Local vs. Global Brands: Who will win?

Frankly, i don't see how small brands can avoid being overrun by the bigger brands. There's just not enough money, talent and resources to compete if a big brand takes it into their mind to rollout into your market. Castor Brown, Student - April 8, 2001

The question of whether local or global brands will ultimately prevail can be answered simply: yes! A brand is merely the relationship that is created between a product and its consumer. The company manages, and is responsible for, the consumers' total product experience. For its efforts, if effective, the consumer responds with his or her patronage. This is a relationship that requires consistent company investment and care to remain responsive and profitable. While global brands have some obvious scale and breadth advantages, local brands have the benefit of proximity and geographical (and often product) focus. These two variables balance each other, sustaining both local and global brands together. In addition, consumers often look to different types of brands for different things. I'm not sure that I want consumer electronics from a neighborhood company. Sony and the like do me just fine, thankyou. At the same time, I look exclusively to local brands to deliver such things as my hometown news and perishables (milk, eggs, etc.) for example. The strength of my attachment can be equally powerful to both brands, as the opportunity for realtionship building is equally available to each type of brand. Consumers will continue to establish relationships with relevant brands that create meaningful interaction with them without regard to geography. Both local and global brands will continue to thrive and to fill their respective consumer needs. Brand managers must be strategic about how they manage the dynamics of the product - consumer relationship to best take advantage of whatever the particulars are of their circumstance. Michael B. Moore, President, Infopop Corporation - April 9, 2001

This is a nonsense debate. Both global brands and local brands have a role to play. What is for certain however is that global companies will not command enduring success if they simply roll out local strategies, is Starbucks. Starbucks will never work in Europe (not UK) or Australia because there is a well established coffee culture. Starbucks is a classic example of an American company satisfying an american demand, and then thinking the rest of the world needs it too. Think Global, act local. Starbucks thinks local and acts global. This is doomed for failure. Anonymous - April 9, 2001

I feel the local brands definitely have a place in their respective arenas because of the personalized service and perceived comfort they provide. People do business with people they like and can relate to and the local ma & pa stores definitely have the big players beat on that count. Certain brands will do well but they will have to learn to co-exist with the local players to protect their brand image.

Sanjay Gandhi, YadaYada - April 9, 2001

To comment quickly on what Anonymous writes on April 9, i distinctly remember reading a whole article on Starbuck's rollout in Italy. At the time i thought the saavy italians would say NO to such a terrible idea but it seems to have taken hold... Lucinda Corning, Account Manager, New York - April 9, 2001

The question in future will be: What does the brand contribute to our local life? Rainer Milzkott, CEO, urbanPR GmbH - April 10, 2001

I feel that global should be a collection of multi-local not a standard "one size fits all" bland positioning. This allows the benefits of globalisation without insulting the consumer by providing a substandard product or service. Martin Payne, Strategic projects Director, Through the Loop - April 10, 2001

I think it is imperative that we define the 2 terms under debate in this particular scenario. A Global Brand is one that ascertains a uniform idea that drives and defines a certain standard of life throughout the world. A Local Brand is one that contributes to a cognitive product-customer relationship on the strength of cognitive ideas related to the ethnic, social, & local needs of the customer. The debate is not so much about WHO will survive as much as it is about how will both survive. For either to survive, it is critical that each forge a clear need-based valuable relation with the consumer. From this vantage point, the local brand has little to do. The global brand has to morph through a series of adaptations in order to survive. As Mr. Moore very correctly pointed out, and all brands that establish and maintain cognitive valuebased relations with the consumer are the ones that survive regardless of geography. This creates a milieu of healthy competition and promotes multi-cultural coexistence. Brand dynamics and details are therefore of prime importance in order to best exploit the particulars that arise out of a circumstance. Sanjet Telang, Marketing Associate, Roche Products Limited/Pharmaceuticals - April 11, 2001

Are global brands dead or dying? Oh, please. Has anyone heard of Wal*Mart? They're only the biggest retailer in the world and have really only come into being in the past 20 years. While they've driven prices down to the benefit of the consumer, they have driven business right out of town. Main Street, USA is a disaster, and as the economy now slumps, you'll continue to see the demise of Main Street. Ma and Pa can't compete on price, variety or selection. However ...

