While the U.S. has long lagged the rest of the world in accepting electric vehicles (E.V.), Prophet’s new research shows that this may finally be changing. It also demonstrates that Asian brands already have clear advantages in the automotive category. But to keep winning, another trend is equally apparent: To be considered indispensable to American consumers, auto companies need to reposition themselves more as tech brands.

“Auto companies need to reposition themselves more as tech brands.”

Findings in the 2021 Prophet Brand Relevance Index® (BRI) underscore just how pivotal a moment we are at. It has taken years, but external changes, including government mandates on carbon emission, manufacturers’ promises to move towards all-electric fleets and the increasing acceptance of strong players such as Tesla, Canoo and NIO, have led the auto industry to an inflection point. US consumers are finally changing their expectations towards automobiles. And here is why.

Reliability Wins the Race

For the first time in the BRI’s six-year history, Honda has leaped into the Top 10. Consumers give it ultra-high scores for dependability and “Lives up to its promises.” Toyota, which is beloved for popularizing hybrid cars, also ranks No. 14, because it excels in these attributes too.

Switching Gear to High Tech

However, the BRI delves beyond practical product factors and gauges how innovative, inspirational and engaging brands are perceived to be by consumers. While heritage brands like Honda and Toyota are highly relevant today, they fall short of other technology brands on these dimensions.

This offers more profound lessons for auto companies. Auto companies have long been injecting more tech into their vehicles and their marketing, but they still act like car companies.

Tech companies have a different way of showing up in the world.

With rapid innovation and deep connections to consumers, they have become pillars of relentless relevance. They earn admiration and respect in ways no other brands today.

Apple is again the No. 1 brand in Prophet’s ranking, as it has been in every single BRI study conducted in the U.S. People love how it makes daily life easier and say it is a top brand they can’t imagine living without. Spotify (No. 12) is another company that has made itself indispensable, artfully weaving itself into people’s routines. The same goes for Netflix (No. 18), recognized for pushing the status quo and helping many through the pandemic. All these technology leaders are building powerful emotional connections with their customers.

And as these tech brands race into the automotive category, traditional automakers are highly vulnerable. Chinese tech giant Baidu saw its stock climb after it announced it was working with automaker Geely (who acquired Volvo) to launch a new E.V. venture. And while less is known about Apple’s plans, it reportedly intends to launch its E.V. in 2024.

Beyond Apple, there are other disruptors emerging in the U.S. include Rivian, a joint venture between Amazon and Ford Motor Co., that has just gone through a massive public offering. And investors are already trading shares of Canoo, an intriguing model that pairs its new E.V.s with a subscription model.

If traditional auto brands want to hold their own against these emerging tech-auto brands, they’ll need to step up their offerings around innovation and intelligent technology to build stronger emotional ties.

Some are. For instance, Hyundai (No. 28) scores an impressive 90% on both “connects with me emotionally” and “engages with me in new and creative ways.” Despite scoring higher overall, both Honda and Toyota are weaker in those dimensions.

Hyundai is gaining that relevance edge by finding high-impact ways to connect to young car buyers. Its recent launch of the IONIQ brand (E.V./ hybrid model) collaborated with BTS, its global ambassador, to release a new song, gaining 26 million views on Youtube to date. Before that, Hyundai’s beautiful Earth Day campaign video featuring BTS was watched over 105 million times. Such moves undoubtedly build an unparalleled emotional connection with Gen Z consumers.

Next Steps to Build Relevance

E.V.s and AI technology are inevitable, igniting consumer curiosity and consideration in the lucrative U.S. market. Asian auto brands, already well known for dependability and trustworthiness, can’t afford to let this opportunity pass.

Honda is said to have developed industry-leading “level 3” autonomous driving technology that is set to be launched in March. This will be an excellent opportunity for the renowned automaker to evolve its brand positioning to be more aspiring and technology-driven.

While there are several other brand lists and rankings out there today, none other speaks directly to consumers to find out which brands are the most indispensable to their lives.

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It is more important than ever for companies to have a brand purpose. To remain relevant to their customers, companies need to find opportunities to share that purpose with the world and in turn, also become inspiring places to work for their employees.

A powerful way to reinforce a brand’s value to both internal and external audiences is through brand anniversaries.

