differences between local and international brands

Real Differences between Local and International Brands: Strategic Implications for International Marketers Author(s): Isabelle Schuiling and Jean-Noël Kapferer Source: Journal of International Marketing, Vol. 12, No. 4 (2004), pp. 97-112 Published by: American Marketing Association Stable URL: http://www.jstor.org/stable/25048993 . Accessed: 14/10/2013 02:09 Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp

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Executive Insights: Real Differences Between Local and International Brands: Strategic Implications for International Marketers

In the current

context

of globalization,

their efforts on the development international

result,

brand

have

firms have

portfolios

ABSTRACT

concentrated

brands. As a

of international been

restructured,

and many successful local brands have been eliminated. This article's objective is to improve the understanding of local brand differences and competitive advantages relative to inter national

To achieve

brands. & Rubicam

Young

ined more

the reanalyzed Valuator and exam

Asset

than 744 brands across the four largest countries in

the United

Europe:

the authors

this, Brand

database

authors discuss international

as

marketers

their

develop

The

Italy.

of the findings for

implications

they

and

France,

Germany,

Kingdom,

themanagerial

interna

ideal

tional brand portfolios. Consistent

current

with

national

have

companies

in globalization, many a multidomestic from

trends moved

inter mar

keting approach to a global marketing approach. This move to global marketing has had a major impact on company the past their

strategies. During concentrated have

branding

companies ment of international

For

brands.

few

international

years, on efforts

Isabelle Schuiling and Jean-No?l Kapferer

the develop is in the Unilever

example,

process of eliminating 1200 brands from its brand portfolio to concentrate on 400 brands. Procter & Gamble (P&G) has 300

kept

after

brands,

of

many

selling

its

local

L'Or?al has built its success on 16 worldwide has

given

In this

context, brands brands

portfolios.

firms' has have

This

consumer

moving of industry,

focus

on

been

found not only

trend has been sector

goods

including

but

represents

in many

also

insurance,

banking,

level

developed

of awareness

close

in their

relationships

and this represents years, their home markets.

solid

oil,

the elimination

a lost opportunity

in the fast other

and

countries.

with

compa

benefited

from a

Consumers

have

local brands

marketing

types

retailing.

of these local

for international

nies. Strong local brands have traditionally high

in

of interna the development on local brands. impact from international brand

a negative eliminated

had

Itmight be questioned whether brands

includ

brands,

names.

global

Many

worldwide

and Mars has invested mainly

and Buitoni,

brand

tional

to its 6 strategic

priority

ing Nescafe

brands.

brands. Nestl?

Submitted

over the

investment

in

Accepted

December July 2004

2003

? Journal of International Marketing Vol. 12, No. 4, 2004, pp. 97-112 ISSN 1069-03IX

97

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Both academics and practitioners have focused on the devel and global brands (Boddewyn, opment of international and Picard Buzzell 1986; 1968; Craig and Douglas Soehl, 2000; Levitt 1983; Quelch and Hoff 1986; Wind 1986). As such, little work has been done to study the specifics of local brands.

Several

articles

have

mentioned

the

of

existence

local brands (de Chernatony, Halliburton, and Bernarth 1995; Douglas, Craig, and Nijssen 2001; Halliburton and H?nerberg 1993; Kapferer 2000, 2002), but no in-depth research has been

on

conducted

national

success

their

that of inter

with

compared

and global brands. international

However,

confront

managers

difficult

questions

when

the ideal international brand portfolio developing must and decide not Nijssen 2001). They (Douglas, Craig, to how international build their brands but also which only local

to build, which to eliminate, which an international to assimilate under

brands

even which

These any

are important

it is particularly

to develop

useful

of local brands

standing

that significantly

influence

success.

company's

Therefore, the

decisions

to sell, and name.

brand

further

to international

relative

under

in

brands

con context. To achieve this, we globalization covers two research that The first phases. exploratory of interviews consisted with international marketers,

current

ducted

phase and the

second

(Y&R's)

