Group Think
Successful companies constantly hone and improve but group think can take over and restrict out of the box ideas. Marketing, given its customer focus and creative inputs is a good place to challenge an organisation internally and positively. It can bring the outside world into the inside world of a company.
Often good products can travel and gain traction in new markets but what are some of the things that one might wish to consider?
What’s Global and What’s Local?
Global companies develop highly efficient supply chains. Companies like Heinz probably know more about tomatoes than anyone else i.e. what types of tomato plant and varieties should be planted and in what conditions; the optimum moment for them to harvested; how they should be transported; and how they should be processed for use in different products from soup and ketchup to beans and spaghetti. They will internally share their knowledge to their markets. In a competitive world such an approach delivers both a barrier to entry and the advantage of lower costs of production.
When it comes to local consumer tastes and preferences Nestle has learnt when and how to dial up a focus on instant coffee and when to dial it down as historically many tea drinking cultures have a higher predisposition to instant coffee. Or how to respond by using local knowledge e.g. the launch in Japan of cold coffee in a can from a vending machines in small local shops.
Whilst it might be efficient to develop a global standardised template e.g. in Shell for a one design website to be used in all its markets, it will leave areas e.g. types of service i.e. self-serve or attendant service and the range of products stocked in service station shops to be inputted and decided locally.
"Being global does not mean forgetting local"
Product Transfer
Might something that works in one market work in another? Companies like Nestle encourage executives to investigate developments in other markets. Decades ago, a disrupter in the US: Lean Cuisine a range of healthier frozen ready meals at under 300 calories e.g. Deep-Dish Zucchini Lasagne was brought to the UK. It challenged a sector full of industrialised shepherd’s pie type meals and it proved to be a game changer in the UK as well. A local insight can become a global insight.
Leveraging success across markets can be good for consumers and as product development and capital costs can be spread across a wider footprint and therefore also good for shareholders.
A local eye on global
Watching trends in other markets is also important to local brands. In the 1990’s financial services companies started to expand both their territorial footprints and product and service offerings.
Prudential in the UK introduced a new stylistic logo which helped it to both resonate with its historical customer base and a new generation whilst also assisting in the strategic expansion of Prudential from the west to the east.
National Westminster Bank rebranded to NatWest following the global trend for banks planning to expand their products and services offer. The change to NatWest meant that it could support a new customer proposition summed up with the strapline of being ‘more than just a bank.’
"Local can also go global"
This issue is also pertinent in a modern world where all companies local actions are no longer constrained by local media channels. Posts, tweets, videos, on: X, Facebook, Instagram, YouTube etc can instantaneously go global. Reminders to all local managers of this modern reality is important. Responses from customers e.g. boycotts in markets far away from a local action could destroy shareholder value.
Tracking Customer Satisfaction
Hopefully a focus on customers will be built into executive’s performance reviews and bonuses and customer satisfaction receive airtime at local and global board meetings.
However, caution might be needed when comparing different countries with each other. Customers responses can vary due to different cultural mindsets i.e. some cultures respond positively to the rejoinder: ‘have a nice day’ whereas others might see it as insincere. To differing degrees some customers in some markets welcome global products and brands but in other markets might reject them.
Also, customer expectations might also vary by market given different cultural contexts or competitive environments e.g. provenance i.e. where a product comes from or is made can sway consumers to different degrees. However many companies have found that customers living in urban cities in different parts of the world have more in common with each other than with rural based customers in their own country.
Advertising
Creative breakthrough can be helped with a big idea and a big budget backed up by market research in local markets across the world e.g. a Shell refuelling plane refilling a Ferrari FI car on a road. The message ‘Shell fuels Ferrari’ didn’t need to be said. Dramatic filming and music did the job. But the film could never have been made if its costs would have had to be borne by one market.
Sponsorship
Brands with global ambitions can benefit from associations with other global brands which might broaden the appeal or bring in new customers.
Some might conclude that a brand such as Shell is quite ‘functional’ i.e. petrol is something of a utility to keep a car going. However, to a significant customer segment its sponsorship and association with Ferrari might bring ‘emotional’ elements of both technical excellence and passion. Understandably this varied but overall it added a positive dimension in most markets of the world.
Brands
Should be seen as having a value and as assets of a company and its shareholders. Perhaps brand value would receive more care and attention if it were itemised by country and on the balance sheet of a company?
In any event, brands in a global world contain intellectual property that needs to be robustly and legally protected. Great brands have good pulling power and help to establish easy recognition, preference and repeat purchases.
However, it is also critical to understanding what customers value locally behind the ‘brand proposition’ e.g. in a Shell petrol station might customers be looking for great petrol or clean toilets or a combination of both and might these elements differ by country?
Licensing and Franchising
Companies with great products and brands can expand their global footprint with lower capital employed by developing a license model that generates a royalty income for the owner. In addition, a Franchising model can release the local energy of local people and their investment and commitment behind a global brand.
Franchisees like brands with higher competitive preference (often honed from what they have learnt from operating in many markets) as they can generate a higher footprint from their invested capital.
There will of course be a need to develop extensive manuals, controls and guidelines but the exercise itself might also highlight further improvements that could be made to a productive and efficient ‘standardised model.’
Consideration should also be given to trademark protection and where to locate the management and ownership of the brand asset i.e. there might also be beneficial tax considerations e.g. Shell Brands International is in Switzerland.
Power of Marketing
Marketing’s focus on listening and responding to the customer works best when one thinks global and local.
Authored by Raoul Pinnell who worked for Heinz, Nestle, Prudential, NatWest and Shell
