Iván Díaz González – Strategy Director at Brand Union
New machines for faster production, better professionals for greater efficiency, new spaces to grow our new production centre, and even new trucks to reach further.
In our businesses, it is sometimes very obvious , that we need to invest in what we do to continue to grow, and in order to remain being competitive.
Sometimes we need to invest to improve our reality as a company. So, why do you hesitate when investing in branding?
If your product or service is the way you relate to others, your brand is the way you matter more to them then others. Because, at the end of the day, we are what matters to those around us.
We are the best quality, the most trustworthy, the best answer, the most empathetic, the most creative, have the best attitude, are the best gateway to the future…
Our brand defines us and helps us to improve the impact we have on others. It helps us to generate proprietary value. It helps us to bring about a decision.
Brands have the capacity to have a positive impact on our businesses. To generate value over and above what we sell, and to build up significant meaning in somebody’s life.
Our brand allows us to give a different dimension to what we do. We may do the same as everyone else, but we can give it a different meaning. We can connect with them differently, build up unique relationships, and find opportunities where our products have not yet reached.
While “what” is what you do, “how” you do it is what makes the difference. And that “how” is your brand.
Understanding your brand as something tangible, just like an item you can handle, shape, hold and touch in the form of its effect on your results, is to understand that the machine that bottles your soft drink is as important as the engineering behind the design of your products or the television advertisement that shows you to the world.
Brand is a form of competition. It is a way of being. It is a way of mattering.
In the end, your brand is income, not an expense. Because it allows to sell more, or better, than others. It allows you to have more or better demand, more or better talent, to generate more or better loyalty, and to connect more, or better, with your customers.
We don’t know of any Managing Director who would consider not investing in their product because that it is what they sell. Yet interestingly we can see how many toy with not investing their brand, which is ‘who’ sells.
Understanding my brand as a tool that lets me be more competitive is to understand that just as our machinery requires investment, so does our brand.
Because investing in branding is to invest in being what you want to be.
When you decide to buy a better machine to make better products, you are investing in your brand. When you decide to pay for employee training courses, you are investing in your brand. When you decide to improve customer service, you are investing in your brand.
Every Euro spent on a company is an investment in its brand.
So, does an investment add something, or take something away? That is for management to decide. When you spend a Euro, do you know how to spend it and where? Do you know if you need faster, or more precise machinery? Do you know if you need a call centre in Latin America or in Toledo? Do you know if you need a better product or better customer service?
Brand is not an investment, it is a direction that guides your investment.
If today you are spending a Euro on your company and you have not paid attention to your brand, you may be spending in the wrong place, or at least not in the optimal way.
The brand is the sum of everything we do, and that includes everything we spend. Don’t consider investing in your brand, because it is not an expense. It is simply a recommendation that indicates where you need to put your money and how you should do so.
After all, in a complex world of equals, we want to stand out from the crowd and this includes being different in “what” we do, or in “how” we tell others about it, through our brand.
Brand is not a logo, a colour, or an advertising method. Brand is the sum of everything we do, of all our behaviours, our employees culture, how we dress and even how we talk, the experience someone has with us. It is all brand.
If you have a company, you have a brand. The difference is how it is managed. So, it is important to pay attention to your brand in order to make it as efficient as possible. Because brand can have a positive impact on your business.
With a strongly business-orientated training at the IESE Business School – University of Navarra and the IE Business School in Madrid, if there is one word that describes Daniel Redondo Esteban, it is “Entrepreneur”. At the age of just 24 he founded MADISON Experience MARKETING with a business concept based on customer services. 25 years on, the company has over 1,800 employees and 5 different business lines offering comprehensive marketing services to clients. A qualitative leap that emerged from the spirit of innovation and creativity that Daniel transmits to his company.
His passion: sport and sporting values, true values. Team spirit, competitive and collaborative spirit. These are the identifying traits that he applies to his business which includes sports marketing in its areas of activity.
Madison has four different lines of business: Madison Agency, Madison BPO Contact Centre, Madison Market Research and Madison Sports Marketing. How is brand image managed? Do you use the same strategy for all of them, or are they run separately?
Our brand image is based on a single strategy that has positioned us as a benchmark group at national and international level in marketing services. It is true that it often not easy to express the particularities of each business area under the same umbrella, but our differential value lies in our multi-disciplinary nature, and it allows us to offer end to end services and solutions for our clients’ customer journey. Our philosophy is to create positive experiences that make the difference.
What are the competitive advantages of your company over its rivals? And what is your strategy for differentiating yourselves from the competition?
The main competitive advantage at Madison is precisely the make-up of the group as it revolves around four business units where each one works in its own competitive environment allowing us to undertake global projects. Also, in line with current trends in digital transformation, as an innovative company, we have created Digitel TS, a company offering digital contract solutions.
Our vision of business is always to give priority to the long term and this is why we have such a high level of customer loyalty. There are hardly any brands that only use us for a single task – almost 90% repeat year after year.
Another relevant competitive advantage valued by our customers is service and proximity. The human factor was one of our initial challenges. We needed to find the necessary talent to reach the demanding goals that we had set ourselves, and today we have great professionals who can face any challenge that may arise.
You have an office in Peru. Why did you choose that market?
Peru was the first South American country that Madison opted for and over time we it would seem we have made a good choice.
At the beginning, when we started this operation, we chose Peru because it was a relevant country in the region because of its potential and its social and economic conditions. We also saw that its market needs were perfectly in line with the lines of business that we had successfully implemented in Spain, and at that point we made the strategic decision to export. These business units, independent but complementary, are: a market research area, a call centre and a communications and events agency.
It is also important to stress the openness that Peruvian businesses have shown to the services offered by MADISON in terms of strategic approach, innovation and cost-benefit.
You also work on every continent. In which markets are you most successful?
Naturally, this is also down to Madison’s commitment to Peru and the development of the region. We have made Peru our hub for all our future LATAM operations.
We have recently opened new offices in Miraflores, from which our 150+ collaborators are working and which will allow us to improve our internal coordination and to be much more flexible in our response. Additionally, we have a brand new focus room, and two auditoria with seating for 70 and 300 people respectively.
We have a multi-disciplinary client portfolio covering practically all sectors. Our short-term objective is to continue growing with our clients, as well as serving other South American countries from Peru.
Are all your lines of business operating abroad? How?
We have been working with the major companies on the Peruvian market for the past three years. Our position is secure as we have 3 business units, independent but complementary: a market research area, a call centre and a communications and events agency.
As well as our activity in LATAM, we are running other international projects, specifically focusing on customer experience for large companies.
Also, in the field of market research we are working on projects for the tourist industry such as PromPerú and Turespaña. In this sector we have also signed an agreement with the World Tourism Organisation to work together on the ‘Visitor Experience Management’ report.
Finally, in terms of sports sponsorship we have set up the International Padel Experience by MADISON, for which this year we received an award for the best amateur circuit by WorldPadelTour.
What are the challenges and opportunities facing the company both in Spain and abroad?
Times are changing, and this change is focused on digital transformation. That is the main challenge. The internal company management processes, events, human group profiles, measurement of user experiences, client contact, contracts… everything will be digital, and we are fully aware of this.
But if anything characterises us it is our passion for innovation and our collective desire to do better. We have already started on our journey, and we are looking forward to making this challenge our closest ally.
Carlos Pobre Menguy – Director for Overseas Trading at Crédito y Caución
In recent years, hundreds of Spanish companies have started to look for new clients abroad in order to soften the blow of the falling domestic market. Exports have therefore become one of the preferred routes for businesses to survive in a recessive context.
Despite the difficulties and risks of selling overseas, export figures have increased around fifty percent since the start of the recession. Meanwhile, the number of companies that have maintained their international sales for at least four consecutive years, with a high probability of future survival, has increased notably and represents a third of the total.
Although Spanish sales abroad primarily take place in the European Union, and the Eurozone in particular – ratifying one of the best known results in international trade such as its direct connection with distance – in recent years business owners have made considerable efforts towards diversification. Furthermore, and in spite of the increase in world competition in the search for new clients, in an environment with an explosion of new exporters from emerging countries, the apathy of traditional demand and the slowing of international trade in itself, Spanish exportation has maintained its market share.
The recovery of the Spanish economy has been due, in a considerable part to overseas trade and its main players: the 150,000 exporters, of which 500 are leading multinationals, and the 10,000 companies that have set themselves up, in one way or another, to work permanently in international markets. All of them have worked very hard to gain in competitiveness and care for the quality of their products and services, innovating and creating internationally recognised brands.
In historical terms, it seems that there is a fortunate change in trend, where the overseas sector may have shaken off its role as a mere aid to business. From a microeconomic perspective, for companies this would mean a departure from traditional presence abroad as a last resort: exporting when not enough can be sold nationally. And in macroeconomic terms, it would contribute to laying the foundations for the overseas sector to become one of the stable fundamental pillars for growth; not in vain, the participation of exported goods and services to GDP has increased by more than ten points in just six years, reaching a third, meaning that Spain has become the second largest exporter in terms of GDP among the five major EU members, ahead of France, Italy and the UK, and only behind Germany.
In short, these are notable achievements by Spanish exporters and, therefore for the economy as a whole. However, in order to successfully continue along the internationalisation route, it would be a good idea to encourage an increase in the number of stable exporters, in particular those selling over 50,000 Euros worth of goods per year – this number falls short of twenty percent – in stark contrast to companies selling less than 5,000 Euros abroad each year, which represent over half of the total. Similarly, the consolidation of what has been achieved so far in internationalisation may also be supported, on the one hand, by working harder to diversify export destinations, particularly those showing greater prospects for growth in new types of emerging media and with growing urban development and, on the other, by strengthening cooperation strategies between companies, as a means of compensating for their small size.
Since the beginning of the recession, international trade has shown clear signs of weakness, especially in developed countries, with growth in terms of GDP below those traditionally reached. Although there is still no unanimous position about whether this is because of a conjectural or structural trend, there are a number of elements that can be identified as being behind this changed pattern in world trade. In addition to temporary factors, such as weaker demand in the European Union, the deceleration of the Chinese economy or trade sanctions, it is also worth mentioning other permanent aspects that, according to Bretton Woods, are behind half of the slowing down of international exchange.
Among the structural causes of the weakness of world trade, key factors are the increasing presence of cheaper services with less freedom of exchange in relation to goods; weakness in investments, a key aspect of trade which, as is widely known, is one of the GDP elements with the highest importation intensity; the United States’ replacement of imported fuel; the transformation process underway in the Chinese economy with goals that are less dependent on exports, investment and foreign technology, and with a relevant replacement of importation; the emergence of new technologies in the entire production process, particularly in the field of data transfer and 3D printing which make a new localisation strategy possible –, with the subsequent influx in the shortening of global value chains – and, in short, the reduction in trade of certain goods; and a protectionist tendency in an environment with increasing international competition.
