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Home >> Opinion
UPDATED: 16:12, February 28, 2005
"I never said that Haier and Lenovo are not brands"
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Photo:Shelly Lazarus, chairman and CEO of Ogilvy & Mather Worldwide based in New York
Shelly Lazarus, chairman and CEO of Ogilvy & Mather Worldwide based in New York
An exclusive dialogue with Shelly Lazarus

Shelly Lazarus is a household word for most of Chinese advertisers and business public relations professionals. As Chairman and CEO of Ogilvy & Mather Worldwide based in New York, Shelly has long been touted by Chinese media as a female who knows brands best in the world than anyone else. Her beautiful Chinese name Xia Lanze are frequently mentioned with affection on Chinese newspapers.

Unfortunately everything changed all of a sudden after November 8, 2004. According to a news story on that day, American Business Week correspondent did an interview with Shelly in Beijing. During the interview, Shelly was quoted as saying "Lenovo and Haier are not brands at all and so far China has no brands in any real sense". The remarks made by Shelly have drew widespread attention in China. Some passionate and patriotic newspapers attacked her assertions as nonsense. In order to put the fire under control, Mr. TB Song, CEO of Ogilvy & Mather China even issued an usual statement afterward, saying that the Chinese media misunderstood the standpoint of Shelly.

Is she really misunderstood? Is the brand building of Chinese companies a futile effort? In order to get the answers, our People's Daily Washington-based correspondent Yong Tang conducted an exclusive interview recently with Shelly.

Yong Tang: Now do you want to clarify and say directly to Chinese readers about the above-mentioned media wrangle?

Shelly Lazarus: I never said that Haier and Lenovo are not brands. They are brands. They are brands with huge potential. They are just not yet as fully developed as brands can be.

I have applauded the success of Haier and other Chinese companies in building brands and the commitment of their leadership. It's clear that Chinese people have very strong emotions about Chinese brands. This demonstrates that many Chinese brands have successfully created a strong 'emotional bond' with people. This is one of the most important factors in achieving a successful brand.

Ogilvy & Mather is very much committed to building Chinese brands, both in China and in overseas markets, where we think there is great potential for growth.

Yong Tang: What are the major obstacles in China's effort to build its own international brands? What could Chinese enterprises do to build their own brands?

Shelly Lazarus: The simple answer to the first question is time and experience. We have been building modern brands in the West for more than a century. However, the Chinese have a great advantage in that they can draw on that experience quickly to their own advantage.

Let me explain how we at Ogilvy & Mather define a brand. Every brand is a product, but not every product is a brand. A product is made up of tangibles: features, offers, specific functions.

A brand is the intangible sum of a product's attributes, its name, packaging, and price, its history, reputation and the way it is advertised. A brand is also defined by consumers' emotional connections to it, created by both their impressions of the people who use it, as well as their own experience. This includes the rational and the emotional responses of consumers.

It's clear that many senior management at Chinese companies are very committed to building their brands. And they also benefit from the strong encouragement by the Chinese government, which is actively supporting overseas development. To the extent that attention is paid to building up the intangible aspects of their brands, including gaining deep understanding of their intended consumer, they will be successful.

The fact is, Chinese brands are facing the same issues that national brands from other countries must address when they go overseas. Like their international counterparts, Chinese brands have to establish and maintain an 'emotional' bond with local consumers, no matter the market. This is a challenging goal for any company seeking to partake in the global economy.

The biggest challenge for everyone is implementation. How to make the brand come alive - within the company and outside the company. At all points of contact with consumers, employees, investors, and others, the brand has to remain true and consistent.

One thing to remember is that there is no one model on how to grow into a global brand. If you look at most of the major global brands, each one follows a slightly different path that is most suited to that company and brand.

Yong Tang: Chinese PC giant Lenovo signed an agreement with IBM late last year to buy its PC services unit. People have different opinions about this merger. IBM is Ogilvy's long term client. Ogilvy has successfully helped IBM get rid of its cold image and make the image more personal. This is a classic example of why Ogilvy is so prestigious in the world. So you should be in a very good position to assess the impact of the merger between IBM PC unit and Lenovo?