They are also an opportunity to celebrate the past while setting up a vision for the future.

In the past few years, many iconic brands have used key anniversary milestones to strengthen ties with their stakeholders and build brand perceptions around a strong purpose. But anniversary celebrations can be used in different strategic ways as well. We’ve identified 3 ways brands can make the most of their anniversary through a focused strategy.

3 Ways Brands Can Use Anniversaries to Reinforce Their Brand’s Purpose

Reinforce the Core

For example, Marvel Studios used its 10-year anniversary to engage core fans and drive loyalty through its “More Than a Hero” campaign. The branding campaign kicked off with a week-long event showcasing 20 Marvel movies in IMAX theaters. Marvel also released behind-the-scenes, never-before-seen footage and launched a sweepstake for fans to share their favorite Marvel memory on social media.

Through these activities and content, they successfully engaged tens of thousands of fans in live events and via anniversary videos on YouTube (which received over two million views), helping to cement loyalty for the franchise.

Strengthen Your Image

Swiss Re celebrated its 150th anniversary by engaging stakeholders worldwide to participate in collaborative dialogues on important topics of our time, such as advancing sustainable energy solutions, funding longer lives and partnering for food security. To achieve its goals, Swiss Re launched The Open Minds Forum around the world, discussing ground-breaking ideas and exploring fresh perspectives on the risks facing generations to come. Employees were also encouraged to write articles and share their perspectives.

The anniversary celebration helped Swiss Re initiate conversations around business and societal risks with its customers and reinforced the brand image of being ‘smarter together,’ by creating a dialogue with people around the world.

Shift the Narrative

For its centennial anniversary, BMW launched “The Next 100 Years”, a year-long integrated campaign to strengthen its brand worldwide. As part of the campaign, the company revealed four concept cars and released “The Next 100” publication to invite industry experts & pioneer thinkers to envision the future of BMW. They interacted with consumers digitally through curated content on a dedicated centennial website, live discussions on social media platforms, and AR/VR interaction through the ‘BMW VISIONS’ mobile app.

These anniversary celebrations bolstered BMW’s status as a future shaper by gathering hundreds of thousands of guests and consumers to join celebration events in person or online.

How Do Anniversary Celebrations Help to Amplify Brand Purpose?

While each of these celebrations took on different forms and focused on different objectives, there were four guiding principles they each followed which made them successful:

• Be authentic: For any anniversary celebration, you need to stay true to your brand DNA in everything you do and say
• Be clear: You need to have clear objectives and create a single, overarching theme to align all activities and leave stakeholders with a clear understanding of what your brand stands for
• Be targeted: You must consider what you represent to different stakeholders and design specific ways to engage each of them appropriately
• Be bold and brilliant: To deliver impact, you must activate at sufficient scale and frequency to get noticed and to show the company in a new light

Lost in Translation

In today’s economy, nothing matters more than a “customer first” mindset. But even the most customer-obsessed companies falter when they fail to translate their global purpose into localized efforts. Take, for example, Marks & Spencer, who announced earlier this year that they would halt online sales in China – just 2 years after also closing down their brick and mortar stores in the market – due to disappointing sales because they failed to adapt to the tastes of Chinese consumers.

The importance of localization seems so evident that it’s hard to explain why so many companies undervalue it. To some extent, the tendency to value globalization over localization stems from the historical emphasis brands have placed on centralization and consistency. But, while a certain degree of consistency is critical for all brands and does bring substantial business efficiencies, brands that tend to be most successful are those that manage to balance the desire for global standards with the need for local flexibility. Brands that are dynamic and ‘living’ versus static and confined.

It’s a strategy that is becoming increasingly important for global companies. “Localization of your brand proposition is ever more important in today’s digitalized world, where consumers expect to be able to cherry-pick and create their personalized value ecosystem,” says Akira Mitsumasu, VP of products, planning and services at Japan Airlines. “Having local knowledge and understanding of how to fit into that value ecosystem is essential to stay relevant.”

How localization fuels relevance

At Prophet, we have identified this obsessive focus on customers and their needs as one of the key pillars of building brand relevance and driving growth. Our research shows that the strongest brands around the world are those that manage to be relentlessly relevant. Everything these brands invest in, create and bring to market is designed to meet important needs in people’s lives. That’s what makes them indispensable.

