‘Made in Japan’ Brand Still Resilient

Corporate Japan has been trapped in a multi-decade long slump, but ‘Made in Japan’ is still demonstrating remarkable resilience, with brands including Sony, Panasonic and Canon dominating the list of the most valued brands in Asia-Pacific for 2011, according to a recent survey by global media firm Haymarket Media.

Sony Building
Shizuo Kambayashi
Sony Building

Despite a recent security breach, unfavorable foreign exchange rates, and the Japan earthquake, Sony took the number 1 spot as the best-known brand in Asia Pacific for the fourth year in a row. The company trumped popular American brands such as Apple , Hewlett-Packard and Google , which came in at number 6, 7 and 8 respectively.

The survey, which spanned across ten markets in Asia, asked over 3,330 respondents aging from 15 to 64 to disclose the brand they felt was the best or the most trustworthy in 14 major product and service categories.

“Brands like Sony and Panasonic have succeeded by creating great products and engaging consumers consistently over time, so that even when faced with a crisis, customers maintain their loyalty,” Mike Amour the CEO for Asia Pacific at Project Worldwide, a firm that specializes in engagement marketing, told CNBC.com.

“In the 1970’s, Made in Japan meant poor workmanship and cheap products…but Sony took a long term view on brand building, with a focus on developing unconventional ideas, which are brilliantly executed and which got attention and results,” said Amour.

In addition to impressive product innovation seen in gadgets such Sony’s Walkman or Toyota’s hybrid vehicles, investment in advertising has been a large contributing factor in the success of Japanese brands.

Japan is the second largest advertising market in the world with $46 billion in ad-spend in 2010, according to communications group Zenith, behind the United States’ $151 billion.

“Japanese brands are built on scale, heritage, product differentiation and significant (advertising) spending,” said Tom Doctoroff, North Asia CEO at J. Walter Thompson (JWT), who points out that much of the creative, brand building responsibilities for Japanese consumer firms have been outsourced to multinational agencies.

Doctoroff believes the country’s brands will continue to dominate consumer loyalty in Asia going forward, particularly because Japanese companies are ramping up their focus on international expansion.

This is becoming evident in aspiring multinational corporations such as Ricoh, Nikon and Fujitsu, which are currently collaborating with international brand building experts to increase their reach worldwide.

But not all agree that Japanese brands will continue to rule the roost in the long-term. Shi Zhang, Assistant Professor at The Anderson School at UCLA points out that while they occupy a large “mental” space for middle-aged to older consumers in the region, this trend may begin to fade with younger consumers.

“Try to pool younger consumers, as I have done so informally in my classes of 45 people by asking students to raise their hands. Their reactions are different, they are less likely to be attached to Japanese brands.”

He says younger Asian consumers are beginning to favor South Korean brands including Samsung and LG Electronics, both of which are also ranked in the top five.

‘Made in China’ Stigma Lingers

Amour, Doctoroff and Zhang are all in agreement that it will take years before Chinese brands begin to win the hearts of Asian consumers.

“Chinese brands have their own domestic markets to conquer before they can successfully venture overseas,” Amour said.

Despite China’s large consumer market, no single mainland brand made the top 100 section of Asia-Pacific Brands list. Home appliance maker Haier , was the closest to the top, sitting at the 102nd spot.

“There is absolutely no Chinese brand right now that is actively preferred to Western or Japanese brands,” Doctoroff said.

However, he added that mainland consumer firms are beginning to understand the importance of image.

One such push by Chinese consumer firms to increase brand recognition is via product placement. The recently released Hollywood movie, Transformers 3: Dark of the Moon, featured products from mainland names including PC-maker Lenovo , flat-screen television manufacturer TCL and leading dairy products firm Yili .

This may be one small step in the right direction, but Doctoroff points out they still have a long way to go.

“The real barrier is the structure of Chinese organizations and their focus on short-term sales versus long term growth. Chinese CEOs are not solely motivated by gains in shareholder value, they have one eye focused on the market and the other one on political motivations,” he concluded.