In today’s changing and demanding world, companies or maybe we have to say transnational companies are trying to wonder if it is possible to have a global brand around the world. The answer is not easy and it does not have a unique response. The main problem that has to be faced is that consumers do not perceive the brands in the same way; this finally means that brands are perceptions and not the product itself. In other words, the product exists in the mind of people and every mind if different. Think that this happens between customers from same countries, never mind about people from different countries. Everyone decodes messages from a specific frame of reference, that is why is very difficult to really have global brands (Pedroza, 2012b).
We can see two alternatives, build the brand Bottom-Up or Top-Down; the first alternative is making a unique marketing for each society and the second one uses universal ideas adapted to different cultures. The important here is to have something in common with the country target and a common iconography.
By the other hand, we can make the question, in what circumstances it is better to have local brands and in what it is better to have global brands? The answer is in the “Minimum Common Denominator” that has to be shared in all countries; they are the basic values or ideas that can be translated despite cultural differences to every target market, with the consideration to be empathic for the local customers.
The solution that transnational firms have achieved is developing strong icon (Apple, IBM, Dell, GM, etc.) and adapt the messages to local culture, this works only as far the global brand does not represent a negative image beyond the owners, or customers are used to buy the product to local companies.
Example of Intercultural Communication
One example that we can look at is the way the American retailer company Wal-Mart has establish their operations around the world. Wal-Mart is the largest company of the world with sales above 400 billion dollars, operating in 27 countries with 69 brands (Wal-Mart, 2012) with more than 9,000 stores in the world, being almost the half outside the US.
As we saw, the company uses different brands depending on the county where it operates. This decision is part of their faster-growth strategy and meaning of its international success. The strategy is to use store names that are familiar to local customers, because they have expanded by acquiring or forming partnership with established retailers. In almost all cases Wal-Mart keeps the name of the local company so shoppers can be familiar with the brand (Leon, n.a.).
An interesting point is that Wal-Mart does not make economies of scale with the brand, but they do it with the logistics, supply chain management, international suppliers, and computers systems and in general the “way of working”.
In the case of Chile, they are present since 2009 by the acquisition of the majority stake in the local D&S retail chain, maintained until today the Brands Lider, Econo and Acuenta in between others (Retail, 2012). They did not change the name of the supermarkets mainly because the history of foreign retailers in the country. In 2004 the mayor French player Carrefour arrived to Chile, selling a few years latter their stores because the low market share achieved (2.7%). The US Home Depot and, earlier, Sears and JCPenney also failed in their venture (Dowling, 2009). The main reason is that Chilean customers are used to buy in local stores, and like to be treated by Chilean owners; despite that in fact the owners do not attend the stores!
This is aligned with a recent study conducted by the firm Millward Brown (Retail, 2012) that places the Wal-Mart´s Lider store brand in the sixth place of the most admirable brands in Chile and in the 26th in all Latin America.
This example shows how the biggest transnational company of the world uses local brands, despite the economies of scale because they decided to adapt to the local market mainly because of cultural barriers and brand status (Egan, 2007).
Dowling, J. (2009, January 3). Wal-Mart in Chile: Low prices, High expectations. Retrieved on August 12, 2012 from http://www.businesschile.cl/en/news/reportaje-principal/wal-mart-chile-low-prices-high-expectations
Egan, J. (2007). Marketing Communications. London, UK: Thompson Learning High Holborn House
FIC (n.d.). What investors say about Chile. Foreign Investment Committe. Retrieved on August 12, 2012 from http://www.foreigninvestment.cl/
Leon, W.A. (n.d.). Why is Walmart´s name different in other countries? Retrieved on August 12, 2012 from http://www.ehow.com/info_8425002_walmarts-name-different-other-countries.html
Pedroza, J. (2012, May 10a). Marketing Communications Ethics. Monterrey, MX: Universidad Tec Virtual ITESM
Pedroza, J. (2012, May 10b). Intercultural Communication. Monterrey, MX: Universidad Tec Virtual ITESM
Retail (2012, June 29). Mexican and Chilean operations among Latin American´s top BrandZ. Retailing Today. Retrieved on August 12, 2012 from http://www.retailingtoday.com/article/mexican-and-chilean-operations-among-latin-america%E2%80%99s-top-brandz
Wal-Mart (2012). About us. Walmart Corporation. Retrieved on August 12, 2012 from http://www.walmartstores.com/AboutUs/
- Why Wal-Mart’s Stock Is Now Cheaper (And Safer) Than Its Bonds (seekingalpha.com)