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I'd like to teach the world to drink Coke

Name That Label

...and eat McDonald's burgers and watch Disney movies. Millions do worldwide. JOHN QUELCH reveals what it takes to take a brand global, and the pitfalls of cross-market penetration

THE importance of global brands is accelerating.

Everyone knows why. There is a global convergence in consumer tastes and values. It arises from telecommunications technology and from increased population mobility -- whether as a result of travel or cross-border job mobility.

The result is a much more rapid transfer of ideas than in the past: Consumers in one culture can learn what is going on in another culture much more readily. As Internet penetration takes off, the speed of idea-transfer will be enhanced further.

It is now possible to identify similar segments of consumers from one country-market to another -- much more than even 10 years ago.

These cross-border segments are often younger, richer and more urban. Older people are more set in their ways than younger ones. And younger people are much bigger consumers of global brands.

Cross-border segments are more evident the further up the income and education pyramid you go. If you polled international managers in Singapore, San Francisco, Sao Paulo, Stockholm and Sydney about their preferred brands of cars or scotch, they would probably all come up with very similar names.

But if you went down into the guts of the mass market in Singapore, the United States, Brazil, Sweden and Australia, you would be much less likely to find the same brand-names mentioned repeatedly.

Also, you are more likely to find consumers of global brands in urban than in rural environments.

In fact, consumer tastes might actually be more similar between New York and Tokyo than between Tokyo and Hokkaido. The farther out from the urban centre you go, the less likely you will find convergence.

A final point about global brands is the degree to which their importance varies from one product category to another.

In product categories that are culture-bound -- like food prepared in the home -- you obviously find large cultural, and therefore national, taste variations.

But, if you turn to personal computers, consumers around the world buy them generally on the basis of the same performance criteria, wherever they are.

So, the chances are that there will be more convergence -- more opportunity to identify global segments.

WHAT DISTINGUISHES A GLOBAL BRAND?

IN 1997, Financial World magazine published a list of what it called the Top 10 global brands -- ranked by market capitalisation. For the global manager, a key question is: What features do these 10 brands have in common?

You can see seven common features of these global brands:

Strength in home market: The cashflow you generate from your domestic market share is what enables you to fund your global rollout.

Geographical balance in sales: There can be no global brand that is extremely strong in Europe, for example, but hardly known in Asia. A global brand has to enjoy a threshold level of awareness and recognition all over the world.

Address similar consumer needs worldwide.

Consistent positioning: The way in which Coca-Cola, McDonald's and Disney are positioned around the world is very consistent. These brands stand for the same values everywhere.

Consumers value country of origin: For many global brands, the country of origin is, paradoxically, a factor in explaining their global appeal. Coca-Cola, McDonald's and Marlboro cigarettes are very much associated with buying into the American lifestyle.

Consequently, there is often an association between the brand itself, the loyalty to it and the fact that it is embedded in a particular national culture.

You would say that France is the best source of perfume: Many global brands of perfume emanate from there and something about the country as a credible source of perfume improves the ability of its brands to have global appeal.

Product-category focus: In the list above, the brand which probably goes beyond a single product-category focus is Sony. But even it has developed a clear reputation for being the world expert in small consumer-electronic goods.

Corporate name: In all these cases except one (Philip Morris and Marlboro), the corporate name is the same as the brand name. If Unilever or Proctor & Gamble had to do it all over again, they might well decide to use a company name more aggressively rather than have separate names for each of their individual brands.

BENEFITS OF GLOBAL BRANDING

THERE are three clear benefits of global branding:

Added value for consumers: For the consumer, there may be a perceived value added when a global brand-name is attached to "emotionally involving" or "aspirational" products.

For example, a car is a highly-involving purchase because you are seen driving it by your friends: Here is an opportunity for a universally well-regarded global brand to add some perceived value in the minds of a segment of consumers.

Or, the country of origin itself may be an indicator of technical performancesuperiority, as in the case of French perfumes.

Lower costs: Most global marketers would claim that having a single global brand worldwide provides a series of efficiencies. There are economies in packaging, advertising and logo-design but, also, some marketing options are open only to global brands.

Very few brands can afford to sponsor the World Cup or the Olympics. Typically, those that can leverage their sponsorship enormously in a way that national brands never have the option to. Less administrative complexity is another benefit of global brand standardisation, as are lower costs of market entry for affiliated brands.

A global brand can facilitate greatly the penetration of line extensions and the distribution of other brands in your portfolio.

Worldwide, Coca-Cola has some 20 very significant national brands of carbonated beverages, in addition to the Coca-Cola brand itself. All of these beverages secure much better distribution by virtue of being its portfolio than if they were on their own.

