Branding: A vital part of marketing strategy

Branding: A vital part of marketing strategy

Cepi Husada
Contributor
Jakarta

When shopping in the well-known malls of neighboring
countries, many Indonesians come in for an unpleasant surprise.
Dresses bearing brands like Kenzo, St. Michael and Nino Cerruti
or shoes carrying Reebok tags are in fact made in Indonesia.
Clothes from other major brands are also made in countries like
India, China and other developing countries.

Not many people are aware that Indonesia is a "tailor shop"
for these internationally renowned brands. While garments were
once a major earner for the country, most garment manufacturers
have to fill orders for international brands. Obviously, cheap
labor is one of the reasons they get their products made here.

The textile and garment industry has been further hit by the
depreciation of the rupiah and the costly imported machines and
other elements. Things have also been made more difficult as
banks are not in a position to provide loans to this unpromising
sector.

What is needed is branding, which offers the most strategic
value in marketing. When the economic crisis hit, the country's
tailors suffered while the international brand owners remained
relatively safe and secure. Another example was when there were
demands here for higher wages and these brand owners just
relocated their manufacturing plants to countries such as
Bangladesh, Vietnam and China. This was evident in the case of
Nike shoes, which only cost some US$10 to produce but are sold in
the United States for 10 times the manufacturing cost.

Establishing a brand equity -- one that is as solid as Nike's,
for instance -- is not an easy job. But Indonesian companies have
to have to start thinking about branding or forever remain the
poorly paid producers of quality and original branded products
that are owned and marketed by outside parties. Also, the cost of
our labor is no longer competitive in comparison with other
developing countries, meaning Indonesia might not even be able to
fill the role of "tailor shop" in the future.

While our marketing experts agree that branding is one of the
strongest elements of marketing, the country still remains a
nation of consumers not producers of leading brands. Everywhere
we go we are surrounded by all sorts of branded products, from
cars and shoes to dresses and food: BMW cars, Armani shirts,
Ungaro perfume, Bally shoes and McDonald's burgers.

The strength of branding is also proven by the crowds flocking
to sales and factory outlets that carry "branded" items at
discounted prices.

How strongly a brand influences consumers is illustrated even
by the extension products launched by McDonald's, like its Happy
Meal, which is another success story in that brand's entirely
solid image.

In view of the importance of branding, it is high time that
Indonesian businesspeople and manufacturers rolled up their
sleeves and started working toward achieving this asset. Now more
than ever, products without a solid brand do not stand a chance
of success in today's merciless marketing battle.