Building and growing a brand has never been more challenging. Strategies cannot be designed and implemented in a linear fashion anymore. This is equally true for growth and identity / equity building strategies.
Even before getting to a state of harbouring global ambitions, brands need to negotiate a maze of evolving and complex category dynamics at a local market level. Even though we are more connected than ever before, local cultures / customs / behaviours / societal fabric have a stronger influence.
Consequently, brand marketers need to adopt a different kind of thinking if they are serious about building strong brands with deep organic growth potential. This thinking can be characterised as a blend of having enough adaptability but be able to balance it out with the brand’s core ethos and values.
Adaptability can be characterised by having the flexibility to cope with local market dynamics. These include understanding the influence of demographic makeup, level of evolution of needs, market maturity, level of competitiveness and the influence of a complex mix of emotional and functional drivers of choice.
An interesting experiment would be to calculate the Herfindahl-Hirschman Index of market concentration for the category in each country a brand has presence in. A surprising, but expected, finding would be the range of values the Index could generate.
It can be easily assumed that categories across different markets will range from monopolistic, duopolies, hyper-competitive to completely fragmented. Each of these would then warrant different strategies to ensure brand building success.
Starbucks created the coffee drinking category in a traditional tea drinking market like China but has struggled to establish a foothold in mature coffee drinking markets of Europe. From a frapuccinno which is considered to be a drink strongly associated with social gatherings in Asian markets, to Italy where anything ending with ‘ccinno’ is frowned upon, it’s a wide spectrum of category dynamics and consumer beliefs.
Adapting to such wide levels of market maturity (and associated consumer behavioural complexities) while staying true to a brand’s core identity and values is a constant challenge. Having flexibility in brand guardrails releases some pressure, but it is only half the battle won.
To be successful in global markets, marketers need to assess their brand’s ability to tap into emerging and evolving needs. Some of the greatest disruptive brands have been built on platforms that solve long standing consumer tensions or simmering ones that are not vocalised.
“In sum, successful brands at a global scale meet needs that transcend national boundaries, demographic differences, cultural complexities and societal make ups”.
Tapping into emerging and evolving needs goes beyond identifying them. It is about having the ability to understand levels of market maturity and complexity. Launching a brand that is in sync with demographic and societal evolution dramatically increases the chances of success. On the other hand, expecting consumers to develop a need that a brand satisfies is a harder ask.
These principles hold true as guidelines for innovation strategies in multinational organisations and also for startups with disruptive business models and products. Marketers need to be inspired by how technology shapes human behaviour but also need to be cognisant of the fact that every product category does not have the same influencing power as technology.
Market and category maturity and their openness or ripeness for innovation vary significantly. Consumer mindsets towards accepting change also varies significantly. An iPhone version launch draws crowds outside Apple stores every time while there is massive resistance to change when it comes to our preferences for flavours of snacks, healthcare products, baby and childcare items, the way we travel and the way we engage with the sharing economy. Take for example Coke’s struggle to introduce a sugar free version, which ultimately made it switch back to a masterbrand endorsement strategy.
Global brand success requires a sharp and disciplined outlook towards emerging opportunities and also the ability to serve needs differently. Dollar Shave Club, Uber, TransferWise, Deliveroo and the emergence of Patanjali in India are some noteworthy examples.
Tapping into emerging needs or serving existing needs differently requires marketers to understand category evolution and the appetite for change in-depth. Reverting to classical economics, if the elasticity towards change is low, new brands will fail. If it is high, there is a stronger likelihood of success.
As mentioned in the beginning of this post, consumers are now more open towards adopting global trends and consumption patterns, but the need to have strong nationalistic identities is stronger than ever before.
Consequently marketers need to manage the influencing power of three factors that never move in the same direction – impact of global trends, nationalistic identity and evolution of category dynamics.
Brands that have been or continue to be global successes manage these three factors by adopting differentiated positioning which address three key objectives – bringing the best of the world to a category, adapting successfully to local customs and traditions and tapping into inflexion points where the desire to change is higher than the desire to remain rooted.