Building Brand Equity Across

Cross-Cultural Markets
A presentation by Leke Alder at the
“What Is Your Africa Strategy?”
Conference by Georgetown Capital
Partners

June 17, 2008

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Introduction
5

n 6 is a perfect number and signifies

harmony & balance
n 6 represents justice in Pythagorean theory
n 6 relates to the dimensions of a cube. It
reflects matter
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This presentation is focused on 6 things:

1. The Book of Assumptions

2. Definition and Implications of Brand Equity
3. Peculiarities of African Markets
4. A Word on Brand Architecture
5. The Big Question
6. Lessons and Recommendations
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The Book of Assumptions

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The biggest branding firm in

Africa today is...
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CNN!
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An analytical study of its methodology quickly

reveals serious flaws. It is terribly understaffed
for the size of its ambition; and opinion often
masquerades as objective analysis.
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For example, Jeff Koinange was the only African

correspondent of CNN. Judging by the size and
complexity of Nigeria, even a thousand Jeffs
cannot cover Nigeria, not to talk of South Africa
or East Africa, or West Africa.
13 Major African languages
n Arabic n Kinyarwanda
n Hausa n Gikuyu
n Amharic n More
n Oromo n Kirundi
n Yoruba n Sotho
n Igbo n Luhya
n Somali n Tswana
n Ibibio n Kanuri
n Fula n Umbundu
n Malagasy n Northern
n Afrikaans Sotho
n Zulu n Kongo
n Chichewa n Tigrinya
n Akan n Tshiluba
n Shona n Wolof
n Xhosa n Swahili

Nigeria alone has 389 ethnic

groups and 521 languages
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But as far as CNN is concerned, East or West,

North or South, Jeff was enough!
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The second critical flaw in CNN's methodology is

that the Network is guilty of Typification.
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According to CNN, Africa is about:

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When CNN is not showing slipper-breasted

women carrying malnourished babies with flies
buzzing around their heads...
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… it shows us a picture of Uncle Mugabe.

Robert Mugabe
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In CNN’s portrayal, he is a typification of the

“African” leader:
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The Arabs wanted to escape

CNN's racial profiling and
someone figured out a way
to do it.

Perhaps the smartest Arab

leader is Sheikh Hamad bin
Khalifa, the ruler of Qatar.
Sheikh Hamad bin Khalifa
Emir of Qatar
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He established his own branding corporation

and named it Al Jazeera.

The mission of Al Jazeera is “to provide accurate

and impartial news with a global, international
perspective”.
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And the vision of Al Jazeera?

“Al Jazeera (English) is destined to be the

English-language channel of reference for Middle
Eastern events, balancing the current typical
information flow by reporting from the
developing world back to the West and from the
southern to the northern hemisphere.”

(Emphasis mine!)
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Now CNN is governed by 2 classes of

assumptions:

1. Assumptions made by us about CNN

2. Assumptions made by CNN about us
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We assume for example that because CNN has a

wide reach, it is an authority on what it says.

That is obviously a fallacy.

In logic, this fallacy is called Appeal to authority.

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Most times, what CNN says is the opinion of

people who for the most are not even experts in
their field. The term “Correspondent” is an
omnibus clause.
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Again we assume that if you say something

authoritatively, it means you are an authority.
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We assume that whatever we hear on CNN is

gospel truth. Indeed, were CNN’s broadcast
bound into a volume of transcripts, it will rival the
Gospel of John!
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We do know that what we hear on CNN is not

always gospel truth. Jeff was accused for
example of staging Niger Delta militants. The
poor guy had become a movie director/producer.
He seemed to have mingled too much with
Nollywood types.
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Now let’s turn to assumptions made by CNN

about us.

Assumption 1:
Africa is one!

There is no Francophone or Anglophone Africa.

Africa is one!
What the Organisation of African Unity (OAU)
could not achieve, CNN achieved!
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Assumption 2:
The nations of Africa do not have individual
identities or peculiarities!
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Assumption 3:
P=Q
Q=P

Africa is Nigeria
Nigeria is Africa

Where Nigeria is a variable and Africa is a

constant.
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I do not want to make the same mistakes as

CNN, even though we share one similarity: we
both speak authoritatively!
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Therefore, in talking about building brand equity

across cross-cultural markets - an Africa
strategy, I will not assume:

n That Africa is one

n That Nigeria is Africa or Africa is Nigeria
n That there is only one phone network in
Nigeria. (There are more than 3 actually:
Francophone, Anglophone, MTN phone and
Celtel phone.)
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But I have already started making mistakes in

this assumption thing. I am assuming for
example that we all know what brand equity is.

Please permit me to delve into the subject.

