Innovation key to technology trust

Apart from worldwide marketing and brand building, Asian technology brands need to invest in product development efforts to engage consumers and gain their trust, advised marketing executives.

In an e-mail interview, Josephine Wee, managing director of BrandFinance Singapore, said by continuously reinventing the wheel, Asian brands will be viewed as innovative leaders that push technology boundaries, leading to improved consumer confidence and trust.

Innovation is important for the technology sector, according to results from the Edelman Trust Barometer 2010. During the economic meltdown, trust in sectors such as banking and government dipped but trust in the technology sector remained strong.

The technology sector was deemed highly trustworthy because the sector is synonymous with innovation, Bob Grove, managing director of Edelman Southeast Asia, said in an e-mail interview. Technology is also perceived as an enabler of business, consumer and community efficiency and lifestyles, Grove said.

Wee noted that a lack of investment in research and development would lead to technology brands not being able to compete in cutting technologies.

She pointed out to the case of Intel and AMD. "In 2005, AMD was steadily outperforming Intel in the corporate server market with more energetic conserving and powerful processors," she said, noting that Intel did not react quickly enough to AMD's challenge.

It resulted in AMD beating Intel's share price performance between 2005 and 2007.

Asian brands need new business model

While the technology sector is regarded as the most trusted worldwide, this level of trust in brands will differ from country to country. Grove noted that brands from emerging markets, for example, were least trusted globally except in their own domestic markets.

The old model of focusing on product functionality and "price being the be all and end all", which made Japanese companies successful in recent times, is no longer sufficient in today's multi-stakeholder and multi-channel environment, said Grove.

"In fact, attributes such as transparency and trust are equally or as important as product or service quality," he said.

Products defect is a key trigger that will negatively impact customer trust in any brand, Wee noted. In 2006, several PC manufacturers including Dell Computer had to recall their laptops due to incidents of Sony batteries overheating and catching fire, she said.

While confidence and trust in Sony took a hit, it was a temporary problem. However, later in 2008, faulty Sony notebook batteries were recalled again due to similar faults.

In such a case, Wee said, crisis management is important. "Consumer expectations are high in an event such as the large scale of the battery recall. And this could be detrimental to any brand reputation if it is not handled quickly and appropriately."

Challenges for Asian brands

Jack Tong, vice president of HTC Asia, said the main challenge taking the Taiwan-based company to the global market was that it was a new brand in a highly-competitive smartphone market. Established in 1997, the smartphone maker entered the global market in 2006.

"There was low awareness of HTC as a brand since we were relatively new and it took time to build consumer trust as a result," Tong told ZDNet Asia in an e-mail.

He noted that HTC was able to overcome the challenges by partnering with major brands and large mobile operators and putting the focus on customers, making them the center of everything the company does.

It established alliances with brands such as Microsoft, Google, Intel, Texas Instruments and Qualcomm.

In an e-mail interview, Anna Ho, head of marketing at Lenovo Asean, also shared the company's venture into the global market.

"Five years ago, when Lenovo acquired IBM's personal computing division, we were a brand hardly anyone had heard of outside of China," Ho said. She noted that the Chinese company is now the world's fourth largest PC manufacturer.

She added that Lenovo was able to earn consumers' trust by focusing on innovation, quality and customer support.

"The market starts building trust in a brand when they see results," Ho said. "We realized early on that to get stronger results, we needed to strengthen our presence in consumer markets where there was market growth."

She said Lenovo divided its market into mature and emerging markets and through this, the company was able to better target consumers and build user acceptance and trust by understanding the different market needs.

To heighten its brand visibility, Lenovo also supported global events such as the Olympic Games by being the Games' sole hardware provider.