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Top>Opinion>Brand Power-led Management


Hiroshi Tanaka

Hiroshi Tanaka [Profile]

Brand Power-led Management

Hiroshi Tanaka
Professor, Chuo Business School (Graduate School of Strategic Management)
Areas of Specialization: Marketing, Brand Strategy, and Advertising

Read in Japanese

Focus to Brands

It has been more than 20 years since the term brand became a word in general use. Attention started being paid to brands in Europe and the United States, partly because merger and acquisition activities from the 1980's onward counted on the value of brands. For example, when Nestle-the largest food and beverage company in the world-bought Kit Kat (chocolate), Perrier, Buitoni etc., and Philip Morris International (PMI)-one of the leading international tobacco companies-bought the dairy product manufacturer Kraft Foods, they paid several times more than the actual value of tangible assets of the companies. Many people then realized that brands were desirable, and worth a considerable investment.

Why do brands have such value?

If the primary value of a watch were its function in accurately indicating the time, the radio wave watch would be the most valuable, as it performs best in this respect. People are willing to pay much more money, however, for brand name Swiss-made mechanical analog watches, even though they are less accurate for indicating the time. Is this only because people have a weakness for brand name goods?

Some may say their judgment of purchase will never be influenced by brands. But do such people buy some Pocky, a Toyota, or an iPhone without having been influenced by their brand name at all (i.e., not even noticing what the brand is)? In order to help understand this, I will give you two real-world instances in which something other than ordinary merchandise is a brand.

The Underworld and Brands

The use of brands is not limited to the trading activities of legitimate business. There are instances in which they have been applied to illegal activities. Frank Lucas who was the only African gang boss in the U.S., took control of the underworld in the 1960's and 1970's.

Lucas bought heroin directly from Southeast Asia. According to one theory, he brought the drugs on U.S. military planes during the Vietnam War. The reason he was so successful was because, in addition to acquiring and transporting the drugs, he took good care of quality control. In other words, he dealt only in high-quality heroin. As a finishing touch, he gave his merchandise the brand name Blue Magic.

The movie American Gangster (2007, directed by Ridley Scott) featured Denzel Washington in the lead role of Frank Lucas. In the movie, there is a scene where he convinces a dealer not to cut Blue Magic with impure substances by shouting to him; "It's a brand, like Pepsi!" His life as a drug king ended with the ending of the Vietnam War. But we can think of him as someone who successfully established a brand for a commodity - drugs.

Movie Industry and Brands

What inspires you watch a movie? Is it the title? Is it the stars? Could the movie director be the reason?

In the movie industry, Alfred Hitchcock succeeded in establishing the director brand ahead of the curve. After a successful career in the U.K. before the Second World War, he moved to Hollywood in the U.S. He was a master of the suspense film, with blockbuster hits such as The Birds, Vertigo, and Psycho.

Unusually for a movie director, he worked to establish himself as a brand. He appeared at the beginning of his films, although there was usually just a fleeting glimpse of him. Hitchcock was often disguised, and audiences enjoyed trying to spot him. He also used his silhouette as an icon.

Moreover, when Psycho was released, he asked people not to enter the theater in the middle of the movie saying: "It is absolutely required that you see Psycho from the very beginning!" These clever promotion strategies elevated his reputation further. In addition, he got into TV, which was gaining popularity in the 1950's, ahead of the pack, on Alfred Hitchcock Presents.

As a result, people started to choose to see a movie because it was Hitchcock's. In sum, establishing a brand as a director was a successful market strategy which had not existed before.

In Order to Succeed through Brands

As these two examples have clearly demonstrated, the key to success in business with a brand involves more than just building a good image. You must produce high-quality products and it is vital to create an effective system to sell them.

Furthermore, you should think about whether to use brand power or not. Companies compete based on different strengths, which include marketing, technology, R&D, and organization. You need to decide what role the brand should play. In addition, companies need to create a market strategy to further strengthen brand power. Nowadays in particular, when business is global, it is essential for companies to build brand power and make excellent use of it.

Hiroshi Tanaka
Professor, Chuo Business School (Graduate School of Strategic Management)
Areas of Specialization: Marketing, Brand Strategy, and Advertising
Born in Nagoya City in 1951. PhD in Economics from Kyoto University. He was Marketing Director of Dentsu, Inc.; Professor in the Faculty of Business Administration at Hosei University, and Visiting Researcher at Columbia University before taking up his current position in 2008. His main publications include: Consumer Behavior [Shohisha Kodo Ron Taikei] (Chuokeizai-Sha, Inc., 2008), Game-Changing Branding [Dai Gyakuten No Burandeingu] (Kodansha Ltd., 2010), Anatomy of Desire [Yokubo No Kaibo] (Co-authored with Kenichiro Mogi, Gentosha, Inc., 2010), and Brand Strategy to Enhance Your Business [Kigyo Wo Takameru Burando Senryaku] (Kodansha Paperback Pocket Edition, 2002). Books as translation supervisor include Curation [Kyureishon] (President, Inc., 2011). Received the Japan Academy of Advertising Award (three times), Chuo University Academic Research Promotion Award, and Shinobu Shirakawa Award (Tokyo Advertising Association).