Monday, August 25, 2008

America's brands face global test

America's brands face global test
Deepak Seth • Guest essayist • August 25, 2008

China may be basking in the glory of leading the Olympics Gold medal tally, but anybody following the coverage of the Games would realize that it is US brands which reigned supreme. Coke, McDonald's, Nike, GE et al were ubiquitous in their presence. In fact, for many a decade US brands have been at the forefront of spreading Americana - a love for all things American all across the globe. Many a time the US brands have succeeded in areas where formal diplomacy has failed.

US brand power is facing some interesting challenges in the global economy. The most important one is on how to retain a single global identity straddling various markets each with its own unique characteristics. On one hand you have a huge but mature and stagnant market like the US with its single digit growths and on the other you have the small but rapidly growing markets like China, India with sustained double digit growths.

If one allows distinct brand identities to emerge in the different markets than the global brand identity weakens. The same brand would mean different things in different parts of the world. If a single global brand identity is enforced all across the globe than it becomes less appealing in the high growth markets. A Hobson's choice if ever there was one.

Several options:

1. Think globally, act locally - a single global brand identity with sub brands to allow for regional variations. This way even if something goes wrong with a brand in a local market the entire global brand is not impacted.

2. The message may be global but delivered in a way that addresses local requirements. So while Coke retains its distinct red color in China it adds "shuang" (Chinese equivalent of "awesome") to its campaign to provide local flavor.

3. Incorporate features from the emerging markets into the global brand identity to make it more universally acceptable. GE's recent advertising campaign utilizes elements from other markets (Indian doctor using portable EKG machine, Dragon heating water for a Chinese village etc.) that reinforce its global identity.

4. Increased cross-ideation from other markets. As marketers attempt to increase growth in the US market they will increasingly look forward to ideas/success stories from other global markets.

Chinese companies are also increasingly making forays into the global market and enhancing their efforts to become global players. The US however is uniquely poised to retain its position as the global brand powerhouse. It has the early strike advantage of already being present in most global markets. Most importantly it already has a microcosm of most global markets present within the US in terms of the local immigrant communities to test market stuff and draw talent from. All strengths which companies from relatively insular countries like China cannot currently compete with.

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