Global Brands & Local Markets

1
Global Brands Local Markets
Ram Brijesh Pudi ravi krishna
2
Definition

• Globalization has been defined in business
  schools as the production and distribution of
  products and services of a homogenous type and
  quality on a worldwide basis.
• Why?
• the fact that foreign sales account for more than
  50 per cent of the annual revenues of companies
  such as Hewlett Packard, IBM, Johnson and
  Johnson, Mobil, Motorola, Procter Gamble, etc..

3
Yesterdays Globalism

• In yesterdays one-size-fits-all world, big
  companies could often migrate something that was
  a hit in the U.S. or Europe by tweaking the
  language and advertising .
• Examples
• Mercedes-Benz, traded on its reputation for
  building highly engineered automobiles to drive
  into foreign markets.
• Coca-Cola Co. and Marlboro cigarettes traded on
  their American-ness to create large overseas
  followings.
• Sony Corp. found that compact, economical, and
  reliable electronics like the Walkman, struck a
  chord with people everywhere.

4
Todays Globalism

• Things have changed.
• No company can safely assume there will be viable
  foreign markets for an existing product.
• Any company seeking to expand globally needs to
  ask if its offerings are culturally and socially
  appropriate for its targeted market.

5
Problems faced by Global brands

• Companies find it difficult to succeed in new
  markets that are culturally unfamiliar.
• They often underestimate differences in the
  patterns of daily life in the new markets.
• This makes it difficult to develop products and
  services that fit peoples lives,
• It is difficult to extend their brand, and manage
  culturally diverse teams.
• Western companies are now paying a great deal of
  attention to the growing number of people with
  expendable income in China, India, and other
  developing regions where the cultures are very
  different from those in the West.

6
Coca-cola Global is Out, Local is In

• Initial set backs in 80s the benefits of global
  integration are sought and the need to adapt
  products to local markets is largely ignored.
• Coke is instituting a strategy of think local,
  act local by putting increased decision making
  in the hands of local managers.
• Make model citizen by reaching out to the local
  communities and getting involved in civic and
  charitable activities.
• Better understanding and appealing to local
  differences.

7
Disney Learning to Say Oui Not Yes

• Before
• workers were required to speak English, even if
  most people in attendance were French.
• liquor was not sold in the park, they have a
  drink with lunch or dinner.
• many of the exhibits and rides did not have a
  local theme, they were the same as those in
  Disneyland USA and thus did not appeal to
  Europeans.
• After
• began creating European-specific attractions
• Started to serve alcoholic beverages
• series of changes, abandoning its global
  approach, and substituting one that appealed to
  local tastes.

8
PG Regional Focus and Global Coordination

• Procter Gamble (PG) with annual sales of
  almost 40 billion has operations in virtually
  every country of the world.
• Trick
• the firm employs a strategy that combines high
  national responsiveness with high economic
  integration.
• strategies being developed and implemented
  locally and/or regionally. In particular, product
  delivery and marketing are local.
• the back office of payroll, financing, human
  resource management and other general services
  and processes is coordinated on a more global
  basis, in order to achieve internal economies of
  scale.
• Result
• economic efficiency and localization.

9
Kingfisher Where Retail is Detail

• The Kingfisher Group, a British retail enterprise
  with annual sales of over 10 billion, was
  founded in 1989.
• retail is detail and local knowledge is
  vital.
• The approach that is used in managing these
  geographically dispersed operations

10
How Companies Try to Understand Consumers

• Two general types of research that companies use
  to understand new markets
• product-focused research asks consumers through
  surveys, focus groups, interviews, home visits
  and usability tests, about existing or
  prototypical products and services.

• 2. culture-focused research uses measures
  like census-taking and demographic data, to look
  at general patterns of daily life like value
  systems, social structures, and relationships
  among friends and relatives.

11
Advantages Disadvantages

• The advantage of product focussed research is
  that
• it leads to specific insights about the offering,
  enabling the company to fix problems or add
  features.
• It can be fast, practical and can lead to
  statistically valid conclusions about important
  details.
• if a prototype of a new offering is being
  examined by a sample group, these research
  techniques can tell you if they hate it a good
  thing to know early in the process.
• The problem with this type of research is
• the results almost never lead to insights about
  possibilities that could make large-scale
  improvements for users.
• The insights from focus groups and surveys are
  almost always limited to thecurrent expectations
  of the subjects.

12
Advantages Disadvantages

• The advantage of culture focussed research is
  that
• A company can learn, for example, that increasing
  numbers of families have two people earning
  salaries, that more people are getting
  high-school educations, and that people are
  putting more value on the privacy of their
  personal information.
• This research will give deep insights into
  behaviors, beliefs and peoples goals, which can
  be used, in turn, to think about the products a
  company is planning to launch.
• The problem with this type of research is
• Findings are seldom specific enough to lead a
  development team to improve the offering they are
  trying to create.
• research is time-consuming, and development time
  for companies only gets shorter,
• this is a difficult research technique to use.

13

• the product research that is practical but does
  not lead to new insights
• the culture research that leads to major
  insights that are difficult to apply
• Of course, the answer is that companies usually
  do some of both and hope for the best.
• Activity focussed research
• focusing on peoples activities when they are
  using a product or service a company wants to
  develop.

14

• Which market do we want to access.
• Take macro and micro data to make a segmentation
  decisions on these markets and choose our
  priorities.
• How can we modify our product to make more
  attractive to each sepate group you can change.
• Performance levels
• Design
• Support
• Speed of services
• Packagining
• Positioning
• Price?
• Can we position ourselves as being the best where
  there are many others to choose from?

15
Tips

• Do not assume an integrated global market.
• be prepared to design strategies that take into
  account regional trade and investment agreements.
• Encourage all your managers to think regional,
  act local and forget global!
• Develop new thinking and knowledge about regional
  business networks and assess the similar
  attributes of competitors, rather than always
  developing pure global strategies.
• The foreign market is not always the same as your
  home market.
• Make alliances and foster cross-cultural
  awareness.
• When global brands target their regional markets
  using the appropriate economic integration/nationa
  l responsiveness, they tend to be successful.

16
How it will help?

• Planning products and services for culturally
  divergent markets.
• Managing their brand across cultures.
• Create and managing teams of culturally diverse
  employees.