Young Asset Valuator.

an of analysis Brand database,

involved

phase

& Rubicam's

conducting extensive brand

Our objective in this article is to better understand the real differences between local and international brands. We first recent

discuss

and identify

development brands

on

perspectives

compared

with

and

local

international

brand

the strategic advantages

international

We

brands.

of local

then

evalu

ate the differences in brand equity between local and inter national brands. Last, we conclude by highlighting the impli cations We

Perspectives

and

on Local

International

Brand

Development

of these

define

local

in a limited may

international

as brands

brands

geographical to a local,

belong

for international

findings

keting strategy and mix

Development

been

or

or mix.

global

country

firm. We

of research

In a more

as brands

or

for more

the

define

elements

radical

that use

in all target markets

The debate on global marketing Brand

in one

brands as brands that have globalized

the marketing strategy are defined brands global

Global

exist

that

area (Wolfe 1991). Such brands

international,

of

a subject

marketers.

same

sense, mar

(Levitt 1983).

is not new, and the topic has than

30 years

(Boddewyn,

Soelh, and Picard 1986; Buzzell 1968; Craig and Douglas 2000; Douglas and Wind 1987; Huszagh, Fox, and Day 1986; Jain 1989; Levitt 1983; Quelch and Hoff 1986; Sorenson and 98 Isabelle

Schuiling

and Jean-No?l

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Kapferer

Wiechmann

The

1975).

to

of moving

advantages

interna

tional and global brands under a global marketing strategy have frequently been emphasized (Aaker and Joachimsthaler 1999; Buzzell 1968; Kapferer 1992, 2004; Levitt 1983; Onkvisit and Shaw 1989). A key advantage benefit

from

development,

name

brand

global

also

to

is firms' opportunity It is well-known

of scale.

can generate significant of the business system, including and manufacturing, logistics.

areas

single

economies

strong brand

a standardized in all

of globalization

cost

reductions and

research shift

The

substantial

provides

that

to a in

savings

costs (Bartlett and Ghoshal packaging and communication 1986; Buzzell 1968; Craig and Douglas 2000; Levitt 1983; Porter

Multinational 1986). economies of scale

these

tages in worldwide formance. brand

reduce

prices is the development It is especially whose

categories, product of consumers,

segments

the

1991).

to market for new product speed tional brands offer is also important can now

which

consumer

fast-moving scale within

goods 12 to 18 months.

when

time

brand

strategies

is the possibility

advantage with

that

initiatives

interna

for international

new

compa in the

initiatives

product on a regional or industry global more a Such takes much cycle are not Another globalized.

any global brand

of supporting

area.

in the communications

large budgets

cially

launch

per of a unique

in important worldwide target affluent and teenager

The

nies,

1987). Such financial

brands

as

such

and Katsanis

(Hassan

segments

enhance

advantage across countries.

leveraged advan

competitive

(Douglas and Wind and

Another image

certain

markets

in costs

reductions

have

corporations to gain major

is espe

This

in the context of very high advertising

important

and

costs.

media

we

However,

note

supply-driven

In most

considerations. been

reason

the primary An

1987).

the

toward

push

consumer

cases,

for companies

and global brands

international stra

that

of

development

and global brands has been driven more by considerations linked to costs than by market

international

example

of

an

has not preference to to decide to move

(Kapferer 1991, 2004; Terp firm

international

that

has

of global brands since the early accelerated its development 1990s is P&G. Its objective has been to achieve competitive in its markets.

advantage

a strategy include costs

reduced not

surprising

proponent

announced tions.

was Local

The

The

significant

benefits

that

economies

accrue

from

such

of scale that lead to

It is financial thus improved performance. a that P&G's key competitor, Unilever, strong a multidomestic of marketing approach, and

in 1999 that itwould competitive

illustrated

further globalize

disadvantage

clearly by an example

and International

of Unilever's

its opera approach

in its fabric softener

Brands

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business.

