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.
