International Marketer’s Blog

A report in the Financial Times (ft.com 07.09.10) discusses the increasing diversity of the American consumer of the future, with global brands facing a much more complex challenge in marketing to a multicultural nation.

According to the Washington think-tank the Brookings Instiution, 83% of US population growth in the past decade has come from ethnic minority groups – primarily Hispanic, African-American and Asian-American, with a combined purchasing power now exceeding $2,000bn. The 2010 US census is expected to count 50m Hispanics, up 40 per cent on 2000, which will offer the same growth dynamics for global brands as an emerging market.

Global brands such as McDonald’s and Toyota have already stepped up marketing to Hispanics since the 2000 census identified the group had outstripped African-Americans as the largest minority. Their impact is obvious across American business with the success of brands such as Häagen-Daz’s Dulce de Leche ice cream or Bud Lite beer with lime.

Addressing local needs while leveraging on the global platform is one of the key objectives for global brands and their marketing and advertising agencies, where creating a truly viable global creative platform and at the same time leaving room for local manipulation, is the real challenge. (more…)

Korean Air, Korea’s flagship carrier, is launching a global campaign with the new theme, “For life on a whole new scale”.

The push stresses the scale of the airline’s vast worldwide network and emphasises its attention to detail in customer service.

This new positioning marks a departure from the airline’s long running slogan, “What Korean Air is made of”, which debuted in 2007.

International marketing activities have kicked off across television, print, outdoor and digital channels.

To ensure the global campaign execution has local relevance, three different versions of the television ads have been developed for Asian, European and global markets.

According to AdWeek, the latest push extends the sophisticated messages of the earlier ads, and also includes a more sales-driven version, highlighting some of the key destinations in the carrier’s network.

Cho HyunMin, corporate communications and integrated marketing team manager at Korean Air, described the new campaign as both extraordinary and original. (more…)

Coca-Cola recently had embarked on a big move to centralize its European marketing operation into a London hub. Joe Thomas of Marketing Magazine (Marketingmagazine.co.uk, 20.04.2010) reported that Coca-Cola currently uses a roster of agencies from countries across the region, all of which contribute to its marketing activity.

Adding to the complexity, the marketing campaign is decided and activated by marketers at a national level, rather than collectively from a region-wide or global perspective. Not only it results in a total lack of synergy in its advertising in each market, the localized marketing activities and ideas actually create unnecessary costs.

Some may comment that many of the markets in Europe operate, on occasion, purely for their own benefit, without considering a wider regional picture. The Diet Coke TV commercial featuring Duffy was criticized for being an idea that was never going to work outside the UK. Some even commented that a Welsh singer in a supermarket would not appeal to any other audience. Putting aside the fact that I actually quite like the song (and secretly love the commercial), the way it was adapted for other markets by simply dubbing the line and subtitling the song in Austrian, Slovenian, Bulgarian…and so on, it has lost its simplicity. As an idea, it has been diluted as an execution – and it was an international marketing execution that cost Coca-Cola money. (more…)

Levi’s has unveiled its first-ever product launch outside of the US, marking an innovative implementation of marketing strategy for the company.

As reported on campaignasia.com yesterday, the Denizen brand developed specifically for the Chinese market debuted in Shanghai. The brand will then launch in Beijing and the rest of northern China before becoming available in selected western markets.

Some 50 Denizen retail stores are scheduled to open across China, South Korea and Singapore by the end of 2010. The Shanghai store opening is planned for early September.

“This is the birth of a new history for Levi Strauss & Co in Asia,” said Aaron Boey, President of Levi Strauss’ Asia Pacific division.

Denizen is a combination of the English word ‘denim’ and the Buddhist concept of ‘zen’. The brand targets the lucrative Asian middle-class population, aged between 18 and 28. (more…)

Energizer is localizing the global strategies for its Energizer and Eveready brands in a move to strengthen its brand across all regions.

When considering global corporate branding or localization, the company decided that the new localized strategy will increase cohesion and consistency of the Energizer brand on a global scale, according to a statement by the company.

The company has selected TBWA Worldwide to take responsibility for the creative output of all Energizer household products, managing international marketing activities through its regional network. TBWA’s Los Angeles office will act as the global lead creative and strategic agency.

“Through this appointment we are building a new, powerful agency team capable of reaching consumers in ground-breaking, creative ways to drive brand preference and purchase intent for the Energizer and Eveready brands globally,” said Jeff Ziminski, Global Chief Marketing officer for Energizer Household Products. (more…)

Diageo is ‘going local’ with its sports sponsorship strategy in Korea, the company’s marketing director has told the Korean Times.

