Top end global brands often face this dilemma; should they retain their original home branding strategies in markets across the world, or, should they opt for a more ‘local’ face and branding strategy? In an emerging economy context, the dilemma is more pronounced. An emerging economy promises a large consumer base where aspirations are building up, and therefore, with rising incomes, it might be worthwhile to hold on to the ‘aura’ of the global brand, whereas, harder financial realities might force these companies to take up a more local flavour, or modest pricing strategies to boost the revenue figures. The first option is to steadfastly hold onto the home-branding and not dilute the core brand proposition. This means only over a period of time, larger sections of consumers upgrade and mature and find these brands more appealing. Choosing the latter option is fraught with the possibility that the brand loses its charm in the long-haul, and examples are many. Heineken, the prominent Dutch brand of beer faced this dilemma, when it was expanding its parent brand across South and South-East Asia (including its erstwhile colony of East Indies, today, Indonesia). Gillette went through its own share of worries and nightmares in Asian and African economies. So, is this ‘impatience’ to reach numbers always wrong for global brands?
To be honest, there is no right answer to this question. Sometimes, the wait can be agonising and often there are instances the brands have exited from emerging economies, as they could not grow a significant consumer franchise over a period. In India, we are witnessing a surge of global brands entering the market, hopeful to have a significant share of the growth story. PepsiCo, Coca Cola, McDonald’s, KFC, Reebok, Nike have all have had successes only after making concessions for the local taste. While the fast food giants had had to change their menus to include vegetarian and Indian flavours, the shoemakers had to introduce SKUs at modest price points.
As for a possible recipe for success, renowned brand consulting firm, Young & Rubicam’s Brand-Asset-Valuator (BAV) model can offer some valuable insights. The model captures the entire brand value as the sum of four (4) distinct aspects, viz. Differentiation (of the brand in terms of its offerings from competition), relevance (among consumers), Esteem (Respect and aspirations of consumers associated with the brand) and Knowledge (how aware are the target customers). It seems that brands, which do not compromise on their ‘Esteem’ and ‘knowledge’ aspects by focussing on more abstract core proposition, tend to be more successful that brands, which dilute these dimensions in attempting to localise. A case in point, Patek Philippe, a brand, which has retained its unique imagery and brand positioning (non-celebrity oriented, very French) and has downplayed its differentiation to make it more acceptable to the Indian markets, whereas, a case of worry is for TAG-HEUER, a brand, which has roped in Shahrukh Khan, the popular icon of Indian cinema to be their brand ambassador, possible diluting their “esteem”. Initial sales figures for the firm suggest that this was a smart move, while it awaits to be seen whether this is going to impact the brand’s image in the long-run.
Posted by: Krishanu Rakshit
Assistant Professor, Marketing, IIM Calcutta.
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