in Europe under different competed and whereas Coccolino, Mimosin), (Robijn, a in all countries. Lenor, brand, unique European Unilever

names

brand

P&G had Neither

Local

Brand

Development

tion

nor

academics to local

have

practitioners Some authors

brands.

have

paid

atten

much out

pointed

the exis

tence of local brands (de Chernatony, Halliburton, and Bernarth 1995; Douglas, Craig, and Nijssen 2001; Halliburton and Himerberg 1993; Quelch and Hoff 1986) and have dis cussed their characteristics (Ger 1999; Kapferer 2000, 2002; Schlosser local

brand

the impact of authors have 2002). Other analyzed on brand names con in a Chinese attractiveness

text (Francis, Lam, and Walls

2002; Zhang

2001), but to our knowledge, to further develop research

one

in Europe,

However,

no

has

the understanding are many

there

and Schimitt

conducted of local

more

local

in-depth brands.

brands

than

international brands, though the trend of the proportion of to international local brands is diminishing. brands the car, computer, and high-tech industries, among Although are well-known for their international others, brands, strong are still characterized sectors In many by their local brands.

Germany's oil industry, British Petroleum acquired the local leader Aral and, in view of its strong brand equity, decided to retain

the

name.

brand

local

In France,

the

leading

whisky

brands are not the well-known J&B or Johnny Walker but the local Label 5, Clan Campbell, and William Peel. In the Czech Republic, Danone did not succeed in imposing its global Lu brand on that market and has had to use the local brand fran chise Opavia to develop its business. In Belgium, the leader in the mineral water market is the local leader Spa, and it has shares

well

above

Local

brands

also represent are well-known

ment.

They

the

international

of marketing invest many years in their markets and often build

with

strong relationships However, strong

local

Evian.

leader

consumers

local

brands

have

over

the years. elimi

been

essentially

nated from multinational brand portfolios, not because they do not represent strong brand franchises locally, but because their

relative

scale.

For

sales

example,

despite

the brand's

itability time was

in both

of Local Advantages Brand Development

Dash

was

also

created

of

economies permit P&G considered 1990s,

have

advantages 100

and

extreme

company's cost complexities

prof at the

in Europe,

leader.

building an inexorable

strategic

of

in Italy and Belgium motivation

firms

represent

sidered. We

The

the European

advantages and substantial

brands

not

of the institution

national

countries.

that

Ariel

The

Strategie

do

the leading detergent, Dash,

eliminating

where

volumes at the end

international logic.

advantages

brands

However, that must

are local

be

con

to the strategic gathered the data pertaining of local brands during the first phase of the Isabelle

Schuiling

and Jean-No?l

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Kapferer

research. This involved interviewing and marketing directors of ten well-known firms: Unilever, Nestl?, P&G, Coca-Cola, Sara Lee, Campbell Food, Bacardi-Martini,

exploratory managers national Benckiser,

the advantages

of maintaining

local

Kraft

to respond

to the

local

A

can be

local brand

market's

have more

Local brand products

next.

brands

to Local Needs.

Response

designed

Reckitt

and Inbev (formerly Interbrew). We discuss

Jacobs Suchard,

Better

general multi

needs.

specific

flexibility

than interna

answers so they can be developed to provide brands, to local consumers' That local needs. is, branding particular a can not only its but also select unique product provide an that and generate advertising campaign positioning an In international local brand reflects contrast, insights. across markets, must of consumers the largest number satisfy tional

and

thus

denomina often represent the largest common the product's and marketing's perspectives.

they both

tor from

of Pricing

Flexibility

can be more

brands brand's

local

strategies

for local

of a take advantage There is also no

can

thus

and

in specific

strength

Pricing

Strategy.

flexible

markets.

risk of parallel imports because the brand is not linked to a can lead to strategy. Such flexibility regional pricing increased profits because prices can be fixed at higher levels. In contrast, ticular

remain

because

corridor, pricing across territories.

made

must

brands

international

comparisons true is especially

This

a par

within can be in Europe,

easily fol

of the Euro.

