In 2002, we carried out a two-stage research project in partnership with the market research company Research International/USA to find out how consumers in different countries value global brands. First, we conducted a qualitative study in forty-one countries to identify the key characteristics that people associate with global brands. Then we surveyed 1,800 people in twelve nations to measure the relative importance of those dimensions when consumers buy products. A detailed analysis revealed that consumers all over the world associate global brands with three characteristics and evaluate them on those dimensions while making purchase decisions. We found that one factor—American values—didn't matter much to consumers, although many companies have assumed it is critical.
Quality Signal. Consumers watch the fierce battles that transnational companies wage over quality and are impressed by the victors. A focus-group participant in Russia told us: "The more people who buy [a] brand…the better quality it is." A Spanish consumer agreed: "I like [global] brands because they usually offer more quality and better guarantees than other products." That perception often serves as a rationale for global brands to charge premiums. Global brands "are expensive, but the price is reasonable when you think of the quality," pointed out a Thai participant. Consumers also believe that transnational companies compete by trying to develop new products and breakthrough technologies faster than rivals. Global brands "are very dynamic, always upgrading themselves," said an Indian. An Australian added that global brands "are more exciting because they come up with new products all the time, whereas you know what you'll get with local ones."
That's a significant shift. Until recently, people's perceptions about quality for value and technological prowess were tied to the nations from which products originated. "Made in the USA" was once important; so were Japanese quality and Italian design in some industries. Increasingly, however, a company's global stature indicates whether it excels on quality. We included measures for country-of-origin associations in our study as a basis for comparison and found that, while they are still important, they are only one-third as strong as the perceptions driven by a brand's "globalness."
CONSUMERS ALL OVER THE WORLD ASSOCIATE GLOBAL BRANDS WITH THREE CHARACTERISTICS.
Global Myth. Consumers look to global brands as symbols of cultural ideals. They use brands to create an imagined global identity that they share with like-minded people. Transnational companies therefore compete not only to offer the highest value products but also to deliver cultural myths with global appeal.
"Global brands make us feel like citizens of the world, and … they somehow give us an identity," an Argentinean consumer observed. A New Zealander echoed: "Global brands make you feel part of something bigger and give you a sense of belonging." A Costa Rican best expressed the aspirations that consumers associate with global brands: "Local brands show what we are; global brands show what we want to be." That isn't exactly new. In the post-World War II era, companies like Disney, McDonald's, Levi Strauss, and Jack Daniel's spun American myths for the rest of the world. But today's global myths have less to do with the American way of life. Further, no longer are myths created only by lifestyle and luxury brands; myths are now spun by virtually all global brands, in industries as diverse as information technology and oil.
Social Responsibility. People recognize that global companies wield extraordinary influence, both positive and negative, on society's well-being. They expect firms to address social problems linked to what they sell and how they conduct business. In fact, consumers vote with their checkbooks if they feel that transnational companies aren't acting as stewards of public health, worker rights, and the environment. As infamous cases have filled the airwaves—Nestlé's infant-formula sales in Africa since the 1980s, Union Carbide's Bhopal gas tragedy in 1984, the Exxon Valdez spill in 1989, the outcry over Shell's plan to sink its Brent Spar oil rig and the protests at its Nigerian facilities in 1995—people have become convinced that global brands have a special duty to tackle social issues. A German told us: "I still haven't forgiven Shell for what they [did] with that oil rig." An Australian argued: "McDonald's pays back locally, but it is their duty. They are making so much money, they should be giving back."
The playing field isn't level; consumers don't demand that local companies tackle global warming, but they expect multinational giants like BP and Shell to do so. Similarly, people may turn a blind eye when local companies take advantage of employees, but they won't stand for transnational players like Nike and Polo adopting similar practices. Such expectations are as pronounced in developing countries like China and India as they are in developed countries in Europe.
What we didn't find was anti-American sentiment that colored judgments about U.S.-based global brands. Since American companies dominate the international market, critics have charged that they run roughshod over indigenous cultures in other countries. Champions of free trade have countered that people in other nations want to partake of the great American dream, and global brands like Coke, McDonald's, and Nike provide access to it. That debate has cast a long shadow over American firms, and they have become rather circumspect about revealing their origins, culture, and values while doing business overseas. Many have tried to position themselves as more global than (ugly) American.
WHAT WE DIDN'T FIND WAS ANTI-AMERICAN SENTIMENT THAT COLORED JUDGMENTS ABOUT U.S.-BASED GLOBAL BRANDS.
However, we found that it simply didn't matter to consumers whether the global brands they bought were American. To be sure, many people saidthey cared. A French panelist called American brands "imperialistic threats that undermine French culture." A German told us that Americans "want to impose their way on everybody." But the rhetoric belied the reality. When we measured the extent to which consumers' purchase decisions were influenced by products' American roots, we discovered that the impact was negligible.
That finding is all the more remarkable considering that when we conducted our survey, anti-American sentiment in many nations was rising because of the Iraq war. Most of the consumers were like the South African who candidly said, "I hate the country, but I love their products." A Filipino confessed: "I used to go on anti-American rallies when I was a student, but I never thought about the [American] brand of clothes or shoes I wore!" "We aren't concerned with how America governs itself," an Indian said. "What we look for is quality in their products." Since people's concerns with U.S. foreign policy have little impact on brand preferences, American companies should manage brands just as rivals from other countries do.
The relative importance of the three dimensions was consistent across the twelve countries we studied, indicating that the calculus used by consumers to evaluate global brands varies little worldwide. Taken collectively, though, the global dimensions were more powerful in some countries than in others. They have the smallest impact on U.S. consumers, for example. Because of the dominance of American brands in foreign markets, a competitive national market, and a certain ethnocentrism, Americans are relatively uninterested in brands' global presence. The drivers also have less impact on consumers in Brazil and India. That may be because of vestiges of anti-colonial cultures, the strength of local manufacturers, and growing nationalism in those countries. At the spectrum's other end, the dimensions influence consumers in Indonesia, Turkey, and Egypt the most. In those predominantly Muslim nations, we could survey only people who worked in the organized economy and belonged to the top 50 percent of the population in socioeconomic terms. Such people may value global brands particularly highly because they represent a way of life that they cherish—a way of life that may be under threat from religious fundamentalism.
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