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

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

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