Managing Global Brands To Meet Consumer Expectations

Malcolm Baker, Founding Partner, B/R/S Group; Greet Sterenberg; Earl Taylor

Increasingly affordable information and other technologies allow brands to be customized for local cultures and for individual consumers. The question for brand strategists is whether, when, where and how to do this. Are global brands merely those that are distributed worldwide, or can “globalness” itself be an element of a brand’s equity?

INTRODUCTION
There is growing consensus that the truth about globalization of brands lies somewhere between the extremes of Ted Levitt’s thesis of homogenization (Levitt, 1983) and Naomi Klein’s more recent prediction of a “no logo” backlash (Klein, 2000). To move beyond a sterile debate about globalization in the abstract, brand strategists need decision criteria based on a typology of brands and environments that they can apply to make informed decisions about whether, when, where and how to globalize or localize a brand.

The ideas presented here are largely based on the Research International Observer (RIO) qualitative study of consumer understanding of and reactions to global brands conducted in late summer and early fall of 2002. We believe this to be the largest and most comprehensive study of its type ever conducted, involving over 1,500 young urban consumers (ages 18-35) in 41 countries and 52 cities around the world. While over 100 specific global and local brands were included in the study, its purpose was not to determine consumer images of these brands per se. Rather, extended focus group discussions used a variety of projective techniques to elicit consumers’ feelings and attitudes about the “globalness” or “localness” of such brands. In our analyses we uncover the underlying dimensions along which consumers evaluate brands across multiple product categories.

The initial 2002 RIO findings (Baker and Sterenberg, 2002) have been further analyzed to produce a “road map” for brand managers based on our brand typology and decision criteria for globalization versus localization. A secondary source of data and insights for our current efforts is a quantitative global survey recently conducted on behalf of the Harvard Business School (jointly funded by our parent company, WPP). This study involved a total of 1,800 consumers in 12 countries selected to represent a mix of developed and less-developed economies and Western and non-Western cultures

THE GLOBAL BRAND AT A CROSSROADS
Ted Levitt’s globalization of markets thesis asserted that global companies and their brands would grow inexorably, offering global consumers an unbeatable combination of quality, availability, reliability and low price. He described a Brand Utopia in which tastes and needs would become increasingly homogenised, with successful companies focusing on what “everyone” wants.

Entering the 21st century, the global brand is at a crossroads. The ubiquity of global brands has become one of the defining features of modern life and one of the core tenets of modern marketing. Yet the issues highlighted by the antiglobalization movement raise questions:

How local should global brands get?

• Is there consumer-perceived value in globalness per se?
• What balance do consumers seek between their need to feel part of a global tribe and their desire to be more individual?
• To what degree do mainstream consumers hold brands accountable for the practices of the companies behind them?

To begin to answer these questions, it is necessary to review a few key findings from the 2002 RIO study.

CONSUMERS LOVE BRANDS
Brands may be constructs created by marketing companies and their agencies that sit on supermarket shelves in the real world. But brands are also ideas and ideals that exist in consumers’ imaginations. That’s where the real connections are made and where brands are invested with personal meaning and relevance. It is in this Platonic, idealized world where brands take on life and where they acquire their redemptive role. (As we shall see, this idealized existence may also prove to be a pitfall for certain types of brands in specific circumstances.)

“If I could I would die for a Chanel suit” (Argentina)

“My son is obsessed, always wanting Coca Cola, McDonalds and Nike shoes” (UK)

“It may be that I have this dream, being like Michael Jordan and therefore I use his sportswear which is Reebok” (Colombia)

“I feel close to Starbucks, I believe it is a great and typical American experience” (USA)

“If I wear Nike there is no need to say anything, if I choose another brand itis as though I am stating something that I have to explain” (Italy)

“Global brands make us feel citizens of the world and we fear their leaving because they somehow give us an identity” (Argentina)

CONSUMERS WANT TO FORGIVE AND FORGET
What was perhaps most remarkable in the RIO study was the degree to which consumers feel protective about their brands. Because consumers have such a strong investment in what brands mean to them, they disconnect their idealized world from the real world – as they do the consumer self from the political self. Consumers are reluctant to accept negative messages from the real world that challenge their view of brands. They prefer to make life easy, to forgive and forget. A change in attitude is easier than a change in behaviour. Typical comments reflect a variety of ways consumers manage potential cognitive dissonance:

“I assume most, if not all, big companies use ‘cheap labour’ so it’s useless to care” (USA)

“I know about Nestle and their milk powder scam … but at the end of the day one Kit Kat can’t make much of an impact” (UK)

“I know Nike has sweat shops, like other manufacturers, but at least these people have a job” (Germany)

“Tommy Hilfiger publicly said that he did not intend his clothes to be marketed for Latin Americans / black people, but I like them and still buy them” (Black respondent, El Salvador)

“It is so far away from your own situation. It is not your mother who gets exploited, you know?” (New Zealand)

“As it does not affect yourself, the brand is so important that you forget about it” (Spain)

While consumers are not actively looking to make a connection between the brand and the company behind it, they may react to information from activists and the media and will respond to bad company behavior that cannot be denied. They have thresholds beyond which beliefs get translated into action. These thresholds are lowest on issues dealing with ingredients, contamination and a range of environmental issues; slightly higher for employment practices; and higher still for activities that relate to marketing and general business practices.

To read the rest of this white paper on the B/R/S Group website, click here.

Malcolm Baker is Founding Partner at the B/R/S Group, a San Rafael, Calif., research firm.

[Oct 23, 2009]