Branding key to boosting Taiwan’s ailing economy
The Taiwan hotel industry is booming; more so than anywhere else in the world, and many in the industry expect the good times to keep rolling for a few years to come. According to the Tourism Bureau, Taiwan registered the second-highest increase in foreign tourist arrivals in the world in the first half of 2014. This strong growth translated into over 9.91 million visitors last year, up from slightly more than 8 million in 2013. The fundamentals in the tourism sector are indeed solid. In 2014, Taiwan’s tourism revenues rose to NT$437 billion compared with NT$187.1 billion in 2008. Now that Taiwan has set the goal of welcoming more than 10 million visitors this year, it is time for tourism authorities to focus on upgrading the quality of the tourism experience.
Growing demand in the face of the soaring supply of new five-star hotel rooms around the country, however, has set the stage for conditional room rate increases and therefore profit growth. In order to increase their competitiveness, luxury hotels would be well-advised to invest in their branding strategy to better establish their products and foster brand awareness that will grow and mature when the marketplace becomes saturated. Branding is especially crucial for products and services sold in emerging markets because it helps you stand out from your competitors as well as to position yourself as a reference “name” in the minds of your prospects and customers. If you want to capture a more significant market share, such brand awareness will also help reinforce your “brand equity” — the amount of money customers are willing to pay just because it’s your brand — over competitors. In addition to generating awareness and revenue, brand equity will further make your company more valuable over the long term.
The same is true with most local manufacturers who need to develop unique Taiwanese design aesthetics in order to stand against competitors. After successfully designing for several international brands, several small and medium-sized enterprises (SMEs) have launched their own brands featuring the local culture, including art, drama, music and more. Such important initiatives are consistent with the “Branding Taiwan” program of the Bureau of Foreign Trade (BOFT, ) that aims to turn Taiwanese manufacturers into brands in their own right, and we must continue to encourage them. Only if such forward-thinking manufacturing firms continue to develop their brands, can Taiwan’s ailing economy fully recover and more companies further capitalize on their manufacturing experience and technological expertise.
The BOFT’s branding strategy has several important initiatives. The first is to help local SMEs set up venture capital funds for domestic brands that have market potential but are not yet floating on the stock market. The second is to create a favorable environment for brand development, including the opening of the Branding Taiwan’s website, which provides information on branding and brand development. The BOFT also researches branding policies and offers loans to manufacturers who want to expand but have insufficient capital to do so. The third measure aims to conduct brand value surveys of Taiwan’s international brands in order to provide local companies with an accurate and standardized reference by which to evaluate their own brands and their competitiveness against other “big names” in the industry. The fourth measure is to provide brand management education by running classes for businesspeople across various sectors. Last but not least, the BOFT aims to further raise the international image of Taiwanese products and brands by encouraging the participation in the annual Taiwan Excellence Awards through which Taiwan’s brands are recognized for their research and development, design, quality and marketing. The BOFT also represents Taiwanese products at various trade fairs worldwide to this extent. Taiwanese brands have a promising future across the Taiwan Strait, as well as the European and North American markets. Developing countries like India and Indonesia also offer Taiwan two massive markets with very high demand for high-tech, high-quality products. With the help of successful branding strategies, Taiwan can surely shrug off its reputation as a subcontractor and become a world player in its own right.