Brands must keep promises

Over the years, marketers have picked up a few lessons on what it takes to build competitive presence in the global marketplace.

Brands aren’t everything:

Building a great brand is not enough because fulfilling brand expectations on a global stage is very difficult. Let’s say, you break through the “perception threshold� of an industry, and convince your customers that you alone are uniquely global. Sounds good, right? But, what exactly might this mean in terms of who you are and what you have to do next, now that you’ve differentiated yourself?

A research firm has for their study taken the case of three firms, each of which has unique aspirations for building a global brand, in different sectors: telecom, IT services, and construction.

Each has done a relatively good job of building a brand that is recognizable the world-over, to the extent that they really stand out from the crowd. Their customers have come to believe they can expect some sort of a difference and are even willing to pay a premium for it. But this is where the trouble begins. These companies have no idea what their customers are looking for. And neither do their customers. Neither side can quite figure out what sort of performance difference might be worth paying a premium for?

It’s not what you think:
That worked in the 1970s and 1980s. Today, everyone has great quality. In fact, the absence of great quality is considered unusual. The embarrassment of losing it could be extremely costly. It’s not economies of scale either. The markets in the businesses are inherently local and the benefit of being a global player does not translate to a price advantage for local customers.

Just Knowing:

GE CEO once said that because of the sheer breadth of GE’s businesses, GE’s executives know more than those of Philips or Siemens. This is simply because they have the opportunity to see more. In seeing more and understanding how different value chains work they can presumably come up with more innovative solutions.

That is almost certainly what the customers in the three industries above believe, but what is so amazing is that they believe it as an article of faith.

End Note:

Any firm that has figured out how to go global in these three naturally local businesses will be able to give the customers “more� of something, as a result of having seen so much. The very act of seeing globally, of recognizing the import of what is being seen elsewhere, and then being able to do something about it on a global stage; is not natural to organizations. Building global brands in industries that are inherently service or project oriented are less about the doing, and more about knowing. It requires new organizational forms and new skill-sets to be fully exploited so as to keep the expectations of customers by the Brand.