On Sunday night Prashant Tamang won this year’s Indian Idol contest, much to the joy of his fellow Himalayans. This story would probably not have come to my attention had not it been reported on last night’s edition of The World, but as I listened I realized that it addressed a question I had been thinking about that morning: can a global brand unleash the same passion as a local brand? The enthusiasm exhibited by Prashant’s supporters suggests not.
I am currently investigating how global brands can best achieve what Geoffrey Probert, Unilever’s senior vice president, deodorants, once referred to as “the right balance between mindlessly global and hopelessly local.” At the time I was very taken with this phrase but as I think more about the topic I begin to wonder, are local brands really that hopeless?
Now, I know that Geoffrey was referring to the business practicalities of trying to manage the 1,600 brands Unilever owned at the end of the 90s. A business like Unilever must focus on those brands that are likely to generate the most return and, as a result, had begun the five-year task of reducing its portfolio from 1,600 to 400 power brands that generated 90% of the group’s revenues. But that did not mean that all Unilever’s power brands were global. Some were and still are distinctly local, with distribution limited mostly to one country.
Unilever’s Marmite is a case in point. A savory spread made from yeast extract, it is loved by many Brits and remains one of the company’s power brands. For many years Marmite was marketed with the tagline “The growing up spread you’ll never grow out of,” and there can be little doubt that many people have fond memories of the brand from childhood. Such is the brand’s appeal that many adult ex-pats, myself included, have been known to carry large jars of the stuff back from the U.K. for themselves and others. Outside of the U.K., few people appreciate the taste of Marmite, and whether the brand would have the same appeal if Brits were introduced to it as adults is a matter of speculation. Today, the brand is marketed with the tagline “Love it or hate it,” reflecting the polarizing aspect of the brand’s strong savory taste even in its country of origin, but the fact that Marmite is entrenched in childhood memories and local culture creates an incredibly strong bond to the brand for many people.
Anna Sussman’s report on the fervor generated by a local boy who made it to the finals of Indian Idol reminded me that people have a strong need to belong. It is human nature to value that which is familiar to us and to take pride in our local culture. Local icons – stars, teams and brands - can unleash tremendous passion. For instance, when Prashant Tamang made it to the finals of Indian Idol, his hometown mobilized to support him. Mobile phones were handed out to workers picking tea and phone booths were set up by the road side, so people could vote for him. They are probably still celebrating in Darjeeling as you read this.
Following up on this idea of local pride, I asked Dom Twose, our global head of knowledge management and associate of the inner magic circle, to dig up some examples of brands that tapped into local culture to become successful. He sent me a case study on the launch of Cola Turka that is a classic example of how marketers can effectively leverage local pride to their advantage.
Cola Turka was launched in July 2003 by Űlker, a large food and drink producer with a loyal following in Turkey. With Coca-Cola the market leader, followed by Pepsi and Fanta, Ulker needed to find a way to make Cola Turka stand out against the global brands. Ad agency Y&R’s 3-minute execution did just that. Set in New York, it portrays the “very strange day” of Chevy Chase when everyone starts speaking to him in Turkish as a result of drinking Cola Turka. Watch the ad and you will see what I mean.
Not content with creating an ad which played to Turkish pride, Y&R also “road-blocked” Turkish TV to ensure as many people as possible saw the ad at the same time. One day prior to the launch of Cola Turka, print ads in the main national newspapers teased readers to watch the TV on Friday at 20:00. No additional information was given. Intrigued, people wondered which TV channel to watch. No problem—at 20:00, Cola Turka was on each and every channel. Nearly 90% of people claimed to recognize the ad and it was very positively received. As one research respondent put it, the ad “made me feel proud to be a Turk.” The discussion that followed this dramatic launch boosted the impact of the brand’s paid communications and Cola Turka gained market share from many carbonated soft drink brands within the Turkish market, leapfrogging its way to number two in the market. (Click here for details on the current status of the cola market in Turkey.)
