Business English: The quest to craft a brand image

When Google launched the Nexus 7 tablet, its challenger to Apple's iPad, the chairman of the Taiwanese company that designed the Nexus's hardware gained only a moment in the spotlight.

As a Google executive stood on stage to unveil the device in June, he introduced Jonney Shih, chairman of Taiwan's Asus, who stood up and waved at the crowd from his seat among Google's leadership team in the front of the audience.

The choreography of the Nexus launch was emblematic of how many Taiwanese electronics companies, which build crucial components for products ranging from Apple devices to Hewlett-Packard notebooks, often struggle to move from being contract manufacturers to becoming consumer brands. As Taiwan is a relatively small nation that most of the world does not even recognise as a sovereign country, its businessmen are proud that groups based there design, assemble or manufacture parts for the lion's share of the world's personal computers, notebooks and tablets. Few of the companies that do that work, however, have broken out as brands in their own right.

  Taiwan's businessmen are proud that groups based there design, assemble or manufacture parts for Apple and HP

Even those businesses that have relaunched themselves as consumer focused companies, such as Asus and smartphone maker HTC, are having to fight to keep their place in consumer consciousness and convince the public to pay premium prices for their products. "When I say 'Taiwan' in Europe, most people think of cheap electronics," says David Brabbins, managing director of Figtree, a branding agency that works with Taiwanese companies.

TH Peng, the greater China chief executive for advertising agency Grey Group, says one challenge is working out what it takes to craft a public image. "Penetrating overseas markets is all about the organisation's dedication to product innovation, marketing and powerful branding, each of which tends to be a blind spot in the thinking of emerging market companies," he says.

According to Thomas Chen, managing director of consultancy Interbrand in Shanghai, that challenge is common to many successful emerging economy businesses that first succeeded as manufacturers and then tried to win over consumers. "That's very typical of Asian brands," Mr Chen says. "They don't really have a salient personality in consumers minds." Their pitch "is all about product quality, service, innovation...that's important but that's a threshold quality, that doesn't make you different. As a branded product, your quality is supposed to be good."

Mr Brabbins says convincing companies that they need to develop a rapport with individual buyers requires a different mindset that focuses not just on the goods for sale but also on the emotion and vision behind products. "It's hard when you're working with a client who doesn't have this background and these skills," he says. "You need a marketing department for starters."

You also need to be recognised for your products. Asus says its work on the Nexus has added to growing praise for its designs. The Nexus, it says, has boosted its profile in the US, where the company is forecasting significant sales growth.

Acer, meanwhile, which last quarter became the world's largest seller of notebooks, is also beginning to emphasise design, and is experimenting with new ways to enhance its brand. The company, which still shares its unassuming offices in Taipei with the contract manufacturer of which it was once part, dominates in relatively inexpensive computers and netbooks. The rise of tablets, mobile phones and the pricier ultra-slim laptops known as ultrabooks risked leaving it behind.

Campbell Kan, the company's president for personal computer global operations, says it is trying to improve its image in mid-range and high-end computers. "We need to become a more, let's say, respectable brand," Mr Kan says.

One way to increase its visibility is marketing. For example, the company was an official sponsor of the London Olympics, beating China's Lenovo to be the games' technology provider. Acer also announced it had hired a new marketing agency and appointed Michael Birkin, a high-profile British executive who has worked on products for Intel, Gucci and Chanel, as its head of marketing.

One focus for Mr Birkin may be to develop a catchy global tagline that can be reinforced with targeted advertising in individual markets - the lack of that, says Tim Bajarin, an industry consultant, has been a weak spot in Acer's global pitch. "With their very big play in ultrabooks and their jumping in on tablets, I think you'll see...a much stronger branding presence," he says.

  Phil Schiller, Apple's SVP of Worldwide Marketing: the Taiwanese company Asus sees Apple as its benchmark for marketing

Money and patience are lacking

One factor holding back Taiwanese companies trying to turn themselves into global brands is a lack of money, and the patience and firepower to keep spending it on marketing. Advertising is expensive and its returns can be slow. Apple's operating margins are more than 30 per cent; Asus's were 5.5 per cent last quarter, and Acer's were 0.4 per cent.

"It is a catch-22, because you've got to spend money to make money," says Mr Bajarin. "The one thing that the Asian companies do not do...is put the kind of marketing dollars into these kind of marketing campaigns the way the Apples, the Dells, the HPs do. Those marketing budgets really make a difference."

HTC, which launched its first global marketing campaign only in 2009, saw its sales shoot up but then fall nearly 30 per cent last quarter. The company says it likes its phones to do the talking, and its tagline, "Quietly Brilliant", reflects this.

The problem is that Apple and Samsung spend up to six times as much on smartphone sales and marketing, estimates Pierre Ferragu, an analyst with Bernstein, the brokerage.

Nevertheless, Asus sees Apple as its benchmark. It wants to turn its image into one to which customers feel an emotional, almost subconscious, connection, says Mr Shih. This reflects comments he made at a recent event in Taipei. Because of their manufacturing roots, Taiwan's companies will always have an edge over competitors at getting products to market faster, he said. But, he has also realised it is tough to get his staff to switch from an engineer's logical "left brain" thinking to the "right brain" thinking of designers.

If Mr Shih's work goes well, perhaps at next year's major product launch Asus will get the spotlight all to itself.