Find the Common Thread

Some of the most powerful global brands grow from powerful, universal desires—desires that have passports, so to speak. In the Axe example, is there a teenage boy anywhere in the world who doesn’t have his mind on sex? This simple concept crosses all boundaries and can be leveraged.

Similarly, Nike has led the global running shoe market by recognizing that everyone wants to be an athlete. Uber disrupted the taxi business worldwide by answering the universal call for user-friendly, cost-efficient urban transportation. And Airbnb created a new home-sharing market by recognizing the need for a more affordable and flexible way to book lodging. These are all common threads that can be used to build a global brand.

Segment across Habits and Needs

Not every brand has the potential for such a broad reach, but with today’s explosion of data disclosing the lives of consumers, it’s possible to isolate more targeted markets. Indeed, companies are recognizing that national boundaries make only crude groupings of people. It’s far more effective to segment people according to their habits and needs. Not South Koreans, but new South Korean mothers, for example. Not Italians, but retired Italian couples. Not Mexicans, but Mexican car enthusiasts. Data that allows for this kind of segmenting is now available virtually anywhere in the world.

L’Oréal, the French cosmetics company, has skillfully mined data to develop relationships with its customers in more than 130 countries. Among other things, the company created an app that adopts virtual technology to allow customers to try on L’Oréal makeup using their smartphones. As of 2017, more than 20 million people had downloaded the app, providing L’Oréal with information about the interests and needs of its customers. L’Oréal uses the data to help maintain its place as the world’s largest cosmetics company.

Enlist Local Managers

Finding similarities across borders is only the preliminary step in entering a global market. A brand must have people on the ground who know the nuances of the culture and the market and can manage the operation. That often means bringing top-notch local people onto the team. Sometimes a mixture of the native born with company veterans works well. For example, Kraft’s Oreo cookie initially floundered in China, in part because the company assumed that what is good for the United States is good for China.

Local managers are necessary to supply the knowledge to tune the product to local tastes and habits, while maneuvering through issues of presentation, pricing, distribution, and competition. Marketers can’t simply assume that a good idea travels well. Kellogg’s, the multinational food manufacturing company, attempted to crack the Indian market by introducing Corn Flakes. But cereal is essentially an American breakfast staple, typically served with cold milk. Many Indians didn’t know what to make of Corn Flakes. What’s more, milk in India tends to be warm, which turned the Corn Flakes into a soggy clump.

Test and Adjust

When a target spot in the market is identified, start small. Test and learn. See how the product introduction goes. If it goes well, scale up quickly. If it fails or falters, figure out why—failure can be a terrific teacher.

With some testing and learning, Airbnb found that automatically translating its web site for international travelers was not always effective. While these travelers search for lodging in their native language, automatic translation often led travelers to assume that their host spoke that language. To avoid confusion, Airbnb has opted for displaying host pages in the host’s native language with the option to translate.

No metric covers all cases, but managers need to monitor carefully the success of an introduction (or lack of it). Careful testing and learning helped turn Tang, the legendary powdered drink, from a $500 million product outside the United States to a $1 billion global titan in five years. The owner, Kraft Foods, had grown frustrated with Tang’s steady but slow growth in the half century since it was created as a nutritious, lightweight drink for astronauts. In 2007 a glocal team tackled the problem and proposed a number of innovative solutions. For one, the team considered lowering the price point by producing Tang in single-serving sachets, which could be dropped into a child’s lunch box, for example. But producing the sachets was complicated and could be expensive. So Kraft tested the idea in Brazil alone. Only after the sachets proved a hit there did the company scale production and introduce the new packaging around the globe.

Decentralize to Find the Right Balance

For a company such as Airbnb, finding the right glocal balance is imperative and relies on effective decentralization to shift the balance locally when needed. While things such as cleanliness standards are global, international markets bring new challenges. For example, Airbnb must be local when it comes to sign-up methods and currency. In the United States, it’s easy to create an Airbnb profile by linking a Facebook account to the site, but this type of sign-up would be impossible in places such as China, where Facebook is inaccessible. Instead, Airbnb must decentralize enough to tap local knowledge and create sign-up methods through channels such as WeChat.

Airbnb also must take into account local payment options. Before the 2016 Summer Olympics in Rio de Janeiro, Airbnb accepted only U.S. dollars as the Brazilian payment method. In the year leading up to the Olympics, Airbnb made arrangements to start accepting payments in the real, the Brazilian currency, through credit cards and other methods.