In this context of sluggish world trade and high geostrategic uncertainty, it is advisable to ensure thorough management of the different international risks that may threaten the good progress of exportation operations, particularly in emerging markets. In particular, an analysis of debt risk provides huge competitive leverage that allows exporters to be safely guided in their search for reliable clients, permitting the success of sales abroad, no matter how diverse. Because, in short, exportation is income.
Before joining Félix Solís Avantis as assistant to the National Trade Director for Food, and as International Trade Director, Félix Solís Ramos worked for renowned international companies in the distribution industry. He has a degree in Economics and Business Studies from the Autonomous University of Madrid and has an MBA from IESE in Barcelona.
Operating in more than 115 countries, Féliz Solís Avantis is a leader in the international wine sector. What are the main milestones in the company’s international expansion?
Founded in 1952, Félix Solís is a family company with vineyards in the main denominations of origin: Rioja, Ribera del Duero, Rueda, Valdepeñas, Mancha and Toro, with leading brands in each one: Viña Albali, Los Molinos, Altos de Tamaron, Blume, Castillo de Albai, Bajoz, etc.
Knowing how to diversify and enhance products in the different DOs, as well as working hard on our commercial network, has allowed us to open many doors onto the different markets and in different price segments. Félix Solís products are currently sold in over 120 countries around the world.
The company also has subsidiaries in three continents: Europe – Germany, the UK and the Czech Republic– America – two in the US –and Asia –two in China – as well as representative offices in Mexico and Japan and a project for a vineyard in Chile. This international expansion has allowed Félix Solís to position itself among the 10 main wine sellers in the world.
What are your biggest markets at the moment, and which are your future markets?
Spain, our domestic market, with a leading position in numerous categories, is still the largest market with around 40% of our turnover, something we consider to be key. Obviously, markets abroad still provide continuous growth and long term development, and we trust that before long it will represent 70% of our turnover. The strongest markets of these are the EU, the USA, Russia, China, Japan, Mexico, Ivory Coast…
How do you manage your brand architecture?
In an atomised a market as the wine industry, the emphasis on our main brands must be complemented with controlled diversification. For this reason the company has over 1,500 finished products around the world. This is necessary as markets differ greatly and we need to know how to adapt to consumer needs.
Innovation forms part of the company’s DNA, a strategy that allows us to make the most of new trends or niche opportunities.
Do you operate abroad with your entire brand portfolio? How?
The portfolio available in each country is the result of in-depyh work by the commercial network which assesses, offers and builds up an appropriate product portfolio to cover all market needs, always giving priority to our main brands.
There are global brands, such as Viña Albali or Peñasol that can be found on practically every market.
What does the Pagos del Rey Vine Museum mean to the company?
The museum represents the return of over 50 years’ trust in our company and our wines. Through our cultural and wine tourism project in Morales de Toro (Zamora), we disseminate the tradition and culture of wine from an old winery that we have recovered as a space to stimulate the world of wine and tourism in the area. In the almost three years that have passed since we opened the Museum in February 2014, almost 35,000 people have visited our facilities; this allows us to have direct contact with the public and convey to them our company values such as tradition, history, family, environment, effort and teamwork. The museum also acts as the company image through its education, gastronomy and cultural programmes where wine plays a leading role, or just the excuse to enjoy and experience all the sensations that Félix Solís Avantis can transmit through its products.
What challenges will the company face in 2017?
Maintaining constant growth in sales with a strong focus on the main brands in each category.
To continue strengthening our own production structures in different wineries in Spain within the framework of an investment of over 30 million Euros; as well as the implementation of the latest technologies in our information systems.
Furthermore, the company’s long-term vision will allow us to develop our own vineyard in Chile in 2017.
Oriol Iglesias – Associate Professor at ESADE and co-author of the book “Brand Desire: How to Create Consumer Involvement and Inspiration” published by Bloomsbury
The large majority of the leading brands in their markets sustain this position due to the enormous pressure they place on their potential clients. This brand pressure is based on three key levers: investment in communications, trade efforts and promotional offers. The main disadvantage of this approach is that, unless the brand is also capable of generating sustained desire among its clients, maintaining a position of leadership is more and more costly, meaning that mid- and long-term profitability is severely weakened. In short, the most profitable leading brands that are also able to maintain their competitive position over time are those that invest in brand pressure, but also brand desire.
Many brands work reasonably hard on the three levers for generating brand pressure mentioned above, but very few also work well with the brand desire levers: (1) principles, (2) storytelling, (3) experience, (4) leadership and culture, (5) participation, and (6) innovation.
- Principles: Principles are the ideas that guide an organisation over time and that give meaning to its business activity. Principles are not static, but neither can they be constantly changing. Principles are ideas that emanate from the history and heritage of a company, but at the same time project it into the future. When brands act in line with their principles they are perceived as authentic by stakeholders. LEGO illustrates the importance of principles very clearly. The company was on the verge of bankruptcy in early 2000 due to disproportionate growth. When the new CEO took over in 2004 he stated that his main challenge was to rebuild the company’s identity in line with its heritage, but at the same time adapting it to today’s context. The LEGO principles were those that needed to give focus to the company’s entire future activity.
- :Storytelling: Stories are a fundamental instrument for connecting with consumers as they appeal to their emotions and lead to inspiration. Stories give us rational and emotional reasons to desire a brand. Stories are also the main tool that senior management has to align the organisation with a number of shared principles and to generate change. But in order to achieve this, a brand needs to build up a narrative goal inspired by its inheritance and at the same time project the organisation into the future, inspiring consumers and stakeholders.
- Experience: One of the keys to generating experiences that attract and foster customer loyalty is paying attention to every single detail and being extremely consistent. But, at the same time, the most desirable brands are the ones that regularly surprise us in a positive way. The most desirable brands are also those that design and offer experiences that appeal to our sense and transmit authenticity. Nespresso is a brand that offers a superior experience. Their coffee capsules are designed and presented to customers as if they were a luxury item. Their stores also reflect this sophistication. The brand also regularly brings out Grand Cru limited editions to surprise customers and delight even the most exclusive palates.
- Leadership and culture: In essence, brands are made up by the employees working for the organisation and who interact with customers. It is their beliefs, principles, attitudes and behaviours that determine the success of the brand-customer relationship. So, on one hand, leaders first need to develop all those initiatives intended for employees to understand and share company principles. But, at the same time, directors also have to offer empowerment and the capacity for manoeuvring to front line employees so that they can decide how to offer more value to their customers at all times. In order to achieve this it is essential – as can be seen in the Ritz Carlton hotel chain – to work with the teams on a daily basis to review the application of the brand principles and share best practices.
- Participation: The large majority of the most desirable brands (except super luxury ones, whose desirability lies partly in their exclusivity) aim to be accessible to their customers and some even actively try to encourage them to take part in many of the organisation’s processes. For example, since P&G promoted their collaborative innovation strategy with clients and other stakeholders known as “Connect+Develop”, the success rate of their innovation has tripled. This is also advocated by the chef Ferran Adrià, who says that an essential part of the creative process are the conversations he has with his customers. The most desirable brands are brands that are committed to co-creation.
- Innovation: Successful brands that want to grow sustainably need to weigh up on one hand the preservation of identity through consistency, while on the other they need to innovate and change to remain relevant. Consistency generates trust, but when combined with the surprise element and relevant innovation they generate desire. The problem is that most brands do not invest in appropriate innovation typologies. They normally obsess over line extensions, when what they should really do is reduce them and focus on renewing their core brands and products, those that provide positive cash flow for the organisation and that allow them to invest in more disruptive innovations to create new categories.
In short, the most desirable brands are the ones that are built up around inalienable principles that give them focus; develop a narrative goal combining all storytelling activities; offer an experience consistent with the principles of storytelling, but at the same time surprise their clients and constantly innovate; have committed employees with the ability to act, and who embrace customer involvement and the development of communities.
The School of Industrial Organisation (EOI) and the Leading Spanish Brands Forum (FMRE) presented on 29 November the book ‘Brands in the Internationalisation of the B2B Company’, which received support from ICEX and the work for which was developed by Opinno Ideas.
The book reflects the importance of the brand in the process of expansion of companies and analyses the keys to the success of international management of the brand for B2B (Business to Business) companies through practical case studies of fifteen successful international Spanish businesses: Abertis, AENOR, Arco, Auditel, Cosentino, Ega Máster, Grupo Eulen, Fermax, Fira Barcelona, Gas Natural Fenosa, GMV, Iberdrola, Kalam, Ramondín and Televés.
The study analyses the characteristics of B2B markets, how their selling and purchasing processes work and what factors are decisive when it comes to choosing a product or service. In order to do this, the Opinno team analysed articles and publications on the matter and interviewed experts such as Cristina Vicedo, Director General of Future Brand Spain, Julio Cerviño, tutor of Commercialisation and Market Research at the Carlos III University, and Gabriela Salinas, Global Brand Manager for Deloitte, as well as the leaders of ICEX in the industrial and technological sectors. Cristina Vicedo firmly believes that B2B brands are no different from B2C brands, and she even states that brand is more important in a B2B context than in a B2C one: “Brands are emotions that persuade and mobilise their target audiences, whatever these are. Companies are made up of people and the trade relations between them are also undertaken by people, and people have emotions.” Julio Cerviño talked along the same lines, stressing that “brands allow the identification and projection of the values of a company or organisation, its products or services, how they differ from those of the competition, reflecting how it is organised and, well managed, they trigger an emotional connection and feeling of trust with customers, fostering loyalty in the target audience, as well as minimising risk and therefore obtaining sustainable cash flow over time.” Gabriela Salinas, meanwhile, addresses the idea of brand as a confidence builder: “Confidence used to be a hygiene factor, an attribute at the base of the pyramid. Today it have become a differentiating factor.”
For the development of the case studies, in-depth interviews were carried out with directors of Brand, Marketing, Communication and Internationalisation from the companies analysed. Miguel Ángel Martínez Olagüe, Director of Marketing and Development at GMV indicates that “brand building is delivering value at every interaction with the customer, meeting by meeting” and highlights that “in a B2B company context brands build trust and legitimise the decider. It is common for the decision maker to prefer to choose to minimise their personal risk within the organisation and prefer “to make a mistake” with a worse deal with someone who is well known than to risk making a better deal with someone who is not well known.” Santiago Alfonso, Director of Marketing for Cosentino, affirms that “the three vectors of success are: innovation, internationalisation and brand management,” precisely the pillars on which the Brand Forum work is based. Luis Gómez, Director of Brand and Reputation for Iberdrola, goes further and says that “we have moved from marketing to branding: everything we do revolves around generating brand value.”
The conclusions of the book offer the following lessons:
- Brand is a competitive element in B2B and B2G environments as much as it is in B2C contexts.