Cola Turka succeeded against well-known, global brands precisely because it was seen to be local. It is a strategy that has been adopted in many countries from Australia to Romania. Global brands may get a head start in many markets simply because local brands are often thought to be poor quality, and people view an international brand as a guarantee of quality. That advantage, however, only lasts so long. When local brands adequately meet the needs of consumers and effectively tap into partisan feelings, the international brands often find that their positions are not as strong as they once were. Local brands have the home-field advantage. It takes a genuinely better product and significant marketing and sales investment to overcome their innate advantage.
So what is your opinion? Do you have examples that make the case for or against the proposition that local always beats global? If so, please share them with us.
Tags: Millward Brown, Nigel Hollis, local brands, global brands, Cola Turka, Ulker, Unilever, marmite
(20 votes, average: 2.7 out of 5)
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September 26th, 2007 at 10:22 pm
Hi Nigel,
Local brands have had it tough against the MNC brands, especially in the develpoing world though there are ones that have stood up to MNC brands and beaten them at their own game.
MNC brands have the following advanatages over the local brands:
1. Deeper pockets
2. Attract better talent
3. Professional management
4. M&A
5. Learnings from other markets
So when Coca Cola reentered India, it just bought out the market leader, Thums Up. Also the local brands tend to be owner driven companies who find it difficult to sustain operations over a longer period of times as management is concentrated in one family.
There are number of classic cases where local brands took on Goliaths and beat them at their own game.
1. Surf used to be undisputed No.1 detergent in 1970’s in india. It was a premium detergent and the market for mass, economical but decent quality detergents was vacant. Indian brand Nirma was launched and soon gained such voulmes that Levers tried everything under the sun to gain back the lost advantage. Nirma kept the lead for next 2 decades but lost momentum in nineties due to management vaccum.
2. Ujala (dye based cloth whitener) beat Reckitts Robin blue through and through. Reckitts and Robin blue never recovered from that in the category.
3. All Out beat both Reckitts & Sara Lee (joint venture) in the mosquito repellent category.
4. Parachute (Marico) & Vatika (Dabur) have kept Levers at the backfoot in the hair oil category in India despite acquistions by Levers.
However the MNC brands can buy out and take over local brands and only now we are starting to see the reverse starting to happen.
Sorry for the long rampbiling piece
Cheers
Sandeep
September 27th, 2007 at 2:50 am
Dear Nigel,
This is quite an interesting one. The local brands are normally worse off against the more powerful MNC brands.
The reasons are as follows:
1. Financial muscle of MNC brands
2. Access to better talent
3. Professional management
4. Learning’s from other markets
5. Global R&D capabilities
Access to talent and professional management are one of the major hindrances for the local brands, especially when competing against large Multi National Corporations. The local brands tend to have a family managing the business and that does mean that professional managers see less chances of growing in the company.
The other big advantage which MNC brands have is that they can just acquire the local brands. The reason that most of the leading brands are from US and Europe is because the big brands have acquired brands that they couldn’t maybe compete against. The reentry of Coca Cola to Indian market happened with Coca Cola acquiring the market leader Thums Up. Kolynos was acquired by Colgate in Brazil. Dabao and C Bons (local Chinese brands) have been just acquired by J&J and Beiersdorf respectively.
There are at least 3-4 instances of David pulling one over Goliath that I know off.
Nirma washing powder in India in seventies took Levers to cleaners and Nirma still continues to be a very strong brand. They suffered in nineties due to the management vacuum as it is a family managed company. The key here was that brand connected very well with the consumer needs at that time and build a huge emotional connect and equity.
Ujala (dye based fabric whitener) came much later to the fabric whitener market and successfully took on Reckitts brand Robin Blue. Through some really catchy advertising the brand has just swept Robin off the market into a distant second place and has managed to actually grow the category.
All Out took on Sara Lee (In joint venture) and Reckitts in the mosquito repellent category and changed the way consumer looked at the market, making machines the norm rather than mats.