Draw Clear Lines of Global/Local Responsibility among Collaborative Networks

In the late 1990s, Kraft tried to introduce America’s most popular cookie brand—Oreo—to countries abroad. Kraft had high expectations for the introduction, but for the most part the world couldn’t have cared less. After a decade, the cookie was only nudging into foreign markets, and the company was ready to shut the effort down. But after Kraft named Oreo one of its 10 priority brands, the cookie got one last push.

Kraft set up a collaborative network of teams that included managers in the United States and in local countries. The network listed the drivers of growth and laid out responsibility—global or local—for each. In China, for example, the local managers suspected that the cookie’s traditional pack sizes made it too expense for the typical family. So Kraft started offering Oreos in smaller units in China, going from 14 cookies in a package to seven. The local managers also knew that Chinese tastes weren’t necessarily American tastes. They arranged to produce Oreos in special Chinese flavors, such as green tea and strawberry, as well as in a version that was less sweet than the American cookie.

The collaborative network also drew strict lines of responsibility when it came to marketing. It would have been efficient to stay global, with one basic ad everywhere. But in China the local managers wanted to feature the Chinese NBA star Yao Ming in a commercial. Those managers knew the market, and they made the right call. At the same time, the global managers knew that the general content of the ads had to follow global guidelines, maintaining the brand’s focus on the emotional connection between parent and child.

Understand the Core Essence of the Brand

Kraft also faced an interesting puzzle in trying to decide what to do with an American Oreo tradition—the iconic “twist, lick, dunk” ritual of eating the famous cookie. Would the tradition travel beyond its home? Research offered no help. “Twist, lick, dunk” was unheard of in other countries. What’s more, Americans dunk in milk, and milk is far less prevalent in the Middle East, Asia, and South America. Still, the ritual underscores the uniqueness of the Oreo cookie, and it connects directly to an essential element of Oreo’s identity—the bond between parent and child. Should Kraft go global or local?

The team argued over it. Eventually, the local Chinese team said, “Okay, the ritual means nothing here, but we’re willing to give it a try, as long as we can feature Yao Ming.” On the other hand, the French said, “No way.” One French manager even went so far as to utter, “We are not lickers in France. Americans lick. We don’t.”

In the end, Kraft had to make a judgment call. “Twist, lick, dunk” is at the heart of Oreo. The team decided to go with the ritual everywhere and take the chance that it would catch on.

The decision paid off, and Oreo’s business grew worldwide. In developing markets, Oreo revenues increased fivefold in six years, turning into a billion-dollar operation. And equally important, Oreo’s profitability in these markets was higher than the average.

Nike offers another example. In 2017, the company was hailed for its inclusivity by producing a hijab for Muslim female athletes. The company launched the light, airy product on an extremely local level through video campaigns in the Middle East featuring famous female athletes from the region. Yet, even though the Nike Pro Hijab is a niche product, it stays true to Nike’s global brand. The garment—for now, only available in black—features the iconic Nike swoosh. The design mimics Nike’s basic advertising, and the idea follows the company’s global insight that everyone wants to be an athlete. The Nike Pro Hijab helps women to “Just Do It,” as the slogan states.

With Axe, the overriding brand essential was the promise that these products would turn a teenage boy into a sex object. Though the marketing varied around the world and has evolved in the past few years, it always revolved around that promise.

In the case of Tang, the glocal team came to an insight—perhaps obvious in retrospect—that the drink’s best asset in today’s world was its sustainability advantage. Tang is lightweight, requires only water, and is environmentally friendly. The team used that insight to push back against sodas and other rivals in the beverage category, and found great success partnering with environmentally conscious children’s groups. Starting in Brazil, Tang developed a series of lively commercials that later were adapted for broadcast in other countries, including Mexico and Argentina.

Apple presents an interesting case, in which its choice of a core essential has inhibited a product’s success internationally. The company decided that its identity was indelibly linked to its design, and as such Apple wouldn’t fundamentally change the product, regardless of where it was introduced. But that means the iPhone remains expensive throughout the world. As a result, Apple has had a difficult time expanding in India, for example, which trails only China as the largest smart-phone market in the world. The Indian market features lots of low-cost competition—a quarter or less the cost of an iPhone—and the powerful Apple brand has little cachet there. As a result, despite various initiatives, iPhone penetration in India has lagged—well below the iPhone’s penetration in China, for example.

By contrast, Uber has held to its core essential of efficient, low-cost urban transportation but has added a variety of local twists. In response to competition, for example, Uber offers a motorized rickshaw service in India and Pakistan, and a water taxi in Istanbul.

As these brand expansions illustrate, marketers entering a global market must know the brand’s core essentials—the qualities so linked to the brand’s identity that they should remain constant around the world. Obviously, a key task in successfully building an international presence is identifying those core essentials. They belong on the global side of the glocal mix, regardless of the local market. They should be articulated specifically and turned into positioning guidelines that are clear to all. Even as the local marketing varies according to the country and culture, the guidelines should keep the brand consistent.