Shelly Lazarus: This is a very exciting initiative and we look forward to watching the merger evolve.

Yong Tang: Can you name a few Chinese enterprises which could hopefully become global brands in the future?

Shelly Lazarus: There are already some Chinese companies, such as Haier and Lenovo that are well on their way to becoming global brands. In fact, we are partnering with leading companies in China as they formulate their plans to further establish their brands overseas. Recently, Ogilvy had a meeting in France, at the home of our founder David Ogilvy, where several of our Chinese clients came to hear advice from global experts on branding and marketing. I think it's too early for us to be commenting on our clients' specific plans, but there is no doubt from the quality of this meeting , and others, that Chinese companies are committed to success in the global arena, where branding is essential.

Yong Tang: Whenever brand building is mentioned, many companies would think of advertisements immediately. David Ogilvy, the founder of Ogilvy & Mather, once said that every piece of advertisement is just a part of long-term investment in brand building. However, many Chinese enterprises face just one common problem: They put a lot of money in advertisements while the result is not as satisfactory as they expected. Why could this problem occur? In other words, how to make advertisements more effective?

Shelly Lazarus: As David Ogilvy pointed out, the real purpose of advertising should be to help build a strong brand. In order to see a real return on advertising investment, a company obviously needs the kind of advertising that will establish and build the brand. That a strong brand is needed to drive superior business performance is recognized the world over. Brands like Coca Cola attribute as much as 95% of their total company value to 'intangible assets' - of which brand value is a large part. The ability of strong brands to drive superior business performance is also well recognized in China and has been reaffirmed by recent research Ogilvy conducted in Shanghai with WPP partner, Millward Brown.

Our research shows strong brands drive higher product preference and command a price premium. On average, Shanghainese consumers would pay 70% more for a strong brand than for a commodity. Furthermore it is proven that a strong brand is able to attract more loyal (and therefore profitable) customers and has much more potential to grow market share in future.

In order to ensure that their advertising is more effective, companies need to clearly define the brand they want to build and ensure that their advertising (whether it be TV, print, radio, outdoor, in store, online, etc.) helps communicate the brand message consistently and effectively. Advertising which doesn't help to build the brand may well generate short-term returns but will not generate longer term growth. Building brands is not a short-term tactic, it is a long term business strategy.

Yong Tang: Many Ogilvy advertisements are very creative and original. They deserve the title of Advertisements Classics. How do you think of the importance of originality in the process of advertisements production? In Ogilvy, what measures have been adopted to inspire its employees to come up with original ideas?

Shelly Lazarus: Creativity is the most highly valued attribute at Ogilvy - and we remind our people constantly of that, from sharing our best work from around the world, to giving out internal awards, to hanging our ads on the wall as framed fine art. We know we must have creative, innovative ideas to distinguish and communicate our brands, and to make meaningful connections with consumers. You cannot bore, offend or irritate people into buying your products. Shrill ads may get attention, but they won't gain affection, and at the end of the day people are more likely to part with their money for brands they like. Advertising is an important way to build likeability, but that takes originality and creativity.

Yong Tang: Is there any other good method that could be used to promote a brand in addition to advertisements? I know that the Editor of the Global Times is eager to build a strong brand for the newspaper. Affiliated with People's Daily, the Global Times is an international news tri-weekly with a circulation of about 1.5 million. In China, the Global Times is already a leader in international news coverage but my Editor still wants to make the newspaper better respected and even more famous. Do you have any good suggestions for that?

Shelly Lazarus: The brand is the relationship between the product, in this case the newspaper, and its readers. While it's hard for me to know the Chinese media market, I can say that the most successful media have built out from their reputation with loyal followers through other communication channels. The Economist, for example is a client of ours, and it has a reputation with its readers for original, insightful news coverage. We have created traditional and non-traditional advertising, promotions, and special events that reflect that ethos. The campaigns we've created for The Economist have worked well, because just like The Economist, they are unexpected, inspiring, and thoughtful.

