This one is long overdue and I apologize for the delay. Between airports, clients meetings and running workshops there is not much time left. This is the last of the series and next week we will conclude our masterclass. This week we will focus on global branding, I remember we did touch on this subject during week two and three, so we can now revisit this again.
While many consumer goods markets in the Europe and North America are stagnating, 65% of the world’s population is living in societies that are experiencing economic growth of 5% or more a year. While the baby boom occurred between 1945 and 1960 in the US, much of the rest of the world is still experiencing a baby boom that began in 1975. The average person has seen his or her standard of living double in the past 15 years, far surpassing that of the US or Western Europe. Put very simply, the majority of the growth potential in consumer markets exists outside of the US and Western Europoe.
Here's an excellent piece by John Quelch, Prof Quelch is the Senior Associate Dean and at Harvard Business School where he taught markeitng for decades. I remembered one time when he was lecturing he presented a marketing positioning diagram of the royal family members, it was hilarious. He is also the non-executive director of WPP Pepsi and a few other companies and has published probably half a dozen books on global marketing.
How To Build a Global Brand - by John Quelch
Ford has finally woken up to what Toyota knew a long time ago: the power of a single global brand. Over twenty years ago, Harvard professor Theodore Levitt praised Japanese manufacturers for their focus on "what every consumer in the world is seeking: world-class modernity at affordable prices." Either because they didn't understand regional differences in consumer preferences or out of self-confidence, Toyota, Nissan and Honda sold standard products under a single brand umbrella. For decades, Ford adapted its manufacturing platforms, features, and model names from one country to another. The results: added manufacturing and supply chain costs that strained consumers' willingness to pay; a balkanized bureaucracy in which regional managers exaggerate the need for local adaptations to defend their turf; and a deteriorating market share, financial performance and stock price. Ford was once one of the ten most valuable brands in the world. They’re no longer on that list, but Toyota now is. How did Toyota—and the other nine companies—do it? There are five characteristics that all top global brands have in common:
1. The same positioning worldwide. This provides a combination of functional product quality and innovation with emotional appeal. Think Coca-Cola and Disney.
2. A focus on a single product category. Think Nokia and Intel.
3. The company name is the brand name. All marketing dollars are concentrated on that one brand. Think GE and IBM.
4. Access to the global village. Consuming the brand equals membership in a global club. Think IBM's "solutions for a small planet."
5. Social responsibility. Consumers expect global brands to lead on corporate social responsibility, leveraging their technology to solve the world's problems. Think Nestle and clean water.
Ford has a proud history. Its name recognition is strong worldwide. The chairman is committed to the environment. Many consumers are no longer considering Fords when buying their new cars, but they are predisposed to giving Ford another chance. Fords worldwide should henceforth have a common look, feel and brand essence. Low volume management distractions including Jaguar, Land Rover and Volvo will be sold off; they’re now meaningless. US-based models like Mercury will be discontinued.Can Ford recover? The answer lies in whether the common vehicle platforms developed for the new strategy prove to be truly global in design or merely more of the same Detroit-centric product that have caused Ford's market shares around the world to erode.