Theodore "Ted" Levitt of Harvard Business School set the marketing world abuzz in 1983 with a bold prediction: Globalization had arrived, and before long global companies would be selling products and services in the same way everywhere on earth. Levitt's forecast was compelling -- and more than a little daunting for executives wondering how they would go about adapting to this brave new world of monolithic brands.
More than 20 years later, however, Levitt's prediction has not come to pass, according to Wharton marketing professors George S. Day and David J. Reibstein, who note that only a handful of truly global brands exist today, despite the increased globalization of markets. In addition, experience has shown that companies need not always create one-size-fits-all global brands just because the world appears to be shrinking. Indeed, firms should recognize that adapting brands to local conditions will on many occasions be the best approach, and at times the only approach, because local conditions will leave them no other choice.
"We know the limits of global brands," says Day. "I don't think there is ambiguity about how far you can push the idea. We know the downside if you try to go too far." Adds Reibstein: "I am often asked by companies, 'Should I have a global brand?' and the answer is always 'Yes.' But that really is an oversimplified answer."
Yes, global companies need global brands to some extent. But global branding is not an all-or-nothing proposition. There is a continuum along which firms can decide how global they wish their brands to be -- with a single global brand at one extreme and an assortment of nothing but local brands at the other. Global and local brands can be part of a successful marketing mix at any spot along the continuum. Decisions to use a combination of local and global brands -- what the Wharton professors call the "hybrid" approach -- depend on many factors, including products, industry, local cultures and the nature of the competition.
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