Stay Nimble and Create Agility

The simple principle in glocal is to be agile and decide what needs to be done globally and locally based on where you can get competitive advantage. Moving into an international market gobbles time and resources. Worse, it usually adds complexity to the overall business—and complexity can be a hobgoblin in global brand introduction.

Over the last decade or so, many small startups have successfully wedged their way into markets, often stealing customers from large, cumbersome operations. Big companies can effectively compete globally in today’s environment, but they have to reorganize themselves to adopt the agility necessary to stay nimble. Several of the principles that we’ve already discussed push the organization in that direction: forming collaborative teams; clarifying responsibility; and starting small, then testing, learning, and scaling up when the results justify it. In general, a company that wants to go global must streamline or shed many of the rules and hierarchies that slow it down.

Educate New Markets

If a company is introducing a product or brand that is new to a country or culture—in other words, opening up a new category—consumers need to be taught to use the product, which can take time. Also, the not-invented-here syndrome occasionally raises its head and can disrupt glocal management.

For example, when Unilever (based in London) was ready to roll out Axe worldwide, the North American team had little interest in taking on the product. The members said the aerosol deodorant market didn’t exist in the United States and the advertising was too erotic. The London-based team told them the category would grow and the commercials could be toned down. They argued that 14-year-old American boys, like boys everywhere, dream of seducing girls. Still no go. As a result, it was several years before Axe was introduced in the United States—years that the product could have been earning tremendous profits for Unilever.

Start Small and Scale Thoughtfully

Even if a product sells well in a new market, scaling it up across multiple markets must be done thoughtfully and with precise orchestration. Simply put, the reason to go global is to grow the business. There are any number of subsidiary advantages—tapping expertise from different environments, improving channeling of resources, encouraging investor enthusiasm, and so on. But the drive for growth is behind them all. And in order to achieve growth, companies have to know what makes the product work and then program the expansion by relying on the principles of glocal management: creating a business model that starts small and scales thoughtfully.

For example, the consumer electronics company Best Buy stumbled when it moved rapidly across markets before realizing that for various reasons the big-box concept—huge stores filled with many categories of products—didn’t have the appropriate business model for markets outside of the United States. In the past five years, the company has substantially dialed back overseas operations while refocusing American operations, in particular emphasizing price and service. Best Buy’s stock price rebounded more than sixfold between the end of 2012 and late 2017.

When you have a good idea that clearly crosses borders, there’s a natural eagerness to expand quickly, particularly as potential rivals spring up. Speed is important, but it carries risks; a company must be careful not to lose sight of its values in the rush. Uber offers a prime example. From its founding in San Francisco in 2009, the company expanded at a breakneck rate, operating in more than 80 countries by the first quarter of 2018. But as board member Arianna Huffington has said, that culture of hyper-growth has had serious costs. Internally it contributed to a range of management issues, including abuse and sexual harassment charges. As Uber expanded around the world, the company has also faced an array of external crises, from strikes to legal battles to a threatened ban. While bookings were still growing in 2017, the company continued to lose money and competition has intensified. “The world has changed,” Huffington told a Time-Fortune conference not long after founder and CEO Travis Kalanick stepped down in June 2017. “What happens now in the culture of a company affects the business metrics.”

Airbnb faced its own problems when the company expanded too rapidly in Paris, Berlin, and Barcelona. Because the business category was new, the cities were unsure how to characterize homes being rented through Airbnb. Nonetheless, the company rushed forward, sometimes completely disregarding local regulations. This resulted in fines. Barcelona, for example, charged Airbnb 600,000 euros in November 2017 for advertising unlicensed properties.

The risks of careless expansion come at two levels. One has to do with oversight. The basics of any business—safety, compliance, hygiene, law—get lost as companies cut corners in their eagerness to grow. The second, higher- level risk goes directly to the values of the company: What’s the purpose? Why are we here? How do we operate successfully and retain our integrity? Nike, which for many years outsourced its manufacturing without worrying terribly about local factories, has struggled for years to shed the impression that it relies on child labor. Walmart has spent years and hundreds of thousands of dollars working through charges of bribery to speed the opening of stores in Mexico and other foreign countries.

In the global environment, the argument that you’re not responsible for the behavior of your overseas vendors or that you were simply following local practices doesn’t work anymore. Your values start at home and must transcend international borders.

Axe

In the early 1980s, Unilever was looking to push into the growing field of grooming for men. The company wanted to create a body spray—a combo deodorant-cologne—targeted to young men, particularly shy types who could be persuaded that a few spritzes from the right body spray would bring the girls flocking.

