It is the world’s largest digital camera maker and is seen as reliable.
But scratch the surface and there are signs of trouble. It has just recently lowered its operating profit forecast by three per cent. Meanwhile, its market share in Japan’s digital single-lens reflex camera has been steadily eroded by Nikon since early 2006. Canon’s brand too is suffering. It was ranked 14 in Media’s Asia’s Top 1000 Brands report this year, a drop of five places from 2006. A report by Interbrand, published in BusinessWeek, places Canon in 36th place, well behind rivals such as Hewlett-Packard and Sony.
According to Martin Chau, research firm IDC’s associate research director for peripherals research in Asia-Pacific, Canon’s positioning tends to be more IT-oriented and practical, which may come across as dull to the young. “Canon places a lot of emphasis on features and functions, unlike, say, Sony, which likes to be seen as stylish. To seasoned technology users, this is fine. But for younger consumers and first-time buyers, it can be a little dreary,” he explains.
Canon has a wide spectrum of offerings which, like larger rival Philips, dilutes its appeal. Imaging products aside, it also provides business solutions, semiconductor tools and medical equipment. This means that its marketing budget is often spread too thinly for it to splash out on concentrated advertising bursts for its hero products.
“Canon probably spends a fair bit of money on advertising, but it has to reserve part of its budget for other aspects of its business because commercial profits tend to be higher than consumer profits,” says Chau.
The crux of the problem may be that the differences between its consumer and commercial products are too great for any emotional branding to be made uniform. “Unlike Sony and Panasonic, Canon has lesser chances of putting its products in households,” points out Chau.
Fact Box
2007: Canon is poised to move into its eighth straight year of earnings growth at ¥766 billion (US$6.5 billion).
In the first half of 2007, Nikon took 47.5 per cent of the global digital single-lens reflex camera market, surpassing Canon’s 36.5 per cent.
Canon moves down one rank to 36 on Interbrand’s Best Global Brands 2007 report, published in BusinessWeek.
2005: Canon took 154th place on Fortune’s Global 500 rankings. By 2007, it had fallen 28 places to 182nd position.
Scott Milano, brand consultant, verbal identity director, Interbrand
Financially, Canon is a solid performer. Unlike some competitors, Canon has always favoured building its own brand internationally rather than increasing sales through OEM partnerships. These efforts have paid off. However, it falls short in brand image, one that clearly defines its vision, strikes an emotional chord with consumers and exerts leadership through revolutionary products.
The brand stands for quality. However, Canon’s kyosei corporate philosophy is internally focused. The company’s brand statement, which is key to communicating brand vision to consumers, also varies by region.
To get consumers to truly live the brand like Apple has done, you need to push their emotional buttons. Seventy-five per cent of Canon’s business, which includes printers and copiers, isn’t cool or sexy. The other 25 per cent, cameras, is of course exciting and consumer focused. Canon must show greater industry leadership with silver bullet products that either shake up a category or create a new one.
We know from its vast portfolio of products that Canon has the technology from the success of brands like EOS and PowerShot2. But does it have what it takes to move the brand to the next level?
Hari Ramanathan, regional creative planner, Y&R Brands
Canon is just yet another case study in how growth distorts the ability of a company to have a clear vision and a brand that follows through on it. The best example of this is in a classic ad for one of its masterpieces, the AE-1. This is from sometime in the early ’80s and the tagline said: ‘So advanced. It’s simple.’ A brilliant summary of the principles the company was founded on and what the brand stood for.
Millions of cameras, camcorders, photocopiers, printers and electric motors (yup, they sell them too) later, the brand is completely confused and has no single thing it stands for.
Here’s what Canon needs to do: write down its brand purpose on a white board and take a long hard look at its product and brand architecture, the answers will be obvious. And then it needs to repeat that exercise with all the advertising it’s doing.
The only thing wrong with Canon is that it has forgotten what Canon is about. My dad gave me a Canon AE-1 when I was 12. To date, when I feel like stepping out for a day of photography, that’s the camera I reach for. If Canon can recreate that feeling in my son or daughter who’ll be born soon, they’d delight me more than with a stupid line saying that.
