Globalization of brands.

October 1, 2003

October 2003

On recent trips to Europe and Asia, I was struck by how rapidly global brands are taking over local markets.

In many categories, the dominant brand is a global brand. I

n accounting, advertising, banks, credit cards, automobiles, car rental services, computers, computer software, fashion, cosmetics, fast food, beverages and many other categories, chances are that many of the leading brands are global brands.

In every high-end restaurant or watering hole in the world, you’ll find virtually the same names on the other side of the bar. Jack Daniel’s, Absolut, Stolichnaya, Tanqueray, Johnnie Walker, J&B, Chivas Regal, Remy Martin, Courvoisier, Bailey’s.

In addition to global brands, we also have global celebrities. Jennifer Lopez is just as well known in India as she is in America. And so is Tom Cruise, Nicole Kidman, Russell Crowe, Arnold Schwarzenegger, Bill Gates, Jack Welch, Bill Clinton, George Bush and a host of other global celebrities.

In books, nothing succeeds like a celebrity author and that’s true in almost every country. The first month it was on sale in China, Hillary Clinton’s new book sold 200,000 copies

(A couple of years ago, a friend of mine in Sao Paulo tried to trick me with the question, “Who’s the most popular athlete in Brazil?” “That’s easy,” I replied, “Michael Jordan.” And, of course, I was right.)

There are a number of factors driving the trend towards global brands. One is the globalization of language. Everyone knows that English has become the second language of the world, but I was surprised at how much English has wormed its way into the cultures of many countries.

Even local stores owned by local entrepreneurs selling goods and services to local people will use English names. Redgreen, Solo Man, Steps, Joy Boy, Dressmann, Sand, Limbo, Brothers, Exit, Nice Girl and Biggie Best are some of the mystifying retail names you find in the far corners of the earth. My favorite is a retail store in Copenhagen called “And.”

The world is also moving toward the globalization of currency. The only question is whether the euro or the dollar will prevail. (The Chinese government recently announced a $4.5 billion-dollar bond issue but not in yuan. The issue will be split between dollars and euros.)

Another significant factor accelerating the globalization process is the Internet, which is the first global mass communications medium. In the past you could communicate worldwide by letter, fax, phone or telex, but these are not mass media like the Internet which has become a strong force in global branding. Look how rapidly Internet brands like Amazon and Yahoo became global brands.

What does globalization mean for companies in every country of the world?

For one thing, if you haven’t already done so, you need to think about going global. If your company doesn’t go global, you can be sure that some other company in the world will move into your home market as a global brand and take some of your business away from you.

Even if you have no intention of going global immediately, you should at least take the precaution of registering your brand name in the 150 or so countries that account for most of the world’s economic activities.

Secondly, your brand name has to work in English. It doesn’t necessarily have to be an English word, but it needs to “sound right” in the English language. In particular, consumers need to be able to pronounce and spell your brand name easily. Nokia is a Finnish name, but it works well in English. Tokyo Tsushin Kogyo is a Japanese name that doesn’t work well in English.

That’s why Tokyo Tsushin Kogyo changed its name to Sony and the rest is marketing history.

Truly, globalization is a trend whose time has come.