lowing the introduction

to Local or International Competi Possibility of Responding can be used to respond to local or inter tion. A local brand national

or

competition

even

to compete

brands. A local brand can be repositioned mix

In contrast,

accordingly.

adapted

for an international

brand must

or

strategy.

global

marketing

against

retailer

and the marketing

the marketing

follow a predefined

strategy

regional

a Portfolio of Brands. An interna of Balancing Possibility and international that mostly tional portfolio comprises can

be powerful, one arises with

brands

global

that

problem

can

country

This was

a negative

have

illustrated

mega impact

in 1998 by the example

consumers

Some

Belgium.

risks. A presents a in brand particular on a worldwide basis.

it also

but

became

after

sick

in

of Coca-Cola drinking

a par

ticular batch of the product. The news circulated quickly and and

globally,

image. The now

it had

a negative

international news

impact

media,

on Coca-Cola's

including

brand

the Internet,

is

around instantly had of which Perrier, example was in water when detected benzene with purity problems recov has never business The U.S. Perrier the product. fully able

the world.

Local

to diffuse Another

and International

and

information

is the case

Brands

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ered from this incident. A lesson that can be learned from is that a brand portfolio with both strong these examples local and strong international brands is in a better position to on a worldwide

risk

manage

Possibility

basis.

toNeeds Not Covered by Interna

of Responding

tional

Brands.

tional

brands

Profitable

cover

must

economies

of scale, interna in many markets.

similar

segments that are unique attractive opportunities

to certain

of the markets

segments can still

countries

from

To benefit

represent

for local

brands.

of Fast Entry into New Markets.

Possibility

a local

acquires

frequently the number-one

acquiring interviews local

also

brands

time, which It is clear

leaders

of

international close

develop relationships trust. leads to a high brand that

local

brands and

by

vent

the brands

scale

in the product

We

Equity of Local and Brands International

have

noted

from

strategy has

large

strategic

with

Separately, that strong Local over

disad important to cost. The rela

that local brands

advantages

has

aggressively

equity. consumers

of

sell pre

economies

significant areas.

marketing

Inbev

brand

represent are linked

generating

or

the

also

of products

tively small volumes

Brand

and

that

a market

to enter

This

ten years. revealed

the past marketers

awareness

from

benefit

which

vantages,

over

local

brands

A company

in the past. For example, brewer in the world by

used

become

acquires

further large investment.

directly without been

also

brand

a way

of

and

international

local brands, but it is also useful to identify the particulari ties of their brand equities in terms of awareness level and brand image (Kapferer 1991; Keller 1998). The literature on international and global brands has provided some indica tions of the importance of brand equity. For international shows that perceived brand research global brands, glob consumer create of brand alness could superior perceptions and

ity (Kapferer 1992, 2004; Shocker, 1994).

Research

important

factors

also

confirms

that

brands (Holt, Quelch, and Alden 2003).

drive

Srivastava,

and Ruekert

is among that quality consumer preference

the most for global

and Taylor 2003; Steenkamp,

Batra,

In addition to quality, international and global brands have been associated with high prestige or status (Batra et al. 2000; Kapferer 1992). Recent empirical studies have demonstrated that prestige is the second factor driving global brand prefer ence Alden sumers argue

and Taylor (Holt, Quelch, some In contrast, 2003).

2003; studies

Batra, Steenkamp, have shown that

local connections, may prefer brands with consumer that there is no intrinsic preference

national

and global brands 102 Isabelle

(DeMooij

Schuiling

some

for inter

1998).

and Jean-No?l

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and

and con

Kapferer

No

research

local

equity.

the product's reveal that

of the products 1989;

Samiee

is emphasized. of origin of origin has an impact

country

and Wyer

of some

and

Douglas, local

studies

consumers'

