Brand Failures

Brands operate on a global scale. Brand names such as Nike, Coca-Cola,
McDonald’s, Gillette, Adidas, Disney, Marlboro, Sony, Budweiser, Microsoft
and Pepsi are now recognized across the world. The dismantling of trade
barriers, combined with the rise of global communications technologies such
as the Internet, has meant that companies can expand into new markets faster
than ever before.
However, many companies have confused the era of globalization with an
era of homogenization. If they have had success with one product in one
market they have assumed they can have equal success in another. All they
believe they have to do is set up a Web site in the relevant language, run an
ad campaign and set up a similar distribution network. What they forget to
understand is that there is more to a country than its language, currency or
gross domestic product. The cultural differences between, and often within,
countries can greatly affect the chances of success for a brand.
In order to succeed, brands must cater for the specific tastes of each market
they enter. If these tastes change, then the brand must change also. As the
bumpy ride experienced by Kellogg’s in India (the first example included in
this chapter) indicates, companies which fail to accommodate and acknowledge
these vast cultural differences face a long battle in replicating their
success at home in other markets.
However, understanding cultural differences is not just about international
markets. It is also about understanding the specific culture of the brand.
When companies acquire a brand that wasn’t theirs to begin with, they can
often make similar faux pas as when they move into a foreign market.
However, instead of making the mistake of misinterpreting the market they
misinterpret the brand. This happened when CBS acquired the guitar
company Fender and when Quaker Oats bought the soft drink Snapple.
Although the companies spent millions on marketing, they lost market share
as they didn’t understand exactly where the market was, and what the customer
wanted. As a result, in both cases, the acquisition weakened the brand.