Brands must skirt pitfalls on the global road

As the world becomes smaller each day due to globalisation, the information superhighway and popularity of social network sites, brands can go global overnight. However, analysts say this is not the right way to do it and there are a lot of things that brands need to do and look out for before going global.

Dwelling on the issue of what truly defines a global brand, Michael Hughes, Executive Director, Strategy, The Brand Union, Middle East, told Emirates Business: "Even though this is something that is highly debatable, most branding experts agree that for a brand to be classed as global it must have a reasonable level of awareness across the world. To be successful, the brand needs to be relevant and desirable to consumers across multiple markets.

"In many cases, brands often use their provenance to build a solid reputation and then transfer this equity into new markets. Often this means adapting the brand in some way to ensure it is relevant and desirable in each market. In the quest to become global, the challenge is to ensure that the brand is not stretched too far from its original promise and doesn't try to become everything to everyone and hence nothing to anyone."

According to analysts, brands cannot go global overnight and a lot of time and effort is required for this purpose. To establish fitness for global expansion a brand must consider the market opportunity gap and opportunity. Brands entering different markets must ensure that an opportunity exists to be able to compete in that market. The questions that need to be asked are: is the category overtraded or is there a desire for something new? Does the brand need to educate the consumers or change buying habits and how much investment is required to do this?



High performance

Brands must also consider performance because to compete on a global level they must make sure that their performance is high so that they can live up to consumer expectations. Brands must attain global standards as there is only one chance to set the standard in a new market and companies need to aim high and be able to deliver.

A company should also invest in research so that it understands the market and the consumers. It should never assume anything about the local market as there are cultural and lifestyle differences that need to be considered. Companies need to understand the market drivers, opportunities and trends and even after entering the market, must keep up with those trends. They must be prepared to flex the brand to take advantage of opportunities while staying consistent with their values and promise.

The brand also needs to appeal to a wide-ranging market. It must have the ability to leverage its local appeal to a wider group without disregarding its core.

Brands must also have a clearly defined position, a clear brand message and promise that it lives up to and ideally should be able to stand out from the crowd in terms of personality and design.

Importantly, brands must keep up with the changing demands of consumers. Even brands with strong heritage and authentic values must be prepared to evolve to ensure they retain their appeal.

Also, sustainability is important these days as consumers are more concerned about the environment and how their actions can make a difference. This is a must for future success in most major markets. However, it is not just about changing the identity or colour palette to green. Sustainable development means meeting the needs of the present without compromising the ability of future generations to meet their own needs and this requires a balanced consideration of economic, social and environmental factors.

Companies must also ensure that they are able to handle and control their brand globally. They must be committed to achieving success and their aim should not be just to enter the markets.

And last but not the least, brands need time to succeed in new markets and short-term thinking can inhibit the ability of a brand to build long-term sustainable trust and appeal. Companies need to consider that it takes time to build a brand internationally and brands need to be realistic in their endeavour to achieve loyalty and success.



Global potential

Talking about which brands in the UAE have the potential to go global, Olivier Auroy, General Manager, Landor Associates, said: "In the UAE, most of the big brands related to hospitality and travel businesses have the potential to go global because, naturally, they have to go abroad and are exposed. Jumeirah and Emirates are already global in a way. They have made acquisitions around the world. For example, Jumeirah acquired Essex House and Carlton Tower and then added their own branding to it.

"In the same way, Emirates has entered and made itself known in the international markets due to its aggressive sponsorship policy of major sports events, teams, stadiums etc. These two brands have the potential to go global because they truly represent what the UAE is all about: boldness, innovation, ambition, differentiation. Plus, their values and products can be appealing for foreigners and the nature of the business gives them the opportunity to go abroad and grow."

Hughes agreed: "Emirates has built its reputation on service and product innovation. It is the first Middle East airline to be seen as a valid competitor to some of the leading European or Asian airlines. Many airlines traditionally build their reputation on their country of origin and the values and reputation that are associated with this. However, Emirates has focussed on being an airline that is about the experiences with the promise to travellers of 'keep discovering'.

