Global Branding-Five Steps to Export Success
From the July 2000 edition of Managing Exports
Managing a global business can be very tricky. Languages, cultures, time zones, even what day it is seem to conspire against the export manager. Even the largest exporters have been caught short entering new markets unaware of local customs and tastes. There's hope, however. To be successful, here are five areas to consider when operating on the global stage:
1) Is your corporate strategy ready to go global?
This may seem to be an obvious question but many exporters operate in international markets with a strategy still rooted in the United States. Your strategy needs to embrace the opportunities and the costs of working in multiple countries. Ask yourself what your competitive advantage is outside the United States. What will allow you to compete and win in a country that has never heard of you? Is your product needed in another culture? Only careful consideration of these questions will create the right platform for your global business.
>Consider the example of an American cookie manufacturer who wanted to launch a market-leading brand around the world. The company's leader wanted "to have the same product, whether it is in Beijing or Boston." In South America the unique sandwich cookie with its dark outer wafers and cr me filling bombed. Why? The dark cookies appeared to be burned to local consumers. They wouldn't even try them! The lesson is that the competitive advantage the company enjoyed in the U.S. didn't translate to the South American market.
2) Do you have a functioning global management team?
Global management teams tend to reflect the environment in which they operate. They are made up of representatives of various cultures and backgrounds in their respective countries. As a result, this type of team is a challenge to manage. An American executive might like to start work early, take a quick lunch and end the day with dinner at 7 p.m., while in Spain the day might not start until 9 a.m., allow almost two hours for lunch, and dinner will be at 10 p.m. Somebody has to give.
The key to building a global team is to have it start by working on something of substance together- to create and build a common vision of the future. That will internationalize the company's strategy while establishing new working relationships across international borders.
3) Can you create a Global Brand?
Global branding is not simply a marketing or Advertise program. It is a way of doing business that transcends the requirements of Advertise and affects every aspect of the business enterprise. A brand is a very valuable commodity in any market-usually commanding a premium price and significant loyalty among its regular users. Why? At its core, a brand is a promise of performance- one that is consistently delivered at a reasonable value and meets a perceived need among its consumers.
A simple test to see if you have strong global brand potential is to see if your brand meets the "D.U.M.B." test. Is your brand promise Demonstrable? That is, can consumers see the promise of performance in action? Is it Unique and different from locally available alternatives? Is the promise being made Meaningful? It doesn't help if you claim something that isn't important to the local consumers. Is the promise Believable? If they don't buy the claim they won't buy the product.
4) What is your enabling technology?
If you make a bold promise of performance with your brand you must be able to deliver. That requires some "enabling technology" that can carry you around the world. The enabling technology should be proprietary, have inherent barriers to direct competitive response, and be applicable to every market you enter. Identifying and deploying your enabling technology may be your single most challenging management task.
Consider McDonald's, the largest restaurant chain in the world. Contrary to popular belief, it isn't the food (which varies considerably around the world) but rather the operation of the restaurants that is the enabling technology. Those operations assure consistent product quality-every time and every place.
5) How will you adapt to local markets?
A consistent complaint of export management teams is that "home market" management tends to ignore the unique characteristics of local markets. Successful global products often require targeting a product against a different consumer audience, using a significantly different manufacturing program, or utilizing different distribution channels. These decisions should be the province of the local manager, as long as the global brand and its enabling technology are not violated.
Consider Coca-Cola, with its syrup as its enabling technology and a worldwide bottling network. To sustain its independent companies, Coca-Cola sells over 300 separate brands of products in addition to Coke. Why? They compete in local markets that require different product portfolios around the flagship brand. Keeping a watchful eye on how your export product fits in with new target markets as well as how it will work to advance corporate strategies and goals will keep your efforts on track.
This guest column is by H. Parker Smith, a Senior Consultant with the Worldwide Strategy Practice of Kepner-Tregoe, Inc., a management consulting firm based in Princeton, NJ. He can be reached at 609-252-2299.