A wonderful article from the Economist appeared earlier this month http://www.economist.com/node/21559894) highlighting the fact that – for all the dynamism and entrepreneurial spirit being unleashed across so-called growth markets – only four emerging-market brands make Interbrand’s list of the world’s 100 most valuable: Samsung and Hyundai of South Korea, Mexico’s Corona beer and Taiwan’s HTC . . .
The piece pointed out how complicated it is to establish and rolling out a brand globally; ensuring that it has resonance and genuine meaning across multiple markets. And now, having spent six months working in India, I would like to add my humble insight to the debate! I believe that there are some principles that apply to brand globalisation regardless of from where they emerge, but that they are particularly relevant to BRIC and other emerging market brands. The challenge is that these principles are far from intuitive, in fact, they may at first sight appear the opposite . . . . . Here goes:
1. Forget about your legacy and heritage; everything that went into establishing your brand identity in your home country. That will mean nothing abroad and may even act as a barrier to generating traction in new markets which are at other stages of the development cycle.
- Huawei was founded by Chinese People’s Army officer Ren Zhengfei, following the introduction of then Chinese premier Deng Xiaoping’s “open-door policy” encouraging entrepreneurial activity. It maintains strong links at board level with the Chinese Communist Party, whose patronage explains much of its success to date, but hardly the type of credential on which to take the brand global http://www.economist.com/node/21559929
- Acer started life as the ‘Australian Educational Research Council’ in 1930 thanks to a Carnegie Foundation grant designed to promote ‘the advancement and diffusion of knowledge and understanding’. The first research undertaken was: the standardisation of scholastic and mental testing for Australia; a study of the number of children aged 10 to 18 in each school grade or type of occupation; and the fundamental problems of the primary school curriculum. http://www.acer.edu.au/about/history A far cry from sleek laptops or mini PCs!
- Nintendo was originally founded to produce handmade hanafuda playing cards (http://en.wikipedia.org/wiki/Hanafuda), before becoming one of the most prominent figures in today’s video game industry
- Mitsubishi started in 1870, as a shipping line before diversifying into coal-mining, shipbuilding, and marine insurance. It did not enter the automobile business until 1970, when an automotive division of Mitsubishi Heavy Industries was launched as a separate entity.
This is the toughest and most counter-intuitive principle; established (national) brands are rightly proud of their roots. The problem is that these legacies are not necessarily transferable (or always relevant) beyond the home country.\
2. Global brands should not always focus on targeting customers . . . . . Again, this may appear counter intuitive, but it’s particularly true within the B2B and services space. One emerging market IT services company I’m familiar with is recruiting at a rate of 70,000+ employees per year; its principal concern is to identify and hire the best and brightest from which ever country they can be found.
This means competing – literally – with the likes of Apple and Google for top talent. A global brand in this context is about meaning something to business and technology graduates, demonstrating a track record in innovation and a genuinely meritocratic hierarchical working environment. The idea being that – even if the company does not manage to recruit all the brightest talent – when these people assume positions of power and responsibility later in their careers, the company’s global brand values will still have meaning then selecting vendors or partners.
In this context, the sole focus of the global brand is on potential employees and future contacts; nothing to do with current sales which are ticking along nicely under the current legacy brand. These types of choices are essential given the time and expense involved in globalising a brand; identify exactly who your primary audience is . . . . it may not be the obvious target.
3. Globalisation is not about geography; they are much more about communities, wherever they are based. Market segmentation has well and truly given way to community engagement . . . . . there is absolutely no reason for this to be restricted by the confines of geography. Manchester United claims to be football’s most valuable brand with more fans in Asia than in the UK (one could argue that there are more Manchester United fans in Essex than in Manchester, but that’s the subject for another post!). http://production.investis.com/manutd/findata/respres/annrep03/annrep03.pdf
Global TV enables the club to appeal and have genuine meaning to fans whether they are based in Clayton (http://en.wikipedia.org/wiki/Clayton,_Greater_Manchester) or Kuala Lumpur (http://www.facebook.com/mymanutd). Geography is completely irrelevant.
4. The most important ‘C’ for global brands is not for ‘creativity’ but ‘compliance; and that means process, process, process . . . . .
All the above will count for nothing in the absence of clear structures and processes to ensure brand compliance across all geographies and all platforms. And this also includes within the home market. As the brand guardians of companies such as Shell (http://www.associatedpetroleum.com/pdf/ShellBrandCIGuide.pdf) , Apple (http://suite101.com/article/apple-brand-marketing-a184516)or (on an extreme scale) the recent Olympic Games (http://www.salon.com/2012/07/27/the_force_of_olympic_branding_salpart/) attest, a fundamental feature of global brand management is compliance. ‘Rogue’ campaigns are much easier to implement and harder to police when implemented across far flung geographies; irrespective of their short term gain, ‘off brand’ campaigns will ultimately undermine the global message and value of the same.
To quote again from the Economist piece:
Emerging-market firms are evolving in much the same way as Japanese firms did in the 1960s and 1970s, from humble stitchers to master tailors. In 1985 Philip Kotler of Northwestern University’s Kellogg School of Management observed that Japanese companies had shifted from “injuring the corners” of their Western competitors to attacking them head-on. The same pattern is beginning to repeat itself, but on a much larger scale.
The same could be said for Korean and Taiwanese brands such as Samsung, LG Electronics, Asus; each demonstrating the level of counter-intuition required to make their brands genuinely global.
Post by: Roger Darashah