The events of the last 12 months have had a considerable impact on brands. Many analysts have commented about the consumer impact of hunkering down or how inappropriate humor in advertising is now out. Instead, I want to talk about what brands are doing and can do in this changed world.
"Local" is defined in Webster's Dictionary as "Characteristic of, or confined to a particular place." One of the biggest changes for brands will be the need to become more local. Local is important because it shows that the brand belongs to and is part of a community. Brands that can get closer to the consumer's neighborhood are more likely to be trusted.
As brands become bigger, the more likely they are to be despised for their success and their size- Starbucks, The Gap, Barnes and Noble and Wal-Mart are just a few examples of companies who have become recent targets of attack. With the recent corporate scandals at Enron and WorldCom, consumers are trusting big business and their big brands less and less. According to a USA Today/ Gallup poll, given the choice of government, labor and business, those mentioning business as the biggest threat to the country has increased from 22% in September 1981 to 38% in July 2002.
As size has been such a part of the problem, brands will need to appear much smaller than they really are. They will have to appear much less dictatorial, one-dimensional and be prepared to take on more fluid and organic characteristics. They will need to do this because the consumer has become more sophisticated than marketers ever wanted them to be.
Big brands can remedy this new "trust chasm" that's emerging by making more of an effort to become part of their local community. One great example was the effort of American Express and their advertising agency, Ogilvy and Mather who responded to the needs of downtown Manhattan businesses post 9/11 by creating advertising that actively encouraged people to support these businesses. Through this action, American Express defied the conventional stereotype of an elitist financial institution that cares little about its business customers.
Another example on a global level is Nike, who during the World Cup translated the "Scorpion KO" campaign idea into relevant advertising with specific events tailored precisely for local markets using local talent. The success of Nike in soccer shows how a brand can become locally relevant.
Brand Localization will take two distinct forms, one that is based on geography and one that is based on mindset.
The geographic aspect of Brand Localization will see three specific Manifestations. These may work together or independently of one another: product tailoring, promotional tailoring and community initiatives. Product tailoring will be an increased focus on developing the product that matches specific taste or style profiles- it may even involve buying or starting smaller brands. Promotional tailoring will engage the consumer in promotions and advertising that is specific to the region. Finally, there will be community efforts which demonstrate through action the corporate citizenship of the community.
These efforts will bring the big brands closer to their consumers and in so doing will help them defend their position from smaller more nimbler local competitors (who often benefit from being "David" in the "David vs. Goliath" business challenge).
Overseas, there's a backlash emerging against American brands. A July 2002 poll by the public relations firm Edelman found 45% of European opinion leaders now have a less favorable impression of American brands as a result of recent foreign trade policy initiatives. The critical imperative for American brands on foreign shores is to adapt to their local cultural surroundings. Brands like Coca-Cola, McDonalds, Levi's and Nike have made rapid strides in recent years to inject more localness into their offerings, this is a trend that will only accelerate, as immersion in local cultures becomes imperative.
It's interesting that these three brands understood the potential weakness of relying too heavily on their "American-ness" some years back. Levi's in Europe started to shift away from their classic iconic American imagery over three years ago, and McDonald's updated its product offering by selling beer in Germany a number of number of years back.
The concept of "Brand Localization" can also be applied to communities of interest, people linked together by an affinity, interest or mindset, irrespective of geography. Brands will reach out to these in an effort to generate closer bonds with these groups. These efforts will be made easier with the application of technologies like CRM and the Web.
Brand Localization will be the future of branding as brands communicate multiple messages across different geographies to different audiences. In addition, these brand messages will better connect to the audience. These audiences will play the role of brand media, using the brand's "currency" to create their own word of mouth related messages about the brand and its relevance to their lives.
Branding is going through radical change and the impact of the last 12 months has only accelerated this. Brand Localization will be the way in which brands find a way to connect and close the gap that exists between them and their customers.