Regional strategies look set to lose out in push to go global

According to a paper by researcher Forrester, 75% of marketing leaders expect to reorganise their operations by the end of 2011.

Global brands such as Vodafone and Coca-Cola have overhauled marketing departments in an effort to achieve cost efficiencies. And according to Forrester’s Steven Noble, author of the new report entitled “Create an adaptive global organisation”, “this will be the year in which marketers get their house in order by forging internal consensus around a global strategy”.

He says that what is driving this change is a convergence of “economic turmoil, digital marketing, social media, and maladaptive organisational charts”.

Forrester says that in order to change this, brands should foster globalised responsibilities and decision-making. Eliminating regional profit-and-loss responsibility in this way will help organisations stay agile, he says.

One brand that has decided to move away from regional marketing to global marketing is Coca-Cola’s Powerade.

Starting with its World Cup campaign, which plays around its status as the “official hydration partner”, the people behind the sports drink are moving away from local campaigns.

Mary Merrill, global category director of sports for still beverages at The Coca-Cola Company, says the global approach “listens to everyone and allows us to strengthen the brand and co-ordinate its messaging better, offering us more efficiency and effectiveness”.

Powerade’s move is reflective of the tack taken by a number of World Cup partners.

Noble says: “Global businesses can buy more and better resources for less, both through flexing their purchasing muscle and by investing in offshore facilities.”

Mark Howe, country director for agencies at Google UK, says this approach “means the brand always works collaboratively and has the same marketing know-how across the whole company.”

Brand Learning, a firm which helps companies establish global marketing capability programmes, such as The Diageo Way of Brand Building and the Unilever Marketing Academy, says that brands should “capture global best practice and embed changes in ways of working that potentially enhance both the quality of decision-making and the speed of those decisions”.

Allen Thrasher, EMEA marketing principal at IBM-Ricoh’s InfoPrint Solutions, agrees that this is important, but only if brands do it “in a manner that generates sufficient return on investment and flexibility, while not overly disrupting the business”.

Even agencies have lessons to learn from the report. Ian Millner, global CEO and co-founder of Iris Worldwide, says this is part of a long-term trend for both the agency business and clients’ marketing approaches as “it will be less about local formulae and more about bright people with global ideas”.

Not every brand will choose to work in this way. Brands such as Domino’s Pizza allow the master franchisor in each country to deal with their own marketing instead.

Doug Walker, an EMEA marketing director at Newell Rubbermaid, says: “Any large organisation always struggles to get the balance right between creating enough control in the centre, and decentralising close to the market.”

It seems that Forrester’s research will give global brands a lot to mull over as they review their plans for the next full year ahead.

Facts & figures

Forrester’s research in a nutshell

Forrester interviewed 13 companies including Anheuser-Busch InBev, Deloitte, Dolby Laboratories, InterContinental Hotels, Kimberly-Clark Worldwide, Levi Strauss, Mercedes-Benz and Pernod Ricard.

In its research, Forrester calls for global brands to move from localised structures to become adaptive global organisations. It defines adaptive as having “a flexible approach in which marketers respond quickly to their environment to align consumer and brand goals and maximise return on brand equity.”

To succeed in the challenging environments, brands should foster globalised – not centralised – responsibilities.

Communication should include sharing best practices worldwide, using global scales to source better marketing resources efficiently.

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