Why global brands must be part of local cultures

Doughnuts don’t appeal to British consumers for breakfast, while Kenyans need to be convinced that cereal is a good option. How companies entering new markets can educate local consumers about the benefits of their products.

doughnuts

The family sitting down to eat a bowl of milk-drenched cereal is a pretty typical scene played out across the UK every morning. But that scenario is not replicated throughout the world, which is why Giles Turrell, chief executive of Weetabix, knows he needs to convince consumers in Kenya, one of more than 80 countries the business exports to, that its cereal brand is an alternative to breakfast foods that are customary there.

While some products will function the same way the world over – think of a phone, a TV or a toaster – marketing sectors such as food, drink, the arts and media are more culturally specific.

But many brands are attempting to convince overseas consumers that their products and services transcend cultural barriers.

Mark Goucher, producer of the stage adaption of the political comedy Yes, Prime Minister is adamant that the production has to be good enough to be accepted by a global audience.

And James Bromley, managing director of the MailOnline website, says that rather than adapting the product to entice US readers, it has drawn in a American audience because it appeals to them as much as to UK readers (see case study and viewpoint, below).

However, introducing an unfamiliar food product to a new country, as Weetabix has done, is difficult if existing tastes are not respected. Turrell says an element of education is usually necessary when entering a market for the first time, so consumers understand the appeal and basic benefits of eating something they might never have tried before.

Meanwhile, Burton’s Biscuits chief commercial officer, Steve Newiss, warns that changing a product to cater for local tastes risks destroying the qualities that make the brand desirable (See Weetabix case study, below, and Burton’s Biscuits case study, below).

We don’t go into markets. We are pulled into markets by our audience. A third of our audience was already in the US

Keeping a brand’s heritage intact when it enters a new market is likely to mean that marketers need to retain characteristics that root it in the culture it came from. Some of these will translate better than others, particularly where food is concerned.

When Krispy Kreme doughnuts crossed the Atlantic from the US to the UK in 2003, the brand used distinctively American styles of consumption to create a positioning that was unique among competitors in its new market.

According to Krispy Kreme UK chief marketing officer Judith Denby, the “undertone” of the brand’s American origins is important, partly because many UK consumers fondly remember first trying the doughnuts on holiday there.

Krispy Kreme has specifically encouraged UK consumers to buy and eat doughnuts as a communal experience. It has called on them to become ‘office heroes’ and has launched gift cards that give holders one box of 12 doughnuts for each month of the year, intended for sharing with workmates.

It is an American concept that has transferred well, extending to doughnuts the more common British tradition of bringing cakes to work for birthdays and other occasions.

However, Denby adds that another American eating habit – doughnuts at breakfast – was left behind when the brand embarked on its journey to Britain. “When we first came over we talked to people about it, and there was an assumption from our US counterparts that we would promote Krispy Kreme as a breakfast food, but that just wouldn’t work in the UK. We just don’t eat doughnuts for breakfast here.”

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Denby says Krispy Kreme “didn’t even try” to impose this breakfast culture on the UK. Indeed, the UK arm of the business has generally resisted the temptation to transplant American consumption habits wholesale here, opting only for the most appropriate.

“Although we are a US brand, our transition to the UK has been about understanding the local market – understanding our customers here, how they behave and how they want to behave,” says Denby.

The American heritage creates “warmth and confidence in the brand”, but for a British franchise business now owned and run independently, American-ness is “not relevant as a primary message for people in the UK”.

The practice of introducing products to different geographical regions is nowhere more established than in the brewing industry. Global brewing companies with portfolios of hundreds of beer brands must put careful thought into which ones are likely to succeed in which country. This is largely because nearly every market will already have its own native beers that have been brewed for centuries.

SAB Miller, which is headquartered in London but has roots in South Africa, calls itself “the most local of the global brewers”, and according to chief marketing officer Nick Fell, it designs its marketing plans to create “strong, relevant portfolios that win in local markets”. The global marketing team includes 10 people whose sole responsibility is consumer segmentation research, which helps SAB Miller understand how well brands such as Peroni and Grolsch will be received in different markets.

“In the absence of a powerfully distinctive functional benefit, people will stick to what they grew up with,” Fell told analysts at a recent marketing presentation in London.

“The vast majority of the world’s beer is locally manufactured for local people,” he added.

This means that business strategies also have to be constructed in response to local market conditions. In Africa, for example, SAB Miller has an aim of halving the price of its cheapest products while doubling the price of its premium products. In Latin America, it is seeking to take mainstream brands and premiumise the category. These strategies are helping the company to pursue global growth through developing markets as sales in the developed world flatten out.

Attempts to create globally consumed brands have proved more challenging. The company’s most likely contender is Grolsch, but Fell says “it is too early to say whether that will ever become a global brand”. SAB Miller has been cautious about where to launch the beer and how forcefully, having learned lessons from the last decade, trying to promote Pilsner Urquell globally.

The business assumed that it could make a brand global simply by giving it to local suppliers and telling them to sell it, instead of educating markets about the benefits of the brand.

