Most companies are convinced that their brand has fully exploited its potential. But far from it: the brand can only score maximum points in the target group if its tradition, its promise and its unique history are well known. The most general definition of a brand is: “The consumer’s idea of a product or service”. So it’s not just about knowing and recognizing, it’s above all about associative connections. Clearly, this is the big moment of storytelling.
Colorful advertisements, television ads and tourism: foreign influences in the major growth markets are getting ever stronger – and they are leaving a clear mark on the perception of local consumers. In addition, the economic opening up of these markets through their WTO entry and bilateral trade agreements are flushing more and more Western brands onto local shelves. The more respected the country of origin, the greater the propensity to buy. Sometimes the foreign brand origin proves to be an important factor in the international brand development.
Without a deep understanding of local culture and myths, hardly anything works in the major growth markets, even if the rest of the preparations are perfect. Whether it´s about gods, festivals and colors in India, Chinese legends and Confucianism, or infectious joie de vivre and folk tales in Brazil: those who do not internalize the cultural DNA of the target markets and coordinate their own marketing accordingly will run into a wall. From Chinese philosophy to Hindu mythology, the extremely diverse future markets offer endless analogies to link a brand with the prevailing symbols, beliefs, tastes and myths. Niklas Schaffmeister (Managing Partner Globeone) and Florian Haller (CEO Serviceplan Group) explain the four factors that are especially important for this undertaking.
As a result of rapid social and economic change all over the world, individualism is on the rise everywhere, especially in large growth markets, which up to now were characterized by a rather collectivist mentality. The drivers of this change are better income and an expanding middle class in large parts of the world. Consumers are enjoying to finally catch up with Europe and North America. They want to make inspiring and fascinating experiences. They want to make up for what was once an impossible dream. Along with disposable income, demand and the strive for independence are growing. This means that emotional factors are increasingly coming into play on top of purely functional aspects as a factor for consumption that is aimed at demonstrating social status, individual taste and being part of the “global village”. The level of individualism, though, still varies from country to country. Successful brand differentiation must therefore address these factors, if international brand development is to succeed.
The rapid changes of our time lead to conflicts between cultural traditions and new ways of life. Career advancers spend more time in the office, they often go on business trips, they have less time for themselves and their families. The lack of time changes everything from eating habits to family orientation, the way of communicating and consumer behavior. And in many international markets, foreign influences, industrialization or massive urbanization are turning even ancient traditions upside down. Individualization is increasing and consumer behavior is spreading, particularly in the middle classes around the globe, which is intended to showcase the newly acquired status.
Insiders have known it all along: When foreign companies succeed in growth markets, half of the success factors are directly related to the adaptation or localization of key elements of the brand strategy. The key question is how best to adapt a brand to local expectations and requirements. Based on multiple years of consulting experience, we at Globeone have developed the so-called market-driven positioning process. This multi-stage process ensures that all relevant internal and external factors are taken into account in the analysis and development of the positioning strategy. The result is a positioning concept that is actually tailored to the needs of consumers and at the same time protects the brand itself from overstretching.
The successful positioning of a brand is part of the high art of marketing. Based on complex factors, a concept needs to be developed that supports branding in the minds of consumers in the local target market. In the first part of our blog series we explained the most important strategies for the global expansion of brands. Against this backdrop, brands basically have the possibility to choose between a global, hybrid or local positioning. It is therefore important to determine the right degree of adaptation to the local market on the basis of suitable criteria.
The House of Communication in New York has been open since the beginning of May and, with 65 colleagues and exciting customers, it is already “fully operational”. It also has a roof terrace with a spectacular view of Midtown Manhattan.
Again and again, brand managers underestimate the simple fact that brands are first and foremost created in the minds of local consumers. The results don´t always meet the expectations of the top management at HQ. A Volkswagen may be a mid-size car in Germany, in China it is definitely a premium car for most buyers and perhaps even a luxury car in India. The development of an international positioning strategy therefore requires a thorough analysis of one’s own brand perception in the target market. This is necessary to ensure that the communication of one’s own strengths can be aligned with consumer needs.
Despite the protectionist demeanor in Washington D.C., German companies have realized record investments abroad in 2017, according to the German Chambers of Commerce and Industry (DIHK). The degree to which a company is prepared to adapt to local market requirements decides which path for the market entry is chosen. Following, we briefly present the four most important strategies.