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From banking to technology to food products, the presence of emerging markets as high growth opportunities for companies presents interesting challenges. Brands that may be well identified and relatable to Western economies, when put into the hands of consumers with a history of few buying choices, struggle to relate to the average consumer.
Lia Proedrou of Brandexcel, a branding and design agency based in Athens, states unequivocally that the cultural differences between these emerging markets are so great—both between the West and amongst one another—that Western trends, within food in particular, simply don’t work. “We take the quality of the product for granted [in the West],” states Proedrou. “For these countries like Romania, Bulgaria, FYROM [a.k.a. Macedonia] and Russia, they want proof [of the quality]. Super minimalistic, modern package design doesn’t work. Retro/nostalgic motifs really don’t work. They want to see something realistic, and something that doesn’t remind them of their past.”
Indeed the political and economic history of these countries can be summed up as communist, bleak, and providing few if any choices. To suddenly live in a free trade society with millions of dollars being pumped in for economic development is a whole new world for most emerging market residents turned target consumers. The educational and cultural gaps, therefore, are much greater and require much more local interpretation, and therefore, interpreters of the brand.
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“I truly believe that the question of adaptability (knowing, understanding, reaching the consumer) can be a problem when there are not local marketing specialists involved in the process of adaptation,” says Aneta Bogdan, managing partner of Brandient, a brand agency based in Romania. “The cultural differences could be a source of failure, of course, especially in certain categories, where the mental cultural patterns and reflexes make the difference.” Bogdan echoes Proedrou’s statements as finding this particularly true within food and chocolate.
Food isn’t the only sector sending Western brands into the new markets in droves. International banks are following the money being invested in emerging markets, and they are implementing strategies to help them acclimate to the local culture. Phil Duncan, president of Landor Europe and Middle East, cites global bankers HSBC and its campaign of “The World’s Local Bank” as a good example of the marriage between a consistent, ubiquitous brand identity combined with a communication strategy that very much plays upon regional and local references emerging economy consumers can relate to. The global brand message HSBC once adopted regardless of the market is now reserved for its business strategy—not the brand communication strategy, which needs to be customized to particular markets by people who understand both the brand and specific cultures.
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Duncan recalls that five years ago very few companies had regional managers to oversee the brand. “Today, they are getting better about recognizing that there are moments to be local and colloquial and there are moments to be ubiquitous.” Nevertheless, critics of large global brands going local cite a lack of local people in these organizations as middle and executive managers. In fact, HSBC was recently mentioned by the International Herald Tribune as one of the companies whose personnel profile still largely remains middle aged, white men regardless of the market. As HSBC demonstrates, though the need is understood, when it comes to acclimating human resources and corporate infrastructure to particular cultures, implementing the necessary changes can take time.
Introducing global products into emerging markets with unique cultures is a complex balancing act that requires a willingness to learn and adapt by both brands and local communities. It’s a complicated dance that, if done correctly, can benefit both partners. Take Kraft, for example. As global brands such as Kraft take center stage regionally by both acquiring existing local brands and introducing well-established global ones, the reverse of “global brands going local” is also happening. Locally established brands are looking to outside branding help to help position their brands to protect their market share against foreign competitors and at the same time are seeking ways to go beyond their own borders.
“It’s really a dichotomy for us. On the one hand we have the challenge of international brands figuring out how to recreate their consumer-centric but much more economic model as they move in [to these new markets],” comments Duncan. “Then we have the surprising strength of some of these emerging market brands looking to us to help them move out [to an international stage].”
In the new European branding landscape, business decisions may be much simpler than the branding decisions that must follow. Because of local brand acquisitions by multi-national companies, the questions of how, why, (and if) to transition a local brand into a larger portfolio are complicated by the question of when. Timing is the variable many large companies are perplexed by.
Comments Landor’s Duncan, “When’s the right time? Will it lose a certain cachet that the locals would either not appreciate—or appreciate more? What does the brand mean in Turkey? It’s likely going to be a bit of an empty vessel. Brands have an opportunity, but also a real challenge in determining which of these levers to pull and when, in terms of building their affinities with consumers. The portfolio management of these brands being acquired and folded in are going to be increasingly challenging for these companies to deal with.”
But global brands understand that the challenges that come with branding in emerging markets could result in huge rewards. Last year, foreign investment in Romania alone increased 75 percent valued at EUR 9.1 billion. Though brands will follow the money, branding needs to create a bond between products and people. And this can only be accomplished by understanding the needs and resources of local cultures. No one said growth was an easy thing in a branding new world.
[3-Sep-2007]
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Alycia de Mesa is a brand consultant, speaker and writer with more than a decade of industry experience ranging from start-ups to Fortune 100 companies. Her latest book is Brand Avatar – Translating Virtual World Branding Into Real World Success (Palgrave-Macmillan).
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It is strange that 18 years since the fall of communism these markets are still considreted emerging and consumers are believed to have "a history of few buying choices". 
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