- The attributes of the greatest value for customers in industrial purchasing processes are: product, augmented services and branding
- Brand is an asset for competitiveness that combines company values and differentiation and serves as a guarantee for quality and service
- Branding also generates trust and legitimises the decision to purchase
- Brand incorporates physical attributes and emotional values to allow them to generate a sensitive and sustainable advantage over competitors
- Coherence and consistency are fundamental attributes
- In the industrial environment brand value is established in the “customer relations” process which is what in the end generates the brand experience and the concept of reputation
- It is necessary to design a brand architecture in line with the company’s strategic positioning
- The complexity of B2B markets makes the human element much more present, transforming it into a much more influential factor than it may first seem
- The complexity and importance of its management is greater as a result of globalisation, the productive dislocation of companies, homogenisation of the offer and the exponential growth of digital communications
Jorge Lorenzo is currently the Secretary General of the Televés Corporation. He started his career in the company in 1985 as the Director General of the Portuguese subsidiary, later taking over the management of human resources and finally as assistant director general until 2012 when he took on his new role.
Jorge Lorenzo is a graduate in Business Science from the University of Santiago de Compostela, with a Master’s Degree in Human Resources Management from the Spanish Confederation of Business Associations
You have recently opened a subsidiary in Scandinavia. What does this step mean for in the company’s international expansion strategy?
It is, indeed, another step in the Corporation’s growth strategy that has been underway for some time, and which has meant that international markets now represent over 60% of our total sales. In recent years we have strengthened our office in Germany, we have set up offices in Poland and Russia, and we have signed important contracts relating to the launch of Digital Terrestrial Television (DTT) and the so-called Digital Dividend through our offices in France, the UK, Poland and Russia. We are also very well positioned in the local markets in Portugal and Italy, where our brand is also highly recognised. This is with regard to Europe. In America, our US office is also working hard to increase our presence in that key market, and we are taking important steps in the Colombian market. Televés Portugal is a launchpad for reaching Africa where there are significant opportunities, as well as the extraordinarily dynamic Middle Eastern and Asian markets, which we are working on from our offices in the Arab Emirates and China.
Televés Scandinavia is a continuation of this strategy, driving growth in the Nordic and Scandinavian markets where we already have a good presence with a market share of approximately 20%, but where we believe there are niche opportunities in emerging markets which, if we can use them well, will allow us to reach 50% over the next 5 years. Furthermore, we want to position ourselves in the Baltic States. We are familiar with the field because we have been working in Scandinavia since 1981 via our distributor, the structure of which will now become a full part of the Televés Corporation thanks to this acquisition for the setup of Televés Scandinavia.
You are present in over 90 countries, in some through subsidiaries and others via a network of professional distributors. What are your main selection criteria for entering a new market?
A key criterion is the telecommunications infrastructure technology in homes and buildings used in that country. Although we have subsidiaries in countries using other systems, as is the case in the US, a large part of our catalogue responds to the technological standards of Digital Video Broadcasting (DVB), which is dominant in Europe, most of Asia and Africa. However, the diversification of catalogue means that the telecommunications standard is more and more decisive as we are firmly committed to optical fibre, networks for local operators and multi-platform distribution platforms for the hospitality sector (hotels, hospitals, homes, etc.). We are also evolving to become facilitators for services in the social and healthcare sector through digital home and building infrastructures. This has been done via agreements with relevant organisations such as the Red Cross which has recently presented its new tele-assistance device, developed and manufactured by Televés.
We operate in practically every market, but we are cautious when it comes to establishing ourselves. Our business model is highly analytical: we never take the step of creating a subsidiary if we are not completely sure about it.
What markets currently have the most weight in the Televés overall business mix and what are the markets of the future?
Western Europe is, for us, a consolidated market, but we still believe that we can continue to make strong inroads in Germany which is of dual importance: it represents a high number of consumers, and it continues to be a benchmark for technology and quality requirements. Making a name for oneself in Germany means a lot, not only in the country, but all around the world. Western Europe is a significant growth vector for us, with reference points in Poland and Russia. Russia is also the ideal platform for us to expand into Central Asia, which continues to have a special relationship with Moscow. The Middle East is also strategically significant for us and the role of the US continues to grow. Looking to the future, Latin America and Africa are regions where we believe we can fight for major opportunities.
At Televés you have opted not to outsource your design and manufacturing processes. What benefits does this decision have for you in terms of competition?
This philosophy of vertical integration and flexibility is linked to the same historical and geographical origins of Televés. When the company was launched in 1958, Santiago de Compostela was something of a backwater, so we had to learn to do everything practically on our own. This is still true because we are convinced that this is the best way to protect the knowledge generated in our company and, at the same time, it ensures better control over quality and customer response. Another benefit is that we can respond much more flexibly than our competitors to fluctuations in demand. We have manufacturing facilities not seen anywhere else in our sector. We have been pioneers in the introduction of SMD technology and robotics. We are currently carrying out our “digital revolution” and the transformation of our production facilities towards Fabric 4.0.
Televés also works on the development of its own technological solutions, such as the case of TForce, a technology that allows us to independently develop, manufacture and assemble MMIC (Monolithic Microwave Integrated Circuits) components. It is a process technique that exceeds the limitations of silicon microchips and represents a significant move forward in the miniaturisation of components. For us it will also mean a strong drive forward in our freedom as designers and manufacturers as we will have more autonomy to develop our own concepts and be less dependent on suppliers.
You have over 200 items of Industrial Property. What are the key ones? What value do they bring to your brand?
Innovation is part of the Televés DNA. As a basic element for the sustainability of a company working in globalised, highly competitive markets, we believe in technological development and we believe it is essential to protect our industrial property. Our own technology differentiates us on the market and gives us recognition as a benchmark firm that sets standards. More than any particular invention or patent that stands out, I think our greatest achievement is never settling for what we have accomplished. We always want to go further because that is what enables us to continue progressing.
Salomé Carrera’s career has evolved in line with the growth and evolution of the firm Pili Carrera since she completed her studies and joined the business founded by her parents, Pilar Rodríguez and Bienvenido Carrera.
Since she started at the firm, Salomé Carrera has worked in different departments, gaining the knowledge and skills necessary for the management and production of the company’s textile business. Today she holds the position of General Manager.
All Pili Carrera’s production is run and distributed from the head offices in Pontevedra. What benefits does this have for the brand in terms of competition?
We have had just one production centre since the company was founded over 50 years ago and this is where we carry out all the manufacturing processes from the initial designs to distributing to stores. Since the beginning, at Pili Carrera we have opted for local production as this allows us to have complete control over all phases of the manufacturing. Our goal is to offer our customers an impeccable garment, and in order to do this we must be able to continuously monitor every process. We also make highly coordinated garments of fabric and knitwear and in order to this we must have both production lines here, at our facilities in Mos (Pontevedra).
You have a chain of single-brand stores and a multi-brand sales network around the world. What led you to opt for this model?
Over the course of the past fifty years, the company has gradually incorporated new product lines such as children’s products, furnishings, cosmetics, etc. This broad offer, together with growing demand from our customers, led us to choose the single-brand chain formula, a space to offer our customers a global concept of our collection. We currently have a network of over 50 stores in 15 countries such as the US and Kuwait. In markets where, due to our store requirements, we cannot set up a Pili Carrera franchise, we have opted for a multi-brand channel, through which we have approximately 600 independent points of sale around the world.
What are the main selection criteria for deciding what new markets to enter?
To set our goals at international level we observe the economic and political situation in the country, its per capita income, growth indices and market analyses, both for possible competitors we may find there and for the adaptation of our product to cultural, social and religious aspects.
How important is the online sales channel for Pili Carrera?
Today this is an essential distribution channel for our collections as it allows us to reach places where we do not have a store and to respond to customers who want our products. We opened it two years ago and sales have gradually increased. It is currently only available in Spain, but our intention is to implement it in Europe.
What sort of a presence does the brand have on social media?
Pili Carrera currently has an official profile on a number of social networks such as Facebook, Youtube and Instagram, all run from our head office in Mod (Pontevedra). In this day and age when new technologies have completely changed our social habits, an online presence is an essential shop window for promoting our brand, interacting with our customers and showing our collections to the public. The use of social media as a business communication tool is the image the the company projects on its online channel and is why we are keenly aware of these profiles, emcompassing the values and image that our brand aims to transmit.
What are your goals for 2017?
For the coming year, our objectives are focused on consolidating our position in the Middle East (Kuwait, Saudi Arabia and the United Arab Emirates) though the opening of new stores, the first being in Qatar, but without ruling out possible agreements in other countries. Another of our major goals for 2017 is to continue our growth in the US and Latin America, strengthening our current presence in Mexico, Panama, Guatemala, Peru and the Dominican Republic.
Enrique Bretos is the CEO and co-founder of Pisamonas, the brand of children’s shoes that, in practically no time at all, has become a reference point in the e-commerce sector. An aeronautical engineer with 14 years’ experience in a management position in the aviation and tourist industry, he made the move to the shoe business to lead the growth and professionalisation of the online children’s shoe start-up Pisamonas.es. In just a few years it has become one of the leading Spanish brands of children’s shoes, focusing on the online business with a single philosophy of quality, price and level of service. This has led them to receive a number of acknowledgements and strong national and international expansion, operating in 6 countries.
All Pisamonas shoes are manufactured in Spain with quality materials and finishes, using traditional processes. Is this an advantage for you in terms of competition?
Without a doubt! At Pisamonas we support 100% manufacturing in Spain, supporting national industry and employment and it is a key element of our brand. I think that the recent economic crisis has helped people to be more aware of how important it is to support local shoe production as much as possible in the face of Asian imports. Furthermore, manufacturing shoes here allows us to follow the processes and quality of our finishes more closely, as well as responding more flexibly to any needs.
And what is your strategy for differentiating yourselves from the competition?
When we founded the children’s shoe business Pisamonas we did it because we saw a niche that wasn’t covered. It was very difficult to find a brand of children’s shoes that offered good quality, good prices and the option of online purchasing. You could find cheap shoes, but imported and of low quality, or high-quality shoes that cost a fortune or were available on foreign websites.
That is why we decided to launch Pisamonas, following a strategy that differentiates us from the competition by manufacturing all our shoes in Spain with good materials and finishes, with designs based on classical lines but adapted to current trends and fashions, and at a good price thanks to a commitment to a high volume of production via selling online.
In a very short time, your online store has become one of the benchmark sites for purchasing children’s shoes online. What factors do you think have influenced this success?
It is probably a combination of many things. It is not about one or two single key elements. The first, proposing value in terms of product and price. I think that our brand has managed to build up a catalogue of shoes of good quality, with attractive designs and at affordable prices, something that was not easy to find. The next thing I would say is that a lot of training, a commitment to technology, passion things well done, having a good team and being patient as in the online world you need consistency and patience to meet your objectives.
Then there is variety. We have more formal, classical lines, as well as more casual designs, babies’ shoes, children’s shoes and even shoes for men and women. From first communion and school shoes, to footwear for the beach, slippers or moccasins as well as Mary Janes. Traditional models adapted to modern times, such as espadrilles, Menorcan slip-ons or desert boots, as well as modern designs in boots and sandals. There is a Pisamonas model for every occasion. If the service is also efficient and friendly – as seen by our recent award for the best e-commerce customer service, thanks to our great team that is always willing to help – and you have policies intended for online purchasing that do away with customer concerns – we have enough to worry about as it is – well, these are additional ingredients for the model to work.