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Definition of Brand Equity

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Now there are many definitions of Brand Equity:

1. Brand equity is that incremental value that

accrues to a product when it is branded.
V. “Seenu” Srinivasan, Adams Distinguished Professor of
Management, Stanford University

2. Brand equity is an intangible asset that

depends on associations made by the
consumer and it can be viewed from 3
perspectives: financial, brand extensions
and consumer-based.
NetMBA, Business Knowledge Center
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3. Brand equity is used to describe both the

value of the brand and the brand's
component values.
Dobney.com

4. A brand's power derived from the goodwill

and name recognition it has earned over
time, and which translates into higher sales
volume and higher profit margins against
competing brands.
www.businessdictionary.com
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5. An intangible value-added aspect of a

particular good that is otherwise not
considered unique.
www.answers.com

6. Brand equity is a set of assets (and

liabilities) linked to a brand's name and
symbol that adds to (or subtracts from) the
value provided by a product or service to a
firm and/or that firm's customers.
David Aaker, Professor of Marketing & Policy, University of
Berkeley
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We can see from the foregoing that there’s no

consensus on the definition of brand equity. For
some, it translates into customer loyalty; for
others, it translates into financials.

I will therefore settle the score by giving my own

definition.
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Brand Equity is the intrinsic and extrinsic value

inherent in a brand. It includes semi-tangible
assets like the name and logo valuation and
other abstract assets like reputational advantage,
market preference, etc.
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Implications of Brand Equity

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Generally, brand equity manifests as follows:

1. Increased market value (market capitalisation)

2. Rising stock price
3. Product/service preference
4. Goodwill
5. PR equity
6. Top-of-the-mind name/brand recall
7. Transfer of value to new products
8. Leverage during mergers and acquisition
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Consider some brands with immense

brand equity in Africa
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Event horizon:
The big bang
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The accepted chronological model of the

universe is the Big Bang.

We do know that the universe is expanding

because of Edwin Hubble’s discovery in 1929
that galactic distances are generally proportional
to their red shifts.
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Thus, the age of the universe is determined by

the light emitted from distant galaxies and
quasars. Because they have been red shifted to
longer wavelengths, we have an idea of the age
of the universe - 13.73bn (give or take 120m
years).
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But this methodology imposes certain

limitations.

Because the universe is expanding, some lights

from the past may never get to us. And because
the universe is expanding, future lights may
never reach us.
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Thus, we have a past event horizon and a future

event horizon.
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In considering some of the global brands on our

list, we are limited by past event horizons. And
because their expansion is in the future, we also
have a future event horizon.

However this much we can gather from these

brands - this is the history we see (I’m going to
illustrate with a few case studies).
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Nestle
Nestlé is a multinational packaged food company
founded and headquartered in Vevey,
Switzerland.

It resulted from a merger in 1905 between the

Anglo-Swiss Milk Company established in 1866
by the Page Brothers in Cham, Switzerland and
the Farine Lactée Henri Nestlé Company set up
in 1867 by Henri Nestlé.
1860 Nestle founded
1905 Nestle merges with the Anglo-Swiss
Condensed Milk Company
1910s Doubles operations through World
War I government contracts
1947 Nestle merges with Maggi
1950 Acquires Crosse & Blackwell
1963 Acquires Findus
1971 Acquires Libby's
1973 Acquires Stouffer's
1977 Acquires Alcon Laboratories Inc.
1984 Nestle launches new round of acquisitions
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1997 Acquires San Pellegrino

1998 Acquires Spillers Petfoods
2002 Acquires Ralston Purina, Chef
America
2005 Acquires Delta Ice Cream
2006 Acquires Medical Nutrition division of
Novartis Pharmaceutical
2007 Acquires Gerber
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Standard Bank
Standard Bank Group Limited is one of South
Africa's largest financial services groups. It
operates in 18 African countries and a total of 38
countries worldwide.

In 1862, a group of businessmen led by John

Paterson founded the bank named Standard Bank
of British South Africa and began banking
operations in 1863, in Port Elizabeth, South Africa.
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1863 Standard Bank of British South Africa

