Building a Global Brand from an Emerging Country
Many companies in emerging market countries have tried to successfully create brands in the developed countries’ markets, but only few have succeeded (Lenovo, Tata and Natura are examples).
Kumar and Steenkamp (2013) studied some emerging market companies that built global brands successfully. They found the key success factor is targeting the right and receptive diasporas
(Editor: ~a large group of people with a similar heritage or homeland who have since moved out to places all over the world) and use them for revenue increases and brand recognition before launching the brands to the mainstream.
But how to find the right diasporas? First of all it is the culture of a certain person that shapes identity. When immigrating, identity will be modified whether consciously or not. There will be changes in perceptions, living, norms and values, but also in language and buying behavior.
The problem is that social scientists usually think of the acculturation process as one-dimensional; the process actually is more complex than has ever been thought. Immigrants have to deal with 2 challenges: Retain cultural distinctiveness in the foreign society, while simultaneously affiliating with the host country and its culture to a certain extent. The degree to which these two challenges are met together determines in what category an immigrant will end up:
: Characterized by a low degree of retaining the home countries’ identity combined with a high degree of affiliation with the host culture. This group does not desire home countries’ products; rather, purchasing host countries’ products is a way to affiliate with the host country. As a result these diasporas are not attractive for building global brands and increase revenues.
: Characterized by a low desire of retaining the home countries’ identity combined with a low degree of affiliation with the host culture. This group has often not left their home country voluntarily, as a result they are characterized by a low level of education. Employment and educational opportunities are often low in both the home and host country. As a result this group is not attractive for revenue increase and brand recognition.
3. Ethnic Affirmers
: Characterized by a high desire of maintaining the home countries’ identity combined with a low degree of host culture affiliation. This group desires to stick to their home countries’ cultural values and beliefs. Because of limited integration into host countries’ social networks, this group will be useful for the revenue increase of a certain brand but not for brand recognition in a host country (demonstration effects will be low).
: Characterized a high desire to maintain the home coutnries’ identity combined with a high degree of host culture affiliation. In comparison with Ethnic Affirmers this group often have better education; higher incomes; higher self-esteem . More importantly hey are more willing to adapt to the host countries values and more involved in host country social networks. This makes them attractive diasporas when for both revenue increases and building global brands as emerging country.
Besides the importance of the type of diasporas in building global brands, four other elements are important:
1. The brand must be universally attractive
: in order to succeed it is necessary that a broader population must have a positive attitude toward a brand.
2. The diaspora needs to be large enough
: the relative size of the diaspora to the home country’s population is crucial, because it must be big enough to justify investments involve in the building of global brands.
3. Distribution of the diaspora must encourage brand expansion on the national scale
: A diaspora distributed all over a country and simultaneously concentrated in certain key locations is most beneficial for emerging companies. In this way diasporas serve as nodes through which the brands are distributed to various regions; as a result that the mainstream can be reached in a cost-efficient way.
4. Socioeconomic conditions of diaspora must encourage brand bulding
: It is important that members of a certain diaspora coincide to some extend with the host population’s profile, because it is well known that people are much more likely to socialize with similar people.
Source: Kumar, N. and Steenkamp, J.E.M. (2013). “Diaspora Marketing”. HBR October 2013, pp127-131