In recent years you have also worked hard on internationalisation and Pisamonas’ sales abroad now counts for around 25% of sales. What export model do you use, and why?
That’s right, today one in every four pairs of Pisamonas shoes is sold outside Spain, and this is increasing. Our sales model on international markets is the same as here. In other words, we sell online – on a website set up for each country – directly to the end user, with highly e-commerce orientated policies, free shipping, free exchanges and returns to the customer’s door, and first class customer service.
We believe that this is the formula that best suits the Pisamonas model. It allows us to keep our prices low through direct marketing, and we are better aligned with our customers’ tastes and preferences thanks to our direct contact with them. We learn a lot from customer feedback from our followers on social media and the opinions and suggestions that they give us. This helps us to improve and adapt our designs and collections each season.
What criteria does the company use to select its export markets?
For the time being we have started on markets that are close by where online sales are an increasing reality and where our types of shoe are already well-received. Fortunately, Made in Spain fashion and footwear is already well recognised abroad as synonymous with design and quality of the same prestige as Italian or French shoes. So, for Pisamonas international expansion is a good opportunity for growth.
What are your short- to mid-term goals?
For the short and mid term we are focusing on consolidating the growth we have had over the past few years, increasing our workforce and adding new processes to the company for greater efficiency, while at the same time working on investment in both new technology and the overseas markets where we operate. Next year we will probably exceed 30% in international sales and in two to three years we will open in new markets to continue our growth and work to make Pisamonas one of the best brands of Spanish children’s footwear.
Juan Manuel Perán Bazán has been Executive Chairman of the Pikolinos Group since June 2016, taking over from his father, Juan Perán, who led the company since it was founded in 1984. The second child of Juan Perán and Rosario Bazán, from a young age Juan Manuel showed an interest in business in particular and for the footwear industry in general. His creative and cosmopolitan spirit soon led him to pack his bags and train at footwear and commercial schools in Germany and Italy, also making the most of one of his other interests, languages. He speaks fluent English, German and Italian, something that has helped him a great deal in business as Pikolinos operates in over 60 countries and exports 80% of its production. After completing his training and working with creative teams at footwear firms in Italy, Juan Manuel joined Pikolinos and moved directly to the Design department. There, in charge of his own team, he was responsible for renewing the ladies’ and gents’ collection for the firm. His mentality of “there is always another way of doing things” enabled him to redefine all the processes and create work flows to make these collections more dynamic.
Juan Manuel Perán represents creativity, organisation, efficiency, the simplicity of things, but also consistency. It was that consistency at work, and his in-depth knowledge of every company process that led him to become Executive Deputy Chairman of Pikolinos Group and then, in 2016, to take over as Chairman, alongside his elder sister, Rosana Perán, Deputy Chairman and head of the financial department.
How important is the brand in the footwear sector?
It is definitely a fundamental part. In the footwear industry brand is an umbrella of support for customers and consumers, a guarantee of quality, service, and know-how. We must work towards having as consistent a sector as possible and that is why we need brands of international prestige. This is our best possible passport to overseas markets.
The Pikolinos values are constancy, creativity, naturalness, excellence and trust. How do you work to link these values to your brand?
At all our points of contact with customers. From the product, stores, to social media, websites, catalogues… We should be, and we try to be, consistent with our values. We show them and defend them in the knowledge that it is precisely these values that have brought us to where we are today.
You have opted for a traditional finish for your products as well as quality leather. Does this benefit you in terms of competition?
We believe it does, yes. The finish of our leather has always been the true star of our collections. It is our calling card to the world and we have always taken good care of it. Our collections have their own personality based on leather that we treat ourselves, at our own factory, in order to control the process and end quality at all times.
What are your goals for internationalisation?
We want to consolidate ourselves in our mature markets, mainly in Europe, the US and China. And also to continue our route into emerging markets where we have a lot to do; a challenge that we face with enthusiasm and great optimism. In this international drive, without a doubt, the development of our own store model plays a key role. Our flagship stores overseas in Paris, Kobe, Rome, Florence, Bruges and Brussels have paved the way for this.
What are the challenges facing the company over the next five years?
We want to grow as a brand. We want to do this in a sustainable way, with solid foundations that will help us to face the challenges that we set ourselves. Developing our product lines, developing our retail chain, facing entry into new markets and remaining constant in our drive with regard to the online sector. I think these are the foundations on which we need to continue building.
How important is the online sales channel for Pikolinos? What percentage does it contribute to the total sales of the brand?
It is on the increase. It is a window to the world. The best shop window one can have. Open 24 hours, where you can say what you are, however you want to say it. We live in a thrilling world, the digital world, and we are fully immersed in it. We hope to reap the benefits, not only in terms of turnover, but even more so in terms of brand recognition.
General Manager FutureBrand Spain
The answer is yes, and I would even go as far as to say it is even more important for a B2B company that for a B2C company.
There are two phenomena that have made B2B companies change their approach and their handling within the company of its most important intangible asset: the brand.
- The first of these has been the creation and proliferation of new brands created in recent years. Whether for motives of business diversification, or geographical expansion, the truth is that both factors have led to companies creating brands that are not entirely necessary or not in line with their business strategy. This has given rise to the fact that many B2B companies are at present focusing on reorientation and reorganisation of their brands to endow their portfolio with more coherence and consistency.
- The second of these is “infoxication.” Globalisation, the accessibility and availability of internet have meant that all kinds of companies, whatever the sector in which they operate and whatever their brands are, have had the need to communicate at some point, even if it has only has only been through a website. This has resulted in a dizzying increase in communication and in the saturated and literal “infoxication” of all the target audiences, that is to say, they are intoxicated by over excessive communication. This phenomenon has led all companies, B2B or B2C, and their brands, to go down the path of trying to be different in order to grab the attention of their target audiences within this overwhelming din.
Are the brands that target a B2C end consumer different than the brands that target other B2B companies or their management? In a short, quick answer, NO.
Brands are emotions that persuade and mobilise their target audiences, whichever these are. Companies are made up of people and the trade relations between them are also undertaken by people, and people have emotions. Hence, it is very important that brands of B2B companies also have an important emotional component, which until recently was the exclusive preserve of brands directed at end consumers.
What it is important to note is that, as well as advertising the brand and investing in it, it represents the company and is the flagship of its values and aspirations in an ever more demanding world.
Within the environment of B2B companies brands create confidence and legitimise the decision maker. It is common that the decision maker may prefer to choose to minimise their personal risk within the organisation and prefer “to make a mistake” with a worse deal with someone who is well known than to risk making a better deal with someone who is not well known.
The brand is therefore a reason for choice and influences purchasing decisions, thus creating equity for the business.
What must a B2B do in order to create a brand?
1.- Align brand strategy with the business strategy of the company. Given the business objectives we wish to achieve in the coming years, we will know in which of them the brand can help us to achieve them, turning it into an additional business tool.
2.- Identify the target audience. With the business objectives as a starting point, define a brand strategy that is relevant to the target audiences; to do this, it is essential to know who we are targeting and so adapt ourselves and speak their language. It is very important, to be clear about who our customers are and identify the best way to reach them and to connect with them before undertaking any commercial activity.
3.- Define a brand strategy, values and positioning that is distinct and sustainable. Within the sector and category in which the company operates, we must analyse the competing brands to identify their values and positioning, which will ensure that our message is distinct, and at the same time the company has to commit itself to supporting and sustaining this message over time, without letting itself be defeated by the short-term demands.
4.- Both the name and identity must capitalise on the identified strategy of the brand. In this way, we reflect our values through our name and the image that represents our company and we offer our products and services in such a way that our public identifies with and purchases them.
5.- Have a portfolio of brands that meets the requirements of our public objectives and our business strategy. There is no need to create brands simply by merit of the fact that the company is diversifying or entering a new market.
6.- Be coherent and consistent. Nowadays this is perhaps one of the most arduous brand tasks, given that we have to ensure that our brand is displayed and advertised to all its target audiences and through all points of contact in a coherent and consistent manner, reflecting its values and positioning, and not allowing itself to be overcome by the demands of the short-term, or by frugal changes in business strategy .
Isidoro J. Alanis is the founder and President of the foreign currency services multinational, Global Exchange. With a Bachelor´s Degree in Business Administration and Management, he continued his academic training in the USA and Spain. In 1996, in Fuentes de Oñoro (Salamanca), he founded the company Eurodivisas, the parent company of the Global Exchange Group. Twenty years later, Global Exchange leads the industry in Spain and is the third ranking company at an international level, and leader in Latin America, with a presence in 17 countries over four continents and with 1,600 employees.
How important is the brand name for a company that operates in an sector as specific as the currency exchange service?
In a sector like ours the brand name acquires particular significance because we handle one of the most delicate assets for our customers, their money. When it comes to trusting a currency exchange service, the customer is first and foremost looking for trust, security, transparency, efficiency and professionalism, the highest quality, as well as a wide availability in terms of opening hours and accepted currencies. For this reason, it is vital to us that our brand responds to these basic requirements and that it constitutes, moreover, an added value which allows us to exceed the expectations of our clients, because we must not forget that the brand constitutes, at the end of the day, what makes one service stand out from the rest.
In 2001 you became the only Spanish company in the industry to go international. What motivated you to do this? And what milestones in your international expansion process would you highlight?
Global Exchange´s backing of international expansion was a strategic decision taken at a crucial moment for the company. With the introduction of the Euro in 2001, 95% of our market disappeared and we faced a dilemma that would leave an indelible imprint on our future: to opt for closure or to back a difficult process of international expansion, which eventually took off in Latin America. This meant a 180° turn around for the company, for our strategy and for our way of doing business, since we had to move into much more complex, completely different new areas, such as the airport sector.
The excellent results that we returned in the first years of our expansion led us to become, in a very short time, industry leaders at the international airports of Latin America and the Caribbean. After this first major milestone, we took a bet on other markets such as Africa and the Middle East, through our subsidiaries in Morocco and Jordan. At the present time, we are putting the focus on Europe, where in addition to being the most significant foreign exchange company in Spain, we have now opened offices at the International Airport of Geneva, Switzerland, and we will be doing so in the very near future at the Airport of Billund, Denmark.
So backing internationalisation marked out our future, because thanks to this decision we are today the third most important currency exchange company at a global level at international airports and we have 180 exchange offices in 17 countries over 4 continents, in which our workforce of more than 1,600 employees serves 4.2 million customers each year.
What markets are currently showing a greater volume of trade for the company´s international business?
The strongest market for Global Exchange is Latin America, where you will find 12 of our 17 subsidiaries and where we are leaders in the sector of currency exchange at the international airports. We have a strong presence in countries such as Uruguay, Paraguay, Brazil, Colombia, Ecuador, Trinidad and Tobago, Dominican Republic, Jamaica, Costa Rica, Nicaragua, Guatemala and Mexico, where we have offices both at airports as well as in other points of tourist influx, such as hotels, ports, shopping centres and on the high street.
