Can I have a McKroket?

'Global Marketing and Advertising: Understanding Cultural Paradoxes' is a very interesting book, written by Marieke K. de Mooij.  She explains almost everything we already have discussed the previous weeks in our blogs.  I picked out one particular part of the book: chapter 2; the Global brand. To discuss this, we need a definition of what constitutes a global brand:

A global brand is one that is available in most countries in the world and shares the same strategic principles, positioning, and marketing in every market throughout the world, although the marketing mix can vary. It has a substantial market share in all countries (dominates markets) and comparable brand loyalty (brand franchise). It carries the same brand name or logo.

McDonald's is a brand that really fits this definition, as you maybe already knew after reading one of the previous blogs about the famous brand.

First of all, McDonalds is available in more than 100 countries, with more than 30 000 distribution points. It serves 52 million customers every day! The only brand that is bigger, is Coca-Cola, as I mentioned in my previous blog.

Secondly, the brand has a very strong image and the same standards all over the world. However, it makes its advertisements and product offers very local, as Caroline already said.

Some examples for the different ads: McDo uses 'Astérix and Obélix' in France, a very famous historical cartoon. In China, the Chinese restaurants all have big tables and it's very difficult to go on a date. So, what does McDonalds? They make tables for two, so the couple has some privacy. This is contrary to India, where McDo is the typical 'family restaurant', with its large tables. Or in Taiwan, they made VIP rooms, because the people like privacy.

The local touch of the brand is also very remarkable: McDonalds sells the Kiwi Burger in New Zealand, the Prosperity Burger in Malaysia, the McKroket in the Netherlands, the Croque McDo in France, etc.

I agree with Caroline that the Americanization of our eating habits is not a good thing. However, I find in very interesting and astonishing when I see all the efforts that McDonalds does to integrate in the different cultures.

 

Lara Moons

Global marketing and advertising - Marieke K. de Mooij

Cross-cultural branding

As the four of us have been talking about for the past several weeks, it’s obvious that people’s consumption patterns are determined by the cultural fiber they tend to follow, especially the original culture seems to be a strong influence.
We’ve mentioned some interesting results of brands expanding their business abroad. Unlike those who probably refused to adapt local habits and for whom global expansion turned out to be a major fiasco. A broach bunch of extending companies gained themselves some global success, e.g. Nokia’s anti-dust phone in India; Some were even able to establish themselves as a part of the prevailing culture, indeed Coca Cola is a universal concept.
Anyway how successful and influential those local brands may be overseas, we can conclude that they’ll always lose a part of their original identity. Although global brands think global, they act very local.

Sien De Neve

Brand communications at its best: Abercrombie and Fitch

“Who needs brains when you have these?”
Pretty sure this slogan sounds familiar to you if you’re in your late teens or early twenties. Indeed it’s one of Abercrombie & Fitch’s. The American casual fashion retailer, famous for their pastel-colored polo shirts, preppy shorts and logoed t-shirts.
But Abercrombie & Fitch has marketed itself more than just a successful clothing brand, it assures their customers a lifestyle. The A&F emporium exists of giant flagship stores with a basic yet contemporary architecture. Two bare-chested male models standing at the front door are hired to greet the delighted customers. Inside you’re hit by loud dance music and the smell of the company’s signature perfume. In fact only its three-metre high walls with wooden shelves, holding t-shirts lit by spotlight, reminds you at the fact that you’re in a store rather than a fancy nightclub. Yes, the ‘Abercrombie kid’ is attractive, athletic, popular and outgoing. The American dream all over. A strategy which has proved to be very successful, but perhaps also an obstacle: for A&F brand protecting is a very big part of their continuing US success, but with the opening of their first European branch in London it’s only left wondering whether this way of branding is expansion resistant.

Sien De Nevehttp://www.elemental.co.uk/newsletters/news_01_07/PDFS/brand.pdf

IKEA, a retailing phenomenon

Four yellow letters on a blue background were enough to become a successful global brand with 180 stores in 23 countries.  However, IKEA, popular all over the world, doesn’t make the same big hit everywhere, beginning with its home country. « In Sweden, going to IKEA is like going to the supermarket to buy paper towels in bulk. But in America, IKEA is a wonder of super design, » said Barbro Osher, the Swedish consul general in San Fransisco.

