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One Big Idea: Global Concerns

April 13,2016

In this week’s episode, Bill takes an introspective look at some global brand strategies that have worked and others that have missed the mark to emphasize what one must consider as brands expand into global markets. If you like our podcast, please subscribe and leave us a rating!

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Transcription

Bill Gullan: Greetings one and all, this is Real-World Branding. I'm Bill Gullan, President of Finch Brands. This is One Big Idea, we've entitled this Global Concerns this week. One of the topics that I found most interesting in the interview with Ana Kornegay from Brown-Forman was the discussion around her experience in the global marketing realm for Jack Daniel’s and other brands. Especially, some of the sensitivities that are part of bringing brands, whether one is as well-known as Jack, or those lesser known, into new markets around the globe.

It was fascinating how she spoke about differences in regions when it comes to the things that they're seeking in terms of import brands. Whether it's Russia being really focused on badging and prestige. Or other countries looking more at authentic brand expressions as being the gateway to influence. We certainly know that the world is a heterogeneous place, even within regions that we may look at on a map and identify through some common characteristics – Europe, Africa, things like that.

We also know that the world has a variety of perspectives on US commerce. Whether it is markets, South Korea's is one example, where the quest for authentic US goods is a really high urgency quest. We certainly saw that in the past in Eastern Europe, although that's eased now. Then there's other markets that are likely a bit less compelled by the Americanism of a brand, that may be coming in and might be seeking values beyond that.

We're calling this Global Concerns because there's a couple of ‘watch outs’ when it comes to international marketing and bringing brands around the globe that have been successful or were launched in the US. Some things to think about.

We know there's a lot of stories, and these are currency in the marketing realm of brands, either through naming or campaigns that haven't linguistically succeeded. Some of these are hilarious, all you have to do is search Google and learn about Chevy Nova, which was a car brand in the US, it meant ‘no go,’ in Spanish, which is obviously not what you want your car to mean.

Coming in the other direction, Electrolux, the vacuum cleaner folks originally entered the US with the tagline, ‘Nothing sucks like an Electrolux.’ What they were going for certainly doesn't work in English slang or American slang. When Pepsi went, I think it was to China, the slogan was, ‘Pepsi brings you back to life.’ A reference to caffeine and everything else and that was translated in China as, ‘Pepsi brings your ancestors back from the dead,’ which doesn't work on any level.

Obviously watch outs when it comes to translation and linguistics, but the international marketing conversation is a lot deeper than that. I remember when we were engaged to really rebirth the Everlast brand a few years back. The first thing we did was global market research to understand how the brand was being marketed and perceived in different countries. Everlast has done a lot of licensing deals around the globe and I remember, never forget in fact, the data across Germany, South Korea, Chile, and other markets where the brand had a foothold, wasn't being very closely managed from New York at that time.

We had found in Chile, the local licensee had really positioned the brand as a women's tennis brand. There was a lot of strength in Chile at that time around women's tennis and around the sport and so Everlast, this proud boxing, tough, authentic heritage in the US was being translated, purely for financial opportunity, in Chile as being focused on women's tennis.

We found in South Korea, even though Everlast hadn't done a whole lot with footwear in the US, there was a ton of demand among teens walking around Seoul for authentic US footwear. The brand and the local licensee had seized that opportunity, but what it detracted from, obviously, was overall brand cohesion. So we went on to rebuild that program.

It really brought home the point about the differences internationally. It demonstrated that, if not well managed, but locally aware and locally sensitive, how things can go off the rails, even as brands expand and seeking financial and perceptual opportunities.

If you think about taking a US brand – be it one that's deeply established or one that has had some degree of success but obviously sees market opportunity across the globe and the billions of consumers who exist around the globe – there are a couple things to remember.

One, as noted, the world is a heterogeneous place and regions that we may learn about academically or read about in the news have really significant country to country differences. You look for example at Africa. You look at Western Europe. You look at Scandinavia. There are differences in terms of local competitors. There are differences in terms of certain values that individual societies place on certain things.

If we think about the US for example and you just look at the differences between states in the US, I mean it's a common language and in some cases sharing interstates and sharing the same entertainment, sharing a lot of different things but looking at the rhythms locally that separate just the individual cultures of different states.

It's fairly obvious in the US, that you may market brands differently, based upon who the local competitors are. You may market brands differently based upon the prevailing communication sensibility or cultural aesthetic of different states. A brand that succeeds in Manhattan versus one that succeeds in South Dakota, yes, there are national brands obviously that succeed everywhere, but often the currency and the nature of communications and look and feel is a different thing.