1988; Hong

Nonaka

1971). Researchers

to evaluate

tend

Such on

(Han and Terpstra

Johansson,

1994; Schooler

consumers

the understanding research provides

of brand equity on local brands, when

country

evaluations

on

conducted

Country-of-origin

indications

general

that

been

has

brand

1985;

have also found more

products

highly

than foreign products (Bilkey and Nes 1982; Han 1989; Kay nak and Cavusgil 1983; Nagashima 1977; Schooler 1971), across

varies

this bias

though

consumer

tries (Heslop and Papadopoulos Some

1987). brands

authors

that

country,

have

1993; Shimp

as perceive originating from Western countries,

they

especially

and Sharma

consumers

that

shown

from

coun

and

segments

prefer a nonlocal

more

than

they

do local brands and that preference is linked not only to per ceived quality but also to social status (Alden, Steenkamp, and Batra 1999). of our

use

To make difference ular

a second

basis of the secondary database

Asset

Brand 44

covered waves

countries

created

have

been

surveyed

this

database,

the

Exploratory Analysis the Y&R Database

in partic attribute, con and trust. We on

research

the

analysis

brand

Y&R database original Three brands. 20,000 the database since conducted The

and

been

and more

in 1993,

evaluate

Valuator. have

was

next

of the Y&R worldwide

worldwide

of interviews

From

we

sources,

and brand image of quality, prestige, of the exploratory phase

attributes

the

ducted

information

in awareness

than

230,000

respondents

to date. we

selected

a

of 12 product

sample

cate

gories in the food sector (see Table 1). They represent 744 dif units

ferent

brand

tries:

the United

the

covering

four

largest European and France,

Germany,

Kingdom,

coun A

Italy.

total of 397 brands (53%) are local, and 347 (47%) are inter national, as Table 2 indicates. A total of 9739 people were from 1999 to 2000. The database is extremely interviewed rich

in terms

of available

lyze were

the data

on

available

brand

usage.

image to evaluate

also

a relatively

consideration

under

were

to ana

able

criteria

(48 image each brand), number high

from Germany

(3460

and of

(9739) and from the

from the total database

respondents countries

thus we

brand

were

There

and

data,

awareness, to consumers

[36%],

2474 from the United Kingdom [25%], 1915 from France 1890 from and [20%], Italy [19%]). We

the

selected

majority tively.

Local

sector

the of

alcohol

and

international

In contrast,

the beer

and International

it covers

because

that offer different

categories example,

food

levels

gum chewing at 60% brands and mineral

Brands

many

product

For

of globalization. have

categories and 56%, respec have water categories

a

103

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of

Table Brands

per Product

Product

Category

Number of Brands

Category 1. Alcohol

153

2. Chocolate

124

119

3. Beer 4. Yogurt

72

5. Mineral

water

6. Frozen

goods

7. Chewing 8. Fruit

45

9. Coffee

11. Soup

49 (41%)

45 (63%)

27 (37%)

26 (58%)

19 (42%)

7 (19%)

25 (69%)

11 (31%)

17 (50%)

17 (50%)

12 (46%)

14 (54%)

19 (76%)

6 (24%)

397 (53%)

347 (47%)

25

744

70 (59%)

29 (81%)

34

TOTAL

71 (57%)

14 (37%)

26

12. Pasta

53 (43%)

20 (56%)

36

10. Ice cream

92 (60%)

16 (44%)

36

36

juice

61 (40%)

24 (63%)

38

gum

Number of International Brands (% of total)

Number of Local Brands (% of total)

1.

of

Number

Table Brands

per Country

2. Brands

Number of Local Brands (% of total)

of

Number Total

International Brands

(% of total)

744

397 (53%)

347 (47%)

France

172

74 (43%)

98 (57%)

Germany

226

139 (62%)

87 (38%)

177

108 (61%)

69 (39%)

76 (45%)

93 (55%)

All

countries

Italy United

169

Kingdom

a majority

at 59% and 58%, of local brands, respectively, to the database. there are many Moreover, according global, in this industry. and local players international, Unilever, are of and Kraft Jacobs Suchard Mars, Nestl?, good examples

are

international and global firms, and strong local players still present in key local markets. Note

that though the food sector was

ditions

and

changed,

as indicated

Barilla,

traditions apparently has dency

have

gradually

satisfy also been

the

major

sector,

players

situation

replaced

of many

are given

brands

which

preference;

brands

that

This

ten

in the retail

the concentration

international

impact on deciding

by products

of consumers.

number

now

has

Danone, Nestl?, local that reflect

including Products

been

largest driven by

ing industry. Logically, international

time,

and Kraft.