"While Emirates is still proud of its home, it has not employed ambassadors for the country as Singapore does with the Singapore girl. Instead, Emirates has built a reputation for having a cosmopolitan staff that represent the world, they speak your language but also provide you with a cosmopolitan crew who help you discover as they share their experiences and knowledge of the world.

"Emirates also has a well developed global network of routes that helps it reach many markets and build awareness. Strategic routing of flights from Australia and Asia to Europe through Dubai have enabled Emirates to be an alternative for European, Asian and Australian airlines for East-West travel.

"Jumeirah is also striving to become an international brand. In a very competitive hotel and hospitality category, it is trying to differentiate with its credibility built through the Dubai hotels. Its positioning, 'Stay different', is something that can appeal to audiences across the globe and has enough flexibility to build a local connection as to what 'different' actually means to the customer and why they should care.

"Jumeirah has already expanded globally by having its hotels in big cities such as New York and Shanghai. However, the brand is still struggling from lack of awareness and understanding and the pronunciation of the name still plagues it in many markets. It has a long way to go to become a truly global brand. Even if it manages to secure properties in leading cities around the world, this alone will not build awareness. If Jumeirah can find its niche within a plethora of hotel brands that are becoming more difficult to differentiate, it has an opportunity to become a global brand for its target audience, not necessarily for the masses."



UAE brands

Auroy said: "Apart from Emirates and Jumeirah, the other brands from the UAE that can easily go global are RAK Ceramics and Aswaaq because they are different, appealing and relevant. And anything related to green also has the same potential. So from the UAE we have Masdar that will soon be a reference. The world will look at the UAE and the way it works on sustainable growth."

So what are the pitfalls that other local brands that want to go global need to look out for?

According to analysts the challenges to competing globally are often underestimated by companies, especially with regard to how their brands need to be tailored for international markets. The pitfalls a brand that has not done its homework can face are language barriers, cultural issues and lack of proper market research.

Hughes said: "There are challenges Middle Eastern companies face as they expand globally, but if brand consideration is core to strategy development then companies will be better equipped to build compelling and sustainable presence off shore.

"However, an obvious challenge that brands from the region face is the language barrier. The perfect example of a brand that failed to overcome language barriers is Chevrolet. Chevrolet entered into the Spanish market to sell the Chevy Nova without investigating the language barriers. 'No va' in Spanish means will not, a word that no car brand would want to be associated with.

"However, a brand that was able to do the necessary research before entering into a global market is Jumeirah. While working on its hotel in Shanghai, the company realised that in Mandarin, Jumeirah has negative implications and therefore it changed the name to 'Zun ya', which is a word related to a peaceful feeling.

"In addition, some Arab brands may be hard to pronounce, so for this and other reasons some companies have chosen to develop specific brand names for the various markets they enter rather than adopting a single brand name internationally. Etisalat, for instance, whilst having a significant presence in many major markets, trades under a different name. In Saudi Arabia, etisalat trades under the Mobily name and in Sudan as Canar. This is in contrast to Vodafone's strategy to build a single global brand."



Cultural sensitivities

Hughes said: "Also, brands must have full understanding of a culture before entering a new market to ensure there are no cultural issues. For example, if an international brand comes into the Islamic market, it must ensure that it respects the cultural differences. It must know what is appropriate and what's not, the same way a local brand expanding globally must consider.

"In addition, another challenge regional companies have is in identifying the importance of balancing their Middle East provenance and roots with the global appeal they want to create. Emirates does this very well; it appeals to a broad range of audiences, but it still holds on to its roots with its Arabian hospitality.

"When expanding, naturally, companies will have less control of the quality of the goods/services they produce. Brands must have strategies and high standards in place to ensure that the quality of the brand isn't affected. Globalisation also has an effect on the brand culture and brand values of companies. It's very important for the brand to be consistent with its values and promises across different markets.

"Falling under the 'one size fits all' approach is a challenge that brands must consider. There is no such thing as a typical Arab consumer or a typical American consumer. The fact is that different cultures like/dislike different things. Investment in consumer insight is vital before entering global markets," he added.

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