That same logic obviously extends to international markets, country by country and even within larger countries that have multiple, well defined regions. Understanding as a first principle that regions are heterogeneous and you really need to do the leg work to understand those differences.

Secondly and one thing that's related to that is that channels are different. When you look at markets where, for example, the dominate strength of traditional retailers is a different proposition. In Asia, for example, and I am generalizing as I said not to, but there's a very strong role, continues to be a strong role for relationships from a distribution perspective and not just to the end consumer. Thus, whereas one might go direct, for example in the US, or one might just have a selling relationship with the retailer, there are certain markets where the way you do it, just simply the way you do it, is through local distribution, because those relationships are highly prized. So if you take your business model in the US, sort of blindly into markets where the channels are managed differently, you're going to run into some brick walls there.

Then the third thing is really just about product. We're not even going into advertising and naming and other things. Those are obvious, there's differences that need to be understood. When it comes to product, I remember working very closely with an executive here at Finch who had brought IKEA to the US. He had been with the brand twenty something years, had launched it across five or six different countries around the world and I remember growing up in Philadelphia when the first IKEA store opened in the US in 1986 I think it was, in Plymouth Meeting, Pennsylvania, in the mall there. I remember how big a deal it was.

Some of the stories he told about IKEA’s entry into other countries were fascinating and fun, but I think one of the things that they needed to understand, certainly to have a successful US launch, was that product dimensions are different here when it comes to beds, when it comes to the way that people organize their homes. When it comes to what their expectations are about living space.

I think he was relating to me that it took a while for IKEA to really get that. Some of their early product assortment focused around that launch in the US was obviously a lot of brand success, a lot of consumer anticipation, but the adoption was challenging and slow, simply because they hadn't oriented the product assortment to the way that American consumers expect to live – the types and sizes of beds that they want to have, the way that their rooms are designed and homes are designed.

That's one example of again, coming to the US, but product assortment very similarly coming from the US elsewhere, needs to be very largely informed by the reality of how folks in those regions are living, choosing, and what they do because these customs are different. The traditions are different, the lifestyles and rhythms that shape all that can be different as well.

The common denominator of being successful in exporting a US brand that has mastered at least a slice of the market here into global markets is there's a very important role for research. Research, in this case, certainly includes consumer perspectives, it includes active listening, it includes what we would call something that's a bit more ethnographic or anthropological in terms of really understanding the rhythms that drive individual decision making and lifestyles within the market that you seek to enter.

Doing this by country and in some cases by region, if the business opportunity is big enough, will uncover some of these differences and really help build that play book for how to market, how to build product, how to distribute, how to sell, and how to service. All these different elements that might ultimately be different in a global business model versus a domestic one.

Beyond the role of research and the importance of running out all those ground balls, there really is a strong role for local expertise. The empowerment of local teams, not only to manage the execution of the strategy but to be inputs into its creation, cannot be understated in terms of its importance, organizationally. When one is thinking about market entry, bringing together as early as possible in that development process, the team that's going to execute this so that they can speak out and contribute. When it comes certainly to the creation of marketing and advertising, but even when it comes to thoughts about product and structure of an overall launch, timing all of these elements, you're flying a bit blind if you're not leveraging the expertise in local markets, even on a consulting basis, whatever the case may be.

I think we'll stop there, but suffice it to say that global opportunity is huge for US based firms, just in terms of gross financial opportunity. The number of people and the amount of dollars or whatever currency are spent on goods and services emanating in the US is a driver of growth and of the acceleration of profitable growth for many, many, US brands.

There are pitfalls that one needs to consider. There are topics that one needs to fully and deeply address and a general understanding of the fact that the world is not one size fits all when it comes to product use and marketing and everything else, is perhaps rules number one as one considers a global launch.

That's it for me, as always we appreciate the dialogue on Twitter, we appreciate your rating us in the app store, we appreciate those who are enjoying this week in and week out, subscribing to what we're doing here so that it flows in there automatically. Our goal, typically, is to do these on Wednesday. Sometimes schedules push it back, sometimes up a day or two, depending on what's happening. We all have day jobs, so to speak. Though we do find great joy in this and we appreciate your time and attention. Have a wonderful, wonderful day, signing off from the Cradle of Liberty.

podcast/ Branding/ global brands/ international marketing