Cultural Avatars: global brands in a flattening world

This interesting article caught my eye today, its a summary of the patterns that emerged from BCG’s recent study of global corporations emerging from developing markets such as India and China. Uh sorry, that’s ‘rapidly developing economies’ or RDE’s – yet another acronym to remember. Of the 6 strategies most commonly used for globalization the story of Mahindra & Mahindra caught my eye. From the article,

So how does M&M venture into foreign markets?

"We are trying not only to leverage cost, but we are also trying to give value and build a brand. Doing it alone requires more financial investment, but we are using more than one model," says Parthasarathy.

For instance, in the bigger markets like the US, M&M rides alone. In smaller markets like Sri Lanka or Serbia it uses distributors. In China, which requires a far greater local knowledge in terms of the market and the legal framework, M&M has a joint venture where it holds 80 per cent. For utility vehicles and pick-ups, the company has entered South Africa.

The company also has a fool-proof checklist for global forays. This ranges from guidelines on prioritising global markets according to the size and attractiveness of market opportunities, to the micro issues of taking the brand abroad.

While the other 5 strategies are also fascinating to read, these three points from Mahindra & Mahindra’s strategy are worth another look:

  1. They use more than one business model, in fact, they customize their business model according to the specific conditions of the market they intend to enter, from size to culture.
  2. They have a checklist of to do’s that covers every aspect of entering a new market.
  3. Lastly, they look at their brand and study how best to interpret it for the new culture or market.

This last one is key, methinks, in why these firms are catching the global business management’s eye. It has been said that these brands, just emerging into the global arena from their home countries, are insecure brands. They are newcomers and do not have a culture and heritage of brand building, such as Proctor & Gamble’s, after decades of creating behemoth global brands. A P&G brand enters a new market with confidence, secure its identity and values, nurtured and honed in the world’s biggest consumer market but an emergent brand enters with more forethought and caution. It is aware that it is an unknown entity and must start from scratch to build its brand identity in the global market.

Culturalavatar11bw
This insecurity, if you will, actually allows it to make fewer mistakes sooner and is able to gain a foothold in the new market in what seems like no time at all, compared to the time it took for the domestic brand leaders to build their market share and mindshare among their global consumers. They ‘leapfrog’ over the learning curve, and adapt themselves for their new role as a global brand.

How?

By looking beyond the domestic cultural influences on the brand’s identity and values, to the core essence, that transcends culture and geographical differences, to map on to our common humanity. This core, then, forms the seed for the new cultural avatar that is created for the new market.

They form a cohesive picture when looked at as a global whole, for the roots of each avatar are the same core values. But they assimilate just enough into the new market’s culture so that they are able to engage with their local customers on their own terms, rather than as ‘imported’ foreigners.

So in effect, instead of the direct entry into the new market or segment, as an established confident brand would – usually with expensive launch strategies – these insecure or emerging brands interpret their core values through the cultural filter, in order to better fit in. Now only their future growth and continued success remains to be seen.

[Update July 23] I believe this to be a very sloppy articulation of the concept and hope to have something with more clarity up on this soon.

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2 Responses to Cultural Avatars: global brands in a flattening world

  1. Thanks again for informing while stirring my thinking.
    The advantage “insecure brands” have is:
    1) knowing they don’t know the new culture,
    2) knowing their core identity very well,
    3) and a scarcity of resources that force them go slow.
    Or so it seems to me as I reflect on your posting.
    Thanks for enlarging the conversation…keep creating, Mike

  2. niti bhan says:

    Yes, michael, exactly so. Thanks!!

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