Amul (GCMMF) took on Walls (Levers) in ice creams and Walls which was dominant in the Indian market was the second brand with in a few years of launch.
The key point with all these brands is that these are not the most professionally managed companies and didn’t have access to the caliber of people which MNC’s normally have but outsmarted the bigger players by knowing the terrain or consumers better. There have been companies like Marico (Parachute & Saffola) & Dabur (Vatika) which have been successfully taking on Levers in their respective categories. Levers despite acquisitions hasn’t made much of headway. However, these are more professionally managed Indian companies.
The silver lining to the cloud is that now companies from the developing world are beginning to acquire brands from the developed world. Tetley acquisition by Tata Tea and Mittal steel acquiring Arcelor are a signal that the tide can turn in favor of the local ‘David’ in the future.
Cheers
Sandeep
September 27th, 2007 at 6:37 am
Hi Sandeep, thanks for your comments - really very helpful.
Would it be fair to say that the main reason local brands fail are business related, not brand related? In other words, local brands probably do have an innate advantage when it comes to building strong relationships with consumers but they often get outgunned by the big, global players?
September 27th, 2007 at 11:02 am
I would hypothesize that the degree to which local brands can beat out global brands depends on how “sophisticated” the market is: Consider a continuum from highly developed industrialized countries to somewhat less developed to undeveloped countries. Brands are more important in less developed markets (loyalty is higher at any rate), and as such the role of brand can be a more powerful influencer in purchase. I would build on this to suggest that the local angle can be quite compelling in less developed markets as long as the local brand can demonstrate parity performance – all things equal, local people will favor the local brand as long as they don’t feel they are compromising. As in your example of Turka Cola, this was an acceptable product, well marketed on the local theme.
By contrast, I believe country of origin counts for less in well developed markets. People in the US are abandoning domestic cars for Japan, German and Korean ones. The exception being when people avoid certain products because of their origin – right now Americans are somewhat wary of “made in China” and we know that American brands are losing favor in may parts of the world.
So my bottom line is that the local angle – possibly fueled by patriotism – can become the basis for marketing a brand as long as the quality is acceptable.
September 27th, 2007 at 11:59 am
Sounds like we are on the same page, Philip.
I suspect that there are some interesting exceptions to your proposition that consumers in “well developed” countries are less susceptible to the lure of local brands. Thinking specifically about the car market GM’s Saturn almost turned the tide by re-energizing the image of US auto manufacturers but the original cars were at best parity products. In fact, surely the whole reason US consumers turned to imports was rooted in quality issues?
September 27th, 2007 at 7:14 pm
Thanks Nigel
The local brands do get outgunned by larger corporations due to resources and experience issues. Not necessarily the global brands have better products but they do have global tie ups with the big ad agencies.
The perception of better performance is more important than actual product superiority. So, local brands are at a disadvantage as they are normally not as media savvy as large global corporations.
The loyalty or favoring the local brand happens largely in the low ticket product categories and not the high ticket categories like LCD TV’s and cars etc. If that was the case, brands like Sony would have been out of the China quite some time back. The consumers want assurance and the best technology when he spends a lot of money & that’s why brands like BMW & Mercedes are regarded well across the world.
September 28th, 2007 at 3:57 am
I’m reminded of the “I’m Backing Britain” campaign from 1968:
I’m Backing Britain
yes I’m Backing Britain
We’re all Backing Britain
The Feeling is growing
So let’s keep it going
The good times are blowing our way.
I can’t believe that would have any traction today.
September 28th, 2007 at 7:01 am
Adding to Sandeep’s point on Coke in India. The turning point of Coke’s ascension here started with the brand acting like a local brand. Here are some of the ads featuring Bollywood star Amir Khan.
http://www.youtube.com/watch?v=NZ2m7cIs1ss
http://www.youtube.com/watch?v=du1siYCToT0
http://www.youtube.com/watch?v=PbA1F8z_ppY&mode=related&search=
http://www.youtube.com/watch?v=K0Fr94c86HU
September 28th, 2007 at 7:46 am
Nishad, thanks for pointing us to these ads. Even I can see how it would have more local appeal than some of the more ‘international’ Coke ads.
