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Corporate reputation: you can't take it with you.

North American companies have more than U.S. $48 billion invested in Asia. Some have been here for more than 100 years. Yet only eight U.S.-based companies(*) ranked in the top 50 of Asia's Most Admired Companies in a survey by Asian Business magazine.

* North American companies employ hundreds of thousands of people in Asia. They sell tens of thousands of products. Most of the Fortune 500 are here. Yet only 30 U.S. companies were included on the 244-company Most Admired list. Not one Canadian company made the list.

* What has happened to all those "household names" that Canadian and U.S. consumers and investors know so well?

* Why, with such major investment in Asia -- home to half the world's population and the world's fastest growing consumer base -- do so few Asians recognise these companies' logos and names, and even fewer admire them?

* One explanation. Just a few years ago, virtually all a Western exporter had to do to succeed in Asia was to ship a product here. The popular craving for anything Western obviated the need for much marketing.

* Those days are over. With Asia's amazing economic growth has come a sophistication that demands world-class market savvy.

Successful companies now realise that they cannot drive Asian markets from strengths gained overseas, and that they must adapt their operations -- products, services, technology, personnel practices, public relations and marketing -- to local needs. They need to demonstrate a true commitment to each country in which they operate. They also need to become more "Asian."

Even if they do realise the need, they are quickly defeated by the thought of operating in as many as 20 different countries, local languages and media. "Anyway," they rationalize, "everyone who counts already knows who we are!" Not so!

Joint ventures have their drawbacks

Another explanation. Today, most Western companies enter the Asian market by tying up with a well-known local company in a joint-venture -- an excellent way to enter a market. They gain instant access and credibility, albeit the credibility of the local company.

Generally, they become hyphenated names: Fuji-Xerox, Dongbu-Aetna, Samsung Hewlett-Packard, Ajinomoto General Foods.

And this is where they often make a major mistake. Relying on the local partner's clout and reputation and assuming their own reputation will carry over from the U.S., they fail to put the time and money into developing a strong, separate corporate reputation in the Asia region.

The executives at headquarters who make the decision to open up Asia often cannot conceive of the fact that millions of people at the highest and lowest levels in Asia have never heard of General Motors or Avon or General Electric or Chase Manhattan or Nabisco.

With today's emphasis on producing returns as quickly as possible, few at headquarters will recognise the need for, and then commit to, an image-establishment campaign for their start-up operation in an Asian country.

Over the past five years, many Western multinationals have reached critical mass in Asia -- in terms of investment, manufacturing, sales, personnel, operations and profitability.

Few have reached critical mass in terms of recognition, acceptance as an "Asian" corporation, political clout, or the ability to use the individual successes of business units, products or country operations as leverage throughout the region.

Many Western companies are now realizing that time and money spent promoting specific brands or lines of business have been at the expense of overall awareness of the company.

Regional executives are beginning to see corporate positioning and reputation-building as an essential part of overall business and profit growth.

The Asian Business survey, the first of its kind to be conducted in the region, found that, "reputation is a major concern of just about every CEO in Asia.

"If stormy economic conditions have taught Asian companies one lesson, it is that they must add value to their products -- or risk losing competitiveness."

"No matter what else these CEOs do," the survey concluded, "in each case, they are finding that their reputation is what sets them apart."

How do CEOs judge their peers here in Asia?

Not surprisingly, they look for basically the same key elements as those used in North America and Europe: quality of management, quality of products and services, contribution to the economy, being a good employer and being honest and ethical.

The most admired companies have built credibility and reputation by total commitment to these qualities.

Quality not enough -- visibility counts, too

There are undoubtedly thousands of North American companies in Asia that already possess those qualities, but still remain in relative obscurity. They're missing the key ingredient: visibility ... the type of visibility that comes from carefully planned and coordinated corporate communication, implemented at both the country and regional levels.

"We are now realizing the value of emphasizing our strong U.S. track record," says Douglas Henck, senior vice president, Asia Pacific operations for Aetna International.

"Aetna started in Hong Kong in 1984 in a joint venture with the Bank of East Asia, a large, prestigious bank in this area. We concentrated on business issues, getting established, recruiting agents and selling the concept of life insurance. We paid little attention to Aetna's corporate image, even as we launched operations -- all of which have different names -- in six other countries.

"We are just beginning to promote the Aetna name. Our agents all over Asia are telling us that they and their clients want to know more about the company called Aetna that stands behind their policies," says Henck.

"We've carefully promoted our local joint ventures. Now we're going to Aetna-ize the region. That has to be done from the regional office. But anything we do must work for each country's operation, or it will be a waste of time and money."

