In Nokia-Apple rivalry, 'cool' & 'quality'

Updated: 2012-04-27 08:49

By Mike Bastin (China Daily)

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In Nokia-Apple rivalry, 'cool' & 'quality'

Apple enjoys huge emotional edge, but with branding, the rational is also important

As the Apple brand powers on and on, some say inevitably toward the world's first $1 trillion (760 billion euros) brand, one of the key challenges facing further progress is expansion in China.

For Apple, or any foreign brand for that matter, there are clear obstacles in China, such as effective government contacts and protection of intellectual property rights. However, a clear advantage Apple has is its strong brand image with Chinese people. Many mention Nokia's spectacular demise when they talk about Apple's future, but Nokia's brand image in China was, and remains, very different to Apple's.

Nokia enjoyed huge success in China until recently but - and it is a big but - this was achieved with rational positioning of the brand only. For example, Nokia was perceived as "high-tech", "leading edge" and "excellent quality" but did not achieve, or even attempt to achieve, any emotional positioning in the minds of Chinese consumers. If brand history tells us anything it is that sustainable competitive advantage is achieved only with effective emotional brand values as well as a functional or rational proposition. This, more than competitor technological advance, is the key to Nokia's recent fall.

On the other hand, Apple enjoys a brand image that includes not just "high-tech", "state of the art" but also "fun", "cool", "fashion" and "happy". It is these emotional values that have contributed most to Apple's success, especially in China, where the public value emotional association greatly.

Apple has positioned itself so positively and emotionally deep in the minds of Chinese consumers with brand name and company place-of-origin association. California is perceived by many Chinese people as "cool", "exciting" with Hollywood and a sunshine, beach culture. The brand name also evoked feelings of "fun" and "happiness".

Apple also continues to benefit in China from the association with the late Steve Jobs. To the Chinese, Jobs is seen as a charming, engaging, effortlessly charismatic, stylish leader, which adds considerably to the brand's emotional image. Many can still picture him introducing Apple's latest blockbuster, breakthrough products such as the iPhone and the iPad. Jobs both informed and entertained simultaneously, with his audience captivated at all times.

Jobs' style and image resonate with the Chinese public, who are used to business leaders with a very different, authoritarian approach and persona. It is extremely difficult to imagine any of the current Chinese business leaders performing on stage as Jobs did, yet this is key to such an emotional image, a Velcro-like attachment between brand and celebrity. Jobs was indeed a celebrity and not just a business leader.

Apple's logo, with a bite having been taken from the apple, also contributes to its emotional image, creating a feeling of excitement and even opportunity. Apple very cleverly omits the word "Apple" from its logo, instead just presenting a picture of the fruit with a bite taken.

Such a successful strategy in China, where brands are still consumed publicly for symbolic meaning such as "status" and "success", should be noted not only by Apple's closest competitors but by all those companies seeking to win over the extremely brand-conscious Chinese public.

Despite Apple's success in China, perhaps the major challenge to its increasingly emotional brand image is accurate financial brand valuation, especially in China.

Apple, therefore, paves that way for different financial valuations according to groups of consumers who interpret and perceive the brand very differently. For example, Apple to most US consumers really is "high-tech" and "functional" but while the Chinese also share this interpretation they also perceive Apple as a vehicle to enhanced "status" and "prestige". Financial brand valuation, therefore, has to become multi-faceted, driven by emotional perception and not financial ratios.

Quantification of brand value not only depends very much on the brand's current customer base and the extent to which they are brand loyal and have become emotionally attached to the brand but also to the prospects for increased market share over the medium term for the brand.

Apple's success in China should be seen as a lead for others, including Chinese companies that rely far too much on little or no clear positioning and simply compete on price. It is quite feasible for Chinese companies to develop the sort of emotional brand image that Apple enjoys. One advantage Chinese companies have over foreign competitors in China is the abundance of emotional brand attachment opportunities that Chinese history offers. It is far easier for Chinese companies to associate themselves and their brands with aspects of Chinese history, for example the five famous mountains and the multitude of national festivals.

Let's finish by restating the importance of solid, rational positioning before any emotional image can be developed. It is no good trying to build a "fun", "cool" image if the brand does not perform consistently to the highest quality level. It is also insufficient to build a successful rational and emotional brand image only to become complacent and ignore the importance of continuous improvement and innovation both functional and emotional. Nokia's success led to such oversights.

In order to achieve this happy blend of rational brand performance and emotional attachment consistently and with innovation and creativity always part of the brand's future, an inclusive, team-oriented and egalitarian management culture appears essential. Such a modern management culture also regards investment in human resources, in the form of training and career development, and new technology as just that and not as a cost to be either avoided or at best regarded as a necessary evil.

Investment in human capital also includes generous holiday provisions, which serves to engender a sense of well being among employees and enables far more creative and innovative thinking. Far from leading to a decline in productivity, more generous holidays and a genuine separation between work and home life has been seen to contribute to a more productive as well as a more contented workforce. Germany continues to represent, by far, the most productive economy across Europe, while the German workforce enjoys the highest number of public holidays.

Such an open, encouraging management culture is certainly characteristic of many of today's globally successful companies such as Apple and Google. More and more Chinese companies are moving in this direction, which is encouraging. However, a more rapid and permanent change in management culture would go a long way toward the emergence of the first truly global Chinese brand.

Apple will continue to eat into China's consumer market and enjoy the fruits of success and at a healthy pace, as long as the competition remains reticent when it comes to emotional image development and reluctant to invest heavily in innovation and new product development. However, a note of caution is required, even where Apple is concerned. At present the combination of (emotional) Apple and (rational) iPhone works but only because the name Apple dominates, but this will not continue indefinitely.

Apple needs to consider a more emotional name for subsequent smart phone upgrades and other high-tech innovation, as people become more technologically knowledgeable and tire of names that simply attempt to describe basic product functionality.

The author is a researcher at Nottingham University's School of Contemporary Chinese Studies. The views do not necessarily reflect those of China Daily.

(China Daily 04/27/2012 page9)