Brands only work locally

Really enjoyed this piece by Pankaj Ghemawat on the myths surrounding global brands. His point that only 16% of the top 10,000 brands on the Milward Brown database are recognised in more than one country, and only 3% are recognised in more than seven is a reminder that the world is not as open as many of us would like to think. Indeed Professor Ghemawat points to what happened to Coke as a sure sign that Ted Levitt’s principle of increasingly homogenous markets was incorrect.

After steadily pursuing a process centred on standardisation throughout the 1990s, Coke has since shifted almost 180 degrees. Today, the company offers a diversified product set, market-specific price points, localised production and distribution and clear distinctons between the approach it takes in the States and internationally.

And those same principles of distinction and specification that now influence a mass market brand like Coke are extending to other brands looking to build share in markets away from home.

Ghemawat’s advice? Focus on the cultural, administrative, geographic and economic differences between markets – nice acronym of CAGE – and develop specific country or regional strategies to make the most of them.

My take-out? Brands can’t expect to build trust and recognition through arrival, announcement or availability. Brands build engagement by syncing with the context they are sold in, and therefore becoming a part of life in a place. There is no such thing as glocal because you can’t transpose or impose one version of local everywhere. That’s colonialism.

Local is also not geographical, it’s psychological. It’s local if it feels local, regardless of its logistics. It needs to feel aligned, relevant and integrated with a space and the people in that space. Until you’re welcomed as a resident, you’re still a visitor – and no local wants to buy everyday goods from a tourist. What works for you at home works for you at home. What Ghemawat seems to be saying is – leave that thinking there.

Everyone has a sense of home, but those senses of home are very different.

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