The global drinks brand has a long history of sponsoring the Johnnie Walker Classic tournaments, a European Tour golf event held in Asia Pacific. But rather than bringing top-ranking international players to Korean customers, Diageo wants to give them an opportunity to watch local players, and even play with them, at next week’s Johnnie Walker Open at Jeju Island, South Korea.

Mark Edwards, Diageo marketing director, said that the ‘going local’ approach represents a shift away from the traditional international marketing strategies of exposing products to all prospective customers. Instead, he wants the brand to focus on local consumer relations to create familiarity and trust of its products.

“You have to find something that people want,” he said. “You need to inspire consumers to motivate them.” (more…)

Taiwanese smartphone maker HTC has moved into the Chinese market this week, with the introduction of a series of models under its own brand name and partnerships with two key Chinese firms.

In a bid to develop market share in the world’s largest mobile phone market, the company is joining forces with China’s largest mobile operator China Mobile and Gome Electrical Appliances Holding, China’s largest electronics retailer, to market HTC phones.

An article in the Financial Times yesterday, highlights the fact that despite Taiwan’s proximity to China and a shared language and culture, HTC chose to launch first as a brand in Europe, followed by the US, before introducing itself to Chinese consumers.

According to the FT, there are a number of reasons why the company has thought global first and local second. The challenge for Taiwanese tech players has been to find global brand solutions, in order to turn themselves from contract manufacturers, operating on slim margins, into global brands. Some Taiwanese companies have tried to operate all retail outlets themselves, or relied on national-level operators. In a country the size of China, provincial networks and outsourcing are more effective. (more…)

An article in the Financial Times this week describes the approach taken by a number of global brands seeking to develop business opportunities in emerging markets. The report’s author Emma Jacobs looks at international marketing strategies employed by established global players such as HSBC, McDonald’s and Starbucks.

HSBC, which has for many years been branding itself as ‘The World’s Local Bank’ is pursuing a strategy promoting the understanding of different cultures as key to developing successful business relations. The company has sponsored this summer’s ‘Festival Brazil’, a programme of cultural activities at London’s South Bank Centre. Running alongside the cultural event is a series of business seminars and conferences about operating in Brazil designed to help people, including foreign journalists and trade representatives to engage with the festival.

Key to successful expansion in new markets for companies such as Starbucks and McDonald’s has been research and investment in products adapted to local tastes.

Starbucks has until recently pursued a strategy trading on its all American image. However, the company is now subtly adapting products to local tastes at the same time as tailoring some outlets more closely to the local environment. The company hope to reconnect with local communities whilst maintaining its core American image. (more…)

Global brands often struggle to succeed in local markets, while local brands meet consumer needs better, according to new research.

Brands with a centralised structure (with brands managed centrally, rather than locally), can lose track of consumer needs and shopper insights, according to the study by Roland Berger and Ipsos.

As a result, centralised product launches suffer significantly higher flop rates (80%) than decentralised ones (50%) posing the question whether companies should opt for global corporate branding or localization.

According to a study conducted by Nielsen, flop rates in the German FMCG market are as high as 85%. Another study found that out of 24,000 new products, only half survived their first year in the market (Source: GfK/Madakom,1998).

In 2001, 32,000 new products were launched, and only 30% survived the first year. Roland Berger and Ipsos cite relevance and differentiation in the market as two top criteria for global brand marketing success. (more…)

Levi’s is promoting its new Work Wear line via a reality TV and online broadcast, in its biggest effort yet to reach the Hispanic market.

The series will follow five young US Hispanics as they journey along the pan-America Highway from Alaska to Argentina. This will culminate in a 10-week reality TV programme to be aired on Discovery en Espanol “The heart of our brand is about pioneering,” said Doug Sweeny, VP of Levi’s brand marketing. “We found that idea really connected with this audience.”

During the series, entitled “Norte a Sur: Una Ruta, 5 Experiencias’, the travellers will stop in 10 cities, contributing to local arts projects.

Levi’s will incorporate research findings on Hispanic youth, such as their fondness for smartphones, blogs and social media, according to the Ad Age report.

“Something cool is that now they’re using technology and social networks to excavate into their past and cultural identity,” said Elizabeth Fauerso, executive director of strategic planning at Dieste, Levi’s Hispanic agency. “They have a stream of salsa music from the 1970s on their Facebook pages.” (more…)