Global Branding In The Present Economic Climate

28 May 2010

Mark Artus, CEO of branding agency 1HQ, discusses how global brands can be more effective in today's economic climate.

The business I lead is focussed on the critical questions faced by brands – identifying them, defining them and finding solutions that answer them. This emphasis on questions means that when it comes to industry events, I'm always impatient for the Q&A session to start. It's usually the time when things get interesting (and sometimes awkward).

And so it proved at a recent event, when a member of the Cadbury family posed this simple question:

"Do you think we're ever going to get to a point where large corporations are there for the greater good of mankind rather than to turn over a fast profit?"

With the chocolate company - founded on the philanthropic principles of the Victorian era and still bearing the family name - having just been sold into the Kraft empire, the context of this question could not have been more poignant. But sentiment aside, and with the relentless demands of a system that puts profit, delivered at speed, above all other measures of performance, the received wisdom would suggest that the quick, simple and pragmatic answer to the question is no.

And yet I believe this is a moment when business needs to consider the question of its fundamental purpose more deeply. The global economic crisis has precipitated what I see as the single most pressing issue facing companies and brands today and for the future – a collective breakdown in trust.

"The crisis has precipitated the single most pressing issue facing companies and brands – a collective breakdown in trust."

That the mis-selling of mortgages in parts of the US should have precipitated a universal meltdown in the financial sector, and that this could spread in turn to all sections of the global economy, is all the evidence we need to prove that we are now part of an inextricably linked, co-dependent business world. At the same time, this corporate connectedness is mirrored among consumers, for whom the digital space has created a vast, instantly accessible forum to air and share their thoughts and opinions on everything from their politics to their brand of toothpaste.

So while in the past debate on the management of global brands has tended to focus on the struggle to accommodate local differences, the future will be much more about the things we have in common – and specifically a deeply held cynicism towards the institutions deemed collectively responsible for the crisis, combined with the means to share it. Mistrust may have reached its boiling point in the West, but I believe it is a mistake to regard it as an exclusively developed world phenomenon. We are already seeing evidence among consumers in markets such as China that international status does not guarantee positive associations, much less sales success.

And herein lies both the opportunity and the threat to global brands. With expectations and sometimes direct experience of the 'big boys' already low, the field is open to small, more nimble and entrepreneurial brands to step in. We've seen the way that brands such as Virgin (soon to break into the world of banking), Innocent and Method have successfully challenged the status quo, and carved out a reputation based on trust both in their ability to deliver their promises, and to do so ‘'ethically'. But the threat is not exclusively at the rarefied level of these iconic brands – lower down the scale, but no less dangerous, are local entrants in a range of categories, claiming to perform every bit as well as the international brands but at an 'honest' price.

So if this is the threat, what is the opportunity, and how does it relate to our original question about the fundamental purpose of companies and their brands?

Put simply, the opportunity is to reap the rewards of confounding expectations, and in the process to create not just loyal consumers, but advocates who are ready and willing to multiply the effect by sharing their positive experience with others. Doing this means offering product brands that deliver at a level commensurate with their price, in the context of a corporate brand that acts and is seen to act responsibly and ethically.

The idea of doing well by doing good is well established in many global corporations. But now, more than ever, living this ideal is vital. It is no longer enough to regard it as an ambition or an initiative – instead it's a mind-shift that leaders must ensure permeates the life-blood of an organisation, and, yes, become seen as its fundamental purpose. It's my belief that CEO's, companies and brands that grasp this, and act on it, will be well placed to deliver financial success in a changing world. Those that don't may well find that their time has come and gone.