begins operations; merges with
Commercial Bank of Port Elizabeth,
Colesberg Bank, British Kaffrarian
Bank & Fauresmith Bank
1883 Renamed Standard Bank of South
Africa
1886 Opens branch in Johannesburg
1890-1955 Owns 600 branches
1962 Registers as Standard Bank
1965 Merges with Bank of West Africa
1969 Merges with Chartered Bank of India,
Australia and China to become
Standard Chartered Bank; Standard
Chartered Bank Group established as
holding company
1987 South African investors acquire 100%
ownership
2006 Acquires BankBoston Argentina
2007 Acquires IBTC Chartered Bank & 67%
share in Turkish bank Dundas Ünlü
Securities; Industrial and Commercial
Bank of China acquires 20% interest in
Standard Bank
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Multichoice
M-Net was founded as one of the first two
subscription television services outside of the
United States, and MultiChoice was incorporated
to provide subscriber management services for
M-Net’s pay television bouquets. It is one of the
first pay-TV channels to launch outside the US.
1986 M-Net founded as Africa’s 1st pay-TV
station
1990 Listed on Johannesburg Stock Exchange
1992 Launches analogue satellite TV in 20
African countries
1993 Multichoice splits from M-Net to become
an independent company
1995 Launches digital satellite TV & Greek TV
platform
1996 Changes name to MIH Holdings
1997 Expands into Thailand; invests in OpenTV
(supplier of interactive TV operating
systems)
1999 Launches Direct-to-Home in China;
increases OpenTV ownership to 80%;
OpenTV IPO; launches Greek digital TV
2000 Launches new satellite for sub-Saharan
Africa & Indian Ocean islands
2001 Acquires 46.5% in QQ, China; launches
services in India & Portugal
2002 Launches interactive TV
2003 Improves service offers
2005 DSTV Premium subscribers cross the 1
million mark for the 1st time
2007 Acquires Tradus (internet auction
company)
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There are 3 immediate lessons we can learn:

1. The brands achieve growth through mergers

and acquisitions (e.g. Nestle, Standard Bank)
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2. The brands seem less concerned with growth

than with acceleration.

F=MxA
where a=acceleration, f=force, m=mass

Acquisition is a good acceleration model.

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3. The brands are generally seen as a

compendium of the events that make up their
timelines/history. The history dissolves into
the brand.

Unilever for example started with Lever

Brothers which produced Sunlight soap - the
1st branded product in 1888.
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Impact of national brand equity

on corporate brand equity
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A nation’s brand equity impacts greatly on its

emergent brands:
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Peculiarities of African Markets

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1. The regional nature of the continent. Africa is

made up of several countries and not one
region
2. The regional nature of the psyche of the
population
3. Socio-economic factors
4. Political factors
5. Educational factors
6. Cultural factors
7. Religious factors
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A Word on Brand Architecture

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Let’s consider brand architecture from the

perspective of other successful cross-cultural
brands:
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Virgin has created more than 200 branded

companies worldwide, employing approximately
50,000 people, in 29 countries. Revenues around
the world in 2006 exceeded £10 billion (approx.
US$20 billion).
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Business Focus
Entertainment, travel, financial
services, consumer products

Conceptual Definition/Brand Essence

Rebellion against the establishment.
Value for money, quality, innovation,
fun and a sense of competitive challenge.
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Headquartered in London, HSBC is one of the

largest banking and financial services
organisations in the world. HSBC's international
network comprises over 10,000 offices in 83
countries and territories in Europe, the Asia-
Pacific region, the Americas, the Middle East and
Africa.
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Business Focus

Integrated financial services

Conceptual Definition/Brand Essence

The world’s local bank

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Societe Generale is one of the leading financial

service groups in the Euro zone. It employs more
than 120,000 people worldwide in 3 three
businesses – retail banking and financial
services, global investment management &
services and corporate & investment banking
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Business Focus

Financial services group

Conceptual Definition/Brand Essence

Extreme focus on the customer;

Synergies that add value to the customer
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From the foregoing, we surmise that 2 kinds of

brand architecture can work for cross-cultural
brand strategy: monolithic as in HSBC and
graphical unification as in SG.

Consumer goods corporations like Unilever

however sometimes adopt a product-based
brand architecture or house-of-brands.
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The big question:

How do you build brand equity across
cross-cultural markets?
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The starting point is to identify cross-cultural

features and platforms:

Features Platforms
1 Quality and excellence Web and new media
2 Strong HR Sports
3 Innovation etc. Youth culture e.g.
music, films etc.
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Other key areas of focus include:

1.Core definition
2.High level of professionalism and institutional
outlook
3.Strong processes and discipline
4.High ethical standards
5.Global outlook with local adaptation
6.Strong HR culture
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7. Innovation
8. Succession planning
9. Strategic planning
10.Wisdom (to deal with the political terrain and
environmental factors. Understanding of the
signs of the times)
11. Regionalised strategies
12. Government relations competence
13. Home government backing
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Bringing It Home
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Lessons from home-grown brands

1. They focus on their competitive advantage in

new markets
2. They have sheer willpower and guts
3. They grow through mergers / acquisitions /
strategic partnerships
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Recap of lessons and

recommendations:
Keys to building brand equity
across cross-cultural markets
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1. Have a strong business definition and

conceptual definition
2. Think big
3. Put in place structures to manage growth
4. Adopt international standards
5. Be sensitive to cultural nuances and regional
differences
6. Put in place a government relations strategy
7. Shed limitations and cultural baggage
8. Embrace knowledge
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Do not be like CNN!

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Don’t assume that this lecture is exhaustive.

Broaden your horizon!

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Thank you!