The post-global brand

Received: 7th January, 2005

JEAN-NOËL KAPFERER
is the author of ‘The New Strategic Brand Management’ (Kogan Page).

Abstract
In 1983, Theodore Levitt published ‘The globalization of markets’ in the Harvard Business Review.
This article, based on only two cases, became the milestone of a wave of globalisation of brands by
all multinational companies. One after another, these companies imposed brand globalisation at all
costs. In 2005, it is possible to examine the costs and limitations of this phenomenon and recognise
the need for a selective globalisation. Global brands should never forget that the business must also
be local: this is the post-global brand.

INTRODUCTION the globalisation of markets was

Jean-Noël Kapferer
HEC Graduate School of
Business, 1 rue de la Libération,
78350, Jony-en-Josas, Paris
France
Tel: ⫹331 39677254
E-mail: Kapferer@hec.fr
In 2003, the last session of the G8
summit coincided with an anniversary
that went unnoticed. Twenty years
earlier, in May–June 1983, a paper
entitled ‘The Globalisation of Markets’,
by Professor Theodore Levitt was
published in the Harvard Business
Review.1 The direct and simple nature
of its argument was to make it one of
the most quoted and influential articles
in the field of business management.
According to Professor Levitt, national
differences and preferences would no
longer carry any weight in the face of
the progress and reduced costs as-
sociated with international products
and brands. With everyone in the
world travelling either physically or, in
most cases, via satellite television, the
desire to buy products and brands sold
in other countries would also greatly
increase.
In short, while recognising that the
world was indeed round, companies
had a vested interest in regard-
ing it as flat, and treating it
like a single market. This was
the strategy adopted by Coca–Cola,
McDonald’s and Microsoft, and by the
many companies that followed in
their wake. The main obstacle to
decentralised organisation and its sym-
bol — national marketing directors —
who, by their very nature, could not
help but promote the opposite argu-
ment, the one that justified their
position.
Twenty years later, how far has
this prediction of globalised markets
been fulfilled? Anyone who travels
knows that the same brands are found
in countries throughout the world,
whether it is Philips, Michelin, Sony,
HUGO BOSS, Nike, HSBC or BT.
Beneath the surface, however, what do
companies really think of globalised
brands? Is it still what they want? Is it
still their ideal?
IS GLOBALISATION AN END
IN ITSELF?
It should first of all be pointed out that
Professor Levitt’s prediction was based
essentially on factors associated with
production and on the unmistakable
competitive advantages of economies
of scale. In fact most globalisation has
taken place at production level, which
is why it has been the target of some
of the criticisms levelled by the
anti-globalisation lobby. In her very

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KAPFERER
interesting book ‘No Logo’ Naomi
Klein berates the companies that do
not have factories and, as a result, wash
their hands of anything that goes on in
the archaic factories of their Asian
subcontractors.2 Nike is a good ex-
ample of this. By contrast, when J.
Mantelet, the creator of Moulinex, a
household appliance brand distributed
worldwide, tried to keep employment
in Upper Normandy at all costs,
it ultimately cost him his company
(but not the brand): Moulinex went
bankrupt and the brand was bought by
SEB Group (its historical competitor).
The movement towards globalisation
of the upstream (production) stage is
therefore unavoidable. Successful com-
panies have globalised their factories
and supply chains to bring them closer
to their markets and/or take advantage
of lower costs. The car industry is a
typical example.
It should, however, be recognised
that this is a movement that has
affected products more than services.
While the circulation of the flow of
money and information no longer
encounters any barriers and is instan-
taneous, the movement towards the
relocation of, for example, the process-
ing of financial information, data files
and bank databases is only just begin-
ning. UK banks and insurance com-
panies have taken the initiative by
finding in Bangalore, the Indian equiv-
alent of Silicon Valley, a well-qualified
but much less expensive workforce.
Call centres serving French customers
are often based on the island of
Mauritius.
There is one point on which the
forecast of globalised markets can be
challenged — the downstream stage
of brands and products that are a long
way from the predicted standardisa-
320 䉷 HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 12, NO. 5, 319–324 JUNE 2005
tion. Of course, Porsche and Jaguar
are found worldwide, but these are
exported brands, like Chanel. They
are the standard bearers of a particular
country or culture, and appeal to an
international clientele. The car in-
dustry provides a good illustration
of why the concept of the global
product is in fact a myth. Paradoxi-
cally, the most global product that
ever existed in the car sector was
Ford’s famous Model T — it was
totally standardised, with 20 million
cars manufactured and sold worldwide.
Even though the domestic market was
by far its principal market, the Model
T was a truly universal product. In
1981, the launch of the famous Ford
Escort in the USA and Europe ap-
peared to be a sign of globalisation.
In fact the US and European models
only had one part in common — the
radiator cap (hardly a global product!).
More recently, the Ford Focus was
launched in Europe (1990) and the
USA (2000), and this time the models
from these two world regions had 65
per cent of parts in common. But
Ford does not think it can go much
further — there are too many struc-
tural and long-term factors against it.
So what are they exactly?
— The first is that energy is very cheap
in the USA, which it will never be
again in Europe. Low-energy in-
novations that have an enhanced
value in Europe are regarded as
irrelevant in the USA. This is why
the engine type cannot be the same
in both regions.
— The second is that vehicle standards
and testing remain primarily na-
tional and in any event regional.
Manufacturers therefore have to
adapt their vehicles to suit the