In Sweden, a home only decorated with products of IKEA is considered as impersonal. And I understand.  I once went in a home which was completely furnished with IKEA products and my first impression was an admiration for such a beautiful house.  But when I walked around, I saw nothing personal, it was like I was walking around in a magazine of the megastore.

In the United States it’s completely different.  There, even the Swedish meatballs served in the in-store restaurants are famous.  They appreciate IKEA for its inexpensive but fashionable goods. “IKEA has much more of a Swedish image here than in Sweden,” said Stig Hagstrom, a Swede who lives in America.

IKEA admits this difference in opinion and understands the fact that a brand moves through the world, from culture to culture.  That’s why it adapted its merchandise to the several countries.  And this change was successful for the company.  IKEA is nowadays considered as a winning, global brand.

Caroline Latour

IKEA's brand reputation

How Coca-cola conquers the world.

Everyone knows Coca-cola. From the biggest town to the smallest village, the white-red written advertisements are everywhere. How does the Coca-cola Company manages to conquer the whole world?

CEO and Chairman of the company in 2001, Doug Daft explains. Before, Coca-cola’s strategy was “Think Global. Act Local”, which clearly shows the aspect of globalization. But, according to Mr. Doug Daft, making decisions at the top of the company and execute them local is not the best option. He prefers “Think Local. Act Local”. This means decentralizing the company and having more faith in the local individuals. He wants to achieve this by meeting the consumers in their own communities, their own houses and then talk with them. Instead of mark out the communities, we have to watch to the original ones.

I found another interesting example on how The Coca-cola Company adapts his product to different cultures.

It takes place in Brazil, in the middle of the Amazon rainforest. Every year, they organise the famous Folkloric Parintins Festival. This festival is a singing and dancing competition between two teams, a red one and a blue one. Coca-cola is the main sponsor of this event.

After a few years, they discovered that their consumers were mainly supporters from the red team. The blue team didn’t want to drink Coca-cola, because of its red colour. They drunk Pepsi, which has a blue color. Therefore, Coca-cola made a local change: they also made a blue bottle. Problem solved.

By this example we can see that thinking and acting local, even with a very simple change, is very important to stay competitive and making progress.

Lara Moons.

The MonroeSt.Journal
Accidental Thinking

The successful strategy of USAA

How can you better understand the needs of a person than immersing yourself completely in his  environment ? That’s what USAA did with its employees. And when you know that USAA is a finacial services company for people and families that serve, or served, in the United States Military, you can imagine the worst...

 When you apply for a job at USAA, you have to know that the training is not that ordinary.  Next to the habitual training for your future function, the new employees also have to review real deployment letters, eat meals ready to eat, walk around in 65-pound backpacks and read letters which soldiers received from their family.  It seems very crazy, but it works!  The employees know better than everyone the needs of soldiers.

An example: USAA was the first financial-services company to allow customers to deposit checks by iPhone. Imagine, you are on the field and you have to transfer money to your family, I don’t think there is a bank every street corner there... One consultant once said, “There is nobody on this earth who understands their customer better than USAA.”

I believe that, if this company has succeeded to plunge its employees in the real life and need of its customers, other companies should also be able to do it. The design, the service, the advertising of a business are very useful, but if you don’t know your customer very well, you can’t succeed.

Caroline Latour

brand is culture, culture is brand

 

Link Cultural en brand success.

It seems so far that often a company makes or breaks it’s entry in new markets by making the right adaption in their product or policy, depending on the different needs in a new environment.

Having read the articles about McDonalds on how they adapt their menu’s in order to suit with local behavior,  I’d like point out that it’s not only about the food. It’s also about the ‘fast’, and how this affects social behavior and social rituals.

The introduction of McDonalds in one way changes the whole idea of eating.

Instead of looking at diner as being a social, family or even religious moment, McDo turns it into big volume consumption. Just eating and getting out in a minimum of time. Perfect for a busy economy , but painfully conflicting with several cultural values.