Thus was born Axe, a relatively inexpensive product that Unilever introduced in France in 1983. There was little magic in the concoction’s chemical formula. The magic came with the marketing that unabashedly, though with an overlay of wit, focused on sex.

Axe turned into a French hit, and Unilever realized that because it had created a brand based on a universal truth—adolescent boys want to score with girls—Axe had global potential. In the ensuing years, Unilever successfully rolled out Axe in numerous countries around the world. The marketing was tuned to the local culture (as noted above, American commercials weren’t as erotic as those presented in France, for example). But the promise that Axe would help attract girls stayed consistent. In a typical offering, one commercial showed a cheerleader tackling and starting to undress a football player, presumably because he was wearing Axe.

Over the years, Unilever continued to add men’s fragrances, shampoos, and so on under the Axe brand. And as the world of digital and social media opened up, the marketing of Axe moved with the times. The portfolio featured, among other highlights, a lively Facebook account, postings on news feeds where young men were likely to linger, sponsorships of Web comedy shows, and Web commercials far racier than standard TV fare. Axe even created a digital game. Recently, however, as attitudes about masculinity and what’s attractive in men have changed, the marketing of Axe products has followed the curve, with campaigns valuing individuality and self-discovery, such as the “Is it okay for guys to . . .” campaign.

The Axe example shows that tapping into a fundamental desire and staying agile can pay off handsomely. In fact, the brand serves as a good case study in the fundamentals—and occasional perils—of building a global brand. The essentials behind smart branding are the same whether you are staying within the United States or going abroad. Do you have a good idea, do people want what you are selling, can your product (or service) establish an emotional connection in the market, is your message consistent through all available platforms? The basic concepts prevail. That remains true even as marketing changes dramatically in the new digital age and entry barriers fall. Small, fast-moving local operators pose a greater threat than ever before, but that simply underlines the need for larger players to stay quick on their feet.

Gillette and Chesebrough-Pond’s

As we have discussed, the real art to succeeding internationally lies in figuring out the global-local balance: What should be managed centrally and what should be handled by the local managers? Where should brand managers rely on global expertise and where should they rely on local knowledge?

Getting the glocal balance right is delicate, and Gillette got it wrong when it first introduced its low-cost razors in India in the early years of the 21st century. The Boston-based mothership didn’t understand the local marketplace. Much of rural India lacks ready access to running water, and as a result, shaving cream clogged the razors, a problem that even the best marketing plan could not have overcome. The introduction flopped because it was “mindlessly global.”

On the local side of the flop ledger, Unilever acquired the American skin-cream company Chesebrough-Pond’s, which already sold its products around the world. As it expanded over the years, Pond’s had represented its brand with a sweet little tulip that appeared in ads and on packaging. The problem was that local operations had been allowed to draw their own versions of the flower, and thus Pond’s was represented by more than 50 different tulips. That’s “hopelessly local.”

The lesson here is that global and local need to work in tandem, drawing on their respective strengths. The formula will vary, but typically global expertise relates to elements of the business that cross borders—the fundamentals of technology, R&D, the company’s safety concerns and basic values, and, importantly in this context, the overall positioning of the brand. Managers at company headquarters, with a gaze that looks over the product in all its local appearances, should have the best vantage to ensure that the essence of the product remains consistent, along with the message supporting it.

Folks at the local level—the people closest to the ground—should have the best insight about the context and the culture. They should know the ins and outs of the marketplace: the tastes and customs of consumers, the pricing and distribution particulars, the potential competitors. The local team’s knowledge should hold sway when those ground-level factors are an issue.

McDonald’s

The glocal mix plays out in different ways depending on the product. McDonald’s has enjoyed enormous international success in large part because it maintains a consistency in offerings, presentation, style, and look. But the company couldn’t possibly sell its signature hamburger in India, where Hindus revere cows and a significant part of the population is vegetarian. So McDonald’s caters to local tastes with food such as the Chicken Maharaja Mac (a double chicken patty) and the McAloo Tikki (a burger made with Indian spices in a potato-and-peas patty).

At the same time, McDonald’s has stayed consistent with its emphasis on global elements, which are the essentials of the McDonald’s brand. The Indian business retains the signature McDonald’s naming devices and even the style and look of the altered product. The in-store presentation—fast and clean—is the same. Marketing across Indian media holds to the traditional company theme that a McDonald’s meal is fun: eat there and happiness follows. And, of course, all marketing carries the iconic golden arches. A McDonald’s ad in India would be identifiable virtually anywhere in the world as part of the McDonald’s empire.