specifications and requirements of
local test centres. Safety standards in
the USA are less stringent than in
Europe and Asia.
— The third factor concerns structural
differences such as the type of roads,
climate, humidity and the result-
ing use of vehicles. This therefore
involves very different drivers of
preference on either side of the
Atlantic.
— The last factor is the customers
themselves. Everyone knows that
the Germans like a certain type of
comfort, the British another. Today,
manufacturers are flocking to China
which alone will shortly represent
25 per cent of the growth of the
world car market. The Chinese are
opening factories and establishing
joint ventures like PSA Peugeot
Citroën, but not with the aim
of slavishly duplicating European
models. It is impossible to ap-
peal to a market of 300 million
Chinese who now have the finan-
cial resources to access the market
without taking account of the
customers themselves.
The time has in fact come to recognise
the post-global brand — the brand that
no longer tries to adhere unreservedly
to the model of total globalisation,
which is no longer perceived as ideal.
Of course, globalisation at the upstream
or production stage remains a priority
in many sectors. Like the car sec-
tor, which has reduced costs by shar-
ing production platforms, companies
can still save more money by creat-
ing a smaller number of product plat-
forms that are able, if the need arises,
to produce differentiated models. The
service sector could also benefit from
upstream globalisation.
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THE POST-GLOBAL BRAND
FROM GLOBAL TO REGIONAL
The further downstream and the closer
to the customer, however, the more
obvious it becomes that the global
concept tends to be replaced by the
regional or local concept in the case of
a large country. There will therefore
never be a car that is truly global, but
a more American type for the USA,
and other types that are characteristi-
cally European and Chinese. This has
already happened on other mass-con-
sumption markets. For example, the
strategy of the US company Procter
& Gamble is based on regionalisa-
tion, with the US flagship brands Tide,
Whisper and Clairol becoming Ariel,
Allways and Wella in Europe. The
company has a factory in Europe for all
its detergents.
It is becoming more and more
common for companies to develop
products for specific geographical
regions, in the way that Hennessy
created Pure White for Europe.
Dannon (USA) could not sell its
drinkable, low-fat yoghurts in Europe
since they neither correspond to local
taste nor meet the current food-
standards requirements. It is however
true that initiatives designed to open
up regional markets, such as the EU,
Mercosur and Alena, help to make the
region, in the broader sense of the
term, a relevant market segment.
Furthermore, it is at regional level that
the world’s markets, and even its
historical and cultural communities, are
at their most permeable.
Finally, even when a brand appears
to be global, when it is distributed and
well known in countries throughout
the world, closer examination reveals
that the product is often far from
standardised — it is more of a
composite, hybrid or highly adapted
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product. For example, L’Oréal differen-
tiates between the cosmetic products of
its so-called global brands by basing
them on the four types of climate in
China, since these determine four skin
types.
The idea of a global market, and the
standardisation that it implies, has
usefully served to start a basic move-
ment in all companies. But over-
globalisation leads to loss of relevance,
a lesson that companies have often
learnt to their cost since 1983. This is
why today’s brands are post-global —
they have assimilated the myth and
distanced themselves from it without
exactly renouncing it. Today, it is
more appropriate to refer to selective
globalisation.
IDEOLOGY AND GLOBALISATION
Why are American brands pushing
strict globalisation hard and the
European ones less so? Probably
because of ideology and national
self-confidence. It is hypothesised here
that the American globalised brands
were exports of successful brands that
had taken many years to find their
optimal functioning (business model)
and positioning in the USA. The idea
that this equation of success would
simply apply elsewhere seemed to be
taken for granted, for the USA
itself constituted a non-homogeneous
market. As an example, it is noticeable
that Wal-Mart’s first store outside the
USA, in Mexico, was created 30 years
after the creation of Wal-Mart.
Its worldwide competitor Carrefour
opened its first foreign hypermarket in
1969, only six years after it created its
first store. Unsurprisingly, and without
doubt, Wal-Mart applied the rules that
made its success in the USA;
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unsurprisingly in some countries, more
remote from the USA than Mexico,
such as Brazil, the golden rule of
everyday low price does not seem to
work. The average Brazilian consumer
is instead eager to capitalise on special
bargains. Carrefour spread more rapidly
on an international basis: as a result,
being unsure about its optimal formula,
it was more open to the specificities of
the new countries it penetrated.
The same holds true for Nestlé,
number one food company in the
world. How can Nestlé be sure that
the situation is the same everywhere
when it comes from a small country
like Switzerland? In fact Nestlé’s first-
ever product, farine lactée, was exported
four months after it was launched in
Switzerland.
THE SEVEN PATTERNS
OF GLOBALISATION
At this time, it is important to specify
the meaning of ‘global’. For most
managers, a brand is global when it
is sold everywhere in the world. Find-
ing adverts in all airports about Nokia,
Dell, IBM or Alcatel seems to be a
living sign of real globalisation; how-
ever, this may be a superficial vi-
sion.
When people refer to globalisation,
it is generally in a loose sense, a feeling
that the brand is known, visible and
distributed everywhere. When travell-
ing abroad some brands do seem
global: they can be seen on billboards
directly on landing at an airport. It is
this vision that creates negative at-
titudes about globalisation, the feeling
of an inescapable loss of country
differences. All commercial centres
now sell the same stuff, the same
brands, throughout the world. Human

