4 questions on brand migration strategies for APAC brands with Jeff Lapatine

SMPL Q&A is a blog feature in which we interview experts on all things relevant to branding, design and simplicity. In this Q&A we speak with Jeff Lapatine, strategy director, about brand migration strategies for APAC brands. 

 These days the Asia-Pacific region is seeing a great deal of brand migration movement, with US and international companies seeking a foothold in local markets, and APAC companies seeking a more global presence. These case studies show that the creative use of acquisition, joint venture and licensed names can be effective tools for easing brand migrations.

What’s an example of an APAC brand that expanded its global reach through acquisition?

In the early days of laptops, IBM created its iconic “ThinkPad” brand. The colorful ThinkPad logotype stamped alongside the keyboard helped build preference for these computers and set the stage for competition between Apple and IBM—Apple had its creative and simple MacBooks, while IBM had its intelligent and businesslike ThinkPads.

By the turn of the century, IBM was charting a new course. As its hardware business became less profitable, IBM lost its appetite for manufacturing and selling personal computers and instead invested in business consulting solutions. As a result, it sold its PC division to the Beijing-based Lenovo Group.

Lenovo has come a long way in establishing itself as a global brand, in part with the success of its 2005 acquisition of IBM’s personal computer division. By 2015, Lenovo established itself as the world’s largest PC vendor measured by unit sales.

The complete migration took just two years, too fast in the eyes of some experts. However it worked well for several reasons. While Lenovo had a strong tech presence in APAC, the brand was less known in the US and other regions. During the migration period, Lenovo benefited from IBM’s continued sales channel support in the US. Additionally, its retention of the ThinkPad product brand smoothed the way for eliminating IBM from the equation.

Initially the PCs carried the IBM ThinkPad logo, and advertising employed both the IBM and Lenovo logos with IBM in the lead. However, by the end of the two-year migration, the IBM name was removed, making room for the “Think” in ThinkPad to transfer IBM’s brand equities to Lenovo. The Think in ThinkPad also helped Lenovo’s subsequent acquisition of IBM’s enterprise servers, eventually named Lenovo ThinkServers, and enabled the company to leverage the attributes of “thinking” in other promotions as well.

What would be a good example of revitalizing a well-known product campaign to build brand relevance in the global marketplace?

You may remember in the 1990s, Motorola successfully named and marketed its cell phones around the world using the “Moto” brand, with “Hello Moto” becoming a well-known catchphrase. However, during this time Motorola overextended its use of Moto across different consumer and b-to-b products. The Moto sub-brand and campaign became tired, and with cell and smart phone competition from Samsung and Apple whittling away at Motorola’s profitability, the company sold its cell phone arm to Lenovo.

When Lenovo acquired the business, it saw a hidden gem in the abandoned Moto mindset. Not only did they decide to keep the Motorola brand intact (endorsed by Lenovo), but they once again started using “Hello Moto,” “Moto by Lenovo” and “motonovo” to tout the new generation of smart phones and ease the transition to the Lenovo brand. In the US marketplace, this campaign currently receives a lot of media attention.

How can you leverage a joint venture to create local relevance?

Joint ventures and brand licensing arrangements are prevalent in the APAC region. In 2000, LG joint ventured with United Technologies’ OTIS Elevator Company to manufacture and market elevators and escalators in South Korea. The joint venture was intended to be temporary, long enough to create local relevance.

The joint venture initially was named LG-OTIS to leverage the powerful LG brand in APAC. As the OTIS brand became more familiar, the joint venture flipped its name, creating the OTIS-LG Elevator Company. Eventually, LG was eliminated and the brand became Otis Elevator Korea. This entire multi-staged migration took less than six years.

This strategy points to the fact that brand partners’ names can be used in various ways during a brand migration, easing the transition to the more pertinent global name.

What is the role of brand equity in post-acquisition strategy?

Samsung Electronics is currently acquiring Harman International Industries, well known for audio technologies and various global product brands including JBL, AKG, Mark Levinson and Harman Kardon. While Samsung will clearly be the parent brand, it doesn’t plan to eliminate the Harmon brand name from the marketplace because, along with the valuable underlying technology Harman brings, it also carries substantial product brand equity. Consolidating brands after an acquisition may be the most efficient, but not always the most strategic course of action.

One size does not fit all for APAC brand migration strategies. Many factors come into play. However, making the right decision about whether to keep acquired brand equity or transfer it over time is critical to success.