International branding - understanding local conventions

This article by Sicco van Gelder of Placebrands and Serge Fenenko of Novocortex is published in the Russian magazine Identity (August 2006). We used our marketing and branding experience obtained in Western and Eastern Europe. 

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The article explores how local conventions (i.e. unwritten rules that govern people’s perceptions of products and brands) influence branding strategies. One of our main conclusions is that brand managers should examine the nature of local conventions to understand how solid they are. When a convention is undergoing erosion in consumers’ minds, you have an opportunity to challenge it. By challenging a convention you can differentiate your brand from the local ones and offer distinct value to consumers. Another conclusion is that providing consumers with new worthwhile experiences is the more successful strategy than adapting your brand to new markets. Below you will find an extract of "International branding: understanding local conventions".

Entering new markets

When a brand enters a new geographical market, it needs to pass through a number of filters that determine how local consumers perceive brands. These perceptions often differ from consumer preferences and perceptions in the brand's home market. The brand manager needs to understand these differences. Otherwise they can cancel, distort or reduce important elements of your brand.

There are hundreds of factors influencing consumer perceptions. In this article we will use a logical framework from the book "Global Brand Strategy" written by Sicco van Gelder and published by Kogan Page in 2003. This framework divides factors influencing brand perception in three types: category conventions, needs conventions and cultural conventions. The word ‘convention’ stands for unwritten rules that govern people’s perceptions of and decisions about a brand. When a convention is considered to be solid, consumers are unwilling to accept an alternative. And this decreases chances to successfully introduce a new brand on the local market. When a convention is flexible, it is undergoing development or erosion in consumers’ minds. And this offers opportunities for new brands.

Understanding and using these conventions will help managers of international brands to successfully penetrate new markets, and managers of local brands to successfully defend their market position. We will use numerous examples from various countries to illustrate how various types of conventions (1. Category, 2. Needs and 3. Cultural) can influence customer perception of your brand.

1. Category  conventions

In every product or service category, there are customs and unwritten rules that most players comply with. For example, why would Dutch or German beer drinkers reject the idea of drinking their brew from a plastic bottle? What is the value of a glass bottle to them? Or there is no value and they are just used to drink beer from glass bottles? This type of category conventions is mainly determined by the major market players in a category. Quite often as a response to internal demands such as production, logistics and advertising and not as a response to consumer needs. Smaller market players often attack these conventions to increase their market share. For instance, the Dutch brewer Dommelsch recently introduced Dommelsch Ice in plastic bottles. These bottles are quite useful in a concert hall, where glass is prohibited. However, consumers still seem to be unhappy about plastic, because "plastic beer is less tasty than the real one in glass bottles".

There are three sorts of category conventions - conventions of representation, of product experience and of media. Let's have a closer look at two of them. Conventions of representation describe how and where a brand portrays itself. They consist of such factors as advertising, packaging, brand name and logo. Conventions of representation often reveal consumer preferences, less obvious to foreign brand managers. For instance, dairy products in Russia, Ukraine and Belarus often have packages and logos that contain references to local traditions and legends. The package communicates that the product inside is manufactured according to traditional production methods. In Western Europe, many dairy products have abstract logos and a limited number of very distinct colors on their packages. Because they want to increase recognition of their brands on the over-crowded supermarket shelves. In order to protect its market from foreign brands (such as Danone and Campina), the small Belarusian company "Kletskaya Krynachka / Клецкая крыначка" uses local legends and national flag colors on its packages. The packages appeal to patriotic feelings of local consumers and position local diary products as "biological, natural, pure" as opposed to "synthetic and full of chemicals" food produced in the West. It's interesting that "Savushkin Product / Савушкин продукт", the market leader in Belarus, uses exactly the same conventions of representation, and similar positioning.

Conventions of medium concern the way a brand is delivered, both physically and emotionally. This includes distribution as well as brand communication. The conventions of medium govern which media channels are considered to be appropriate for brands within a category. They also govern the choice of distribution channels. Western supermarket chains have found that challenging distribution conventions in Russia, Belarus and Ukraine can be very difficult. For instance, the conventions governing distribution of fresh groceries – consumers tend to shop for fresh fruit and vegetables on the local market – are much more durable than was expected.

Category conventions are often the first to be challenged by international brands, as they often lack demand-side logic. In addition, they are the most clearly observable and recognizable of the three types of conventions discussed in this article.

2. Needs conventions

The second type of conventions is needs conventions: consumers obtain their brand experience with an eye to their personal needs. The needs conventions determine how needs are manifested. This means that, although a particular need may be common to all people, the same need may be satisfied in a different manner in different societies. For example, a basic need for breakfast may be met by eating sandwiches with a cup of tee in Russia, eggs and toast in the UK, rice and fritters in China and a muffin in the United States. In this article we will use examples of security needs and social needs to better understand how needs conventions influence consumers' perception of brands.

