Global Brand vs. Geographically focused brand. The Brand Strategy dilemma

Brand strategy

globalization global brand

Today, the business case for globalization is strengthened more and more by competitive pressures: the fear of some companies that they will be left behind other companies if they fail to globalize.

Top reasons to go global

From a company perspective, international expansion provides new opportunities that may translate into enhanced growth and profit, a uniform worldwide image, possible exclusivity, global customer satisfaction and brand recognition. A global brand is a symbol of quality, value and prestige, it stimulates brand loyalty and equity and, sometimes, it might facilitate the ability to charge premium prices.

However, the biggest challenge in keeping the same image and positioning throughout the world remains the market diversity.

Consider these before you decide to go Global

At the business strategy level this means way more product decisions and challenges such as:

  • which products and services to introduce in which markets
  • how much to standardise worldwide
  • address product packaging and services challenges.

But probably the most important thing to keep in mind is that a brand goes way beyond the attributes, features and qualities, style and design. It’s about experience, belonging, reputation and self-expression… which implies to really understand the local market, how the brand translates, the laws and regulations, the national preferences…

Good global brand positioning includes truly understanding your competition and then looking at your competitive advantage. It includes, understanding customer behaviour and how he shops.

It also includes keeping in mind that there may be global products but not global people or global motivations and that your company may have to reposition its brand due to a competitor’s response or customer’s changing needs and demands.

The business resources in going global are much greater (global branding and advertising, sales teams and offices in each country, expensive patent and intellectual property registration in many countries, product brochures in various languages and translation).  Even when a global strategy exists, this takes years to develop, requires substantial management time and expertise, consistent investment, as well as quality and quantity consistency.

Other challenges might consist in: legal complications, translation issues, cultural issues, possibility of negative connotation, brand damaging and problems with black and grey markets.

Benefits of geographically focused brands

By deciding to be geographically focused and address a smaller customer segment a company still make substantial profit and have a defendable business, especially if the focus is to offer a better solution to the target market.

It works well for products with good reputation and for companies with low-volume, high-margin products.

Avoiding the intense competition, marketing efficiency (permits more focused marketing), local identification, meaningful name (no cultural/translation issues)  and avoiding the taxation of the international brands are just a few of the main benefits of a more geographically focused brand.

When to take your company global?

Going global is good:

  • for prestigious products and/or culture free products
  • and/or when the company has significant resources to invest.

It makes sense if:

  • there is a perception of slow growth and increased competition in domestic markets and
  • if the profitability is so poor in the home market that international expansion may be the only opportunity for profits.

Therefore, the strategy of a global brand can be expensive to implement, it doesn’t work for all products or all product categories and apply more to market leaders or companies with significant resources to deploy.

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