How Local Brands Can Win Mindshare Globally

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Brands matter. There can be no argument that the battle of the brands is the battle for mindshare amongst an increasingly educated and demanding consumer base. A brand that achieves dominant mindshare is a brand that delivers profit – and profit that continues until that brand is disrupted by another market entrant with a more savvy knowledge of local conditions, attitudes, psychology and other core market determinants.

This is true not only in developed markets but perhaps even more so in markets that are in their infancy. These markets see not only mature brands entering the consumer space, but also mimics –brands that are close enough in look and feel to global icons, but are hoping to carve themselves a niche in markets where consumers want and need value – value in terms of quality and cost and value in terms of brand recognition.

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Take for example India – one of the largest and most diverse markets in the world. It is characterised by consumers that exhibit behaviour that is both mature and aspirational at the same time, a crossover market if you will. In this market there are both Gucci and Guchi (a well-known knock off of this famous brand), both Coca Cola and Thumbs Up (India’s Cola market leader). Each of these brands (legitimate and not so above board) are aimed at different segments of an increasingly fractured and layered demographic. But is this the way forward for local brands, imitating the global brands and hoping to eat into their pie? How does a local brand compete when a global brand with a seamingly limitless budget decides to enter their markets? How can local brands compete against those glossy advertising campaigns ?

A recent study by Mckinsey and Company, revealed that in emerging markets word of mouth is all important. Trust in brands it seems is a very personal issue. But how does one engender trust? 30 years ago you could ask a public relations practitioner and they would almost always give you same answer – that is that trust is earned through the actions and words of reliable spokespeople. This may on the face of it seem obvious. Get an academic, the local union member, celebrity or a religious figure to endorse your product and you have an almost guaranteed winner. This is known as the ‘champion approach’ by many PR practitioners.

An ad agency executive, asked that same question, during the same era would have given a different answer. In all probability it would have been to outline an above the line strategy (paid placements) of billboards, print media, television or radio (especially powerful in emerging markets like those that are found in Asia or Africa).

So how do brands get under the skin of consumers in this day and age? At this juncture it might be useful to examine what brand positioning actually is. In a nutshell brand positioning can be defined what the brand promises to deliver to the consumer, what is its value proposition? A combination of functional and emotional benefits.

Classically brands convey information in two different ways, the first is the consumers functional interaction with the brand, for example does the brand actually leave dishes clean, sparkling and with a lemony scent? The second (and this is the challenging part), does the brand deliver on its emotional promise – is my hipster credibility actually enhanced by wearing a particular brand of jeans? Am I more confident because of the brand? Does it support my internal perception of myself and lead therefore to individual emotional satisfaction?

The challenge is of course that brands simply cannot be all things to all people. The marketing function of the organisation (or their external marketing advisors) must proceed to segment the market in order to effectively communicate why their particular brand is worthy of consumer loyalty. Once the organisation has isolated the correct demographic then it must decide on messaging and channels (or drivers like advertising, retail outlets, logos, packaging etc). Audience segmentation, messaging and channels are where the art and science of brand positioning meets the reality of sometimes fickle consumer behaviour. Nowhere is this truer then when a local brand goes head to head with a renowned global brand.

Perhaps the following success story is instructive. Thailand’s most successful snack is Tao Kae Noi –crispy fried seaweed in a bag. Primarily sold in 7-11’s, the snack was the brainchild of Aitthipat Kulapongvanich who launched the snack line in 2004 when he was barely out of his teens. Today he a billionaire and the snack regularly sells out on the day it is delivered to 7-11’s across the Southeast Asian region (including 3000 in Thailand alone). In effect this young man took on the established brands from Frito Lay / PepsiCo and proceeded to carve out a market share where the brand now plays alongside Lays, Fritos and Cheetos. So how did this upstart entrepreneur come to dominate the market so thoroughly?

In simplistic terms he was the right person, in the right place, at the right time. Unwrapping this perhaps trite outline of the circumstances which led to the success of the fried seaweed brand allows us some insight into the importance of brand positioning.

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Firstly Aitthipat Kulapongvanich was deeply immersed in the culture of his home country and at his age he was in tune with the drivers of young consumer behaviour. Seaweed was (and still is) an important part of Asian cuisine. The packaging is a mixture of local language and English, bright and cheerful. It is promoted actively in store and almost every packet allows the consumer to enter into a competition. The product is now available in a number of varieties including hot and spicy and chicken. But perhaps most importantly it is a taste that is local and culturally relevant. In addition the functional benefits are fairly straightforward to understand – a great, familiar taste and a wide variety of brand options as far as flavors are concerned. Another important fact is that it does not cannibalise Frito Lays existing product lines to any great extent. What you have is a new market entrant, with a new product. How does the brand engages its target audience emotionally? The local product has entrenched itself due to being a widely known success story. It is ‘proudly Thai’. The inventor, Aitthipat Kulapongvanich has had his life story made into a movie. This is how a local brand can succeed and thrive even though the markets are full of global brands such as Pringles, Planters, Doritos etc.

The key to differentiation must be a carefully considered approach to the value that a brand offers the consumer. A company must keep in mind that unless it crafts a strategically sound brand promise then all the work on channels and how it gets its message out there will not make any difference. So how does this process take place and what are the considerations that must be taken into account when defining the brand positioning? Classically there are five reference points when defining the brands positioning. The first of these is Category frame of reference – which product category and sub category will the brand be competing in? The second is related to defining the target market (think of this as the bulls-eye in a game of darts). The third part of defining the brand positioning is absolutely crucial – the key differences between the brand and other competing brands in the market needs to be established. A great example of this is Starbucks offering of plug points for the charging of laptop devices and the availability of free wi fi in their establishments. In addition Starbucks invests heavily in the training of their Barristas to engage with customers in order to convert them from casual coffee drinkers into Starbucks loyalists.

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The Starbucks brand positioning is an ‘experience’, they call it the “third place”), an experience aimed at a specific consumer segment – business people or people on the move like students. The fourth is, why should the consumer believe in the brand? When Banyan Tree says they welcome travelers from around the world who are looking for a sanctuary to rejuvenate the mind, body, and soul, they don’t encourage young kids on the property. This speaks to the brands credibility. Finally, what’s the brand purpose? Renting a house? Not according to airbnb, they have a bigger purpose. On their website, they write “But really, we’re about home. You see, a house is just a space, but a home is where you belong. And what makes this global community so special is that for the very first time, you can belong anywhere. That is the idea at the core of our company: belonging.” Have a bigger purpose – that’s how you decommoditise your products and services.

So the challenge for local brands is complex but the steps are simple 1) Identify your target customers really really well and get to know what makes them tick 2) have crystal clear clarity on your value proposition 3) Deliver your products and services in an emotionally engaging way, based on your value proposition 4) watch the the competition like a hawk and 5) communicate the purpose of your brand existence.

It bears repeating that brands cannot be all things to all people – they need to differentiate their offering and continue to innovate. And remember – even if you have established customer base and your brand has been around for 30 years, some global brands could come along and steal your brand proposition in the blink of an eye – just look at the number of global brands in your country.

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