding,” which involves communicating them to consumers and external stakeholders. I believe that the challenges faced by large companies and SMEs in Japan are different. For many large companies, the challenge tends to be internal branding.

However, in many SMEs, internal branding is often naturally addressed. For them, the challenge lies in external branding. Amid shortages of human and financial resources, investing in external branding is often not prioritized. However, in the long run, external branding can prove to be a worthwhile investment.

Confident communication of the company’s purpose, vision, mission, and values with stakeholders such as consumers, the market, shareholders, suppliers, and retailers—this can instill a sense of pride in employees and engage them in their work. This engagement from employees will lead to improved performance and the reduction of unnecessary costs. Furthermore, it will also help attract talented employees. From this perspective, investing in external branding becomes money well spent.

With changes in the environment, the advancement of digitalization, and a dramatic increase in the amount of information, companies and executives can no longer remain inward-looking. The idea that bragging about your own initiatives is a vice, that good product or service will speak for itself and get noticed—this kind of thinking is in fact somewhat arrogant. We must speak more about ourselves. This is a challenge that Japanese executives, or even Japanese people in general, need to confront.

In the hope of developing management theories based in Japan

One of Japan’s strengths is its ability to quickly course-correct once it realizes there is a problem. When it becomes apparent that something is going wrong, the response is swift, and the direction changes for the better. Therefore, I am optimistic that both internal and external branding will yield positive results if action is taken. To achieve this, the first step is to “recognize” the problem. Another important factor is to have confidence.

The “Lost Decades” from the 1990s to the 2000s may have deprived Japanese companies of their confidence. However, Japan has many unique strengths. This is also true for management strategies and marketing practices. There are strengths specific to Japanese companies that are not found in Western businesses. I want Japanese executives to recognize this more, and I aspire to develop management theories originating from Japan that can be presented to the world. This is the motivation that drives my research activities.