Economy, Domestic Economy

Branding, the Missing Link in Iran’s Business Environment

Branding, the Missing Link in Iran’s Business EnvironmentBranding, the Missing Link in Iran’s Business Environment

In today’s global marketplace, effective branding is viewed as a key to success, one that gives the companies a major edge in increasingly competitive markets. Brand is often considered as a company’s most valuable asset. Yet, the importance of branding in Iran has often taken a backseat to other considerations.

As a report by ISNA suggests, despite their high quality and competitive prices, Iranian products have largely remained unrecognized to the domestic and international consumers as the manufacturers often fail to realize the power of branding, or when they do, they simply cannot afford it.

Iranian consumers often show more inclination towards foreign brands. This is while some marketing experts point out that despite the high production costs in Iran, some Iranian products are sold at much lower prices compared to their foreign counterparts.

Leather, textile and garments, porcelain, and paint are only some markets wherein the Iranian products are losing ground to foreign imports in spite of their high quality and lower prices.

Experts describe ‘branding’ as the missing link in Iran’s supply chain, paying attention to which could help promote the Iranian products in both domestic and international markets.

  Branding is Expensive

Mehdi Yekta, the head of Tehran’s Garment Manufacturers and Exporters Association believes the cost of creating a brand in Iran is too high and often not feasible for startup companies.

“The emerging companies looking for creating a brand need to go through rigorous formalities. They also have to spend large sums to invest on advertising. All this, while brand is an intangible asset, which is not reflected in the company’s balance sheet,” says Yekta.

  Social Factors

Cultural and social factors are considered as important parameters in determining the success of brands. The Iranian consumers, as mentioned earlier, are more inclined (and more loyal) to foreign brands.

As Yekta suggests: “It takes more than just improving production and upgrading the machineries and manpower to make the Iranian brands appealing to customers. It requires a national movement.”

As the global market competition grows fiercer, the need for effective branding strategy becomes more evident. The Iranian enterprises need to strive for creating strong brands that are appealing to the palate of both Iranian and international customers.  As every brand reflects the values held by the organization, Iranian brands must also “represent the Iranian culture and values,” as the Chairman of the Expediency Council Akbar Hashemi Rafsanjani noted in his opening message to the first International Brand Strategy Conference.

  International Brand Strategy Conference

In a move to emphasize the role of branding in economic development and support the national brands to have a stronger presence in the global markets, the first International Brand Strategy Conference was held in Tehran on 25-26 January. As many as 193 private and governmental institutions participated in the two-day event, which hosted a number of international marketing scholars including world-renowned marketing expert Philip Kotler.

The major topics of discussion in the conference included:  the importance of brand strategy, social branding, brand scandal, brand and social responsibility, corporate and brand values, branding and brand strategies, brand architecture, brand valuation and evaluation, brand and public relations and advertisement, brand awareness and loyalty, and seamless implementation.

According to Conference Secretariat, the 2nd International Conference of Brand Strategy is scheduled to be held in December 2015.

  Top 100 Iranian Brands

The National Festival of Industry Champions is a prestigious event held annually since 2005, in collaboration with the ministry of industry, mine and trade to award the most valuable brands and the most successful companies.

The top 100 Iranian brands and companies were introduced at the tenth edition of the festival which was held on January 11 in Tehran. The top 100 Iranian brands were evaluated to be collectively worth 300 trillion rials (over $8.5 billion).