Yong Tang: Many people know that Ogilvy's clients include a lot of famous multinationals such as IBM, Federal Express, BMW and Unilever etc. But many people don't know some governments are also Ogilvy's clients. As far as I know, Indian Financial Minister is one of your client. He asks Ogilvy to enhance India's international image in the world. His hope is: Whenever I talk about India, I want people to think of software rather than elephants. Is this true? What services could Ogilvy offer to those governments? How is the result of those PR efforts?

Shelly Lazarus: Worlwide, Ogilvy has worked with many different local and national governments on a variety of communication initiatives, from general reputation and image efforts surrounding tourism, to others aimed at economic development and revitalization. We just developed a wonderful campaign for India that goes beyond showing the country's rich cultures and inspiring physical beauty, to promoting it as a place of great potential, an exciting forward-thinking country. Right now, we are involved with the French Government in an effort to attract more international business investment in France - a country often celebrated for its cultural qualities, but not its business side. In all cases, we find the same principles of brand-building that we use for traditional companies can apply to the communication challenges facing geographic entities.

In China, we are working with some local governments and organizations, such as Shishan Development Zone in Guangdong province, and the Shanghai Expo organization.

Yong Tang: Some people claim that Ogilvy is not very successful in China. How do you think of this comment?

Shelly Lazarus: Ogilvy China is one of the leading marketing communications groups in the country, both in terms of revenues and people. The company is the only network able to offer a genuine 360 degree offering of marketing disciplines. In each area - advertising, direct marketing and public relations, Ogilvy is the unmatched leader.

It has a list of blue-chip Chinese and multinational clients who are deeply committed to brand building in China.Our Chinese clients include: China Mobile, Great Wall Wine, Bright Dairy, Haier, TCL, Tsingtao Beer.Our multinational clients include: Coca-Cola (Sprite), Cisco, GSK, IBM, Kodak, Motorola, SAP, Unilever.

Also, I would have to say that we consider Ogilvy China to be one of our most successful and important units, and we anticipate great growth and opportunity on par with the growth of China overall.

Yong Tang: You have been ranked many times by the magazine Fortune among the Most Influential Females in the World. What advantages does a female top executive have in managing a huge company like Ogilvy?

Shelly Lazarus: My advantage is that I had the good fortune to grow up professionally in a company where meritocracy was the norm. In a company which values ideas and creativity, it doesn't matter where or who they come from, male or female. Being a female did give me some advantage early on in my career; I was often the only female in the meeting, and when we were discussing how to sell products bought predominantly by women, like hair shampoo, people inevitably turned to me for my ideas. That has long since changed, and I am proud of the fact that Ogilvy is full of talented men and women. In fact, I think that organizations that do not have a diversity of people, from all kinds of ethnic backgrounds, educational experience; of different ages, are poorer for it.

Yong Tang: What books and people influence you most?

Shelly Lazarus: I am not a big fan of business books in general. They tend to be either too academic or too ego driven. Usually you learn everything important in the first chapter anyway. I think I am more influenced by my senior colleagues at Ogilvy - who have proved the value of the long-term partnership - and by my clients, who have taught me so much over the years about how to lead, how to do it with grace and humanity. I also think that staying abreast of current events, being curious, is vital in a world that has grown smaller and more interconnected. Books, periodicals and newspapers that open up the world with true intelligence and insight are invaluable.

Yong Tang: How do you think of the future of Chinese companies' brand building? Are you optimistic or pessimistic?

Shelly Lazarus: As I said earlier, I think the prospects for Chinese brands, and Chinese brand-building are excellent. Every meeting I have with Chinese business and economic leaders underscores a real willingness to understand and employ the best brand thinking we have in developed economies in order to make their own brands prosper. With that focus, it is not a question of whether these companies succeed, but when. (END)

By Yong Tang, correspondent of People's Daily Washington Bureau


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