This evolution is part of the natural business cycle. Our marketing classes told us that there are four stages to the life of a brand. Just as niche brands - such as TiVo - appeal to early adopters, more established brands - especially those that have failed to innovate to maintain relevance - die off and be replaced with new brands and so the cycle begins all over again. So, one guy's opinion: Today is no different than yesterday and tomorrow will be no different than last week. Sucessful brands simply balance the need to be differentiating with the need to be relevant. Whether big or small, the best brands embrace this. Dave Schneider, VP, Director of Business Development, BBDO Minneapolis - April 12, 2001

Speaking purely about brands online, the early days of the Internet made the mistake of suggesting that this global medium would take local brands around the world. Clearly, this has not been the case. In fact, the Internet has forced brands to consider the effectiveness of their localized business channels because the direct nature of the medium, which, ideally, facilitates some kind of direct fulfillment or contact with an organisation via a website. For many 'new economy' organisations, the website is the brand and thus the basis for the entire customer relationship. Perhaps it is fair to say that the organisations who effectively manage brand communications through a multitude of local channels will be the global brands of the next couple of years. Lachlan Brahe, Online Media & Marketing Manager, Love - April 17, 2001

Why the debate? Global brands will stay strong people wish, want, need to belong to something bigger. Local brands fill the need for rebellion, coziness and community spirit. As always, there will be a co-existence. Ultimate survival, outlet-by-outlet comes down to sensible business practices, good product and customer relations. Kimon Lycos, Account Director, Laurent and partners - April 17, 2001

I am writing my thesis about gaining competitive advantages through international brands. There is a trend to "localization of brands". Global brands will further exist but they will have to face the problem that we don't live in one world but in many. Brand managers have to react on the psychological trends like national or local pride esp. in Europe and create different brand strategies for different regions. Christian Eberl, Student - April 18, 2001

A product or service is nothing if it can't deliver. We become faithful to a brand because it's either consistently available, reliable, authentic or all three. One of the strongest 'brands', in the UK anyway, is ORGANIC. Unfortunately, the shampoo got there first, but as we have become more media-literate and companies have to try harder to entice us, so we will become more product-literate. The other day, I made a telephone appointment to meet my bank manager (normally we talk over the phone) using the centralised phone number. When I turned up, I was told he had been moved a year

ago to another branch (thanks for telling me). After the first twenty minutes of the cold bastard approach from my new 'account manager', he gave in and told me about how all tellers etc are being replaced by a centralised telephone system and machines. His salary fluctuates depending on the sales targets he meets (business plans, loans etc). He is getting out. It took me an hour and a half, while he contacted head office for me, to do what used to take an account manager five minutes over the phone. We're all aware of the centralising of companies and it's affect (talking to someone 200 miles away about your gas meter etc) but have these service providers missed the point? Simon Hillier, student, Camberwell College of Arts, BA Graphic Design - April 18, 2001

There's a problem that global branding can mean all things to all people. The internal organisational importance of global branding has never been greater; live this and you'll beat local brands. Equally, the external presentation of brands should always involve local identifiers. So I always advise leaders to invest in glocal brand architectures, but chartering this requires that brand communications connects to strategy, business model, organisational culture and action learning. chris macrae, Brand Profiler and Charterer, Chief Brand Officer Association - April 19, 2001

I also take issue with Anonymous, 4/9/01. The pre-existence of a coffee culture in Europe and Australia does not preclude Starbucks from succeeding there any more than the pre-existence of a food culture prevented McDonalds' from succeeding internationally. The real point is the brand experience. If global brands like Starbucks offer an experience consumers want, they will succeed....... an experience that can mean different things in different locations, depending on the subjective, emotional dimensions surrounding the brand in particular markets. Successful global brands will need to allow for subjectivity - for the consumer to decide what the brand means for them, unlike traditional brands where meaning is created at the level of the company. The successful global brands will also tap people's need to belong - less and less to traditional groups based on socio-economic status, race, religion or even gender - and more and more to the new, highly fluid tribes centred around different parts of their lives, and in which brands can play an important role. Andrew Simms, Principal, Andrew Simms Marketing, Sydney - April 19, 2001

Starbucks succeeded in America because there was no coffee culture there to start with. Coffee US style, was usually reheated brown liquid in a perspex pot. Anything better than that was going to succeed. Will Starbucks (read global brands) succeed in a different environment like Australia or Europe? I don't really know but certainly if there is no dominant brand already in the marketplace - and in Australia at least, while there are lots of franchise cafe groups, there is no dominant brand - I reckon Starbucks (read global brands) could win the day. Mind you, what coffee afficinado would want coffee in a paper cup! Joe Podosky, Strategic Account Director, Brightfox - April 22, 2001