When we look at companies that perform well on our Brand Relevance Index, including Nike, Amazon and Samsung, we can see how they use localization as a strategic opportunity for brands. Done right, it provides a potential lever for growth in an era of escalating disruption. It creates more relevance to more people in more markets.

“If you want to be customer-centric, you have to localize,” Li Run, Senior brand director at TCL, recently told us. “Only by understanding consumer needs and providing products and services that meet their local needs and values, can a brand achieve the deepest level of connection – getting beyond acceptance and towards being loved by local consumers.”

While localization is a strategic opportunity for brands everywhere, it is particularly critical in Asia. Growth here is expected to continue to drive the global economy for years to come. As multinationals seek growth in Asia’s diverse economies, localizing their brand and marketing is emerging as a core strategic component.

But it isn’t easy. “Very often when a company comes to Asia with growth plans, it first needs to develop an authentic narrative for the Chinese market,” says Charles Ferguson, Group Chief Commercial Officer at Tricor. “But the mindset and behavior of the Chinese can be very different.”

“Only by understanding consumer needs and providing products and services that meet their local needs and values, can a brand achieve the deepest level of connection – getting beyond acceptance and towards being loved by local consumers.”

Multinationals aren’t the only ones wrestling to find the best approach. More Asian brands are looking beyond their domestic markets for the next wave of growth, and localization will be vital if they are to replicate success at home in other regions.

This is a significant challenge in a part of the world where brand-building is still in its relative infancy. In the consumer electronics industry in China, for example, Oppo and Vivo have been successful with their strategy of investing colossal sums in celebrity endorsements and product placement. But that is unlikely to be sustainable as they expand into new markets. As a result, One Plus (in which Oppo is an investor) have taken a new approach for the Indian smartphone market, using guerilla retail and messaging around ‘the speed you need’ which resonates with Indian consumers desire for technical excellence. This has helped them capture share in the premium tier.

Unlock the power of localization

While localization has the potential to increase brand relevance and accelerate growth, the best approach will look different for every company and every market. Here are the four essential questions senior management and marketers need to ask:

Do I need to localize my brand?

Very often the culture, value system or competitive landscape mean that the benefits you want to stand for are not relevant or even have different meaning. For example, investment company T. Rowe Price uses the tagline “Invest with Confidence” around the world. But the meaning of confidence varies: In Japan, people feel confident when reassured everything is as it should be, while in Hong Kong, confidence comes from access to exclusive information. So how the company communicates and delivers on the same brand promise is tailored in these markets.

Who should I localize for?

In an ideal world, companies might localize certain aspects in all markets, but that’s often not practical. Prioritizing which specific markets, and which consumer segments within those markets, warrant a localized approach is vital. But, are you clear on who you are targeting in different regions? Do you fully understand the attitudinal differences across markets and the implications for your brand? Developing a robust fact-base about the consumer to identify any potential differences is critical.

Budweiser is one example of a global brand that has managed to use a similar brand positioning but targeting a different audience in a way that fits their lifestyle. Their target in China is younger and more premium, so they have devised fresh retail and digital activations tailored to this audience to draw them into the brand experience beyond the product itself.

To what extent do I localize?

There are so many elements that make up your brand strategy and marketing mix. It is hard for companies to know how much change is right. Should you alter your brand promise, product names and logos, the product itself, distribution channels, or simply modify the messaging or visuals? The key is to identify the levers that most impact relevance in the category and market.

At Marriott, for example, the brand’s foundations – its positioning, promise and values – “must be globally consistent,” says Mike Fulkerson, VP, brand and marketing, Asia Pacific. “Keeping those foundational elements is important to meeting the needs of consumers around the world. We are most focused on localizing how we communicate the brands as well as more specific elements of the guest experience, such as food and beverage.”

How can I deliver?

Finally, it’s important to be realistic about the capabilities you have both in-house and through your network of partners, to bring a localized strategy to life in an authentic way. “Having a management team that understands the value of both cultures is very important,” says John Kim, CEO at Burger King Japan. “Look for people with sensitivity, as well as personal depth and maturity, people who can listen and comprehend the ‘why’ behind what people are saying and to decode the underlying values.”

