ANALYSIS: Local argument grows for global giants - Emerging Asian brands are sharpening the focus to go local, reports Richard Lord

<p>Even in the jargon-ridden argot of marketing, "think global, act </p><p>local" stands out as a particularly over-used cliche. The reason why is </p><p>obvious: multinational corporations can make massive efficiency gains if </p><p>they use global marketing methodologies, and adapt them for local </p><p>markets. </p><p><BR><BR> </p><p>But that might be changing. Multinational marketing machines are </p><p>realising that acting locally may no longer be enough. Increasingly, </p><p>CEOs like Coca-Cola's Doug Daft are coming out and saying what is rarely </p><p>uttered: that they may need to think local as well, with all the </p><p>resource implications that has. </p><p><BR><BR> </p><p>The problem with merely acting local is that it's a pretty superficial </p><p>way of adapting to local market conditions. Really engaging with a </p><p>market is often no longer just a case of changing your marketing </p><p>messages: it's about changing the whole way you operate to respond to </p><p>those conditions - everything from branding to product range to </p><p>packaging to distribution. </p><p><BR><BR> </p><p>A new report, produced by Ogilvy & Mather, backs up this view. It claims </p><p>that increasingly, consumers don't perceive a difference between local </p><p>and multinational brands; brands that are available locally are </p><p>perceived as local, and multinational companies are keen to give their </p><p>global brands a local identity. </p><p><BR><BR> </p><p>But this is happening against the backdrop of increasingly powerful </p><p>local brands, battered during the Asian financial crisis, but now </p><p>catching up with their western counterparts in their marketing </p><p>sophistication. In China, for example, seven of the 10 most-recognised </p><p>brands are local, according to figures from Gallup, with 80 per cent of </p><p>consumers preferring Chinese brands. All of the top 10 Chinese ad </p><p>spenders in 2000 were local, according to ACNielsen. </p><p><BR><BR> </p><p>The rise of local brands presents multinationals with an uphill </p><p>struggle, says the report's author Richard Armstrong, O&M's regional </p><p>planning director - particularly if they pursue global marketing </p><p>consistency. "Multinational brands want to be perceived as local, but </p><p>how do they go about getting that credibility? It's about being immersed </p><p>in local culture and local market conditions. That's something that </p><p>multinational brands are particularly bad at doing. </p><p><BR><BR> </p><p>"They should employ more local people. Especially where multinationals </p><p>pump their bright stars into international postings as part of their </p><p>career path, it doesn't lead to local integrity and to immersion in </p><p>local culture." </p><p><BR><BR> </p><p>Local companies, by contrast, will tend to be more plugged in to local </p><p>culture, have better understanding of local distribution networks, and </p><p>be able to move more quickly, unhampered by the long decision-making </p><p>chains multinationals often suffer from. </p><p><BR><BR> </p><p>It's this desire to engage better with individual markets that has </p><p>driven the increased localisation of the marketing efforts of </p><p>multinationals like Coke. </p><p><BR><BR> </p><p>It has also seen UK grocery retailer Tesco fiercely stressing its local </p><p>credentials in Thailand, through its partnership with local retailer </p><p>Lotus and its policy of sourcing local goods. Similarly, when Daihatsu </p><p>launched in Pakistan, it spent the first three months just promoting the </p><p>length of time its dealership had been there. </p><p><BR><BR> </p><p>It's not the right way for all brands. Nike, for example, has a global </p><p>marketing outlook, with local implementations that are twists rather </p><p>then full-scale reworkings. The sportswear market, and the company's </p><p>core target audience of teenagers and children, make this possible, </p><p>explains Hong Kong marketing director Rebecca Hon: "Kids and teenagers </p><p>tend to want the same sort of things everywhere. We're lucky to have </p><p>global synergies - sports is so universal. It must be very difficult for </p><p>companies like packaged goods manufacturers." </p><p><BR><BR> </p><p>Hon sees the relatively slow decision-making apparatus of multinationals </p><p>as a possible advantage when it comes to identifying the right cultural </p><p>trends to latch onto in its marketing: "Sometimes it's good that it </p><p>slows things down, and we don't jump in the wrong boat, especially in </p><p>Hong Kong, where there's a new trend every five minutes." </p><p><BR><BR> </p><p>Its emphasis on global harmonisation informs Nike's attitude towards </p><p>local staff, too. It uses local people, but rather than expecting people </p><p>to localise their perspective, it expects local people to globalise </p><p>theirs. </p><p><BR><BR> </p><p>"People move around a lot, so that those people understand that the </p><p>market isn't as small as their own country - the market is the world," </p><p>says Hon. </p><p><BR><BR> </p><p>Whatever route multinationals choose to take, the threat they face from </p><p>local brands is growing. And as markets like China grow more </p><p>sophisticated, the artificial lustre of global brands may wane. </p><p><BR><BR> </p>