Learn Strategic Brand Management
Brand Equity In Question
Strategic Implications Of Branding
Brand And Business Building
From Private Labels To Store Brands
Brand Diversity: The Types Of Brands
The New Rules Of Brand Management
Brand Identity And Positioning
Launching The Brand
The Challenge Of Growth In Mature Markets
Sustaining A Brand Long Term
Adapting To The Market: Identity And Change
Growth Through Brand Extensions
Handling Name Changes And Brand Transfers
Brand Turnaround And Rejuvenation
Managing Global Brands
Financial Valuation And Accounting For Brands
The criticism of local brands has therefore been exaggerated (Kapferer, 2001) and their strength underestimated. Because they tried to replace local brands with global brands too quickly, Procter & Gamble and Danone were forced to back-pedal and try to win back the customers they had lost. It should be remembered that pro-global propaganda was a oneway street and did not brook any form of opposition.
However, it is worth considering how many leading brands are in fact not local. The leading brands on a number of markets – fruit juices, beer, cooking oil, butter, cheese – are all local brands. It could be argued that these are traditional products, but it is significant that in Korea and Japan, the number one hamburger is not McDonald’s or Burger King, but Lotteria (an offshoot of the Lotte department stores).
The same is true in Belgium where Quick is still the market leader, more than 10 years after the US giant penetrated the Belgian market. The paradox is explained by the ‘first mover advantage’. In these countries, it was the local brands that established the hamburger restaurants and the market for which they became the referents. There is no difference in the structures of these competitors, but the key factor of the success of any restaurant is its position – when McDonald’s arrived in Korea and Belgium, the best sites were already taken.
Today, many global brands affirm that they try not to appear global. This is certainly true in the case of Danone, which is in fact legally the local brand in four different countries. The Danone brand, the result of an innovation, was created in Spain in 1919 by Isaac Carasso, who named it after his son (Danon is the Catalan diminutive for Daniel). Danone was registered in France in 1929, while Dannon Milk Products, Inc. was created in New York in 1942 by Daniel Carasso, who had emigrated to the United States.
The brand was subsequently extended to Mexico. In each of these four countries, Danone or Dannon is regarded as a local brand. Strangely enough, according to its directors, the German brand Nivea also aspires to be perceived as a local brand even though it is one of the most widely distributed brands in the world. The same applies to the Danish brand Velux, the number one roof window manufacturer, Bic, Garnier and others.
In 1998, the trend was for globalisation at all costs, and having bought the Czech company Opavia, the Danone group decided to replace this local brand with its own global brand. However, Danone had seriously underestimated the strength of the local brand and had to back-pedal. Opavia had more than 70 per cent of the market share in the Czech Republic. During the communist era, the only ‘treat’ available to the Czechs was biscuits, and Opavia had become their friend and ally.
Last but not least, Opavia was also the name of a Czech town, which made it a patriotic brand. All these factors were difficult to appreciate when legislating from a distance. Each country has its own icon brands and globalization simply cannot afford to ignore the consumer.
The international study referred to earlier (Schuiling and Kapferer, 2004; see page 468) identified the levers specific to local brands – confidence and proximity. These are key factors of success if the local brand also knows how to market its products effectively.
Developing local brands
Since many brands are and will continue to remain local, how can they be developed in the face of international competition? The strength of local brands has already been demonstrated (Schuiling and Kapferer, 2004) and their strong points compared with global brands. But confidence and proximity will not provide indefinite protection – they have to be maintained, and the strategies that maintain them are therefore particularly important.
But it is equally important to address the weaknesses of local brands – a lack of innovation, fun and fashion, according to the new, younger generation of consumers. Local brands also suffer from a number of weaknesses and limitations at management level, and these are outlined below:
A good example of management of local brands against increasing international competition is Amore Pacific, Korea’s dynamic and leading cosmetics company, and strong market leader thanks to a wide brand portfolio. How did Amore Pacific strengthen its brand proactively?
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