Recently, there has been an outflow of cash from Chinese brands into global blue-chip sponsorships.

In January, Alibaba shelled out $800 million to become a top-tier Olympic Games sponsor until 2028, and last month Vivo signed a $450 million deal to sponsor the 2018 and 2022 World Cups, joining Wanda and Hisense on the roster of FIFA’s top tier partners.

It is well-publicized that Alibaba has aggressive growth goals, and with less than 10% of revenue coming from outside of China today, it must win overseas in order to meet its targets.

“Alibaba shelled out $800 million to become a top-tier Olympic Games sponsor.”

With the recent signals from Beijing that brand-building is a key growth imperative for China (as evidenced by the proclamation that May 10 is now “Chinese Brands Day”), it is likely that we will see more and more Chinese brands using global sponsorships as a platform to drive greater awareness and consideration as they enter new markets.

It remains to be seen whether these sponsorships will promote consideration of Chinese brands in Western markets, but spending the cash needed to get their brand in front of more than 3 billion eyeballs is certainly a good start.

3 Key Elements of Successful Brand Sponsorships in China

To create a return on the investment, brand sponsorships must amount to more than putting a company logo on a T-shirt or billboard. They need to deliver on three things:

1. Serving Clear Goals that can be Measured

Surprisingly, many companies focus more on what to sponsor than on the business impact the sponsorship will make. First, identify the objective of the sponsorship. (e.g., Are you trying to increase awareness, advocacy or engagement?) Make sure leadership is aligned on the goal, and then build the team and capabilities needed to deliver against your objective.

2. Authentically Linking to the Brand

Sponsor companies often struggle to show a connection between their brand and the event that customers can easily understand. For any brand sponsorship to be effective, there must be congruence between your company and the values of the property you’re sponsoring. For example, Visa sponsored members of the IOC refugee team. This resulted in customers associating positive values of “acceptance, partnership and innovation” with the Visa brand.

3. Ensuring Sponsorship Activation is Integrated

Every brand associated with the Olympics or World Cup (officially and unofficially) competes for the same customers’ attention, making it hard for any to stand out. So companies need to look for integrated experiences across digital and physical channels that elevate their sponsorship to a bigger idea. (e.g. Abbott nicely linked social media and smart offline tactics with their sponsorship of World Marathon Majors to encourage advocacy among fans and reinforce their message of “human potential.”)

What is Co-Branding?

Co-branding is several companies partnering with other brands as a means to generate buzz, force reconsideration or even enter new markets. These partnerships can be a powerful tool to achieve specific brand and business objectives.

When Should You Co-Brand?

But when does co-branding make strategic sense, and what is needed to make sure you are partnering with the right brand? First, you need to have a clear objective. What are you trying to achieve from the collaboration? Here are a few examples of when co-branding could make sense:

1. Do you need help building a different brand image that is more desirable to your target?

Co-branding enables your brand to borrow equity through association with another brand. It can also create new equity for both brands. Think about Go Pro and Red Bull. Their partnership bolstered the images of both companies and reinforced the idea that they are brands that push boundaries.

2. Do you need to strengthen loyalty by enhancing the user experience in new ways?

Co-branding is an efficient way to introduce a tangible enhancement to your offer. Take Starwood Hotels and Uber, for example. By adding Uber rides as a way to earn points in their SPG loyalty program, Starwood provided a relevant value-add that further differentiated it from other programs.

3. Do you need new customers to consider buying your brand?

Co-branding allows you to showcase your brand in a new light, and convince consumers to discard previous perceptions. Look at companies Huawei and Leica. Through their unexpected partnership, Huawei was able to leverage Leica’s strong brand expertise to overcome negative associations consumers may have had about Huawei’s quality.

How to Find a Right Co-Branding Partner?

Once you have determined that co-branding is right for you, the next step is to find the right brand partner. During this process, you want to create good KARMA. That is, any future co-branding partner needs to be:

• Known– A brand that will be well recognized by your target
• Additive– A brand that brings new equities beyond what you stand for today
• Rare– A brand that is not associated with many others, so you can uniquely benefit from the association
• Matching– A brand that operates at a similar or higher price premium to bolster willingness to pay
• Attractive– A brand that is desirable enough to change your target’s purchasing behavior

“What are you trying to achieve from the collaboration?”