Nutella,

linked fully to local tra this

by the rapid development

in this

brands

international Evian,

at one

cultures

that belong

to

have

a

retailers

are displayed

on

shelves.

supermarket

104

Isabelle

Schuiling

and Jean-No?l

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Kapferer

our

First,

of the database

analysis

shows

the awareness

that

level of local brands (85%) is significantly higher than that of international brands (73%), in confirmation of the results from the first phase of interviews. This points to a significant level might be advantage for local brands; this awareness related to the number of years that brands have been in the

of the Y&R

Results Database

market.

ferent

of the brand image, based on the 48 dif

the analysis

Second,

brand

attributes

the perception international

in the database,

available

of quality brands

that

shows

is as high for local brands as it is for versus

(25.3%

24.3%),

as Table

3 indi

cates. There is no significant difference between either group of brands. Note that of the 48 available attributes, quality is the most

attribute

important

selected

by

consumers.

Third, the image of trust is significantly stronger for local brands than for international brands (22.1% versus 17.9%). This also confirms the findings of the first phase of inter views

of international

element

of the value

Fourth,

trust

they

is also

brand

equity

1991); that is, brands

(Aaker 1991; Kapferer

because

is a key

Trust

marketers.

exist

to consumers.

convey

as an

perceived

important

attribute

for

local brands, as is indicated by the significantly higher value rating for local brands (18.8%) than for international brands

Local Brands

Variables High

Trustworthy

17.9* 22.1

Good

18.816.8*

value

Friendly

15.414.4

Traditional

12.7* 15.1

on a of Means Comparison of Image Variables Selection

14.0

14.5

Healthy

15.6

11.4*

Original

13.3 13.6

Reliable

22.1 17.9*

Distinct

12.6 12.8

Trendy

Social Kind

12.5

12.2

11.7

12.2

10.1 10.4

Authentic Fun

11.3*

9.8 11.29.3

Sensual

7.4 6.9

Prestigious

Local

3.

14.7* 15.7

to earth

*Significant

(%)

17.2

18.6

Simple

Brands

Table

24.3 25.3

quality

Down

International

(%)

difference

between

international

and International

and local brands, p < .05.

Brands

105

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(16.8%). This might

be linked with

the fact that prices

are usually local brands lower than consumers a sense brands, providing

those

of

of better

of

international value

for the

money. Fifth, earth"

are

local

brands

than

international

perceived brands. This

local brands offer a more basic/no The

also

study

as more

also

that

indicates

to

"down the

conveys

idea

that

frills brand proposition.

local

are

brands

as

perceived

more traditional (15.1%) than international brands (12.7%). This is quite logical, because local brands are linked more to local

and

traditions

local

cultures

than

international

brands

are.

Sixth, the results also indicate that local brands (22.1%) ben efit more from a significantly stronger image of reliability brands than do international (17.9%). This attribute is closely correlated in the database with the trustworthy attrib ute,

this

confirming

strong

for

advantage

local

brands.