Security needs include our needs for safety, protection and certainty. Although basic security needs involve protection from physical and mental harm, their definition can differ between countries. A good example is the road safety. German drivers trust properly functioning brakes to ensure their safety, while French drivers prefer a powerful engine. There seems to be no or very little interest in road safety in Russia or Ukraine, as local consumers tend to believe in destiny - "if you are destined to die in a car accident, you will die in a car accident regardless of security measures". So, if you work for Volvo and your company introduces a new car brand on the Russian or Ukrainian market, you will have to find other advantages than the highest security standards.

Social or affiliation needs are our needs for belonging to a social group and feeling right. Sometimes these needs can be quite universal. This is one of the reasons why such brands as Nike, Harley Davidson and Kuyichi are so successful in various countries. The Kuyichi brand was launched five years ago to create fashion collections that comply with Fair Trade principles. E.g. paying more to local producers who adapt their working conditions to international standards, and using organic materials and ecological processes. Now Kuichi sells its jeans wear in 14 countries through more than 650 stores. Kuyichi achieved this success by appealing to the need of many people to make their own contribution to the better world. When people buy Kuyichi jeans and t-shirts, they support local producers and durable economies in developing countries.

Examples of Nike, Harley Davidson or Kuyichi do not mean that local brands should give up their attempts to attack global brands, which are good at spotting universal social needs. A good example of using social needs (and attacking conventions of product experience) is success of the first Russian blockbuster "Night Watch / Ночной дозор" and its sequel "Day Watch / Дневной дозор". Russian teenagers believed that really cool movies can only be maid in Hollywood. The Night Watch producers disagreed with this convention, and convinced Russian teens that their blockbuster is at least as cool as the Hollywood ones. Their message was very clear - if you haven't watched the movie, you will be absolutely unable to converse with your school friends. And nothing will help you, not even the latest model of Nikes or Nokia. Of course, the success of Night Watch can also be explained by cultural conventions - Russians love fantasy novels and magic stories.

3. Cultural conventions

The third type of conventions is cultural ones. Culture is a system of shared beliefs, values, customs and symbols that members of a society use to deal with their world and with one another. Each society develops specific cultural conventions, which influence the way its members are supposed to think and behave. Branding strategies and activities are also viewed by consumers in the context of local cultural conventions.

For instance, different societies have various beliefs about the world. The most typical example is the so-called country of origin effect. Consumers often have a set of beliefs or myths about a country that can have a positive or negative influence on brands from this country. For example, Germany is often associated with engineering excellence, France with romance, Italy with design flair, China with cheap quality products and so on. According to the Nation Brands Index, Russia is associated with very reach culture, not to be trusted government (due to 30 years of cold war), very bad investment climate (due to the Yukos and other affairs), and oil, weapons & metals as the main export products.

Another example how beliefs can affect your brand is U-specs. U-specs are universal and affordable spectacles for developing countries, developed by a team of VU Medical Centre in Amsterdam led by Dr. Rob van der Heijde. U-specs can be adjusted by wearers to suit their own eyesight; no visit to a doctor is needed. This makes U-specs truly universal. In order to further develop the product and to fine-tune its branding strategy, U-specs were distributed to a limited number of people in India. Their we discovered that local beliefs about health are very different from the western ones. Indians believe that children generally have great health, and therefore they don't need spectacles. Indians also believe that elderly people are generally ill, and therefore they also don't need spectacles. In order to create awareness that wearing spectacles can really improve your life and health, the U-specs team decided to target children first. Children can be convinced by their teachers and medical staff that local beliefs about health are wrong. And children can convince their parents that wearing spectacles can improve school results.

Using local conventions to build brand strategy

Understanding local conventions is extremely important in developing brand strategy for a new market. When a local convention is solid, consumers are unwilling to accept an alternative. So, you will probably have to adapt the particular aspect of your brand to this convention. When a convention is flexible, it is undergoing development or erosion in consumers’ minds. Thus, there is an opportunity to challenge such a convention, in order to differentiate your brand from competitors and to offer distinct value to consumers. You can judge the solidity of a convention by conducting competitive analysis and consumer research.

The most important consideration is whether adhering to or challenging a convention will provide sufficient additional value to consumers. Providing consumers with new and worthwhile experiences is much more important than adapting your brand to new markets. One of the best examples of brands that became global by offering new experience is the Mexican beer Corona. Corona was discovered in the 80s by European and American tourists visiting Mexico. Corona conquered western markets because its taste was very different form the traditional western beer. And because a long-neck bottle of Corona served with a slice of lemon reminded customers their exotic holidays, Latin rhythms and night parties.