Global brands are here to stay, and they are not new. We have been witnessing their evolution over many decades, they are increasingly clever as they mirror and/or meet the demands of a local

marketplace. Brand is an emotional relationship between a single consumer and an orgnaisation or corporation. For brands that provide an experience, global portability is easier, as the environment in which the brand lives can be easily adapted for the consumer - the Starbucks experience varies according to location, whether it be New York, Chicago or London, as does McDonalds. The presence of a global brand, although scary for small local businesses is not a bad thing - often the market is grown as a result. Retailers need to specialise, food brands need to improve quality and experience brands need to differentiate based on personality and heritage (things that can not be copied). The challenge for the global brand lies in balancing similarity of experience with quality and difference, to prevent sameness and blandness or poor quality. The future is bright for local, regional and international brands, as long as they align corporate strategy with brand strategy, and that it is underpinned with good quality products, service and value for money. In other words, do what you do, but do it well and have integrity, then customers will respect you and reward you with their custom. Leonard Rau - April 23, 2001

Of course global brands are here to stay if not from the ability to provide a universally proven product then for the advantage of being able to leverage foreign currency into aggressive advertising budgets. The question is not if but how well these brands will succeed in the global marketplace. The key to these brands success will be in their ability to continually adapt and provide unique offerings to the local markets. The role of global brand directors will become increasingly difficult as they are challenged to maintain a fluid, congruent identity in light of such greatly varied brand objectives and executions. The concept of global portability has reached a scary frontier in the digital age. For some Internet companies, exploration into foreign markets has comprised mainly of a mirrored system rollout, with little variation in strategy, offering, identity or design. With the exception of a few peer to peer based businesses this approach has been largely unsuccessful. The example and the lesson remains the same whether it be a digital offering or traditional provision of products and services: global brands must dynamically offer the quality and differentiation required for each individual market via a ground up re-evaluation of the business, brand and strategy prior to entry. Anonymous - April 23, 2001

Whether global or local, a brand will be successful if it delivers what the customer wants. Global brands such as Starbucks are successful because (more increasingly) the concept of indiviuality is a

homogenous trait - the brand operates at a personal level, but can also be exploited internationally. Starbucks have simply applied local thinking to an international audience. As long as the customer is the focus of a company's strategy, geography is proving to be an irrelevant factor. Karl O'Leary, Marketing Manager, Argos - April 24, 2001

Those companies that work out what consumers want/need and find a way to deliver it or relate it rationally or emotionally to their brand/product are always the strongest. A strong brand maintains relevance, yet is distinct and differentiated from the competition and this is generally independent of whether or not the brand is owned by a mega-corporation. Mom & Pop stores CAN be successful if they find a way to meet the needs of their community and exploit them. In the same way, the Wal-Mart formula "low prices, good value" works because in finding the lowest common denominator, it does exactly that. Successful Mom and Pop stores that have continued to be successful have stopped trying to compete with Wal-Mart on price and have used "quality" and "service" to justify their higher prices. This formula works too, just not on the scale of Wal-Mart, and such stores are famous brands within their community, just not in the world in general. (By the way: over 80% of people who live on this planet have never heard of Wal-Mart so it's not really a global brand in the sense of Coca-Cola or Nike.) Matt Rayner, Planning Director, The Media Edge - April 25, 2001

Companies must learn to Brand Globally and Prospect Locally Paul Marobella, VP, Brand Strategy, Greco Ethridge Group - April 27, 2001

Global brands, like McDonalds & Coke, are evolving into owners of a portfolio of global and local brands. Like stock portfolios, so brand portfolios will be general, some in a specific industry; some global and others regional. mike freedman, brand developer, airborn - April 28, 2001

When it comes to individual purchase decision making, being "global" is fast becoming a brand attribute in and of itself. The connotations of a brand existing in mutliple geographies and cultures carries with it a set of associations that regional brands cannot own. The same is true in reverse. Coca Cola's approach to owning global and regional brands is wise, because it enables them to reap the financial benefits from the varying levels of "regional loyalty" that exist in each the hearts and minds of every individual. In the future, growing brands will decide whether it's more valuable to retain a regional association, based on the strength of their existing brand equity within their current customer group. Michael Zagorsek, Brand Strategist, Sapient - May 2, 2001