‘How can a local brand become a global brand like Jollibee?’

Q: We were in a professional management association meeting on branding when one of the resource speakers in the panel asked: “Considering the times and the fact that we are a poor country, why the fuss over global branding?  Why don’t we instead talk about the global recession we’re all in and figure out how to get out of this?”

Here’s the quick answer from another speaker: “At the individual company level, it’s striving to be a Jollibee and become a global brand that counts as one of the best if not the best way to get out of the recession-like sales performance. Do not confuse recession as a market environment and recession in company sales.”

We tend to think that there’s more practical sense in this last speaker.  So may we ask this of your column? Please tell us how a local brand can become a global brand like Jollibee and how quickly.

A: If you consider the case of Jollibee, it’s easy to answer the last and second part of your question. That’s almost public knowledge. For a local brand to become a global brand, it may take two to three decades. That’s how long it took Jollibee. Of course, this is assuming that Jollibee qualifies as a global brand.

The two established brand valuation companies, BrandFinance and Interbrand, both define a global brand as one “that has worldwide recognition.” Both also come out each year with the top 500 most valued global brands. Because BrandFinance is the more comprehensive assessor, we’ll refer to its ranking of the top 10 global brands. There’s only one Asian brand in that top ten listing. That’s Samsung whose brand name (if it were for sale) has a $38.2 billion price tag as No. 6 rank. Apple has the No. 1 ranking valued at $70.6 billion, or almost double that of Samsung’s.

Samsung is a good example to pick not only because it’s the only Asian brand in the top ten but also because of the popular misperception that it attained the global brand status in the short period of five years.

The corporate history of Samsung tells us that this South Korean multinational conglomerate opened for business back in 1938 as a small trading company dealing mainly in groceries but producing its own noodles. It started to be noticed worldwide when it counted itself as a domestic sponsor of the Seoul Olympics in 1988. Then, ten years (and not five years) after in 1998, it paid its way to be a worldwide Olympic partner in the Nagano Winter Olympics. It was then that the brand attained worldwide recognition. There obviously is no short cut to becoming a global brand. It just takes a long time to become one.

What about Jollibee? As a group of companies and counting the stores of its many acquisitions, Jollibee has an impressive presence in the country with its 2,001 stores as of 2011. But overseas, it’s now serving only in China with 70 stores and Vietnam with 11. That kind of 3-country geographical presence hardly qualifies it as global.

What’s more significant to point out in this discussion is the marketing reality that global brand is more an “effect,” a “consequence” rather than a “cause” sales growth especially in the long run. If your brand sales and market share continue to rise year after year, then that ascent will reach a level where BrandFinance or Interbrand may value it as a global brand worth so many millions or billions of dollars in the brand acquisition market place.

The foregoing means that it’s much more important for you to turn to the truer “cause” or “causes” of brand sales and market share growth. These truer causes are market segments together with products. However, think market segment first, and then product but only after attending to market segment. The Senior MRx-er proved the wisdom of this business-growing marketing rule in his 2010 book, Market Segmenting, Self-Segmenting and Desegmenting. That rule said: “The ultimate source of growing your business is market segments. Even if you have the most interesting new product from R & D, if you do not have a segment in need of it, it will have zero sales.”

It also pays in terms of marketing insights to think of the local-brand-to-global-brand transition as analogous to the ambition of a cheap brand that’s in the economy price segment to participate in the premium price segment.

The marketing history of such a brand like, for example, Unilab of the ’70s, demonstrates how much more difficult and how much longer it takes to complete that journey.

This is made most apparent when compared with what has happened to the many brands in the premium price segment that decided to enter the economy price segment. Just recall the successful cases of, for example, the premium Tang powdered orange drink brand entering the economy orange drink market segment with Kool-Aid in the FMCG market, or in the pharma market, the premium priced Glaxo anti-hypertension extending its market reach to the larger economy price segment with its Duncan anti-hypertension brand entry.

In tackling any marketing issue then, it’s worth your while to avoid what the Harvard marketing guru, Professor Ted Levitt termed as “marketing myopia.” In the present discussion, marketing myopia is the danger in defining and limiting your diagnosis to the topic at hand, namely, “local brand versus global brand.”

Ask always mid-way into the exchange of views, what are being overlooked.  As you can see in the above, there were at least two important overlooked considerations:

(1) “Is attaining global brand more an effect than a cause of recession-free sales and market share growth?”  and

(2) “What are the truer causes of growing sales and market share over time?”

Keep your questions coming. Send them to us at [email protected] or [email protected]. God bless!