Asian Firms Hope to Raise Their Profiles Among American Consumers
Getting noticed is not always easy. Just ask the people at Samsung Group.
The South Korean company began a campaign about 10 years ago to make American consumers aware of its household wares--like microwave ovens, television sets and videocassette recorders--that were primarily sold under the names of more well-known makers. Now the Samsung brand appears on products sold in pricey department stores and promoted with $8 million worth of annual advertising.
The results? A consumer survey last summer showed that most people were still unfamiliar with Samsung. “When you mention the name to people,” said company spokesman Richard Leister, “it raises a question mark. There is still a bit of work to be done in order to build the national awareness of Samsung.”
Products made by firms in South Korea, Taiwan, Singapore and other rapidly developing Far Eastern nations have been sold in the country for years. But many of these companies outside Japan still have a long way to go before they win the recognition and customer loyalty--and the related rewards--in the United States that firms like Honda and Sony enjoy.
Many of these firms are corporate giants and world leaders in their businesses. Samsung, for example, is the world’s largest manufacturer of microwave ovens, and Kunnan Enterprises of Taiwan holds the title of the globe’s biggest maker of tennis rackets.
Yet the names of these giant firms and their products are still relatively obscure in the United States.
For example, Daewoo, the third-largest company in South Korea, ranked near the bottom of a recent survey measuring consumer awareness in the United States. In the ranking of 672 names, only four others were more obscure than Daewoo, despite a sizable ad campaign, according to Landor Associates, a corporate design firm that conducted the survey.
Lacking a strong identity can make it harder for a company to command the prestige and higher prices that are the privilege of a well-regarded brand name.
Costly to Create Image
“Established brands are very valuable commodities,” said Robert Kahn, executive director of Landor’s Los Angeles office. “It is generally a wise thing to do. It is difficult, though. There are so many competing brands and images that make it difficult to capture a share of the consumers’ attention.”
Creating a well-known brand name and image is a costly, time-consuming process. Not only must companies spend more on marketing and production to live up to that image, but they must battle against a huge number of competitors promoting their owns names and reputations.
Manufacturers from countries such as South Korea and Taiwan must also overcome lingering doubts in consumers’ minds about product quality and workmanship, said Renee Fraser, general manager of the Pacific division of the advertising agency Bozell, Jacobs, Kenyon & Eckhardt. Still, that’s a marked improvement from a decade ago when many Americans expressed an ‘ “I don’t think I would have bought something from Korea’ attitude,” she said.
In contrast, a host of Japanese companies can claim well-known names and an image for quality. But 30 years ago, the Japanese found themselves struggling to raise their profile and turn around a poor image much like today’s firms from emerging Asian nations.
“In the early 1960s, if you would say a certain product was made in Japan, you were ensuring its low-quality image,” said Clive Chajet, chairman of Lippincott & Marguiles, a corporate image consultant.
Aim for Dealers, Retailers
“It takes time to establish a world-class brand,” Chajet said. “It’s far too soon to judge whether these brands have succeeded or failed.”
Many companies have found it easier building brand awareness by begining with wholesalers and retailers.
Advertising for Pro-Kennex tennis rackets, made by Kunnan Enterprises of Taiwan, has mostly featured the technical aspects and quality of the company’s rackets. The strategy, which also pointed out that Kunnan was the world’s largest maker of tennis rackets, was aimed at making retailers and dealers aware of the brand, said Mark Wentura, senior marketing manager at Pro-Kennex. The ads ran mostly in trade publications.
Pro-Kennex, which has recently begun running ads aimed at consumers, is the third-best-selling brand in the United States--behind Prince and Wilson--eight years after its introduction in this country. “We’ve been accepted in tennis and now it will be easy to create an image as a racket sports leader,” said Wentura, referring to a new line of racquetball and squash rackets bearing the Pro-Kennex name.
While companies such as Kunnan build themselves a brand image in the United States, they risk losing as customers the many companies that sell their goods under other names. These companies, besides being steady sources of sales, also have established distribution networks and bear the costs of adverting and marketing.
“We worked hard not to ruffle anyone’s feathers,” Leister said at Samsung. And for good reason: Half of Samsung’s $800 million in annual U.S. sales are from products sold under other names, like General Electric microwave ovens.
Despite the importance of such sales, Samsung began selling its own brand-name products in the United States in 1978. First, low-priced Samsung-brand products appeared at mass merchandisers, such as K mart.
Then, two years ago, the company looked to upgrade its image by launching an advertising campaign and selling products at specialty-electronic and department stores. “We felt it was time to get away from the low-end image that Samsung had and promote the Samsung brand,” said Leister.
At the same time, the company expanded its U.S. repair and service centers. “If a customer buys a product from a company that they don’t really know, in the back of their mind, there is some concern,” said Liester. The customer, according to Liester, asks: What happens if it breaks?
During the 1988 Olympic Games in Seoul, Samsung, along with many other Korean companies, advertised heavily during television broadcasts of the games. This fall, Samsung launched its first nationwide print campaign, which touts Samsung quality in such publications as National Geographic and Smithsonian.
“It’s just the begining,” said Leister. “Not only do we have to get the name recognized but have it associated with a quality product.”