It is significant that Coca-Cola -- which is most often cited as being a global company in the consumer-goods area -- has this vast array of national brands. The company recognises that in every country-market, although there are consumers who are interested in a global brand, there are many others who are happy paying a lower price for a national brand.

It wants to capture a piece of both market segments.

Cultural benefits for company: The third key benefit, often overlooked, relates to the company's culture. Good people want to go and work for, and continue to work for, global companies.

With a strong global brand, you are in an advantageous position to recruit and retain better people. The motivational aspect, the pride that emanates from being part of a company of global repute, probably should not be underestimated.

HOW TO BUILD A GLOBAL BRAND

COCA-COLA develops a pool of advertisements -- all of which reflect the current brand strategy, but from which different country subsidiaries can select.

You have the brand slogan, which is "Always Coca-Cola" currently -- the idea being that every time you think beverage, you think Coca-Cola.

You have the brand logo -- the circle containing the contour-shape Coca-Cola bottle. In addition to that, you have the polar bear, which issued in some markets -- but used heavily in the US -- as another icon of the brand.

These communications devices build collectively a consistent visual image for the brand globally.

Then, there are the attributes that help develop brand-meaning -- such as heritage, user-imagery and enduring values.

When Heineken entered the Chinese market, its first advertisement showed someone simply pouring beautiful Heineken lager into a glass, with a close-up of the green Heineken bottle and the red star on the label.

The advertisement's emphasis is on establishing the quality of the beer, on the company's heritage and its use of the finest of ingredients.

The next stage in developing the brand-image is to run advertising which shows who the users are and how, where and when they use the product.

For example, you will never see a Heineken advertisement in which the lager is drunk out of the bottle. It is always shown being drunk out of a glass, and only by good friends in a relaxed setting.

It is never shown being drunk at a beer-bash. That is all part of the consistent visual positioning of the brand worldwide.

The real challenge is to create some enduring values that the end-consumer can associate with your brand, that is, to establish a relationship between the consumer and the brand.

This will ensure repeat purchases and inoculate the brand against an occasional failure to deliver satisfaction.

PITFALLS OF GOING GLOBAL

THERE are three key mistakes that companies often make.

Standardisation: The first error is to standardise everything. You may have a global brand, but you do not have to standardise the entire marketing programme. There are a host of different decisions that make up any such programme.

The trick is to decide what to standardise and what to adapt in each country. The more strategic elements of the marketing mix (like positioning) tend to be standardised, while the more execution-sensitive elements (like distribution) tend to be adapted.

To adapt costs money -- and you have to be sure that the extra cost of adaptation is more than offset by the extra profit accrued. Standardisation is more appropriate for back-room versus frontoffice functions.

In other words, those aspects of marketing where the customer is interfacing directly with the company -- sales and customer service -- tend to require more local adaptation.

In addition, when you are launching a new product, it is easier to standardise from the start.

If you have an established product that has already been marketed in an adapted way in some countries, it is difficult to turn back the clock and create a single standardised programme.

Ignore market-development differences: Most global brands are at different stages of their development cycle in different markets.

This is natural since they will be mature and advanced brands in their domestic markets, but new brands in many emerging markets.

A global-brand strategist has to look at differences across countries in terms of both category development (CD) and brand development (BD). Heineken groups countries on this basis.

In low CD, low BD countries, the emphasis has to be on generating interest in beer as a beverage. However, in high CD, low BD countries, the emphasis is on generating brand trial.

I believe the way in which the debate on global marketing has changed in the last 10 years can be summed up by two questions.

First, instead of asking what the differences are among countries, people now ask what are the similarities?

Start with the similarities, and then try and adapt to the differences, rather than starting with the notion that everything is different and then trying to search for similarities.

Or, you can say that the question that was asked 10 years ago would have been: Why should we go global? Then, the onus would have been on people to justify why they should go global, whereas now the onus is on people who want to justify not going global. Tension between headquarters and field operations: This occurs on a global basis, but it also occurs on a national basis.

A retail bank headquarters' staff often tries to control the branches country-wide that may want to do things differently. I would like to suggest two quotations -- the first to the people at headquarters who think everything should be done the same way everywhere: "A desk is a very dangerous place from which to view the world" (John LeCarre, British spy novelist).

But, for those people in the field organisation who insist that their situations are different -- their answer, from ABB's chairman Percy Barnevik, is "the cost of delay exceeds the cost of chaos".

In today's global marketplace, you do not have the luxury of rolling out a new product country-by-country at your convenience.

You have to launch it worldwide, as fast as possible, to avoid competitive preemption.

Professor John Quelch is the dean of the London Business School. His analysis of global marketing will appear in full in Business Strategy Review (March 1999) published for the school by Blackwell Publishers.

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