The importance of doing your homework, literally
– how global brands depend on local insights
In today’s globalized world, more and more companies operate across national borders in different cultural contexts, which means that a brand need to, be uniform in its expression and adapt to local – sometimes widely different – needs, values and expectations.
Products, services, keywords and messages are interpreted differently depending on location. A brand can also have different meanings in different cultural contexts. It is therefore central that global brands consider these factors in terms of organization, supply, and not least market communication.
A classic theory that addresses this is Geert Hofstede’s Cultural Dimensions Theory, which defines culture as a set of shared perceptions, values and norms that distinguish different groups. The theory identifies a number of dimensions that describe how one views and interprets the world as part of a certain cultural context. For example, in individualistic cultures people are encouraged to make consumption decisions based on personal preferences, while collectivist cultures encourage group-based consumption decisions, which of course affects which strategy one should adopt in a new market.
Globalization and economic development were long predicted to equalize consumer needs, expectations and behaviors worldwide. The same applies to the idea that a well-established brand is attractive in itself with its heritage and symbolic capital. However, more recent research questions this. Instead, it is believed that as the income levels of different cultures converge, the global market is further diversified. More companies are also realizing that understanding the unique needs, expectations and cultural differences of different markets can be critical to brand success.
The realization of the importance of local consideration a dilemma for today’s global brands
An underlying premise for branding is usually the ability to reduce potential customers’ search costs and risk perception through standardized communication, symbolism and brand identity. But global brands face the challenge of adapting locally, which goes against this. Expansion requires more than simply applying proven standard forms to new markets. There are many examples of those who tried this but failed (Disney at the launch of Disneyland Paris) and those who succeeded better (Coca Cola, IKEA, Louis Vuitton).
The key is to find a balance between standardization (brand consistency) and adaptation to local needs. The brand identity (which is, after all, a cornerstone of one’s own success) needs to be maintained, while local preferences and consumption patterns are addressed through customized elements (images, advertising, channels, etc.). Achieving balance strengthens brand reputation and trust globally, opens doors for local engagement and creates emotional bonds in new markets. A failure, on the other hand, can lead to ineffective business and marketing decisions and, in the worst case, an establishment flop.
This is where survey companies come into play. Mapping of differences as well as similarities in values, habits, language and norms across national borders requires access to reliable panels, proven methods and statistical analyses. The same goes for the ability to distinguish significant differences and similarities from those that are actually interesting. Especially when we enable local anchoring in the analysis and collaborate across national borders.