In addition, Spain is currently one of our most important subsidiaries because it represents 27% of the total volume of business of the group. After our entry into the Euro compelled us to close 95% of our network of offices in Spain, in 2011 we began providing our service in Spanish airports and so we re-established our commercial activity in our country of origin. In just five years we have gone from a single currency exchange office in the city of Salamanca, the only one that remained open after the entry into the Euro, to currently having a network of 29 offices located in the main Spanish airports (Madrid – Barajas Terminals T1, 2, 3 and T4, Barcelona – El Prat T1 and T2, Alicante, Palma de Mallorca and Tenerife South) and we have become the most important currency exchange company in our country.
What does the creation of the online currency reservation service mean for the expansion strategy of the company? In what other ways does Global Exchange take advantage of new technologies?
Adapting our business to digital philosophy is something we consider to be essential. This is a service that comes from our strong commitment to innovation and excellence in customer service, and which provides access to our services and makes it possible to reserve currency comfortably by internet from anywhere in the world. With this service we offer our customers added value and reduce their worries when they are travelling.
Technology is in our DNA. We are constantly reinventing ourselves and for this it is essential to make full use of the endless possibilities offered by technological advances to anticipate the needs of our customers, to adapt to the markets in which we operate and to become more and more competitive. In fact, all our computer programmes are designed and developed internally. We have a department of Technology and Development which is made up of over 50 people, focused exclusively on technological innovation and the creation of our systems.
What are your internationalisation goals for 2016?
Our goal for this year is to open new offices in six countries. We are looking towards both Asia and Europe, where we will continue consolidating our expansion with new openings. This will lead to an increase in the number of offices, taking us from 180 to 230 branches, with more than 5 million customers being served. In turn, our staff numbers will increase by approximately 400 people.
Rafael Moragón Martinez is a graduate in Business Administration and Management of the Autonomous University of Madrid, has a Master´s Degree in Business Strategies for Asia Pacific from the Copenhagen Business School (CBS) Denmark, a Specialist Master´s Degree in Management of Financial Portfolios from Options – Futures Institute and a Diploma in Marine Purchasing & Supply from the IMPA (Intern. Marine Purchasing Assoc). After having undertaken various positions of responsibility in different sectors of Tec Container, he was appointed Managing Director of the Board of Shareholders, and is completely in charge of the overall running of the company, strategic planning and development, as well as of all the sectors which make up the organisation.
Tec Container has served the market for 40 years. What are the milestones you would highlight along your path as a brand?
The path of the brand has been in line with the evolution of the company. From the beginning we wanted it to be associated with one of the core values of the company, which is the technology and innovation behind our designs. One of the most relevant milestones has undoubtedly been the establishment of three brands under the umbrella of the main brand: containerspreaders.com; lashingcages.com and ohframes.com. All three complement the brand´s flagship message, placing emphasis on the products around which we wish to focus our strategy, in addition to our great commitment to digital transformation.
What importance is placed on the brand in the strategy of the company? What motivated you to recently change your logo?
TEC Container has undergone a transformation on a very profound level in recent years. Not only has it changed its strategy but also aspects such as our business culture. We believe that it is important to convey this message to the market in a very simple manner, one that is very visual and also easy to grasp. Amongst a range of activities and advertising we believed that the logo was, without doubt, one of the best ambassadors for this change.
You have a presence in more than 80 countries and the greatest part of your income comes from international markets. What are your competitive advantages compared to other international groups?
To highlight one, I would go with our ability to listen, to understand the customer and to adapt to what they really need. Other groups, perhaps due to their greater size and therefore lesser agility and flexibility, are not able to offer this capacity for adaptability that we offer. We do not dispatch products, we create solutions and help make transactions more efficient and secure.
Which markets currently offer a greater volume of trade for Tec Container´s international business and which are the markets of the future?
TEC has a presence throughout the world and the answer to the question depends on which line of business we focus on. On an aggregate level, the market in which we have the greatest presence is Europe. Without doubt the future leads along the path of continued expansion throughout Latin America and the United States of America, although we are also working to increase our presence in the rest of the world.
What promotional strategy is the brand pursuing in the international markets?
For TEC positioning on the Internet is vital. Also making contact with local companies whose brands are closely associated with quality and safety is essential to us. And lastly, our brand is doing an important job, along with institutions and other stakeholders in the market, to promote the creation of new regulations that ensure high standards of quality and safety.
What are the challenges facing the company over the next five years?
The challenges for TEC are to continue the process of transformation the organisation is involved in. We know that change has come to stay and for this reason we are developing the capabilities within our organisation to continue to be leaders in agility and flexibility, whilst maintaining the safety and quality standards that, without a doubt, have allowed us to become a benchmark in the market.
Almudena Alonso – General Manager of Cohn & Wolfe Spain
In recent years, intangible assets have been growing in significance to the point of becoming an indispensable part of the equity of a brand, surpassing even the rest of its assets. Therefore it is essential to know what it is that determines the positioning of a brand in the minds of consumers.
To answer this question, a few years ago at Cohn & Wolfe we decided to undertake the study ‘Authentic Brands’, which gathered the opinions of more than 12,000 consumers from 14 markets, seeking to discover their perception of brands and their degree of authenticity.
But first and foremost, it is necessary to clarify the concept of authenticity. It is a concept closely linked to the ability to fulfil promises made and which, applied to the business sector, is identified with the satisfaction of expectations raised among the stakeholders. In other words, it is the key to establishing a relationship of mutual trust between brands and audiences.
The study also removed any doubt about the importance of authenticity. In fact, nine out of every ten consumers would reward the authenticity of a brand, either through their loyalty or even by recommendation to other customers. This is a differentiating factor that brings an enormous competitive advantage.
Consumers, who, thanks to technological advances, now assume the role of “prosumers”, have become accustomed to expressing their opinion and to influencing others and brands. In this way, their role has changed and, in response to the huge amount of information they have access to, they have increased the level of their demands, forcing brands to strive not to be left behind.
In fact, only 7 per cent of consumers in Spain believe that brands are open and honest, which places Spain as the second European country in which less is expected from brands, second only to Sweden. Therefore, there is no doubt that authenticity presents itself as a great opportunity that very few are taking full advantage of.
So what then should a brand do to be perceived as authentic by the public? What factors are the most important to consumers? These questions hold the key to ensuring that a brand gains the confidence of its customers and makes authenticity one of its principal intangible assets.
Nevertheless, authenticity is a concept that is too broad to be defined in terms of a single attribute. In fact, according to the consumers surveyed, there are three values that determine the authenticity of a brand: reliability, respect and being real.
That is, in order for trust to exist in the relationship between brand and customers, it is imperative that this brand be synonymous with reliability and security. That is to say, there must be a definite value for consumers, which is manifested in the quality of the products or services and the fulfilment of promises made.
On the other hand, one of the greatest consumer demands on brands is that of respect. An inescapable commitment demonstrated by treating customers well, but also through an aspect that has been gaining importance, thanks to digital advances in society: the protection of the customer´s data and privacy.
The last, but by no means least important value, is being real. Consumers want brands that are natural, close and, ultimately, real. In fact, in our country, this aspect is the most problematic, given that, according to the consumers who participated in this study, brands do not manage to communicate honestly.
Thus, to achieve a good balance between these three pillars it is essential to win the loyalty of consumers and achieve a relationship of trust with them. The benefits are beyond all doubt, since the direct experience of the consumer has a significant effect on their perception of a brand. Therefore, improving and investing in this experience may offer very good results.
However, as this study demonstrates, brands must still work to achieve effective and honest communication with their audiences. And in this sense, the role of Public Relations in the marketing mix is fundamental because it allows the public to be approached in a more open, close manner and overcomes once and for all the barrier that exists between clients and brands.
Therefore, brands must not be afraid to open up to consumers or to be transparent and close. The path to authenticity necessarily passes through accessibility. If a brand manages to transmit its values and projects to their audiences, it will increase the direct experience of their customers. And the key to being considered an Authentic Brand lies in this experience.
Rubén Gil – CEO Enjoy Brand Licensing
Licensing is defined as the transfer of the equity of a brand to a third party who, in exchange for that equity, delivers a payment in cash. This equity is added to a product or service, making it more attractive to the consumer.
In the strictest sense, licensing would be the cession of a brand to a third party for the manufacture and distribution of a given product or service in exchange for a royalty per unit sold or for a service rendered. There are many examples, from Paw Patrol T-shirts to the advertising campaigns of Movistar in conjunction with Star Wars.
Licensing is a magnificent tool for the expansion a brand, so for this journey into different sectors and regions, it is therefore an excellent means of achieving the internationalisation of the brand.
So then, what are the requirements for a brand to be internationalised?
Requirements for the Internationalisation of a brand:
- Reputation: in order for a brand to be suitable to be licensed, it must have recognised prestige and must bring equity to those who purchase this brand (licensees).
- There has to be a scheme of licenses: that is to say, it must be clear what products are being licensed, the price/ positioning, advertising, and the regions where the brand will be licensed.
- A series of procedures must be in place:
- A Style guide: a style guide must be produced, which will serve as a basis for future licensees to adapt the brand to their products or services.
- A Design Department, which enhances and updates the style guide and undertakes the whole procedure of approval of the licensed products or services (products or services to which the equity of the brand has been brought), as well as for all advertising of the licensed products or services carried out by the licensee. This is crucial because it protects the brand, and lends it coherence and continuity.
- The Commercial /Marketing/License Department, which markets the licenses and undertakes the monitoring, coordination and leadership of the licensing scheme.
- The Accountancy Department, which monitors and oversees the collection of the corresponding royalties (remuneration the licensor receives from the licensee in payment for the transfer of the corresponding license).
- The Legal Department: must be able to assume the costs of the protection and monitoring of the brand in all the regions in which it has a presence.
Now that we have covered the fundamental requirements, we shall consider the steps of approach to internationalisation of brands by means of licensing .
The brands that “travel” best are those which originate in the world of entertainment (TV, cinema, apps, Internet, music), sports and fashion.
Development schemes for internationalisation of a brand may be organic, as is the case with Disney, where all the means are at their disposal, through the exposure of their product through their TV channels, and where their local offices undertake all the advertising. Or they may be non-organic activities, through agents, in which case the owners of the brands (licensors) build networks of independent agents, to whom they cede part of the equity of remuneration in exchange for undertaking development of the business in the field.
As previously mentioned, at the time of implementing an internationalisation scheme based on the licensing of a brand, we must work from a base of the reputation of the brand in the region in question. If the brand is not reputable, it will not be of interest.
Once the reputation of the brand is assured, it must be decided how to undertake its commercialisation, whether directly or through agents with local licenses.
The manner in which this area is usually dealt with at a pan-regional and international level, is that the agreements are managed directly by the owner of the brand. For example, agreements with companies like Zara, McDonalds, Hasbro, given that the agents are few, their scope worldwide, and their high level of strategic importance. As agreements are refined at a regional level, the role of the local licensing agency takes on more importance.
