In our consulting work we find that most clients strongly believe two things:
As a result of these ironclad beliefs, they insist on expanding their brands into other categories. “It’s the only way to grow,” they say.
So they fall victim to the first law of branding, the law of expansion. “Sure,” they say. “Expanding our line may be dangerous, but it’s the only way to grow.”
It’s not the only way to grow. In fact, the perfect solution to achieving both goals is to build a global brand. That means:
For years the magic word on many products has been “imported.” Food, beer, wine, liquor, clothing, automobiles, appliances, and many other items have benefited from an imported label. As if crossing a border suddenly increases the value of the brand.
Actually, crossing a border often does add value to a brand. Since value lies in the mind of the consumer, the perception of where the brand came from can add or subtract value. Does anyone doubt the value of:
Would watches from Albania, wine from Poland, cars from Turkey, electronic products from Russia, or clothing from Portugal have the same perceptions? Obviously not.
Every country has its own unique perceptions. When a brand is in sync with its own country’s perceptions, that brand has the possibility of becoming a global brand.
Wherever you live in the world today, chances are high that a significant number of people are wearing Swiss watches, driving German cars, drinking French wines, playing with Japanese electronic products, and dressing in Italian clothes. (Hopefully, not all at the same time.)
In spite of duties, tariffs, import quotas, inspections, regulations, red tape, and petty harassments, the world is becoming one big global market. And your product had better get on the global brandwagon or risk losing out altogether.
Heineken NV is the leading brewery in the Netherlands, a small country with a population of only 15 million. Yet by going global Heineken NV has become the second-largest brewery in the world.
Can any brewery do the same? Of course not. To be successful as a worldwide beer brand (or any worldwide brand), you need to do two things:
Heineken was the first beer brand to pursue a global strategy. But beer is a product closely associated with Germany, not Holland.
Heineken got lucky. Holland is close to Germany, both geographically and ethnically. As a result, many beer drinkers think Heineken is a German product. (The company has been known to distribute cardboard coasters to bars and restaurants with the words “printed in Germany” featured on the coasters.)
Heineken also got lucky in a second way. Beck’s, its major German competitor on the global market, is saddled with an English-sounding name.
Heineken got lucky in a third way. The largest-selling beer in Germany is Warsteiner. Normally, the leading brand in a country known for the category can be a big success in the rest of the world. (Witness the success of Barilla in the U.S. market with the theme “Italy’s #1 pasta.”) But no German beer brand starting with “War” is going to have much of a chance on the global beer market.
There are many ways to play the global game. Instead of appealing to the core market, you can appeal to a different segment of the market. Corona Extra has become a global force by associating the brand with the boom in Mexican cuisine. Asahi beer has done the same with Japanese cuisine. And Tsingtao beer with Chinese cuisine.
Corona Extra is a good example of the skillful use of a country’s perception to promote a brand. Because a wedge of citrus was associated with the drinking of Mexican tequila, the importers of Corona Extra used the same imagery to launch the brand.
The toothpick and lime on top of the Corona bottle became a visual symbol that you could see halfway across a bar or restaurant. “What’s that?” asked the non-Corona-drinking consumer.
“It’s Corona Extra, the Mexican beer.” So successful was this strategy that the brand became the largest-selling imported beer in the United States, topping even Heineken. In a twist, its American success has stimulated sales south of the border, where Corona Extra has become the leading beer brand in Mexico.
The perception of a country is important. There is no such thing as a global brand with a global perception.
With some 62 percent of its sales and 76 percent of its profits outside of North America, Coca-Cola insists that it is a global brand, not an American brand. And it is, literally. (Robert Goizueta, Coke’s longtime chief executive, was from Cuba. Its current CEO, Douglas Daft, is from Australia.)
But it would be a major marketing mistake for Coca-Cola to abandon its American heritage. Every brand (no matter where it is bottled, assembled, manufactured, or produced) has to be from somewhere. As American culture (especially in music, film, and television) has permeated the world, Coca-Cola has benefited greatly because of its American connection. “It’s the real thing,” Coke drinkers will say proudly with accents from places far and wide.
Every brand, just like every person, is from somewhere. A fifth-generation Irish-American might say he or she is “Irish.” Coca-Cola, bottled in Mexico, is still a gringo brand. The same holds true for Levi’s, the quintessential American brand.
It doesn’t matter where your brand is conceived, designed, or produced, its name and its connotations determine its geographic perception. Häagen-Dazs might have been developed in New Jersey, but its origins sound Scandinavian.
A number of years ago we met with the chairman of the SMH Group, the company that makes the Swatch watch. “What would you think about an automobile made in Switzerland?” he asked.
“Great,” we replied. “We have the perfect advertising headline: Runs like a watch.”
“I’m glad you like the concept,” he said. “We’re going to call the new product the Swatch car.”
“Wait a minute,” we added. “Swatch is an inexpensive fashion watch you wear a few times and throw in the dresser drawer. An automobile is a serious product and a serious investment. People define themselves by what they drive. If you want to give your new car a watch name, call it a Rolex.”
But he didn’t listen. The company used the Swatch name while the car was under development (first in a joint venture with Volkswagen and then later with Mercedes-Benz). Recently, wiser heads prevailed and the name was changed to the Smart car.
Smart thinking. The Smart car is now available in Europe as a fuel-efficient, low-pollution car for congested cities.
The choice of the Smart name for a global product illustrates a trend in global branding: the use of English words for brands that may have no connection with the United Kingdom, the United States, Canada, Australia, or any other English-speaking country.
Take a new energy drink invented in Austria. The amino acid–infused, caffeine-injected, detoxifying, carbonated drink was not called “Roter Stier.” Instead, the manufacturer used the English words “Red Bull.”
Red Bull has become an “in” drink in Europe and has also become a big brand here in the United States.
The top three high-end brands of blue jeans ($100 and up) all have English names, but none of them are American. Replay and Diesel are made in Italy. And Big Star is from France.
English has become the second language of the world. If you are going to develop a brand name for use on the worldwide market, the name better work in English. It doesn’t have to be an English word, but it should sound like one.
In addition, care should be taken when translating English slogans into other languages. Sometimes the results can be disastrous. For example: “Come alive with the Pepsi generation,” translated into Chinese, comes out as “Pepsi brings your ancestors back from the grave.”
The Perdue slogan, “It takes a strong man to make a tender chicken,” translated into Spanish means: “It takes an aroused man to make a chicken affectionate.” And the Coors beer tag line, “Turn it loose,” in Spanish becomes “Suffer from diarrhea.”
While we encourage one global message for a brand, sometimes changes must be made to accommodate languages other than English.