So, Dom, you could not find the song on YouTube, is that what you are saying?
September 30th, 2007 at 6:18 am
Hello Nigel,
This is Melih Cilga, Business Planning Consultant at Millward Brown Istanbul office. Regarding your Cola Turka example and the proposition if local may beat global, I will say that Cola Turka’s success against its global competitors was a temporary and volatile achievement:
It is true that right after the launch campaign, Cola Turka’s market share had peaked to 20 percent for a short period and managed to be temporarily victorious over Pepsi Cola, but then started to gradually decrease so far to 13 percent placing the brand as the third player in the market.
Yet the launch ads were fun to watch and people found it entertaining to talk about them. We have probably seen the highest scores of “word of mouth” success created by a TV campaign. And I also remember that one of the Cola Turka ads claimed, “In 18 months (after our launch) we have penetrated into 63 percent of all Turkish households”.
To create an awareness, Cola Turka successfully used the concept “Expose and show off the great Turkishness inside of you”, which was simply based on the “nationalist pride” feelings.
But sustainable marketing success is not that easy and you know, creating a huge awareness and widespread trial purchases do not necessarily promise any consumer loyalty.
Maybe Cola Turka was also aware of the fact that positioning the brand as the “Turkish local cola” was a dead-end path to convert trialists to loyal consumers, so they changed their ad agency, packaging design and the slogan: Now Cola Turka relies on the concept “We are all together, we live all together and every walk-of-life drinks Turkey’s local Cola”. As a result of this new creative approach which tries to encompass entire country, Cola Turka sponsors all of the four biggest football clubs at the same time.
But still, I think, there is a lame part of this new strategy: It lacks the “brand relevance” with the real consumers’ real brand preference stimuli: I say that you can not be the preferred brand of everybody: Targeting everybody means targeting nobody: Yes, we live all together in the same country, but in terms of our consumption habits and purchase experiences, life is neither that simple nor that one-dimensional as Cola Turka tries to suggest.
As a solely personal opinion of mine, if they continue to rely on this “one-dimensional and smoothening” approach for another couple of years, I suppose that their market share will be stabilized at around 5-6 percent, thanks to those patriotically and religiously sensitive consumers who will buy Cola Turka only because its producer Ülker is famous with supporting these values…
Last but the not least, when it comes to chocolate wafers and chocolate bars market, the proposition if local may beat global is surely true in Turkey and Ülker is the leader of this market, beyond any dispute.
September 30th, 2007 at 8:55 pm
It may seem subtle and no doubt there is a grey area,
but I`d think two sets of cases and processes can be
distinguished here.
For the Indian cases, there is of course a
local/global angle but I`m not sure they need
necessarily be framed this way. As Sandeep says, what
these brands have done is take on global brands at
their own game and win. They may achieve this through
some local insight or resource but their success is
still based on doing the same things as global brands
but better.
I don`t deny this an important issue, but for me the really interesting cases are those where the whole game is framed in local/global terms. Social Categorization Theory
argues that we constantly fence and re-fence the world
to not only provide meaning but also to maintain a
positive social identity and increase our self esteem.
One reason for the success of Cola Turka I would think
is the use of the Turkish language as a mechanism for
making salient national identity – interestingly I
would think this is also supported by the’national
event’ style media planning in a category that is defined globally. In line with Social Categorization Theory and emphasizing the flexibility here, a Japanese shampoo manufacturer became hugely successful through using famous Chinese models in their ads instead of western models. On another day in another category, a Chinese model is as much an ‘enemy’ as a westerner, but the ‘black hair’ denominator enables a sense of ‘we’ to be formed.
From a brand perspective then, local vs. global is as
much a perception as a reality. For the local card to be really well played, we need first consider what we mean by local both in terms of scope and content.