It is of crucial importance to choose local agents carefully, given that there are licensing agencies that specialise in a particular type of property (brands), some of which are large agencies with many holdings and resources, and others that are smaller with fewer holdings and fewer resources. The recommended criterion is to select the agency based on the type of brand that is to be commercialised. If it is a brand of entertainment, with a good reputation and a short life span (very dependent on media exposure), the ideal would be a large agency, given that, in spite of having many other properties, they will focus on the ones with best reputation, using the wide range of resources at their disposal. In contrast, if the holding belongs to the realm of fashion or design, where the handling must be more painstaking, with a focus on the long term and a more “artisan” style of work, and with a more medium and long term profitability, agencies specialising in this type of brand, with fewer properties in their portfolio, tend to be the ideal.
Also of great importance is the level of resources the licensor is prepared to devote to coordination and leadership of the local agents. If resources are limited, then it is best to use a pan-regional licensing agency, with offices in several countries and with management centralised in one of them, given that in this way it is possible to manage large areas such as Europe, Asia, Latin America and North America, with 5 or 6 players . This greatly simplifies management, but the down side is that it will not be the best possible agency in the region. If the resources are available, then the ideal is to select the best possible agency by country, although this implies higher management costs.
The local agent will perform the prospecting for the best licensees, submit the contracts of license to the Licensor for approval, undertake a monitoring process of the whole relationship with the licensees, promote overlapping marketing activities between the different licensees and support activities that retailers undertake with the brand. At times they may also participate in the process of approval of the licensed products.
Once the network of agents around the world is established, the position of the licensor must be to act as the leader the licensing programme. The licensor should lead activities in the main countries, in order to work in coordination with the local agents, with the following key players:
- Key retailers: fundamental, because they lead the brand, what they display in their premises sells and what they don´t, does not.
- Resources: if the brand depends on a specific type of media exposure, it is crucial to coordinate this exposure with the placing of the product in the market and other marketing activities that the key retailers and licensees undertake.
- Main licensees: such as international or pan-regional partners.
Ultimately, the internationalisation of a brand through licensing is very efficient because it transfers much of the risk to the licensees, who assume the manufacture, distribution and advertising of the licensed products, and it also transfers the management of business development in each region to local agents. The challenge that is always faced in these case, is that lack of control may lead to a loss of prestige for the brand, for which reason the mechanisms for controlling and leading the key processes are very important, as is the choice of the right partners, equally in the spheres of agents, retailers and licensees.
Mercedes Perea has a Bachelor´s Degree in Economics and Business Administration from the Complutense University in Madrid. In addition, she has a ‘Maîtrise de Gestion’ from the Paris IX University (Dauhpine) and an Executive MBA from the Instituto de Empresa in Madrid. She completes her education with the “auditor and certified accountant” official certificate. After several years as auditor of large multinationals and almost 11 years as CFO, she is appointed Managing Director of Algoritmos, Procesos y Diseños, S.A. (APD).
What role does the brand play for a company like the APD Group?
Branding is really fundamental. In APD, we work on a daily basis to represent our core values in our brand, since the brand constitutes the best calling card for our company and a guarantee of success in the hypercompetitive worlds of ICT and engineering in which we operate.
We try every day to develop our brand in order to agglutinate all those identifiers by which we want our stakeholders to recognize us with.
Is the same brand used in all the sectors in which the Group operates?
In the last years, we are trying to rationalize the usage of our brand to strengthen it, by supporting and clarifying APD’s value proposal. Perhaps, the utilization of different brands for different sectors has not been very helpful when transmitting the kind of company we are. Aware of this fact, we definitely bet on a better and greater definition of our brand, through a more effective communication. Our objective is to facilitate the understanding to our domestic and foreign customers, positioning ourselves with a differentiated and relevant offer.
What comparative advantages of the APD Group would you highlight over its competitors?
We are a consolidated 100% Spanish capital company with more than 35 years in the market. With an extensive proven experience, I believe that our values make us unique compared to our competitors, especially against big size multinational companies. We offer high value added engineering solutions and innovation, adapted to the specific needs of our customers, offering turnkey projects that include consulting studies, installation, commissioning and the after sales service.
All this in such diverse sectors as security & defense, healthcare or public administration. We are recognized as a symbol of service, quality and reliability.
What is the implication of the internationalization in the strategic plan of the company?
APD has historically banked on export projects, what has enabled us to consolidate our existing presence in certain countries. As a company that develops its own technology and enjoys high R&D capabilities, we necessarily must strengthen the international markets.
I firmly believe that once our products or solutions are consolidated in the domestic market, growth will be fueled by the development of the company beyond our borders. In recent years, our business figures in foreign markets have matched the numbers in the domestic market, granting us not only stability in a very turbulent years in Spain, but also significant growth rates.
What challenges and opportunities does the brand face in Spain and abroad?
The fundamental challenge remains the need to transmit effectively our values through our brand and to associate it with the new products and high technology solutions developed during the last years. There are already German, Korean and Peruvian customers who appreciate our brand, nevertheless we still have a long way to go in this regard. A huge challenge that we certainly tackle with the greatest illusion every day.
CEO at EMEA & LatAm Interbrand, Gonzalo heads the regional corporate group, spearheading its growth agenda and supporting marketing and consulting efforts in the region. He has worked with reputable companies across all sectors: banking and financial services, telecommunications, the automotive industry, airlines, transport, fashion, luxury goods, FMCG, food & beverages and technology, among others.
Before joining Interbrand, Gonzalo was Managing Director at Futurebrand and Vice President and Managing Director at Green Team Advertising in New York.
How would you rate the level of development of branding in Spain? Do you think that the business world is sufficiently convinced of the strategic importance of brands?
For Spanish companies, brands have become a key element, in particular for projecting their image and reputation, as well as with regard to their relationship with stakeholders. It is important to recognise that, little by little, more importance is also being given to brands because of the way they are strategically defined. It can therefore be said that the level of development of branding in Spain is on the rise. Brands are no longer seen to be just a logo, but as an intangible asset that has become an element for forging links with clients. They provide a guarantee of quality for brands and products and create a link with the end consumer.
The business world is gradually getting used to the idea of the strategic role that brands play and the influence they have. The potential of brands has become tangible. However, in over half of all Spanish companies, there is only one person in charge of their corporate brands. There are no trained teams who manage them. It should also be mentioned that the steering committees of just 30% of companies attach importance to brands, when in truth, the commitment of these professionals to the brand is a factor in the success of brand strategy. This means that the path has yet to be laid. The biggest obstacle is precisely the lack of involvement by senior management when it comes to managing the brand of their company. Digitisation has changed the way consumers and the brand itself interact and so, now more than ever, it is vital for both CEOs and employees to be the best ambassadors for their brands.
If we analyse brand value rankings, including Interbrand, we can see that in recent times there are emerging brands that did not even exist a few years ago, while other brands are disappearing. This is especially true of Asian brands and those of new technologies. Do you think this trend will continue in the coming years?
As technology becomes part of every aspect of our lives, we are entering what we at Interbrand call The Age of You, the era of personalisation. Brands, as elements that link businesses with people, are becoming the nexus that leads to the creation of business and personal value. Data and technology have helped optimise our day-to-day experiences as brands such as Google, Apple, Facebook and Amazon (GAFA as we say at Interbrand) have completely changed the definition of services and their connectivity. People now have greater access to many more options and as a result we have more demanding expectations of brands. We now expect brands to move at the same pace as people’s lives. Apple, for example, which is number one in the Best Global Brands for 2015 ranking, is at the top because, among other things, it has exponentially increased its environment and its focus on customers. That said, I’d like to mention that this year, for example, one of the brands that has entered the ranking for the first time is Lenovo. It is the second Chinese brand to appear on the list after Huawei in 2014. It can be seen that there is indeed a trend in Asian brands but above all we are talking about technology brands, and those at the top of the ranking are Apple, Google, Microsoft and IBM.
Speaking of trends. What do you consider to be essential for branding in the coming years?
In The Age of You, brands must be agile in order to respond immediately to consumers. If a brand is fragmented, it can result in disaster. The clarity of the message, behaviour, principles and how to communicate the brand must be fully integrated within the organisation and communicated to the strategic partners to help disseminate it. Complex approval processes have no future in the social and dynamic world in which we live. Things happen and move at such a speed that immediate answers are required. A strong organisational structure is the key to being agile and living up to consumers’ expectations. It’s like flying a plane where there are two sets of controls; both the consumer and the brand itself direct expectations and needs.
One of the great difficulties faced by branding professionals is that sometimes it is not possible to measure the work. How do you measure the value of a brand and its evolution when it comes to measuring intangibles?
It is important to mention that value is assigned through research and analysis and is assessed using a specific methodology. At Interbrand we have our own methodology which focuses on investment and on the management that is carried on the brand on a day-to-day basis as if it were another asset of the business. Interbrand was the first company in the world whose methodology achieved ISO 10668 certification, the international brand valuation standard.
This means that our methodology takes into account all the ways in which a brand influences a company, from attracting and retaining talent to providing the client with what they expect from the brand. The final value can thus be used to guide the brand’s management so that the decisions of different businesses are taken using much more information. There are three aspects that contribute to the valuation of a brand: the financial performance of the products and services offered by the brand; the role that the brand plays in the decision-making process; and the strength of the brand.
During the economic crisis we have seen that companies that stood behind their brand and behind the idea of differentiation have best withstood the ups and downs. In your opinion, what advantages does a strong brand offer a company?
Strong brands position themselves better than others during a crisis. The ones that perform the best are those that invest during hard times as they will emerge stronger when the recession is over. In times of crisis there are five key points to keep a brand strong and these include: communicating in a consistent and confident way; exceeding expectations when dealing with problems; being transparent and totally ethical; putting aside corporate policy to focus on the consumer; and using creativity and innovation for every single touchpoint. When something is unique, different, credible, relevant and engaging, a successful brand can be achieved. It is important to mention sustainability and standing the test of time. The great advantages enjoyed by companies with strong brands are authenticity, relevance, differentiation, consistency, understanding and presence. If you do not communicate, you will not be understood; if you are not understood, you will not be remembered; if you are not remembered, no one will buy what you are offering; if no one buys, you will disappear. That is why brands are so important and why it is vital to invest in them.
Cases of companies that invested in their brand during the crisis and emerged stronger because of that are: Movistar, which increased its brand value by 5%, as shown in the recently published Best Spanish Brands for 2015 ranking; and Apple, which continues to reinvent itself and anticipate the needs of its customers, was Number 1 in the Best Global Brands for 2015 ranking.
If you look at Spain, there are very few brands that can be considered to be truly global. Why do you think that is? Which brands do you think have the most potential to internationalise?
There are many international Spanish brands, but only a handful are truly global. In Europe, our main unresolved issue is to fully internationalise so that we are known outside of Europe.
