Panasonic eyes unity in brand revamp

The company has set out to address a perceived lack of brand value and global competitiveness by renaming itself and sub-marques National and Technics after its highest-profile brand, Panasonic.

The rebranding accompanies a push to increase sales outside the stagnant Japanese market. As Panasonic, the firm reportedly aims to boost its revenue to 10 trillion yen (US$101 billion) by 2010.

For Gregory Birge, managing director of marketing consultancy F5 Digital Consulting, the move is long overdue.

“It has taken Matsushita a long time to realise that to be successful outside of Japan, brand image is critical,” he said, pointing out that it is following the same path Sony trod half a century ago when it evolved from the unwieldy Tokyo Telecommunications Engineering.

Birge adds that in spite of a strong product range, Panasonic itself lags behind Sony in terms of global awareness, held back by a bewildering array of brands within the parent company, including National, PanaHome, Technics, Quasar, Victor and Rasonic, that dilute its presence.

This brand dilution was underlined in Media’s recent Top 1000 Brands research by TNS. Panasonic came in 15th, well behind Sony and Samsung, despite similar levels of advertising investment. National came in at 117.

Japan currently accounts for around half the company’s sales. While it has established a relatively strong presence elsewhere in Asia-Pacific with the sales of home appliances - chiefly microwave ovens - the rebranding initiative is expected to facilitate expansion in rapidly growing markets such as China and India.

It is also targeting Europe, where Panasonic Corporation president Fumio Ohtsubo says it plans to begin distributing its three main appliance products - air conditioners, refrigerators and washing machines - by March next year.

“In addition to our mainstay consumer electronics business, we expect to find potential growth globally in the home-appliances business,” he said. “Though profit margins tend to be thin, we have maintained a nine per cent margin in that business - the highest among all of our units - by selling compact, low-energy products.”

Ohtsubo explains that as well as allowing greater focus, the rebranding will reduce the marketing investment currently required. It will have only one brand to promote.

But while describing the move as a “brave decision”, Birge cautions that the strategy to phase out the National brand, one that is recognised for its budget products in Japan and the US, risks weakening the equity of Panasonic.

“People who see National as cheap may come to see Panasonic as a cheap brand,” he pointed out. “If the company wants to switch it to Panasonic, it will need to change the product. But it’s easier to lower the cost of a very expensive product.”

To establish itself as a credible competitor to Korean rivals in the region, he says the firm will need to focus on its TV and camera ranges while improving and updating its DVD line and seeking partnerships and acquisitions.

While the company is a market leader in the field of plasma-screen technology, it is understood to be weighing up a possible tie-up with Canon and Hitachi to step up development of LCD flat-panel TVs. It has also announced plans to fuel the market for Blu-ray DVD players by introducing cheaper variants.

Parita Chitakasem, research manager at Euromonitor International, agrees that meaningful strategic alliances will be critical in successfully launching innovative premium products. She also notes that the firm will have difficulty maintaining competitiveness in the large kitchen appliance sector outside Japan against manufacturers such as Whirlpool, Electrolux and Haier, indicating that “premium branded and innovative product ranges remain the way forward”, particularly in non-Asian markets where Panasonic is known primarily as a TV manufacturer.

Although the move may be overdue, Birge said it was “never too late” for a company to take steps to realign itself as a truly global competitor. “It’s an amazing change for a Japanese company to make,” he said.

“The big question now is where it will put its effort. It won’t just be about communications campaigns, but about understanding the real values of the brand. Panasonic deserves to be a strong brand.”