The

results also indicate that there is no significant difference between the perception of prestige for international brands (7.4%) and that for local brands (6.9%). The relatively low level of this attribute for both international and local brands case

in the

is surprising

of international

brands,

as this was

not identified in previous research on global brands (Holt, and Taylor 2003; Steenkamp, Batra, and Alden Quelch, 2003). The

database

and

international

also

provides brands.

information The

results

on show

the usage higher

of local for

ratings

local brands (42.9%) than for international brands (37.4%), as Table 4 indicates. Note that the usage intention figures indicate a different pattern; ratings are slightly higher for international brands (47.5%) than for local brands (46.0%). This tional

are attracted to interna that consumers indicate might to local brands but that, in reality, they prefer purchase

brands. The identified value advantage of local brands could the difference

explain

lower

relatively

keep people

between

value

rating

from buying

A intention. and usage usage could for international brands

the brands

they would

have

liked

to buy. We

and

ables

use

sumers with

usage

identified

we local brands, as the dependant Local Brands

Variables

Table 4. of Usage and Comparison Usage Intention

on the 48 image analysis the reasons 9 factors. To evaluate

a factor

conducted

also

Usage

a regression this produced International

(%)

con

analysis a signif Brands

(%)

37.4*

47.5 46.0

intention

Usage * Significant

42.9

performed variable;

vari

difference

between

international

106 Isabelle

and local brands, p < .05.

Schuiling

and Jean-No?l

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Kapferer

icant percentage of explained variance (76.9%). Two factors, trust and basic/no frills, interacted significantly with the indicator variables (local brand and international brand), at a significance level of 5%. This confirms that consumers per ceive

local

basic/no-frills an

For

to be more

brands

and to offer a more trustworthy than international brands. proposition

brand

international

brands

provide

context

indisputable

of market

benefit

generate attractive.

from

important

However, can create

a

of a strong international

global marketing must marketers companies

to develop

strategies

Because

brands.

power

Conclusion Managerial

and image worldwide, unique are of scale that financially

International

2001).

for firms to

and global brands create barriers

having economies

application risks that

(Schuiling

tralized

advantages.

of these

of their size, international to entry,

and global In the current

it is sensible

globalization,

the development

accelerate

international

company,

many

approach consider

usually

their powerful

use

cen

global brands.

such companies have less intimate Therefore, relationships and take a long time to react to problems with local markets its strategy when Coca-Cola they arise. For example, changed

it found that its structure had become

when and

that

it was

more

and

to give are now

local

consumers

even

launch

and, local

approach teams Local

local

to a more

to return

decided

pany

new

to local

freedom

to develop permitted on the basis of local brands.

have

subsidiaries

too cumbersome

In 2000, the com multidomestic marketing

to local markets.

insensitive

over

Thus,

launched

subsidiaries. to

advertising

can

knowledge, the past two years,

brand

local

many

initiatives. Even

the strong P&G, to understand

forced

advocate

of

limits

the

of

global marketing, As we its strategy.

was men

in 2000 in Belgium, P&G tried to replace tioned previously, the leading local and very profitable detergent Dash brand with

the European-wide

discontinued

brand.

Ariel

an

Dash, In the wake

advertising of business.

For nine

months, move

inconceivable

P&G for

of this, because P&G's type were so was in the detergent it forced poor, category some to renew marketing It for Dash. also support reopened to costs. Because it reduce that had closed local subsidiaries this

results

P&G had put distance its business

sumers,

firms maintain

tional

between

suffered.

We

close

contact

local market by communicating local

even

consumers,

if there

itself and the local con

with

that

recommend with

the

realities

interna of the

local experts who know

is an extra

cost

element

asso

ciated with doing so. We

have

local

Local

also

brands

shown can

offer

that,

in addition

strategic

and International

to international

advantages

Brands

that

brands, international

107

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and Implications

should

marketers greater

strategic

that must

the

largest correct

the local

a standardized

number

for a specific

positioning international

strategy.

quickly

and with minimum

They

a

by portfolio brands. We believe

sufficiently situation.

Our

the

recommend

international

of

a balanced

mar

international

international

number

brand

of both strong

brands. on

research

exploratory

that

development

that combine

and

in this

the need for risk management

we

Therefore, encourage

the risk represented

a majority of international that academics and practitioners have not contains

emphasized

portfolios local

that

through

brand.

local brands can help minimize

Second,

keters

local

markets

investment

marketing

of a successful

the acquisition

new

introduce

also

by a global

influenced

being

can

pricing

to satisfy select

can

market, existing taking can into account. They

competitors

adopt specific pricing without

to the specific

product Firms

of consumers.

