Summary

Branding in Emerging Markets

As developed markets became saturated, a lot of brands started entering emerging markets because of the huge
growth potential and increasing disposable income in these markets.

However, not all brands that entered these emerging economies have been successful. There are some
common mistakes that a majority of brands end up committing. Also, consumer behaviour in these
markets differs significantly from that of developed economies. Hence, brands need to take all these
factors into account while implementing a glocalisation strategy

Branding mistakes in Emerging Markets

Some of the common mistakes that brands from developed economies end up committing while trying
to make a mark in emerging economies include:

1. Viewing emerging market economies as an extension of their home markets - A number of brands from
developed markets commit the mistake of assuming the emerging market economies to be an extension of
their home markets. Because of this, they are unable to factor in the differences between the two
economies, and hence, create brand strategies similar to their home economies in these markets, which
results in a discord and hampers effective brand communication.

2. Assuming similarities in consumption patterns - Several brands fall into this trap, where they assume that as
the income levels in emerging markets increase, the people’s consumption patterns will resemble those of
developed markets and they’ll start making buying decisions as people in developed markets do. This is a
flawed assumption, simply because consumers’ culture, buying behaviour, etc., does not change with their
income. These depend on the history, heritage and political influencers of each country, and thus, vary from
one country to another.

3. Incorrect assumption of the addressable market - Brands commit this mistake by making branding
strategies keeping the GDP in mind. This creates a mismatch between expectations and final results, and
yields a low return on investment. This is because in emerging economies, the wage gap between people
belonging to different stratas of society is extremely wide.

4. Improper product-market fit - This happens when brands don’t try to understand the requirement of the
consumers and launch their existing brand portfolio in a new market

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 without checking whether the product fits the needs of the market or not. For example, when global firms
try to sell off their older or sub-par models in emerging economies as premium products, it usually
backfires and dilutes the brand value in the consumers’ minds. This happened with Ford when it entered
India with its older models, which were priced as premium products. Now, because of this blunder, Ford is
considered to be a less premium brand as compared to Hyundai.

5. Mattel’s famous brand, Barbie, was a big flop when it was launched in China. First, it viewed the Chinese
market as similar to the American market and launched Barbie as a fashion and lifestyle brand. It associated
Barbie with femininity by showing it as a dazzling and
fashion-forward doll with skimpy clothes. However, China’s idea of femininity is more about being sweet,
gentle and loving.

Second, it assumed similarity in the consumption pattern by opening a huge store with an assortment of
products and services, including a spa, bar, cafe, etc. It assumed that just like American mothers love to
spend time with their daughters while shopping and enjoying a relaxing day at a spa, Chinese mothers
would also enjoy the same. However, the Chinese population’s idea of spending quality time with children
is at a zoo, cultural family gatherings, etc., with the entire family, and not just shopping.

Third, there was no product-market fit. Barbie launched premium priced products without creating any
brand value for consumers.

Customer Behaviour in Emerging Markets

Consumer behaviour in emerging markets differs significantly from that in developed markets.
Consumer behaviour traits particular to emerging markets include:

1. Brand-consciousness and aspirational values - Consumers in emerging markets are quite aspirational
and constantly look forward to moving up the social ladder. They purchase high-end brands to showcase
their enhanced social status in the society. This provides global companies with an opportunity to upgrade
their brand’s position to a premium brand in these markets. For example, Van Heusen is positioned as a
premium brand in India, whereas it is just a mid-market brand in Western countries.

2. Strong emphasis on word-of-mouth - Consumers in these markets give a lot of importance to their
neighbours’, family’s and friends’ opinions about different brands and products. They put a lot of trust in
brand recommendations from their near and dear ones. Such brand recommendations drive consumer
sales in these markets.

3. Fewer number of brands in the initial consideration set - Consumers in these markets have very few
brands in their initial consideration set and a majority of the time end up purchasing brands from this
consideration set. Hence, it’s essential for a brand to ensure that it is in the initial consideration set of these
consumers.

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4. Major focus on in-store experience - In-store experience plays a huge role in moulding the consumers’
final purchase decision. Consumers like to touch and feel the product and judge its quality and durability
on their own by examining the product in the store.

Van Heusen was able to establish itself as a premium brand in the Indian market by taking into account
these consumer behaviour traits. It marketed its men’s shirts as something a ‘classic British corporal’ would
wear. It also introduced the concept of power dressing for women in the Indian market.

It created a great in-store experience in the form of store design, the presence of trained personnel to
demonstrate products and make recommendations, product displays, etc..

Glocalisation Branding Strategy in Emerging Markets

To effectively implement the glocalisation strategy, companies need to have the right people,
proper internal communication mechanisms, a common planning process across markets and
products, and a mechanism to incorporate country-specific branding strategies with global
branding strategies.

1. Having the right people means having a person or a team responsible for the brand, who
will monitor the global representation of the brand and approve all brand-related decisions.
These people coordinate with the local teams across countries to create a global brand without
weakening the local brand strength.

2. Effective internal communication mechanisms should be set up to share insights and

best practices from different markets across all countries. The data regarding all country-
specific marketing efforts should be tabulated and shared globally across teams to support
global branding strategies.

3. A common planning process across markets and products should be put in place to
ensure that all local communication is aligned with the global brand identity and vision. There
should be no mismatch between a local brand’s communication and the identity, vision and
values of the global brand.

4. A mechanism to incorporate country-specific branding strategies with global branding

strategies ensures that branding strategies across countries are consistent and not vastly
different from each other and the global branding strategy. This can be done in two ways: first,
by having a global branding strategy and providing scope to country-specific branding
strategies to modify some aspects of it to suit their local needs, and second, by creating a global
branding strategy from all the country-specific branding strategies by grouping them based on
similarities and identifying the common elements.

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 Lexus, the luxury division of Toyota, overhauled its global branding strategy, which was
earlier based on a localisation strategy where each country devised its own advertising
and branding. The new strategy focused on communicating performance and design as
the overall brand message while building localised creative ideas around these themes in
each market.

Lexus set up a team of 25 marketing experts from the top 10 global markets who were assigned this
responsibility and would meet continuously for months before a product's launch. The regular
meetings of these experts ensured that a common planning process was followed across markets for
all products. Lexus first decided on the branding strategy, and then took certain steps such as getting
brand managers to meet to ensure that they would be able to implement and execute their strategy.
By setting up an overall brand message in the beginning, Lexus was able to establish a global brand
strategy through which all the country brand strategies flowed down

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