The main characteristic of Spanish brands is the passion that Spaniards have and this is imbued in everything they do and make. The sectors that are most associated with Spain are those related to leisure and lifestyle, be it the food industry, tourism or fashion. It is true that the scant presence of Spanish brands abroad is noticeable and this is linked to poor promotion of their Spanish origin. What we do need to consider, however, it is that in general terms, Spanish brands are perceived as dynamic and constantly evolving, and as good value for money. We must bear in mind that Spanish brands are gradually beginning to be known thanks to the creation and development of new icons, sponsorships and celebrity/brand ambassadors.
Top, globally-known, Spanish brands today are Telefónica, Santander, Zara, Mapfre, Carbonell, Iberdrola, Real Madrid CF, Ferrovial, NH hotels, Prosegur, BBVA, Mango, Pronovias, Cola Cao, Repsol, FC Barcelona, ACS and Freixenet. The most visible Spanish brands are those of mass consumption. Brands such as Zara (the leader abroad), Mango, Real Madrid CF and Iberia, among others. Strong Spanish brands always support the image of Spain abroad.
Some of the very interesting brands that will get people talking in the future more than they are right now are: BQ, in the technology sector; the personal brand of Kike Sarasola and his groundbreaking BMate and Room Mate projects; the toyshop Imaginarium; Natura Bissé in the cosmetics sector; and DO La Rioja and Vega Sicilia which are two of the most desirable and sought-after wines in the world.
What are the main challenges facing brands today?
Brands have to grasp the fact that today we live in a fragmented way; at Interbrand we have coined the term “micro moments”. It does not matter if a brand has a perfectly seamless ecosystem because the connection people have with the brand is created in a fragmented way. There is widespread confusion because players, products, brands and choices have multiplied, while the time available to consumers to make decisions has decreased sharply. Therefore, now more than ever, brands have to earn the right to be part of that group of brands that create experiences for each particular individual, what we call the “mecosystem” (literally, an ecosystem built around me, in other words, the individual). The goal is to be part of that “mecosystem” every minute of every day because individuals rate the brand as a whole with regard to every part of their experience (each micro moment). The most successful brands are those that are able to prioritise and build people-based experiences; they use technology to promote products and services in ways that integrate them into people’s daily lives, and listen to their needs in order to implement them. This is because today’s businesses and, as a consequence, brands, have to adapt to people’s pace of life.
The secret to success is to be consistent, to work on offering a 360º brand experience at every touchpoint as well as focusing on actions. Large companies are transforming and emerging from their comfort zones to reach out to customers in a more friendly way.
Juan Luis Manfredi Sánchez
Professor at the University of Castilla La Mancha
Corporate diplomacy is the instrumental development of strategy to guide relations between the public authorities and private organisations. It entails defending interests by using tools typically found in diplomacy. Companies become diplomatic entities, without detriment to other conventional activities used in international economic relations. Corporate diplomacy is the task of the chief executive to the extent that it requires an understanding of globalisation, the need to acquire new skills and competences, extend the network of influence and modernise management tools. The management staff of the 21st century have to increase their range of skills and competences. It is not enough to understand financial statements, it is also necessary to know how to speak and communicate with the various conventional and digital audiences, to have an understanding of multiculturalism, to learn how to manage in uncertainty, to welcome technological disruption and to have an enterprising spirit every day of the year. Good managers are those that are capable of leading, negotiating and communicating, these being tasks that are inherent in diplomacy. The future of corporate management lies in developing this kind of managerial intelligence, which is adapted to real rather than imaginary globalisation, and experiences its complexity.
Corporate diplomacy makes sense when we look at the four basic functions of diplomatic activity: representation, negotiation and the protection and promotion of interests. When transferred to the sphere of private organisations, we understand that diplomacy entails establishing relations with third parties (with the capacity to take action or make decisions) in order to resolve both one’s own and others’ problems, create common working frameworks and generate trust. It is indeed a question of transferring a function that was reserved for State policy to the area of business management. In the international arena, diplomatic activity has ceased to be the monopoly of states in the face of the rise of stellar mayors and cities, corporations, NGOs and networks of shareholders.
Representation is the first function. Until now, the role of chief business directors, whether CEOs or corporate capital representatives, focused almost exclusively on internal management, with small incursions into the institutional sector and public opinion. This traditional role is insufficient to tackle today’s problems, where the role of the most senior executive is a leadership one and is much more political and visible. It is no longer possible to drive the development of business objectives by granting an interview here and there or by giving an annual speech to the general assembly of shareholders. The bottom line now depends on more elements, and the reputation determined within the framework of public communication is of course one of these elements. In the whirlwind of ideas, our proposal has to be distinguished with arguments and accurate facts, not just with isolated actions.
Negotiation is the capacity to reach agreements that can be sustained over time and that are capable of creating specific, solid competitive advantages. The diplomatic function hinges on the ability to engage in dialogue with the various stakeholders, who probably pose different problems and wishes. Here the role played by the human dimension is a key one: the ability to understand matters on a personal basis. The role played by the chief executive, the CEO, or whatever name is used in each organisation, is absolutely critical. It is not a question of being nice to everyone, but of having a specific personality that reflects the values of the company. Coherence makes it easier to ensure success than unfurling a host of communication activities that are not sincere. The personality of the chief executive is a diplomatic asset that varies depending on the nature of the company. In a family business, the chief executive promotes specific values, uses the weight of history as leverage, and sees continuity as being a powerful asset. Personalism is the order of the day. On the other hand, listed companies can change their profile and orientation much more easily, which gives them agility and speed. However, the new executive does not allow other assets to be captured such as tradition, history or ties with the region.
This element determines how relations are established and how resources are managed at any given time. Game theory has to be overcome, at least in its reductionist view of a zero sum game. Our experience tells us that personal strategies that advocate a result which accommodates the interests of all the parties perform better in the long run. Long-range vision will result in the good reputation of the company and its legitimacy to operate in the market. Sensu stricto, the imposition of wills only leads to sporadic victories, but not to the creation of value. I can draw a lesson from chess: the company’s overall position (regarding accounts and agreements) is more important than the last move made, which might have been a waiver or a bad tactical decision.
Corporate diplomacy is not a specific lobbying activity, and here I disagree with the ideas of Susan Strange (2000). The British scholar puts more weight on relations between companies and governments, an interpretation that omits some of the elements of current strategy. In their relations with governments, organisations aim to influence a country’s economic and industrial policy. A second modality might be the establishment of relations with other companies in the same sector in order to establish alliances, build coalitions, or undertake new projects. Strange links this activity to lobbying inasmuch as it points to exerting pressure on the legislator as a recurrent measure. Thus, it is possible to influence regulations in one way or another.
She is indeed right when she notes the need to know how to manage relations with regulators at their various levels of operation (local, national and international). Specifically, it entails finding out the needs of the legislator and of the environment affected, as well as how to interpret changing trends. On another level, it is necessary to find out how global unions influence labour decisions. Depending on the industry or the market, their ability to influence negotiations may be significant.
This knowledge of the environment in which a company operates might be the only way of anticipating change. For this reason, in my opinion, it is not only a question of monitoring legal activity but also of taking preventive action to reduce risks and conflict with the public authorities. The monitoring activity is reactive and cedes leadership to third parties, resulting in an increase in uncertainty. Precise knowledge of the political and social evolution of the key authorities an organisation has to take into account when designing its strategy turns out to be more competitive. This is what managerial intelligence is all about.
Protection is materialised in two areas of the organisation. First and foremost, the people, who are the driving force behind internationalisation. The diplomatic experience needs to be used to weave a network of professionals that can combine the strategic decisions taken by the centre with their tactical application in each of the target markets. The network that manages to combine ambassadors, secretaries, attachés, youngsters and veterans. Each country requires a differentiated formula. Even more, protection involves exiting the country in the case of emergency, the ability to link up with the country’s police and defence services, and knowing how the intelligence services work. The second axis of protection is the global supply chain. No matter what the activity is: global production, distribution and consumption processes link up the geographic blocs of free trade. It is essential to protect the various situations in order to avoid being overwhelmed by a crisis, an emergency, a power outage, or a rise in sea level. This global vision of resources widens safety system requirements and orientates managerial intelligence towards the protection of what is irreplaceable: people and raw materials.
The promotion of the company’s interests has different dimensions. Globalisation has given new prominence to chief executives. Transparency, instant communication, social networks and new media have made companies and their executives influential players. The public arena demands that executives become leaders and adopt a decisive role in changing the environment, in new creative capitalism.
Corporate diplomacy is a function that is typically found in managerial innovation in the 21st century. A presence in the public arena, as well as the impact of the action taken in this area on the bottom line have given new meaning to the idea of collaboration and relationships with third parties. This constitutes a qualitative leap in the stakeholder theory, so popular in the 1990s. Following the publication of the book by R. E. Freeman “Strategic Management: A Stakeholder Approach” in 1984, many companies and analysts gained an understanding of externalities, the management of relations with third parties and the need to design a strategy that considers the consequences of our business decisions. Transformation gives more value to public opinion, which is so manifest in any decision. Anyone affected, equipped with their mobile phone and handheld camera, can provide an account of inappropriate behaviour. The public space of the company is more extensive and, of course, cannot be controlled exclusively by the business.
Negotiating with external agents, establishing strategic alliances in various parts of the world, manoeuvring via offensive or defensive coalitions and having the best available information on those aspects that are deemed to be key for decision-making is a real challenge when the market boundaries no longer merely coincide with the domestic market and a handful of other countries. The new global village multiplies exponentially the need for a constant stream of information, for a continuous presence and for management tools of proven effectiveness. At the same time, corporate transparency has become an essential aspect for operating in the market. There has been an increase in demand for corporate responsibility under various guises.
The profile of the business leader with the almost absolute power of yesteryear has evolved into the need for a new type of leadership that is much more focused on understanding, persuasiveness, and efficiency in seeking out potential agreements. In short, the whole range of characteristics that form part of managerial intelligence. Just as hard power has evolved towards new territories, the “imperial CEO” that prevails in the US market has ceased to be a benchmark. Empathy, the ability to listen and an understanding of diversity in globalisation are now required. This is what moving from management to leadership entails. Corporate diplomacy is therefore spawned to cover leadership needs in global organisations. Corporations are now aware of their greater autonomy from the public authorities and of the shortcomings of the latter in contributing to the swift and diligent resolution of their conflicts and crises in other markets, following the usual pattern of international diplomacy and, at the same time, of national diplomatic services. In the first place, those who contribute to the company’s reputation, perception and credibility by offering knowledge that coincides with reality and fluid dialogue are all the social agents concerned.
It is a very complex context. The corporate diplomat acts like an orchestra conductor searching for harmony. He or she is guided by managerial intelligence, not only by the bottom line or the earnings bubble for each quarter. This type of leadership favours a presidential style, the prominence of the entrepreneur that projects their personality, weaving a network of contacts at the service of the business and generating an atmosphere of trust. Senior management accompany decisions, but if the aim is for private diplomacy to be successful, it should have the backing and involvement of the chief executive.