 Another downside of globalization is that exported products can easily lose their authenticity.

As Benjamin Barber formulates it: “… we all know the difference between getting crêpes in Dijon and getting them in a New York place called Les Halles”.

For the same reason as before, there has been made a change in the product causing it to be mild duplicate of the original delicacy, and therefore losing its original history and cultural value.  In a way that’s OK, it has always happened, and maybe something even better will result out of it, but the fact that this product is still claimed to be typical French, and soled for the same reason, makes it lose its original identity.  

        And increasing globalization makes these processes occur more than often. 

Thomas De Vuyst

link: http://www.cato.org/pubs/policy_report/v25n3/globalization.pdf

Home sweet home

After reading the previous blogs, we are sure that the consistency of brand success in different cultures is a difficult assignment. But it gets more complicated. Did you know that migrants hold on to their local habits, even after 50 years and even if they have to pay a lot more for it?! Just look at the big sympathy that expatriate Britons in New York have for their pots of Marmite, an original British pasta with a distinctive, powerful flavour, which is extremely salty.

A new study by economists from the universities of Tilburg and Chicago did a research and discovered two things. First of all that there is a lot of variety in the most preferred brands in different regions, although every region had the same choice of brands. Second remark: 16 % of the studied people were migrants. The test clearly showed us that they bought fewer local hits and more from their original hometown, even after 50 years.

This phenomenon has important consequences on how economists calculate the gains of trade, according to David Atkin of Yale University. As we all know from our economy class last year, opening up a region to (inter)national trade can raise the relative prices of the goods where the region has a comparative advantage in. This goods were often the cheapest in a closed economy and therefore also the most used.

In theory, people change their purchases of food when the relative prices change. Mr. Atkin proved that in practice, consumers keep practising their traditional food preferences. This means less food for more money.

Did the economists, who stimulated the liberalisation of trade, forget that people can also be traditional instead of rational?

Lara Moons.

The Economist

China's Snow is like water - and now it's bigger than Bud

What Belgian people already knew decades ago, has now been proclaimed worldwide: beer is the world’s most popular beverage.
And as people all over the world, from the Americans to the Asian inhabitants, have savored the taste of beer, emerging markets arise, and they’re of significant importance.

Meanwhile, the Chinese have developed the skills of brewing beer with significant results. By 2008, Snow a so called Chinese beer, has outsold the world leader Budweiser. CR Snow is a joint venture between China Resources Enterprise and SABMiller, a European based brewer. It was founded in 1994 and by now one of China’s biggest drink companies.
Although average beer consumption is still at a modest level in china, 28 liters per person compared to 100 liters per person in the UK, it’s growing fast. And inevitable has become a favorite target for western brewers. But the stakes are high and success is limited.
In a country where 25% of the inhabitants earn less than 1$ a day, consumers prefer local brews, charging less than 30 US cents for a 640ml bottle of beer. But those who managed to participate with local companies have closed a potentially lucrative deal.

Sien De Neve

http://www.guardian.co.uk/business/2008/nov/21/beer-sales-budlight-snow-china

McDonald against traditional food

In my last blog, I mentioned McDonald’s particular way of infiltration in countries such as India, which have very different eating habits compared to America. Yesterday, I found an interesting article about how McDonald is perceived in these countries and its impact on the several cultures. I can already say that the opinions are more than divided.

On the one hand there are the anti-globalists who affirm that traditional values are repressed by the introduction of non-traditional food, like McDonald’s fast food. However, this “Americanization”, like the anti-globalists call it, is not the only problem. There is a great difference between the Americans who see eating as a necessity and foreign countries which view eating as a social moment and where it has an important role. In these countries, McDonald doesn’t really have its place. People appreciate the moment of eating together around a table and can't imagine that you just take 5 minutes to go to the McDonald and eat your hamburger on the way to school or somewhere else.

On the other hand, some people think positively about the impact of McDonald.  First, McDonald adapts its menus to the local eating habits and works with the regional communities. So you can say that the company respects the local values. Moreover, culture is changing all over the world, some faster than others, and McDonald is certainly not the reason of this shifting. They affirm it’s only another step in this evolution.