Henck's point is important. Any company that is serious about carving out or maintaining a market position in Asia must become an "insider" or risk losing out to competitors more in tune with the local scene.

Other service industries, including banks, have learned this lesson. Throughout this century the major U.S. banks followed their U.S. customers overseas.

That worked well in the '60s and '70s, says Tim McGinnis, senior vice president and area director for Chase Manhattan Bank. "In the '80s, that business started to decline -- by as much as 90 percent. Now the main portion of our revenue comes from our Asian customers."

Global focus changed

"What this means is that all of a sudden, instead of being focused on business being driven between Asia and the U.S., it is now Thailand to Japan, Japan to Hong Kong, Hong Kong to Singapore or Malaysia and Indonesia."

Becoming an Asian business means that Chase now employs fewer Western expatriates -- those who usually have spent a long time in Asia -- and moves its Asian executives throughout the region.

The public relations challenge for Chase, says McGinnis, is to be seen not just as an American bank but more of an Asian bank.

Three things are essential to achieving this, McGinnis says: "Positioning ourselves as a global American bank, being seen as an Asian bank and becoming a much clearer part of the fabric of each community we're in." That strategy is paying off. Chase ranked 152nd on the Most Admired list.

A few years ago, AT&T was an unknown name in Asia. That is changing as the company implements its strategy for globalization.

Today, AT&T owns and operates business units employing over 10,000 people directly and through joint manufacturing ventures across the region, supplying communication equipment and services to an Asia-wide market. It is acutely aware of the region's special needs and conditions, and is beginning to develop a distinctive Asian identity.

As it becomes an integral part of the region's communication market, AT&T hopes that, in this part of the world at least, it will gradually become thought of as Asian Telephone & Telegraph.

"Increasingly companies must have two diverse goals," says Marlene Schange, AT&T's regional public relations director.

"They have to have global facilities which at the same time are tailored to meet individual national and regional needs.

Market to specific region's needs

"It was a major adjustment to enter a region this size and realize few people outside of the U.S. expatriates know what AT&T is, especially since it's a household name back home. To make an impact, a company needs a carefully targeted approach."

When Schang was sent to the region in 1987, one of her first moves was to standardize the appearance of their advertising, press materials and other marketing collaterals to achieve maximum public awareness of the company and to ensure AT&T's high standards were promoted in every country.

Simple actions such as translating all press releases into the local language or languages and adding local tie-in to all U.S.-originated announcements not only ensure greater coverage and understanding, but also show that AT&T cares about what people think in Hong Kong, Colombo, Bangkok or Taipei.

Schang also set up an AT&T public relations steering committee in Hong Kong that brings together the leaders of all the AT&T business units and the advertising and public relations consultants. The committee's purpose is to set direction, take concrete action and focus on local community sponsorships, public affairs and media relations.

This technique proved so effective that Schang has set them up in a number of countries in the region. She also retains outside public relations firms in most markets.

AT&T's efforts are paying off. In the latest Asian Images Survey (1991) of The Far Eastern Economic Review, a weekly regional news magazine from the Dow Jones stable, AT&T moved up in one year in the corporate awareness category from 84 to 89 percent in Asia, and from 86 to 95 percent in Hong Kong. In the Asian Business magazine's Most Admired list AT&T placed 136th.

AT&T, Chase and Aetna's experiences are being mirrored by multinationals throughout Asia. Asia's markets today are the result of fundamental changes in trade and investment flows that began in the '80s, are accelerating in the '90s, and are rapidly ushering into reality the "Asia Pacific Century."

Increasingly, the world's largest and most powerful companies are of Asian origins, as are 80 percent of the Most Admired companies. This share could grow by next year's survey unless North American and European multinationals operating there become more Asian in their approach. At the same time, they must take immediate steps to strengthen their corporate reputations in the region, and in each Asian country in which they operate.

An investment in Asia requires an investment in reputation-building and a commitment to being "Asian."

* McDonalds, 4; Coca-Cola, 14; Hewlett-Packard, 16; Esso, 23; Colgate-Palmolive, 26; Pepsi Cola, 31; DelMonte, 32; Hyatt Hotels, 40.

Anne Forrest is executive vice president, Warren Williams International, Ltd., Hong Kong.
COPYRIGHT 1993 International Association of Business Communicators
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:improving the reputation of North American companies in Asia
Author:Forrest, Anne
Publication:Communication World
Date:Jan 1, 1993
Words:1810
Previous Article:Face-to-face communication comes face-to-face.
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