richness and diversity seem dangerously
eroded by the law of economies of
scale. Of course, those who do not
travel are pleased by the possibility of
accessing the brands and products they
see on television while watching the
world.
People tend to favour extreme solu-
tions and simple alternatives (to be or
not to be . . . global?), for they are
rhetorically more provocative. Real life
is in the middle, but it is more compli-
cated. What is new then? Realism in
globalisation, the mark of the post-
global brand.
It should be remembered that a
brand is a system relating three poles
(like a triangle): a concept, a name and
set of signs, and a product or service.
As a consequence, when one speaks
of globalisation, one should specify:
globalisation of what?
It is well known that there are
strong compelling economic reasons to
globalise products or platforms. There
are also good reasons to use the same
name, for the sake of capitalising
on one single name and exploiting
the extra value of global perception.
Finally, some concepts are reflections of
the existence of global segments.
Actually the combination of these
three poles creates eight possible alter-
native strategies as far as the continuum
from globalisation to localisation is
concerned.
What are these eight structural
types, which are obtained by combin-
ing the two possible answers on each
part of the brand system? They range
from the fully strict global model
gradually to the full local model (all
three poles are local). There are very
few adaptations, except for details:
— Type 1 is the paragon of non-
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THE POST-GLOBAL BRAND
adaptation: this is the case of luxury
brands.
— Type 2 recognises the need for
different positioning strategies: thus
Mars is a meal substitute in the UK
(have a Mars a day), but an ener-
giser in Europe. Cars follow the
same approach. The Ford Fiesta is a
small car for the German market,
but it is seen as a family car in
Portugal.
— Type 3 acknowledges the need for
important product adaptations. This
is the typical Nescafé globalisation
model.
— Type 4 is the result of brands being
split between companies. This is the
case of Persil: this brand is operated
by Unilever and by Henkel. As
a result, under the same name
are found different products and
positionings. It is also the cause
of the demise of Dasani: it got
bad publicity in the UK because
Dasani there meant filtered water.
In France, however, it was supposed
to be water from a specific natural
source. But the bad reputation hurt
the brand name and, as is well
known, bad reputations, like any
rumour, travel fast.
— Type 5 results when the company
cannot use the same name for legal
reasons everywhere. For instance
Vauxhall in the UK is Opel in
Europe: everything is the same but
the name.
— Type 6 results when almost simi-
lar products are sold under two
world brands with different price
positionings. It is what is currently
happening at the high end of the
Volkswagen range, where the cars
are very close even in design to the
Audi entry models.
— Type 7 is the business model of
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Cycleurope, leader of the European
bicycle market. Cycleurope is a
Swedish company which has
bought the market-leading bike
brands in other countries. These are
typical local names, with high
recognition and proximity. Surpris-
ingly for regular bikes, there are
strong differences in the bike
standards expected by the Dutch,
Swedes, Germans, French and
Italians: the size of the wheel, the
gears and the height of the bike are
different. Standardisation can only
concern the frames.
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CONCLUSION
Globalisation in its strict meaning had
a great organisational advantage: it was
simple to manage through extreme
centralisation. The post-global brand
will have to learn other decision
and implementation processes: the or-
ganisations will have to become col-
laborative.
References
(1) Levitt, T. (1983) ‘The globalization of
markets’, Harvard Business Review, Vol. 61,
pp. 92–102.
(2) Klein, N. (2000) ‘No logo: Taking aim at
brand bullies’, Picador, New York, NY.