How Global Brands Compete

Jan 9, 2017 | Uncategorized

In a 2004 article in the Harvard Business Review, Douglas B. Holt, John A. Quelch and Earl L. Taylor evaluate the current worldview of global brands and their overall effect on various countries. They conducted an extensive study into transnational brands versus non-global brands and their impact on the consumers of the world. Here are the highlights of their findings:

  • Consumers worldwide are in awe of the political power of certain global entities and their overall impact on societies, communities, nations and the planet as a whole.
  • There are three main characteristics that consumers look at when considering a global brand. Quality signal, global myth and social responsibility are the factors that reign supreme in the overall perception of global consumer brands.

    • Quality signal plays a critical role in the credibility of a global band. Approximately 44% of consumers rely solely on this principle. Reasonable prices, new products, consistent guarantees and dynamic nature are a few of the factors that consumers cited when referring to overall quality of a product.
    • Global myth addresses various symbols of cultural ideals. Approximately 12% of global consumers rely on this as a means of brand preference. They use brands to create a sort of imagined global identity that they can share with like-minded individuals across the world. Global brands tend to make people feel as if they are a part of something bigger, they show the future of consumer products and they are a symbol of luxury and convenience.
    • Social responsibility, especially these days, is the most important characteristic that people perceive in global businesses. Only 8% of people use this as a deciding factor in their brand choices. Global brands wield extraordinary influence on society’s well-being. People generally expect these companies to use their vast influence for the greater good. People have been convinced that these companies should use their influence to tackle pressing social issues and global epidemics.
  • Aside from these deciding principals in the use of global products, consumers from other countries have been concerned with the ideals of Americans ever since the war in Iraq began.

  • Anti-American sentiments are on the rise, leading to a drop in the use of U.S. products.
  • Overall, global consumer segments consist of four main types of consumers—Global citizens, global dreamers, antiglobals and global agnostics.

    • Global Citizens comprise 55% of the population and solely rely on whether companies behave responsibly on pressing issues such as consumer health, environmental concerns and workers rights.
    • Consumer Segments are the second largest segment at 23% of the world’s population. These consumers are less discerning about transnational companies. This facet of the population is more likely to believe global myths and remains devoted to their use of certain products.
    • Antiglobals make up approximately 13% of the world’s population. This sect of the population is highly skeptical of transnational products and their wide influence. They mostly avoid contact with transnational firms and their brands. The highest numbers of this group are primarily located in the UK and China.
    • Global Agnostics are the least influential group of consumers when it comes to global brands. Comprising about 8% of the population, this group evaluates a global product by the same criteria they use to judge local brands. In the United States and South Africa, the numbers of this population remain high.
  • There are five main goals that global brands should have when considering new opportunities and new responsibilities. These are; Thinking globally, managing the dark side, building credible myths, treating antiglobals as customers and turning social responsibility into entrepreneurship.

    • Thinking globally is essential for major corporations because their products are ultimately symbols of what consumers perceive them to be. Firms must learn to participate in a polarized conversation about global brands and influence it.
    • Managing the dark side of companies is difficult, but essential. Managing perceptions of global brands is an integral part of keeping the company successful. Advertising approaches are paramount in maintaining a positive image.
    • Building credible myths is also a gateway to success for large brands. Firms must create appropriate myths highlighting things such as personal empowerment, consumer centered campaigns and philosophical dialogue with consumers. This ultimately earns credibility with your market demographic.
    • Treating antiglobals as customers is equally important. Although this facet of the population typically strays from larger firms, they represent one in ten people in the world. Companies must earn the trust of this segment by focusing on them as disgruntled consumers and making every advance to perfect their products for this demographic.
    • Turning social responsibility into entrepreneurship is key, especially since social responsibility has become an integral part of societies allegiance to certain firms. Most companies have launched successful social responsibility campaigns including philanthropic efforts and environmental initiatives. People tend to buy products that are socially responsible or fund a good cause.
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