Localised approach necessary for growth
In an exclusive interview with Brand Equity, Hollis speaks about the fundamental need to adapt to local needs and why product brands make deeper connections than service brands.
It might be important for a global brand to adapt to local cultures to be successful. But can premium or niche brands take the same approach?
In general I think the same checklist applies but obviously some become irrelevant depending on the brand and the category. Take the example of Apple���s iPod. The iPod is a channel to content. People use it the same way around the world but the content they put on it - music, videos and photos - will be very different. So Apple can safely ignore step number one, they do not need to adapt the player to meet local needs. The target audience for iPod is fairly homogenoeus and has a reasonable level of disposable income so step number two, solving the value equation, is less relevant. If we look at luxury brands there are many which need to maintain a consistency and highlight their origins to be successful like Burberry, Chanel and Moet Chandon.
Despite thinking and acting local, Coca Cola still trails behind a purely indigenous cola brand Thums Up in India. What can be the possible reasons?
Thums Up had many years to establish its franchise after Coca-Cola withdrew from India in 1977. So when Coca-Cola re-entered the country it faced two very strong brands, an MNC in Pepsi and a local brand in Thums Up. Coca-Cola then found itself in the difficult position of having to overturn these established brand relationships. That does not happen overnight and Coke only really began to make substantial progress when it took a more localised approach.
What is the inflection point where international brands have to start thinking local? Axe from Unilever rarely goes local in its communication. Do you think it���s because of the category Axe operates in, where the desire to be attractive is universal?
Tapping into a common motivation is key to creating a brand promise which transcends countries and cultures. Yes, Axe taps into a desire common to most young males but it does sometimes need to complement its global approach with local executions. When the brand launched into Japan, Unilever used a combination of local ads to establish what the brand stood for and then global executions to consolidate that positioning. Once the idea behind the Axe positioning is established, however, it may not need to create local copy. In the case of other brands, I would suggest the tipping point comes when consumers start to evaluate it on exactly the same terms as local brands. Often an MNC brand will be perceived to be better quality than local ones but that is not necessarily a sustainable advantage.
But can localisation dilute the halo that MNCs bring along?
For creating a strong global brand, it is important that the process starts with thinking global. Then all that remains to be done is recreate the same relation by taking into account the cultures and values of different countries. This approach can help even global brands gain advantage over local competition.
Failure to adapt to local needs and tastes is so fundamental that the brand may not establish itself at all. Unfortunately, that is not an unusual event. Marketers often assume that because a brand was successful in one country it will be equally successful in others. For example, Home Depot is a very successful home furnishing and do-ityourself store in North America but failed to establish its brand in South America. That���s because people there shop the category differently. By contrast, it is not a requirement to get close to local culture, but research reveals that it is a driver of purchase intent for both global and local brands. MNC brands which can get close to the local culture are typically stronger than those that do not.
How do local companies play the game in the presence of heavy-weight MNCs?
National or local brands have a homefield advantage versus a MNC brand seeking to enter the country. They are often wellknown and well-adapted to local needs. They are part of the local culture as people have grown up with them.
What local brands may lack, however, are the core skills and resources to evolve the brand to meet the threat posed by an MNC brand which may be perceived as better quality and setting the trends for the category. (In his book, Hollis uses examples like Unilever���s Marmite in UK and Australia, Amul in India, BMW MINI, Efes Pilsen in Turkey and Cola Turka in Turkey to explain the success of a local brand.)
How can marketers take advantage of brand attitudes in a new market?
A brand attitude is a belief that people have about a brand. They might believe that a brand is popular, a trend setter or of good quality. The role of marketing is to seed and establish positive brand attitudes which drive purchasing behaviour. Brand attitudes will differ across brands in the same category and may differ for the same brand from country to country.
The Global Brand Power Scores in the book has very few service brands with the notable omissions being Walmart and Tesco. What explains their absence?
Service brands do not create the same strength of connection with customers as product brands. This is because human beings are involved in the creation of a service brand and in most cases human behaviour is different at points of time.
Sometimes, the only time that a customer will contact the brand is when there is a problem and if the solution offered is not satisfactory, it leaves a bad taste in the customer���s mouth. When international brands enter another country, many customers choose them only for the international levels of service that the brand can offer, which is not available through their local brand.
How important a factor is price in the creation of a global brand?
Price is a barrier as well as a signal to quality that the brand carries.