gE Blog Series: Global Branding Part 5 - Challenges to Global Branding
In 1983, Professor Theodore "Ted" Levitt of Harvard's Business School announced that globalization had arrived, and before long global companies would be selling products and services in similar ways all over the world. In spite of Levitt's prediction, only a limited amount of truly global brands exist in today's business world, although markets are undeniably in an age of economic globalization. The reason behind this stems from the immense amount of forces that provide challenges to brands wishing to branch into global markets, of which a select number of firms have overcome.
While technology continues to make cross-cultural interaction more efficient, brands wishing to export internationally continue to fight against forces that derive from the inherent market differences that exist from country to country. Specifically for American brands, many firms have learned that they cannot open franchises globally based on domestic models, regardless of how successful those models might have been in the United States. Global brands have had to adapt their products to match local tastes, especially those involved in the food and beverage industry, to match the cultural desires of the targeted population. Global brands have also faced criticism from activists that are opposed to globalization, whom have criticized global brands for contributing to third world poverty by implementing poor labor practices and low wages.
Of these forces working against global branding, one of the strongest challenges to overcome includes the competition with local brands. When breaking into new markets, brands are immediately in competition with local businesses that typically have existed for generations and have been passed down through family traditions. These family firms also have strong support from loyal customers that have an established tradition of conducting business with a particular firm. Despite the upper hand in advertising technology, many expanding brands have failed in establishing their brands due to undermining the significant loyalty that local brands have with their communities.
Although the adversities facing global brands exist, global brands have managed to overcome these barriers to achieve great success in international markets. These brands share common features, including a consistent name that is easy to pronounce, balanced corporate sales that don't pertain to a dominate market, the ability to address similar customer needs in a variety of markets, and a great similarity in the execution of tasks like pricing, packaging, and advertising across cultures. Successful global brands have also learned to communicate successfully with their stakeholders, such as on aspects like shifting objectives, understanding what local needs and issues exist, and through understanding the delicacy involved in shifting existing markets to accommodate the entrance of the global brand. Lastly, successful global brands have learned from their mistakes and the mistakes of others, therefore having the determination to understand where they went wrong and how they might do better to reach their global branding aspirations.