Companies are increasingly tapping into foreign markets and yet they are struggling to export their reputation, writes Kate Hilpern
According to the Reputation Institute, the best 100 companies have a 5 to 22 per cent weaker reputation overseas than at home. So what’s going wrong?
The answer is simple, says the Reputation Institute. Most large companies focus on the product and service dimension in their export markets, at the expense of their overall image. In other words, they see these markets from a pure sales perspective and fail to tell their company story. The result is that people aren’t willing to support them as much as they would companies who genuinely engage them.
The solution is less simple. Even where brand communication is a priority, there can be a clash between local markets, which are busy focusing on the nuances that make their world different, and head offices, who want a globally consistent and resourced brand.
“Finding the elusive balance between global clout and local resonance can be complex, but failing to do it can lead to inconsistent messaging, which can be very damaging to a brand’s reputation,” says Alan Wilson, marketing professor at the University of Strathclyde Business School.
Head office and local markets work on different time zones much of the time, in more ways than one, says Brant Long, global brand director for Jones Lang LaSalle. “The corporate strategy is to be thorough, slow-paced and to hand out tools that are bullet-proof. In contrast, local markets are very reactive and have to be nimble and opportunistic because they are so close to the money. This alone can create tensions.”
The best brands give local markets the freedom to explore their own cultural differences
His advice for those at headquarters is to venture out of their ivory tower and travel, identifying exactly what the communication complexities are and how they’ve been solved in other markets. Work by the mantra of “less is more”, he adds. “Many local businesses are under pressure to compete and undertake innovative marketing activities, the result of which can be that the brand story gets diluted. It’s far better to do one thing really well.”
Global versus local doesn’t have to be a case of one or the other, says Thomas Brown, head of insights at The Chartered Institute of Marketing. “Many organisations are pursuing a balanced model where core or strategic assets – advertising, images, copy and so on – are created and procured centrally with regional input, and are then provided as templates for local markets to adapt and implement. This gets the best of both worlds – efficient use of resources, consistent application, but with local market sensitivity built in.”
In the current economic climate, the arguments for cost savings and efficiencies are strong, but it is essential they get balanced against the arguments for local relevance, says Mr Brown. “Language, imagery, colour and tone can have different meanings in different markets. People operating in a head office in one market may be unaware of this or not appreciate its potential implications on the ground thousands of miles away.”
Pete Petrella, creative director at Gyro London, agrees. “The best brands give local markets the freedom to explore their own cultural differences with great effect,” he says. “Both Nike and P&G have shown that with a strong planning approach and a single-minded brand proposition, multiple markets can create effective marketing communications.
“Meanwhile, Johnnie Walker’s sophisticated work in Asia more than proves that it’s possible to take an idea that was created in a distinctly Western environment and roll it out to great effect.”
Central to this, in his view, is early stakeholder involvement. “The earlier you gather requirements from your local markets and genuinely listen to their challenges, the more likely you are to create something that will be welcomed as useful and relevant for a local market audience. Many brands do not take this approach: local involvement is just a token gesture rather than a central part of the development process.”
Companies are increasingly benefitting from a central “hub” that embodies the company values. For firms, such as BMW, this means an actual centre for staff to become entrenched in what it means to live the brand; for others it will be a digital asset management system. Either way, as the company expands, it gives employees a touch stone that they can refer to before making local decisions.
“Many marketing agencies now provide such services,” says Mr Brown. “And if they don’t, organisations are increasingly turning to specialist system providers or even developing such tools in-house.
“Technology is the key here, particularly in a multinational or global business with people and budgets dispersed over multiple offices and time zones. But it’s important to remember that technology is an enabler – not a solution in itself. Putting a brand portal or marketing asset management system in place requires education, communication and ongoing management to make sure it is used consistently and that feedback from local teams is taken on board.”
But beware of taking too much comfort in expressions such as “think global, act local” or “freedom within a framework” without thinking through what they really mean for your company, warns marketing strategist Cesar Lastra. “The result can be vanilla – neither global nor local,” he says. “The best solution is to work top-down and bottom-up, and make sure that both the brand positioning and the creative expression of the global brand are based on robust, human insights.”
HSBC – “the world’s local bank” – executes brilliantly on deep, human insights that resonate around the world. “Whenever I arrive in any airport or see an in-flight ad, it’s HSBC drawing from its long-standing Chinese values, but with a globally relevant expression,” says Mr Lastra. “SABMiller – the world’s local brewer – is doing the same thing, but rather than having a corporate umbrella campaign, it has a mix of local brands across several countries, which form brand communities and draw on local leanings, sitting alongside global premium options, such as Peroni or Grolsch. It is a sharp contrast to AB InBev, which is marching across the globe trying to turn Budweiser into a global powerhouse on the scale of Coca-Cola.”
Perhaps the lesson most easily forgotten in our digital times is that whatever you do locally goes global and vice versa. There was a time when local markets could do campaigns and global would never know about it or when brands could have a local positioning in one market and stand for something completely different in another. But now, thanks to YouTube, Facebook and Twitter, that time has gone.
‘My Russian products perform like Western products’
Russian Standard Vodka was launched in Russia by Roustam Tariko in 1998, but taking his premium brand to the world was his real dream. Today, the brand is sold in more than 80 markets across Europe, the United States and Asia.
His founding mission was to provide affordable luxury to everyone, and it was this simple and globally relevant brand message – coupled with his focus on his emotionally-led brand story and the emphasis on fine ingredients – that has been the catalyst for his success.
“I believe in emotional branding. I’m an aggressive patriot,” says Mr Tariko. “My products have Russian names, but they look and perform like Western products. They appeal to both sides of the Russian psyche: the love of Russia and the appetite for Western lifestyle.”
In 2011, Russian Standard Vodka was ranked as the eighth most powerful vodka brand in the world, according to Intangible Business’s 2011 Power 100 ranking.
The product’s portfolio dominates the premium sector in Russia with a 50 per cent market share and the super-premium sector with a 33 per cent market share. Meanwhile, international export sales demonstrated a 20 per cent growth in 2011 and are expected to continue to grow internationally by more than 15 per cent this year.
But brands from Russia, China and India can face huge obstacles as they move into new markets says Inga Howell, head of business development at Calling Brands. “Western consumers are usually unfamiliar, often suspicious and sometimes downright hostile to brands that have their roots in these countries,” she says.
“Western consumers want to know much more about the companies behind the products. Brands must explain who they are and why they matter. In Russian Standard Vodka’s case – and in the food and drink sector more generally – emphasising where you’re from can be an advantage. We all believe that Russia will make the best vodka.”