First,

to international

is in contrast

This

deliver

possible

and

marketing

firms

provide areas.

that can better respond

consumers.

of local

needs brands

in many

flexibility

they offer a product

brands

Local

consider.

the Y&R

database

that

indicates

local brands benefit from strong brand equity. In particular, local

higher and do,

brands

international

consumer

from

benefit

brands

awareness a strong

enjoy

they

image. They benefit not only from a good quality also

a better

from

value

for

local

brand

image but interna

than

perception

find that trust is an important advan

tional brands do. We tage

trust

and

than

a unique

it provides

because

brands,

relation

it is not that takes years to develop; ship with consumers It is doubtful linked to any particular level of investment. that

an

international with

relationship ment in marketing.

could

recommend

leverage advantage in building with succeeded

At a time when

achieve, strong firms International

trust

of

are

should

essential take

unique invest

that

international

that

local

brands

consumers.

local

is more

differentiation

product brands

a

such reproduce after substantial

even

the

marketers have

brand consumers, Thus, we

to

difficult

into

differentiating account that

the

substantial

assets.

owning a franchises local brand strong represents key long-term we not elimi asset. Therefore, that companies recommend on the basis nate financial consid of short-term local brands erations

but

advantage local level. In support trate that the virtues

that

they

of owning

consider brands

with

strong

recommendation, firms multinational

of local

acknowledged

brands.

Through

that trust is essential Isabelle

Schuiling

equity,

recent

of this some

long-term even at the

have

illus examples to recognize begun

its actions,

Unilever

has

to develop brands in the and Jean-No?l

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Kapferer

food sector. In its ice cream business, best-known

brand

local

in the United

Wall's globalizing

logos,

and new

Even

in France,

in Italy, while

and Agnesi

Kingdom,

has kept the

as Miko

such

names,

products,

num and Solero.

Unilever

as Mag

such

concepts,

in the traditionally

cos

globalized

have L'Or?al has discovered that local brands business, to In retain U.S. clients. the power May globalizing a strat belline L'Or?al has pursued brand, double-branding

metic the

is the host brand and another name

egy, inwhich Maybelline is

the

local

For

brand.

the

example,

in France

Gemey-Maybelline

and

markets

company

in

Jade-Maybelline

Germany. We

also

firms

recommend

in their

that

recent

the

acknowledge

ism in the different parts of the world, account be

might

for the

effects

critical

for

same

the

consumers

in all

brands

categories for a company brand

argument

a balance

lio to maintain tional

regional

including Europe, and

to avoid overloading

international

is another

This

where.

more

movement. It of the antiglobalization more to offer firms diver international

sity in their brand portfolio with

international

strategies, trends toward

every portfo

of both strong local and interna

brands.

to create a source of new ideas, Finally, nies the should encourage development As we mentioned Coca-Cola previously,

international of new

local

compa brands.

local granted new is a pow teams local brands, which the right to develop new new to generate local brands These erful way ideas. at brands into successful international could be transformed has

a later point. In addition, firms' providing local marketing teams the opportunity to build local brands has an impact on teams'

the

motivation

international

that develop

new

local

In summary,

Strong

worth

local

Therefore,

recommend

local

companies

eliminate

represent

to

teams

ideas.

strong

away opportunities. advantages

strategic

that

are

and they enjoy strong brand franchises for any

nated from their market, cessfully.

we

encourage as a source of new

be throwing

they might brands assets

Thus,

marketers brands

consideration, are real

level.

skill

if international

local brands,

that

and

there

company.

When

are many

brands

to relaunch

it is difficult

reasons

are elimi

them suc

to encourage

the

of brand portfolios that contain a balanced mix development of strong local and international brands. Aaker, David A. (1991), Managing the Value of a Rrand Name. New -

and Branding,"

Brand

Equity: Capitalizing York: The Free Press.

on

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