Many brands are attempting to convince overseas consumers that their products and services transcend cultural barriers

In contrast, with Grolsch, it is looking at key markets to understand how to grow market share before considering a global roll-out.

“We have not made the same mistakes as we made before. We blew a lot of money launching Pilsner Urquell in a lot of markets. We were left with light pockets and red faces,” admits Fell.

Even at Anheuser-Busch InBev, the world’s largest beer company, the biggest brands are not universally present in all markets. In fact, the UK is unique in being the only territory where the three beers it refers to as its “global brands” – Stella Artois, Budweiser and Beck’s – are all present “in a big way”, according to chief marketing officer Chris Burggraeve.

But Budweiser has now begun to emerge as an exception, establishing itself as AB InBev’s “first truly global beer brand”, Burggraeve says. This has only happened as a result of the 2008 merger between Anheuser-Busch and InBev that created the company, and which increased Budweiser’s reach. Its worldwide presence was not fully realised in marketing terms until the 2010 FIFA World Cup in South Africa, where it was an official partner.

“It was Budweiser’s first big ‘coming out’ party. It was the seventh time it sponsored the World Cup, but it was the first time it was really activated worldwide,” says Burggraeve.

Budweiser has crucially gone on to establish itself in China, now the world’s biggest and fastest-growing beer market. While it has had the help of specifically Chinese campaigns, particularly around the Chinese New Year, much of the branding is the same as that used around the world. Its World Cup sponsorship and TV advertising concepts used in western markets have also led its brand communications there.

Few brands achieve mass-market ubiquity worldwide like Budweiser by letting consumers adapt to them. But it is not necessarily down to the functional benefits that SAB Miller’s Fell refers to.

Instead, Newiss at Burton’s Biscuits points out that it relies more than anything on the spending power of the brand. It is rare, though, that a brand has the money “to make the taste local, to bring the consumer to them”, adds Newiss.

“Coca-Cola and McDonald’s have enough of a business system and sufficient financial clout to bring the consumer to them. Elsewhere, there is a plethora of local businesses that go to the consumer. When you are a small to medium-sized enterprise, like us, you are in between the two.”

While all businesses wanting to enter new markets need to make a significant commitment to understanding the local needs of consumers, many are finding success by investing in a marketing programme to educate people about how their brand fits into people’s lives.

Weetabix: Teach a market to love your product

weetabix

Weetabix exports its breakfast cereals to more than 80 countries around the world, and each locality has characteristics distinct from the next.

In its highly competitive homeland of the UK, Weetabix’s share of overall cereal sales stands at around 7%. In contrast, it has 70% of the cereal sales in Kenya.

However, Kenya is a relatively undeveloped breakfast cereal market and Weetabix has forged ahead there partly because other manufacturers have not devoted serious thought to breaking in. The company has found a distribution strategy that suits the mode of consumption – a bicycle-borne sales force that delivers sachets containing two biscuits to small rural shops.

While Kenyans tend to opt for a small-value transaction, the complete opposite model is used by Weetabix to sell its cereal in Mexico. There, consumers are more likely to buy large boxes containing 48 biscuits.

Any brand must adapt to the unique conditions of a particular market. But even if the proposition changes, for Weetabix the core product generally remains the same.
According to chief executive Giles Turrell (pictured, above), opening up a new region for the first time often means teaching people about what a brand stands for and the basic cultural concept of how to consume it.

“In many markets, what we know as a breakfast cereal – in terms of a bowl with milk – is not as established as it is in the UK or the US. In some countries, we will be doing more of an educational job.

“The other thing about Weetabix is that the brand is not as developed internationally as it is in Britain. In the UK, we only have to say ‘Weetabix’ and most people know about it. They are familiar with the brand.”

Having secured £900m in new finance in 2011, Weetabix is currently on the path to international expansion. It is seeking low double-digit percentage growth abroad in 2012, focusing on a selection of markets “where we have a right to play, and perhaps a right to win”, Turrell says.

Though Weetabix has a portfolio of brands including Weetos, Ready Brek, Oatibix and a number of variations on the basic products, the company initially plans to use just two of them in its international push – Alpen and Weetabix.

But Turrell has ambitions to replicate the success in the UK across the world. “Of the more than 80 markets we export to, we have identified a handful that we really want to grow consistently with how we are growing Weetabix and Alpen in the UK,” he says.

But the messages are different from its UK marketing: “In the UK, our Fuel for a Big Day campaign is based on an insight. It is based on an emotional positioning and it’s talking about how it can help families through a busy day.”

In less developed markets, the message is more functional. “We will have to talk more about the benefits of what the brand does – whole grain, energy, low fat, low sugar, high fibre,” says Turrell.

Burton’s Biscuits: Identifying new markets

International expansion is on the cards for British company Burton’s Biscuits. Although its chief commercial officer Steve Newiss describes it as a “small to medium-sized enterprise” that takes pride in its British roots, two years ago Burton’s announced an ambition to treble its overseas sales in five years.

To achieve this aim, Newiss is introducing products that suit particular markets.