For my part, even if I like America and its culture, I don't like this Americanization of our eating habits.  Dinner is for me a moment that has to be shared with your family or friends,  not in a fast food surrounded by people you don't know. 

Caroline Latour

McDonald, globalization and culture

Three steps to make a brand successful

To persuade me, you must use my words, think my thoughts and feel my feelings. This famous quotation of Cicero summarises perfectly how a brand can be consistent in different cultures. This persuasion has three important elements: the central positioning and personality, the core proposition and the adaption to cultural differences.

The first one is central positioning and personality: where will the brand stand for? A decisive factor in understanding the brand is his name. An example of the 80’s: General Motors  brought his new car on the market and called in ‘Nova’, which had to represent everything that was new. They asked themselves why the sales in many southern European countries did not go well and discovered that ‘Nova’ means ‘does not go’ in Spanish. After changing it into ‘Corsa’ things got better.

Secondly, the core proposition has to summarise everything. What do we want the customers to think by hearing our brand name? They should be able to distinct our brand from others and to know why they have to buy our product.

The third, often forgotten but very important element is the adaption to cultural differences. When we have developed the core proposition, we have to adapt it to the local market. Here are several components to take in mind, like different languages, customer needs and values. The United States often make a mistake here. They think of Europe as one region, one big place where a one-size-fits-all approach is very affective. But we can already deduce from the previous two blogs that European marketing is a difficult assignment with a lot of different cultures. Communication is very important. Talk to the people instead of organize everything from a distance.

To conclude, it is important to first of all know where your brands stands for and after that you can execute is to different cultures.

Lara Moons

Ensuring brand cosistency in different cultures

Globalization invading the local culture

It’s a strange feeling that you have when you’re walking down the streets and suddenly perceive that one of your favourite boutiques has been replaced by one of the many chain stores. Slowly but surely, globalization will invade the entire world.

But we’re not the only one who are fretting about that phenomenon. Howard Schultz, the CEO of Starbucks, also worried about the loss of ‘the soul of the past’ and ‘the warm feeling of the neighbourhood stores’.  That’s why he has created a new stealth strategy for his chain store. It consists of rebranding the existing Starbucks’ stores to give them different names and more local similarity.

Howard Schultz was definitely not the first who has thought about this strategy. McDonald f. ex. Succeeds in Asian countries thanks to its alternative menus based on local eating habits. Coca Cola came to India in the 90’s and convinced the people, in the local languages, that Coca Cola was originating from there.

It’s certain that Starbucks will certainly not be the last company applying this strategy. Many will follow. But will it make a company more cultural? I don’t think. I believe local people will still prefer the warm feeling of the neighbourhood stores to the artificial ‘local’ chain store.

Caroline Latour

the stealth of Starbucks

Cross-cultural branding and leadership

These days it’s inevitable not to have felt the impact of globalization. When many countries all over the world opened their economies to the rest of the world, many opportunities followed (a broader reach for brands, more potential customers); but it wasn’t all a bed of roses…
Henceforth global business will also be determined by cultural issues. It’s regularly known that culture is a baseline for individuals and institutions to function and therefore also affects their consumption patterns. The open market economy has created an extremely challenging business area, where global brands have to find a way to fit their basic strategy with local cultures in order to have a little chance at success. They have to find a balance between standardization and the prevailing culture’s philosophy.
A brand that achieved to combine those extremely well is Nokia, who saw its share in the Indian mobile telephone market increase from 300,000 subscriber in 1996 to 55million in 2004, only by taking into account the local needs of the many rural customers. Their offer of mobile phones with an dust-resistant keypad and antislip grip, was a major success.
The launch of Euro Disney, otherwise, sets a perfect counterexample. They kept holding on to the authentic brand policy and forgot to be sensitive to the European’s preferences, which resulted in great failure.

By now it’s obvious that brands have to understand the locals’ consumption patterns an go along with the cultural fiber if they want to gain the advantages of globalization. The growing popularity of Internet makes this a whole lot easier.

Sien De Neve

http://www.venturerepublic.com/resources/Cross-cultural_branding_leadership.asp