To sum up, as far as corporate diplomacy is concerned, the executive becomes a kind of statesman, a person capable of uniting individual wills. In an open, competitive market, the leading entrepreneur plays another game – the one where they try to be better informed, have a better position and a better reputation. Corporate diplomacy can contribute to innovation in the management model and equip the board of directors with the tools required to make the leap to the global economy. 2016 may be a decisive year.
After preparing for civil service exams to become a judge, María Ángeles Moreno embarked on a career as a lawyer specialising in industrial property. In 1991 she joined Herrero & Asociados after working for Spain’s leading industrial property agent at the time. Ms Herrero runs the Department of Trademarks abroad, being in charge of the processing, management, surveillance and enforcement of trademarks worldwide, including EU trademarks and the special services provided to Latin America.
As experts on the matter, what role does the Herrero & Asociados brand play and how is it protected in your corporate strategy?
The brand has strategic value for Herrero & Asociados as it does for any other company that wants to stand out in the market. In our sector, the brand is of crucial importance; not only do we need to have a healthy portfolio of brands that enables us to provide our services with real peace of mind, but we also need to create a trademark every day through our good practices in those EU and Latin American jurisdictions where we have a presence, and also wherever our clients are located.
With regard to your presence in Latin America, what is your competitive advantage over other international firms?
Our competitive advantage lies in our profound knowledge of industrial and intellectual property all over Latin America, this being a product of the experience gleaned from more than 30 years providing specialist services to our clients.
This experience and knowledge of the needs of our clients and of many other companies led us to establish a presence in some of the countries in this region, starting with Mexico, then Brazil, and now Argentina.
Our offices in Latin America are not a carbon copy of the structure of our head office, as is the case with other firms. Our central office offers our clients centralised services that are complemented with a local touch from our offices and associates. We do not have fixed structures, but adapt to the specific needs of our clients in each of the countries as well as to local laws and practices.
We listen to our national and international clients; we understand their needs and endeavour to cover these and to even anticipate them. This is why our offices are a perfect reflection of the demand emanating from their requirements.
What are the main selection criteria for deciding what new markets to enter?
The search, penetration and consolidation of new markets has always been one of the biggest challenges facing Spanish companies in the global arena. International expansion at Herrero & Asociados was not only a challenge, but also a necessity if we were to respond to our clients’ needs.
At Herrero & Asociados we decided, nearly 10 years ago now, that we wanted to lead the way in industrial and intellectual property matters in Spanish and Portuguese-speaking markets and it is for this reason that we embarked on our expansion with an office in Portugal, later spreading from Spain and Portugal to Mexico and Brazil, countries where our clients required special attention.
Today we cannot be more convinced that our decision was the right one. In Mexico we have carved out a position for ourselves among the top ten submitters of patents and we have won the trust of huge international and even local clients that have seen Herrero & Asociados as a firm that responds to their needs, with the characteristics of a local firm but with the benefits to be derived from our international vocation.
If we add to this the fact that our offices, and not just the one in Mexico, provide a benchmark for local Trademarks and Patents offices, and our firm is recommended in major international legal directories, we cannot fail to be really satisfied with the decision to internationalise our company.
What are your biggest markets at the moment, and which are your future markets?
For us, Latin America is a market that is one of a kind. Maybe this has been one of the keys to our success and it is for this reason that our expansion is still focused on this huge market.
Looking at macroeconomic data, Mexico and Brazil are still our top priority, and Argentina is our new target. With the opening of this new office, we are also catering to the demands of our foreign clients who have been asking us to open this office for some time now.
For us, Latin America is a short and medium-term business objective in which we feel completely integrated and very comfortable – it was not in vain that we started to work on this area from the moment we founded our company.
What promotional strategy is the brand pursuing in international markets?
Our promotional strategy is very simple: we seek out the best professionals in each of the areas in which our clients demand our services so that we can give them attention of the utmost quality with an awareness of the economic situation worldwide. We have created the structures required to be in a position to provide this service at extremely competitive costs.
What are the main challenges facing Herrero & Asociados at present?
- The main challenges we are currently facing at Herrero & Asociados are clear: to continue innovating, creating new services for our clients and to fully protect intellectual and industrial property rights on a global scale.
- To understand and adapt to new business models, getting involved in the affairs of our clients, remaining proactive and providing a personalised service to all clients.
- To remain an international firm with just one business objective: to provide specialised legal advice at national and international level, with maximum quality, professionalism and exclusive dedication.
On 3rd December 2015 the Leading Brands of Spain Forum (FMRE), together with the Office of the High Commissioner for the Spain Brand, organised a ceremony to publicly recognise the ‘Friends of the Spain Brand and Spanish Brands in Hong Kong’ at a gala dinner commemorating the 25th anniversary of the Spanish Chamber of Commerce in Hong Kong.
The ceremony was attended by over 200 people, including prominent representatives from the business, diplomatic, academic and institutional sectors, in both Hong Kong and Spain, along with around twenty accredited journalists.
The event was chaired by the Spanish Government’s High Commissioner for the Spain Brand, Carlos Espinosa de los Monteros; the Spanish Consul in Hong Kong, Santiago Martínez Caro; the president of the Spanish Chamber of Commerce in Hong Kong, José Martino, and the managing director of the Leading Brands of Spain Forum, Miguel Otero.
Friends of the Spain Brand
Airline that recently announced the opening of the first direct link between Hong Kong and Spain.
Hutchison Whampoa Limited
A company that has made significant investments in Spain and particularly in the port of Barcelona.
Hong Kong Arts Festival and its patron Stanley Ho (ex aequo)
These people have clearly focused on Spanish art and culture, affording it great prominence in Hong Kong year after year.
Hong Kong’s telecommunications giant, which has made a clear commitment over the past few years to the technology being developed by Spanish companies, thereby facilitating their expansion throughout Asia.
Friends of the Spain brand
Friend of the Meliá brand
For its support in gaining recognition for the brand among Asian tourists.
E.Bon Holding Limited
Friend of the Cosentino brand
For its key role in developing its brands on the Asian continent.
Friend of the Lladró brand
For being a prestigious art collector who has supported the brand for years in Hong Kong.
Friend of the Estrella Galicia brand
Watson’s Wine Wholesale
Friend of the Freixenet brand
This is one of the main distributors of wine in Hong Kong and has played a key role in the growth of Freixenet in the region.
BON BON Paradise
Friend of the Alimentaria brand
For its commitment to Spanish cuisine and its constant backing of this institution.
Friend of the Leading Brands of Spain Forum
A highly renowned public figure in Hong Kong who has spent years building bridges between the two countries and who played a key role in getting this event to be staged in Hong Kong.
Friend of the Spanish Chamber of Commerce in Hong Kong
One of the institutions that has invested the most time enhancing the prestige of the Spain Brand in Hong Kong in its respective fields.
Corporate Director of LLORENTE & CUENCA
Executive Director of the Senior Management Program and Lecturer at the IE Business School
Member of the Scientific Council of the Real Instituto Elcano
Consultant, LLORENTE & CUENCA
Nowadays, the operational environment for doing business no longer relies on predictable factors and variables that remain static for long periods of time.
We are living in times of constant change.
Times of rapid change for those for whom the discipline of managerial and business foresight has become obsolete.
Uncertainty has become the new norm.
On the one hand, markets typically offer, in the words of lecturer Ángel Núñez from the IE Business School, an increasingly non-distinguishable range of products.
It is becoming harder and harder for business models to keep their promise of offering differentiated value with respect to the market, customers and consumers.
On the other hand, disruptive innovation extends across all industries.
New business models are born every day to deconstruct the large value chains of companies that dominated 20th-century industries and finally snatch the “golden nuggets” of these value chains from them.
It is no surprise therefore that the average age of companies included in S&P 500 Index has plummeted from 75 years of age in 1957 to 10 years of age in 2013.
In this context, innovation is not just a fad but also a necessity if you want to survive in the market.
The development of know-how and knowledge also seems to be limitless.
Everything a human being learns today will be obsolete within a period of roughly 18 to 24 months.
Uncertainty is also pervading the geopolitical order and international relations.
The stability – undoubtedly perverse – which de facto created a world divided between two major powers competing in a global arena has vanished along with the end of the Cold War.
We are living in a world in which there are no longer any fixed lines marked off by political, economic, commercial or informative barriers.
The boundaries are blurred and the stage is set for new stars to break through.
New power alliances, regional blocs, trade agreements and connectivity networks are created that define the world of the 21st century.
A world in which, despite the writings of many scholars, intellectuals and dilettantes, economic globalisation has still yet to happen.
True globalisation has still not arrived.
We only have to mention, for instance, the case of the new China that has emerged, which has increased its presence in Latin America to the point where it is now the region’s second largest trading partner. China’s bilateral trade relations with the Region, contrary to the expectations of some analysts, offer encouraging growth prospects for the future.
We are reminded of this in “Latin American Economic Outlook 2016: Towards a new partnership with China”, the latest report drawn up by the Organisation for Economic Co-operation and Development (OECD), the Economic Commission for Latin America and the Caribbean (ECLAC) and CAF–Latin American Development Bank, and which was presented during the 1st Meeting of the Ministers of Foreign Affairs at the Ibero-American Conference held last week in Cartagena de Indias, in Colombia.
Over the last few years, China has also become the largest investor in Africa.
The Chinese economy has embarked upon a process of re-orientating its economic growth model, moving away from the purchase of raw materials and focusing on domestic consumption and services.
This change in its production model is having a domino effect on globally connected economies.
Furthermore, the negotiation of major regional trade agreements also creates new global spaces for trade and economic rivalry in a world devoid of dominant imperial powers.
Hence, the Trans-Pacific Partnership (TPP) aims to strengthen economic ties between its signatories and could become the biggest trade deal in history since it aspires to bring national economies on board that account for 40% of the global economy.
Additionally, in the other major oceanic basin, the Transatlantic Trade and Investment Partnership (TTIP) is designed to remove tariffs and regulatory barriers between the US and Member States of the European Union.
These are just two examples that show that true economic and, by extension, business globalisation is still in its infancy.
All these phenomena require companies and their leaders to learn to adapt to new environments that offer very little facility for prediction.
Managerial skills like flexibility, agility and resilience become an absolute must.
New times call for new styles of leadership aligned with a strategy to protect and strengthen the reputation of the organisations they service.
Reputation is, at the end of the day, the asset that will guarantee differentiation between promises of value and obtaining the social licence to operate in the markets of the companies.
And, with these, their long-term survival and sustainability in an environment that is plagued with risk.
For this reason, corporate diplomacy – that is to say, the managerial task that involves establishing permanent dialogue with all stakeholders so as to have an impact on them – is the basic job that needs to be addressed by corporate leaders, who should hence act and behave like ambassadors for their companies and promote the values defining such companies on the international stage.
Exercising corporate diplomacy basically consists of building trust in the business models: what they are, what they represent, and what they aim to be.
And, undoubtedly, economic and international trade relations based on trust have a direct impact on the future of companies and on the success of their value promises.
The business world urgently needs to identify a new breed of managers.
Leading business schools have the responsibility to fashion real corporate diplomats.
Uncertainty is the new norm.