Branding lessons from Apple that Singaporean firms must learn

Since the launch of Apple Worldwide Developers Conference (AWDC) on 10-14 June at San Francisco, there had been little hype around the Apple brand till the recent release of the new iPhone 5C and iPhone 5S products on 12 September 2013.

The products were received with some disappointment, mostly revolving around the pricing and the expectation of a product revolution of the iPhone series. In this episode, it seems that Apple’s overall branding strategy requires fine-tuning.

Branding losing lustre

As with every Transnational Corporations (TNCs), branding fatigue among consumers is common. This is especially so for Apple, whose brand is often associated with disruptive and innovative products that captured the hearts of consumers worldwide.

With only incremental innovation and no revolutionary product, there is a die-down enthusiasm associated with the brand. This marks a declining attraction to the brand with consumers shifting their hearts to other big players’ product competing in the same Smartphone market. It appears that consumers are growingly less mesmerized with the brand and its associated products.

Brand confusion? The iPhone 5C & iPhone 5S release

One of Apple’s proudest product ranges, iPhone, received much disappointment from both investors and consumers after the recent pricing release of the new models.

The iPhone 5C, which is expected to penetrate into emerging economies, may find headwind due to the still “pricey” price tag. Consumers in these emerging economies may be deterred from purchasing the cheaper version, as the price is still far from the affordable range and is relatively expensive compared to rival smartphone series.

The expectation of consumers is tarnished by Apple’s pricing and could induce consumers to search for other leading Smartphone brands or perhaps even local imitate designed and manufactured phones that resemble the appearance of iPhone products.

This creates a terrible situation for Apple’s branding since consumers who purchased these imitate phones maybe mislead to believe that it is the authentic version. Therefore, Apple risks facing brand “degradation” in emerging markets.

Likewise, the price difference for iPhone 5C and iPhone 5S appears to be too narrow for consumers to choose iPhone 5C given that consumers may view greater marginal benefit to purchase the iPhone 5S.

As such, iPhone 5C tend to be viewed as an “isolated” product of Apple that fits awkwardly in the iPhone brand of Smartphone. The brand name, Apple, and its subsequent brand- iPhone, may no longer be able to command a strong branding message for all of its Smartphone leading to brand confusion.

In short, there needs to be an overhaul of the branding strategy. Furthermore, this problem is also applicable in other industry such as the cosmetic line. Suppose there is a brand A and under this brand, there are multiple products such as cleanser, toner and masks. The key question to ask is:

Can the brand sufficiently and effectively bring out the brand message and create affinity in the minds of consumers?

When people think of Brand A, or even your company or product brand, can they think of any positive images of the products under it? The key issue lies in the fact that Apple’s branding strategy appears to focus on a global market perspective without much focus on localized branding in a certain way.

As such, for Singaporean companies to go global, one must strongly adopt the “glocalisation” method, that is going global and acting local. This would allow the brand to be deeply immersed in a new cultural setting and improves brand standing.

Dilution of brand capital -- the woes of outsourcing

Despite being a generally well-loved brand, Apple has not been spared from intense criticism; as the saying goes “with great power, comes great responsibility”.

Apple is a great brand, and still command a reasonable high market and brand power that can accrue brand capital and thus consumers are willing to pay a premium for its products. Nevertheless, with such market leadership power, it faces intense scrutinisation by global players -- consumers, human rights groups and government agencies.

Such complex power relationships are also applicable to Singaporean firms who venture abroad. Competitors and consumers have the rights to start demanding higher ethical standards on the company.

If services are outsourced, companies must assure that the similar consistent high standard of services in parent companies by their affiliated partners.

Third parties criticism of Apple’s contract manufacturer and service centres are valuable lessons to be learnt for Singaporean companies. These manufacturers though, are not owned by Apple have evoked unhappiness among consumers who are increasingly educated in human rights.

With consumers willing to pay a premium for Apple product due to its branding capital, they would also wish to see that the products they purchased are manufactured under ethical work conditions.

In addition, after product service is critically important. Apple focuses on designing the software of its product while outsourcing other key functions to third party companies. The servicing centre in foreign countries is a potential avenue for branding damage.

Although Apple may have a clear set of service quality requirement for these affiliated service centres, there can be difficulty for Apple to promptly assess its affiliated partners’ service quality. This means that its overall branding can be jeopardized and put at risk by its partners’ performance in ensuring consumers’ satisfaction of its product.

This problem is perhaps a prevalent concern for Singaporean firms who have outsourced a large portion of their operations as they embark on overseas expansion. Parent company must have a strong and effective control of its outsourced partners’ processes so as to ensure that its brand is not damaged by irresponsible affiliated partners’ behavior.

While the list can go further, a key important lesson is building brand capital through building affinity with consumers. Successful brands are those in which consumers have a natural liking for its product.

To achieve that, it would require companies to achieve brand consistency in its advertising, products and ensure a certain control level of its affiliated partners.

Only when all these are achieved, the company can start to accumulate brand capital and enjoy the benefits of being a well-liked and trustable brand.

Stay cool and enjoy the entrepreneurship journey!