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Local Brands and Global Brands
Local Brands and Global Brands
Local brands are defined by Wolfe (1991) as brands that exist in one country or in a
limited geographical area. It is also noted by Schuiling et al (2004) that local brands
belong to a local, international, or global firm. Local brands provide a link between
the national economy and individual well-being. Levitt (1983) defines global brands
as brands that use the same marketing strategy and mix in all target markets.
Johansson and Ronkainen (2004) assert that global brands benefit from the scale and
scope of having presence in multiple markets. The researchers define global brand as
“a brand that is marketed under the same name in multiple countries with similar and
centrally coordinated marketing strategies.” However there are some selected global
brands that don’t have the same name but share some marketing program elements.
For example, “Mr. Clean” also sells under the “Mr. Proper” and “Maestro Limpio”
names, among others. Although global brands play a dominant role in today’s world,
Consumer Perception of Global vs. Local Brands: The Indian Car Industry
the advantages of the local brands are still stronger and this is reviewed in the
following part.
2.4. Pros and Cons of Local brands and global brands
An exploratory research on the Y&R (Young & Rubicam’s) database was conducted
by Schuiling et al (2004) across four largest European countries: the United Kingdom,
Germany, France, and Italy. The study affirms that local brands benefit from strong
brand equity and specifically, local brands benefit from higher consumer awareness
than international brands do, and they enjoy a strong brand image. Local brands
benefit not only from a good quality image but also from a better value and trust
perception than international brands do (Holt et al, 2003). Value is linked with the fact
that prices of local brands are usually lower than those of international brands,
providing consumers a sense of better value for the money (Schuiling et al, 2004).
According to the research by Schuiling et al, (2004), local brands are also perceived
as more “down to earth” than international brands, meaning that local brands offer a
more basic/no frills brand proposition. The study also indicates that local brands are
perceived as more traditional than international brands, because local brands are
linked more to local traditions and local cultures than international brands are. It was
also found that trust is an important advantage for local brands, because it provides a
unique relationship with consumers that take years to develop. It also indicated that
there is no significant difference between the perception of prestige for international
brands and that for local brands. Another significant finding was that consumers are
attracted to international brands but in reality, they prefer to purchase local brands
(Schuiling et al., 2004). In the words of Johansson and Ronkainen (2004), although
Consumer Perception of Global vs. Local Brands: The Indian Car Industry
global brands may have more success in high-profile, high-involvement categories,
consumers may still give local brands preference in purchasing every day products.
The advantages cherished by local brands can be dominated by the enormous
advantages enjoyed by global brands. Eckhardt (2005) avows that local brands are not
more flexible than global brands in terms of their marketing activities when they
compete in a foreign product category due to cultural categories being associated with
the product category. Just as global brands need to conform to international marketing
dictums, local brands sometimes need to conform to deeply held preconceptions about
the product category in which they operate.
Johansson and Ronkainen (2004) assessed brand realities on the global - local
continuum using data from Young & Rubicam’s Brand Asset Valuator (BAV). This
database is considered to be the most exhaustive of its kind, covering 20,000 brands
across 40 countries. Data have been collected since 1993 across a wide range of
industry sectors to measure brand perceptions of more than 100,000 consumers. It was
noted that local brands exhibit higher familiarity among consumers, but when
familiarity levels are similar, global brands enjoy higher levels of esteem. Also that
Global brands were known for their perceived quality. The researchers asserted that
global branding will arguably face different challenges by product category. Certain
categories, such as automobiles and computers, are deemed more global in terms of
the similarity in consumer preferences. Apart from discussing the pros and cons of
local and global brands, it is necessary to comprehend the shifts that occurred due to
increased consumer preference from local brands to global brands.
Consumer Perception of Global vs. Local Brands: The Indian Car Industry
This research can help us understand why people may gravitate toward one brand or another.
"The findings reveal how multinational or local firms can solidify consumers' preferences for
global or local products if their consumers' global or local inclinations are compatible with their
products' positioning,
Consumers prefer local soft drinks rather than global brands like Coca Cola or Pepsi due to their
built-in mindsets connected to their desire, a new study said.
“Global-minded consumers prefer global products and local-minded consumers prefer local
products (different specifications for consumers from different parts of the world)” the study
authors explained.
“Due to rapid globalisation, local products… such as Mecca Cola (France) and Fei-Chang Cola
(China) and global products… Pepsi and Coke, routinely compete against each other,” wrote
study authors Yinlong Zhang (University of Texas San Antonio-UTSA) and Adwait Khare
(Quinnipiac University).
The authors set out to answer the question “why global products fare better than local products in
some markets and local products better than global products in other markets?”
The inclination toward global or local mindsets is connected to people’s desire for
distinctiveness (local) versus their desire to be similar to others (global).
In three subsequent studies, the authors enhanced the accessibility of participants’ local or global
identities to investigate their responses to products.
“A reversal in preference occurs when global-minded consumers’ desire for distinctiveness from
others is enhanced and when local-minded consumers’ desire for solidarity with others is
enhanced,” the authors wrote.
“The findings reveal how multinational or local firms can solidify consumers’ preferences for
global or local products if their consumers’ global or local inclinations are compatible with their
products’ positioning,