He explains: “I spent 20 years at Kraft before joining Burton’s. I spent the last eight years at Kraft as vice-president of international development, working across 157 international markets with a classic international expansion package – taking products with strong heritage in their home markets into new territories.”

Newiss is now pursuing a similar approach with Burton’s products, which include well-established British biscuits such as Wagon Wheels, Jammie Dodgers and Maryland cookies. The company also manufactures and distributes Cadbury’s chocolate biscuits under a licence that it holds for about 85% of the world.

Wagon Wheels had been sold previously in Russia, before the financial crisis led to Burton pulling the brand out. Newiss says this decision was taken due to fears of not being paid by buyers, not because of the failure of the product.

With Russians generally having a sweeter tooth than Britons, the marshmallow and chocolate covered treats are a surprisingly good fit for the market, he claims, and Burton’s is now trying to reintroduce them there. He says: “We are trying to build business by reigniting Russia because we know there is heritage there for Wagon Wheels.”

The Cadbury licence is particularly lucrative, and was credited as the primary reason for Burton’s more than trebling its profits to £13.1m in 2010, the latest period for which accounts have been publicly filed. Being nearly 200 years old, the Cadbury’s chocolate brand has more heritage than most, and Newiss says this helps to determine where in the world Burton’s takes Cadbury’s biscuits.

Newiss says not only the desire for a product but also the means of introducing it will be governed by local tastes. In Canada, he continues, Cadbury is associated with seasonal events, so everyday consumption of Cadbury’s biscuits must be built on the back of that. In France, it is the other way round.

burtons

One of the uncharted markets the company is currently exploring is China. Here, Burton’s is advancing city by city, starting with Shanghai. Now it is seeking a second city, but Newiss points out that “you can disappear in China” by being too ambitious too soon.

When the international expansion plans were drawn up, Newiss says they put great emphasis on breaking into new markets. In fact, Burton’s has found greater headroom for growth than it previously realised in existing overseas markets such as France.

There, the Cadbury’s Fingers brand has been slightly adapted to be called Finger, with a small Cadbury endorsement. The chocolate coating has also been changed to cater to French tastes and the resulting sales growth has been impressive, Newiss says.

He adds that you have to be able to identify markets that already suit your products and keep as close to the original formula as possible.

Yes, Prime Minister: Promoting the product, not the heritage

Britishness itself is “no help at all” in attracting an audience to a play, according to Mark Goucher, producer of the stage adaptation of political comedy Yes, Prime Minister, which is currently touring Australia following a run in London’s West End.

yes prime minister

But this country’s reputation for creating theatre helps British plays succeed abroad, says Goucher. “There are only two markets for theatre work to be showcased and developed – London and New York. People look to London to find out what is going on and to license our shows,” he adds.

Yes, Prime Minister has made a more successful transition than most plays do when they go to Australia, says Goucher. He attributes the production’s positive response to the popularity of the original TV show, and the fact that Australians can recognise and laugh at the “bureaucratic pomposity” of the British system of government.

He stresses that certain changes were necessary, even to a work that has the cultural cachet of Yes, Prime Minister. When the production transferred, it took on an Australian cast and director. And while they can’t “mess around with the product”, Goucher says “there are some things in the script that probably don’t translate terribly well to Australia, so they have been allowed a little bit of licence”.

However, the setting and subject matter are still essentially British. Goucher also insisted on keeping the same branding in the marketing materials as for the play’s

London run. Advertising agency aka, which worked on the West End marketing, was opening a Sydney office just as the play arrived in Australia, so Goucher persuaded the producers there to retain its services.

Licensed productions are now planned in Malta, Croatia, Hungary and Israel, as well as further European countries. Talks are ongoing about runs in Los Angeles and New York. The key ingredients for Goucher in marketing Yes, Prime Minister in Australia and creating a showcase for further foreign tours have been an appreciation of the local market, but also faith in the product itself.

Viewpoint: James Bromley, managing director, MailOnline

We have a dedicated editorial team in the US, based in New York and Los Angeles, creating content for that market. But we find that people now define themselves not by geography but by their interests. If you are interested in a particular sport, event or celebrity, you don’t go to your local news product, you go to the one that you feel best represents what you are interested in.

We don’t go into markets. We are pulled into markets by our audience. A third of our audience was already in the US before we entered that market. We didn’t decide that we wanted an audience in the US – the audience adopted us. All we have done is add to the content that we had already created. Our business is growing, and it is growing fastest outside the UK.

This country has a fantastic heritage in journalism, and our approach is different from many of our competitors in the US market. Ultimately, we produce the content that audience wants to read, rather than it being anything about where we hail from.

Our competitors include [gossip sites] People magazine and TMZ.com, and also the news from the Boston Globe and other high-end products.

We often see debates happening between US and UK users in the comments, especially on stories where there are differences in each country. Whether that is on gun crime or fashion, you find people speaking across the geographies.

We don’t really target an audience – the audience finds us. It might be counter to some people’s opinions, but the reality is if you walk into any office across the country there will be people looking at MailOnline.

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