October 1st, 2007 at 10:11 am
Hi Melih and Chris, thank you for your comments.
Melih, you seem to imply that tapping into Turkish patriotism was unlikely to convert people to loyal buyers in the long run. I wonder if that is really true? It seems to me that it has a lot more campaign potential than the new one that you describe. It does sound pretty bland - inoffensive maybe but also unlikely to create any real passion for the brand as a result.
Chris, you make an interesting point that local may actually be hometown or a whole region/ethnicity/culture depending on the context. Does social categorization theory give us any clues about when group identity tends to outweigh personal identity? Obviously this has a bearing on when a “local” appeal might work best.
Thanks again, Nigel
October 2nd, 2007 at 3:58 am
Hi Nigel
That’s a big question but fascinatingly Melih’s post encompasses some of the issues. I’m mixing theories here, but regardless of the process one thing we constantly seek to do is maintain the balance between fitting in and standing out - at a party for example wearing the same brand is fine (fitting in) but wearing the same product is not (standing out). As Melih says, this has important ramifications for the “We are all together, we live all together and every walk-of-life drinks Turkey’s local Cola”.
It’s almost common sense, but one case where the “local“ appeal might work best is when our ability to stand out / existing group identity is threatened. I’m no expert on Turkey, but I’ll put my head on the block and say that the Cola Turka campaign is about as good an example of this as you’ll find. In terms of category, the cola market is dominated by Global/American players and in terms of the market there may be tensions in Turkey regarding general issues such as globalization and specific issues such as the penetration of English / pressure to learn English. The campaign plays on this beautifully – it makes salient Turkish identity and the threat to it.
So my ultimate take on, “Are local brands stronger than global?” is (surprise, surprise) “depends”. The above is just one example but from a brand strategy perspective, I would think the contribution and adaptation of academic research could lead to the development of a powerful framework for analyzing this issue (and your question). It would then be up to Market research to apply this to any individual case at hand.
October 2nd, 2007 at 5:22 am
I was intrigued to see “Marmite with Guiness” in my local supermarket. An intriguing marriage of local and global brands. Nigel, can you resist a separate post on this?
There are many shades of gray in the way MNC’s define global and local brands, usually along a spectrum that looks like this:
Local for Local
Local for Global
Global for Global
It seems to me that a Local for Local brand should, almost by definition, have the potential to present and maintain a closer fit to its local target market than a Global for Global brand… For starters, it’s positioning is not constrained by the need to conform to the lowest common (global) denominator. The Local for Local brand is also freed from the shackles of global decision making, which surely gives it an advantage in speed and agility. So, why then are Global for Global brands stronger then their Local for Local competitors in so many categories? I think Sundeeps thoughts on funding, management talent etc are probably close to the mark.
October 2nd, 2007 at 6:17 am
Thanks for the follow up Chris. Your comment makes me think of Douglas Holt’s proposition that iconic brands are the ones that tap into cultural tensions (which are typically “local”).
As you suggest Cola Turka may have succeeded so well (at least initially) because it was seen as a counterpoint to Americanization. The myth of America which helped sell brands like Levis and Marlboro in the past has lost some of its allure, and because Coca-Cola and Pepsi have been so successful on the global stage they are identified with the “threat” of lost local identity. This tension would appear to be global in scope because has opened an opportunity for many other local cola brands, e.g. Mecca Cola and Big Cola.
I guess the trick is to stand out in a good way. In the past using an American brand helped people stand out in a good way - cosmopolitan, independent, easy-going - but now it is less attractive - domineering, opinionated, self-serving.
October 2nd, 2007 at 7:36 am
Ben it looks like I missed your comment earlier. Your conclusion is where I end up. A local brand ought to have the home field advantage but all too often it loses out to the team which can afford the best players.
As to Marmite with Guinness, that I have to see! And here it is. A very interesting combo considering that Marmite is a by-product of beer anyway! Apparently this version is made with the same yeast used to make Guinness? And the pack and PR stresses it contains no alcohol.