In the upcoming months we will introduce the 25 strategies that will boost your business in the BRICs. Today, we will have a look at the factors that influence your local positioning strategy.
Global, local, hybridized – the agony of choice
Successful brands know how to position themselves in terms of a global versus local appeal. They understand the market expectations, identify the right brand appeal, and make the right choice between a global, local or hybridized positioning.
Before any decision regarding a brand’s positioning can be taken, there is the question of where the brand comes from conceptually? Is the brand a global brand that puts global consistency first? Or is the brand relevant in a local consumption context that closely resonates with local consumers’ ideas and feelings? Or does it offer a smart mix of global and local appeals? The decision should be based on four major factors that have a critical influence on the extent to which a foreign brand needs to be adjusted to the local context: the product category, the status relevance, consumer patriotism in the target market, and the income level of local target groups.
When you consider local versus foreign positioning, it is important to find out how closely your product category relates to the local culture. Products such as food or traditional clothing are usually closely attached to local cultures. In these categories consumers tend to favor local brands or international brands with a strong local flavor. In more innovative categories (such as cars or electronics) consumers in emerging markets are more willing to opt for global brands. The second key question is: how visible is the product and how relevant is it in reflecting and displaying the consumer’s status? In transitional economies, consumers generally use foreign brands to display status. Reasons for this might be shortcomings from the past (e.g. like India’s socialist era when private property was forbidden). Many consumers crave social prestige or want to show their cosmopolitan sophistication.
When consumers in emerging markets make their purchasing decisions, consumer patriotism also plays an important role. Usually it is the traditional elites, lower-income consumers and the elderly who are more patriotic. In some cases patriotism is the result of historical conflicts. For example, Chinese consumers are sensitive to Japanese products due to Japan’s war crimes. However, in India, China, Brazil and Russia pragmatism prevails most of the time. Finally, the income level determines the positioning as well. There is a rule of thumb that applies to most emerging markets: the higher the degree of prosperity, the higher the preference for foreign brands across many categories. This is because wealthier consumers are more cosmopolitan and tend to be more open to experiment with different brands.