Home EuropeEurope II 2002 Telecommunication, Competition and Branding in Eastern Europe

Telecommunication, Competition and Branding in Eastern Europe

by david.nunes
Martin RollIssue:Europe II 2002
Article no.:8
Topic:Telecommunication, Competition and Branding in Eastern Europe
Author:Martin Roll
PDF size:20KB

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Article abstract

Eastern European (EE) telecommunications are becoming increasingly competitive in response to the market, the information economy the WTO and the EU. Few, if any, of today’s international telecommunications brands come from Eastern Europe. To build their revenues, EE telecom companies need to build internationally recognized brands to drive their entry into world markets. Businesses and consumers place increasing importance on brands they know and trust. Companies whose brands are global reap clear benefits in terms of growth and market capitalization.

Full Article

Eastern European telecommunications companies are now undergoing rapid change. The formerly state-run sector is liberalising, privatising and becoming increasingly competitive in response to the demands of the market, the information economy and agreements made with the WTO and the EU. The incumbents need to find new ways to drive growth over and above that derived from their traditional income stream from fixed line subscribers. Examples of companies, in the midst of tremendous change – adapting themselves to the new world – are Hungary’s Matâv and Poland’s Telekomunikacja Polska. Eastern European telecommunications companies, as a result of their histories as state owned monopolies, have been accustomed to provide services without much emphasis on branding and marketing. In the past, they provided services without personality, without values and without a distinct character. One can still see evidence of this fading attitude from the past. Only a few internationally known telecommunications brands have originated in Eastern Europe. In contrast, there are known brands galore from almost all Western telecommunications companies. The time has come to remake this outdated heritage to reflect the new Eastern Europe that is finally emerging. A combination of many factors is driving globalization and forcing businesses to look outside their home markets for growth opportunities in new markets as well as for economies-of-scale and diversification to improve their risk/reward ratio. However, the competition in the global business environment is increasing and creating a unique market position and competitive advantage becomes more and more difficult and expensive. The high level of investment necessary to maintain production capabilities, and the rising cost of R&D for product differentiation – efforts needed to keep from being perceived as just another generic service provider – puts totally new, intense, demands on Eastern European management teams to cover these heavy investments. The Eastern European telecom companies that aim for wider markets and success in the future will have to create and implement a global brand marketing strategy. They will, however, need to build a better return on their revenues, and to move up the value chain to enhance their profit streams. Brand Marketing for Telecommunications Companies Today, businesses and consumers are placing increasing importance on brands. Brands give us identity, stimulate our senses and enrich our lifestyle experiences. It is a human need to affiliate and surround ourselves with things we know, trust and aspire to be. Strong brands with unique appeals championed by passionate leaders are becoming the body and soul of the 21st century businesses. They are strong drivers of business growth and are helping to create new types of telecommunication and IT companies with a competitive edge. From a local point of view, there is no clear differentiation between the value of a strong domestic brand – such as the brand portfolio of SingTel in the South East Asian telecommunications market – and that of an international brand, such as AT&T, a familiar name around the world. From a broader perspective, however, we find that the market capitalization of leading branded companies with substantial growth outside their home markets has greatly outstripped those who were less then adventurous outside of their home markets. Comparison of the market capitalization of leading, global, strongly branded firms clearly shows that the market puts a premium on those firms seeking to build international brands and capitalize on growth opportunities wherever in the world they can be found. The priority, it should be noted, is to build global brand leadership, not just a global brand. As more and more telecommunications companies come to view the entire world as their market, brand builders look with envy upon those have created global brands – brands whose positioning, advertising strategy, personality, look, and feel are in most respects the same from one country to another. It’s easy to understand why. Even though most global brands are not absolutely identical from one country to another – TDC (former Tele Denmark) means something different in the Denmark than it does abroad – companies whose brands have become more global reap clear benefits. Leadership for Successful Branding A branding effort, to be really effective, be embodied and led by the CEO. He must be the company’s, and the brand’s, primary advocate and nurturer. It helps when the top executives have a passion and talent for brand strategy, but