Global Brands Entering Local Markets

The advent of globalization and proliferation of Free Trade Agreements between countries has transformed the world economy into one unified market. We are more than ever dependent on each other for growth and trade. However, the question is whether global brands of today are prepared for these new growth markets.

There is an increasing trend of global brands assuming that their tried and tested marketing strategies and ideas are going to work in these new growth markets with minimal or no localisation. The reality is far from the truth and frankly, if the brand conducts a brand agility index analysis of existing efforts of their own (or even their competitors'!) to decide on their next best steps, they can maximize their time and efforts. Regardless, it will be important for any brand that wants to make in-roads into new markets to consider the six factors below:

1. Rising Nationalism

From Indonesia to India, there never has been a greater focus on “Make in India or Indonesia”. Even in open economies like Singapore, the focus is now increasingly on supporting local brands. From a communications perspective, brands need to understand the driving force behind this nationalism and then see how can they best fit their global brand into a local perspective. You are already seeing this from various global companies such as HSBC’s “The World’s Local Bank” campaign or Coca-Cola’s “Share a Coke” amongst the many others. Global brands need to reflect this new reality into their marketing mix and you need to determine how much localization you can insert into your global brand.

2. Cultural

Have you ever seen any recent commercials especially those from multi-cultural countries like Singapore or the US. You will notice the delicate balance of the different races being portrayed in the commercials. While this seems so simple, very often global brands tend to either ignore or forget this. How many advertisements or commercials have been taken off the air or brands forced to apologize because ethnic sensitives were not adhered to. This is why before a global brand launches into a local market, it is very important to assess what works and what does not. You have to understand the boundaries that do exist – something that works in the US does not always work in Asia.

3. Religious Tolerance

Imagine Victoria Secret running lingerie ads in religiously conservative countries in Asia. You can imagine the uproar it will cause yet global brands continue to make such mistakes. Quite often, global brands tend to either forget or ignore local religious beliefs. The next time you want to run a local campaign, do ask the locals what they think of it by conducting focus groups. The reality is that many countries in the region remain as conservative even if their market development suggests otherwise. For example, you can’t run a campaign on Wagyu beef in a mostly non-beef eating country like India.

4. Know Your Market

This is a cliché but the surprising answer is still “no” as global brands usually launch their product in the market without understanding the market. Have you factored in the GDP of the country or the average income of the common man before launching your expensive fashion wear? Surprisingly, many brands do not and the result is disappointment and a waste of investment dollars. An obvious example would be plans to open a Hèrmes boutique in Afghanistan when poverty levels are high and it is currently a far-from-ideal area for luxury shopping. I have been asked by a few clients, why a certain campaign failed or what could have worked better and my answer is a simple “wrong product in the wrong country”. It is not about awareness, it is about suitability and relevance.

5. Politics

Political spats between countries can and will continue to have dire effects on brands. Try launching a Japanese product in China when political tensions are high and you will witness first-hand how spectacular the launch will be. Sadly, many brands still do not understand that political spats will impact them and really, it is about timing. It will be good to assess public sentiment in a country towards your brand before launching it.

6. Understand Your Product

Who are you targeting? What kind of demographic audience are you looking at? How do you communicate with them – is it through advertising, digital media, billboards etc.? These are basic questions but surprisingly, global brands still get it wrong. It is easy to target developed markets like the US or U.K as you have the infrastructure and distribution models in place and most of the population will have access to necessities like electricity and television. However, this does not apply to all of Asia Pacific region where a large part of the population does not even have regular access to electricity let alone the internet or other forms of communication. The question becomes then how do you reach your target audience otherwise your product is bound to fail before its launch. 

Communicating with your target audience has never been so challenging however for those who get it right, the opportunities are boundless. Remember, you need the Right Strategy for the Right Target Audience by launching the Right Product in the Right Market at the Right Time. 

Ahjay Rai has more than a decade of experience in running multi-market integrated communications plans for Fortune 500 companies across the region. He also has a strong understanding of the different cultural and political nuances that are important for the success of any product or campaign launch.