in tomorrow’s tough environment all top-executives must be able to represent and lead the brand. The leadership of companies such as – SingTel, AT&T, NTT Docomo, Telefonica, BT, TDC, Vodaphone and Orange all meet that description. Tomorrow’s CEO must be a brand champion who approves corporate and product branding strategies, all brand-stretching decisions and monitors the presentation of the brand worldwide. He or she must be familiar with local contexts and managers, identify insights and best practices, and propagate them. In the best-prepared companies, the local CEO acts as the brand champion. He “owns” the country brand identities and positions and takes responsibility for ensuring that the country teams implement the brand strategy. A strong CEO has credibility and respect not only because of business talent and organizational power but also because of a depth of experience, knowledge, and insight. A suggestion from a visionary CEO with branding talent and experience gets careful consideration. Corporate Branding Strategies of Telecommunications Companies Successful global brand leadership means using organizational structures, processes, and cultures to allocate brand-building resources globally, to create global synergies, and to develop a global brand strategy that coordinates and leverages country brand strategies. That is, of course, easier said than done. For example, companies traditionally tend to give the bulk of their brand-building attention to countries with large sales – at the expense of emerging markets that may represent big opportunities. But many companies have successfully engaged in global brand management, and in our experience four components are crucial: · Simulate the sharing of insights and best practices across countries · Support a common global brand-planning process · Assign managerial responsibility for brands in order to create cross-country synergies and to fight local bias · Execute brand-building strategies, sharing insights and best practices globally Implementing the Strategies in the International Market – Caution! There are six guidelines for international expansion which Eastern European companies need to follow for marketing and branding success: i. PREPARE: Before the launch, prepare adequately. Make sure that the business addresses unique consumer needs and survey the ground before tailoring the business. Plan and prepare from the outset to go international. Assess the company’s culture, its management team, and their international experience. Learn from others, be open to change and involve internationally oriented leaders from the key expansion markets. ii. SCALE: Build a flexible, scalable, business model. Make sure all processes can be revised and expanded in response to technology and the commercial environment. Devise a business model that can be replicated in new countries and markets without re-inventing the wheel. CEOs should ask: If I were to be travelling for 6 weeks, can the company automatically move on and enter new markets without problems? If yes, the company is ready and processes are in place. If no, the likelihood of failure with international expansion is great. iii. INTEGRATE: Technology and commercial issues are not the only factors. Involve marketing and strategic branding as an important part of your management process. From planning and design to launch, after-launch and marketing, they should be fully integrated to communicate and provide a complete picture of the products and services to the distribution channels and the consumers. iv. EDUCATE: Where and how to get the products/services. Convey the benefits that the company bring to consumers. Build marketing and branding programs for the new markets. Involve the distribution channels as they have in-depth knowledge of local tastes, behaviours and attitudes. Make your own judgements, but listen carefully to others. Avoid the “not-invented-here” syndrome. v. TRACK: Start with a well-thought product/service, monitor the market feedback and track consumer perceptions and reactions, and constantly improve the business model and replicate best practices. vi. DELIVER: Deliver on your promises to distribution channels and consumers. By over-promising and under-delivering you undermine trust and confidence in your business. Empower distribution channels to convey your best experiences to the customers; these channels are the face of your branding strategy. Eastern Europe- an International Branding Battleground During the next five years, there will be rapid changes in Eastern Europe and the opportunities for telecommunications companies to benefit from international branding efforts will be greater than ever before. International branding will move up the boardroom agenda and, I believe, will become one of the most prominent drivers of value in Eastern Europe in the coming decades. Businesses with a sustainable business model, with visionary CEOs with branding talent, will start to emerge on the global scene. The modern Eastern European company leader will need to be a complete player who can cover all bases and have the vision to follow through. Being a marketing wizard is no longer enough. One has also to be an excellent business leader and brand marketer with a truly international edge. One must be a leader who surrounds himself with highly skilled people with global experiences – troops able to deal with rapid change. This is how to win an international branding battle. www.venturerepublic.com

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