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Global Packaging: What’s the Difference?

By Randall Frost

Global marketing for packaged goods involves greater product and branding differentiation. When a brand owner seeks to appeal at the local level it risks its global consistency. From high-touch to high-tech, international brands are struggling to achieve economies of scale with packages and products that successfully appeal to an increasingly global clientele.

In 2003, McDonald's announced that all of its restaurants—30,000 in over 100 countries—would soon be adopting the same brand packaging for menu items. According to a company press release, the new packaging would feature photographs of real people doing things they enjoy, such as listening to music, playing soccer, and reading to their children. McDonald's global chief marketing officer was quoted as saying, "It is the first time in our history that a single set of brand packaging, with a single brand message, will be used concurrently around the world." Two years later, the company appeared to backpedal when it announced plans to localize nutritional value charts on its packages.

To the extent that international brands appeal to global tastes, worldwide packaging strategies might be expected to show signs of convergence, especially as consumer tastes around the world become more homogeneous. But there is little evidence that this is happening.

Computer manufacturer HP strives to convey brand personality on packages that may need to accommodate text in as many as eight local languages. Fast-moving consumer goods companies, for their part, have hardly been more successful in finding global solutions to their packaging needs. Unilever standardizes some branded products while localizing others. Procter & Gamble adjusts branding strategies across borders. P&G markets its brands in Asia under the company brand name, but in Europe and the US, the product brands are not blatantly branded as P&G brands.

Much of the reason is that, with the notable exceptions of a few mono-brands like Coca-Cola and Pepsi, few international brands address the same markets wherever they are sold. Mark Kennedy, chief strategy officer at the brand consulting firm Landor Associates, is of the opinion that the term "global brand" is actually a misnomer when applied to most brands marketed by international companies. "There are very few truly global brands—brands that occupy a similar space in multiple markets from the point of view of who they are targeted against and their level of premium-ness in that market. Do they do the same kind of job in all the markets they are in? If they don't, I'm not sure they are global brands," he says.

By way of illustration, Kennedy—whose office is in Hong Kong—points to problems international companies have had entering the Chinese market. Kennedy says there have been three waves of attempts to get a foothold in that country. The first involved joint ventures with Chinese companies, most of which failed. In the second wave, foreign companies attempted to launch international brands without well thought-out marketing plans. These also failed. It has only been in the third wave, he says, that companies have actually attempted to understand the market and its consumer needs—and to develop products to meet those needs.

Kennedy says that companies that have successfully entered the Chinese market with an international product have often ended up localizing it, while launching a second "local" product. The first product remains the premium one and provides profile, but small sales volume. It is the second product that, with its lower marketing costs, yields a high market volume.

Local competitors in China typically rush to market with competing products following the successful introduction of a new international product. The super-charged competition encourages consumers to demand products that better meet their needs. By contemporary Western standards, the current proliferation of products and brands in the Chinese marketplace may seem a consumer's dream.

Herbert Meyers, co-author of The Visionary Package, says he was astonished on a recent trip to China to see the range of toothpaste offerings there. "The Colgate packages carried such a variety of promotional copy, all right next to each other on the same shelves, that they, in my view, made no sense at all," he says. "Different packages promoted ‘MaxFresh Breath Strips,' ‘Sensitive Breath Strips,' ‘Advanced Whitening,' ‘Total Plus Whitening,' ‘White Teeth in 14 Days,' and ‘Maximum Cavity Protection.'" Adds Meyers, "If I were looking for Colgate toothpaste there, I wouldn't know which to choose."

The current high level of product differentiation in China may be reminiscent to some in the United States of the 1980s, when American corporations were busy extending their product lines to address every perceptible customer preference. In a 20-month period during 1989 and 1990, for example, Procter & Gamble introduced 90 new products. By 1994, Colgate and Crest each offered more than 35 types and packages of toothpaste.


But this situation didn't last. Large retailers in the US began to recognize that they held tremendous power and influence over their suppliers. Taking their cues from the successes of Loblaws in Canada, Marks & Spencer in the UK, Aldi in Germany, and Carrefour in France, they decided to take on brand manufacturers with their own private store labels. With the additional help of product listing fees, retailers were able to exercise enormous control over what appeared on the shelves. The shift of power to retailers left fewer distribution channels available to brand manufacturers, who had to focus their resources on fewer product variants. The result was a marketing model characterized by fewer "bigger" brands.

Compared to markets in the US, markets in China are at very different levels of development. It may not always be possible to cover the entire market there with a single brand. A mainstream brand in Shanghai, for example, may be super premium in a smaller city. In response, international brand manufacturers have resorted to maintaining very high volume shares. This has effectively translated to producing products to fit every consumer need—usually under one master brand. Significant differences such as these in product/brand differentiation across countries can obviously play havoc with corporate global branding strategies.

Even as products overseas become increasingly differentiated at the consumer level, there may be a corresponding need for some international brands to differentiate themselves at home. Marty Neumeier, author of The Brand Gap, says American brands—more so than European and Asian brands—have become increasingly driven by a need to do this. "In the US, we're used to competing on a large scale, so we've had a head start on focus," says Neumeier. "And today, in an era of extreme marketplace clutter, we're learning that differentiation may not be enough—that it may take ‘radical differentiation' to succeed against so many competitors."

The highly differentiated US fast food brand Subway struggled in China because sandwiches are not popular there. "They were going in with a product that wasn't very culturally relevant," says Kennedy, of Landor Associates. "And they amplified that by the fact that the fillings they had didn't have much relevance to the market. The question would be: If you brought the sandwich in and changed the filling to a much more local type of filling, would you have had more success? Or would people have still said ‘I just don't eat sandwiches'?"

Marieke de Mooij, the Dutch author of Global Marketing and Advertising: Understanding Cultural Paradoxes, traces these kinds of problems to Western marketing managers being too focused on achieving brand consistency. "This need for consistency leads to developing brand personalities and identities that may be meaningful in the culture of the country of origin but may have a totally different (not desired) meaning in other cultures," she says. "So a consistent input by the global company may lead to inconsistent take-out by the consumer."

De Mooij says a few international brands of European origin (for example, L'Oréal and Nivea) have succeeded by continuously communicating innovative ingredients or introducing innovative line extensions rather than trying to market culturally hobbled white elephants. She believes that this type of continuous innovation is a prerequisite for successful global standardization.

One might also consider Nestlé. Although the Swiss company has been rationalizing its product line in the West, when it introduced coffee into the Chinese market, it developed a highly differentiated product. Kennedy explains, "When coffee came into China, people just didn't know how to drink coffee. Nestlé created a mix so they put the right amount of coffee with the right amount of cream and the right amount of sugar. So the coffee would taste reasonable. Previously people had been getting the mixing of the coffee all wrong. Nestlé understood the cultural issue there, and they now dominate the coffee category in China. That opened the door for Starbucks to come in."

Professor Kees Sonneveld of Victoria University in Australia is president of the International Association of Packaging Research Institutes. Sonneveld agrees that the future for global marketing involves greater product and branding differentiation—at the local rather than the global level. "[W]ithin countries, markets are becoming more and more differentiated," he says. "Not only by age and social sections but also in terms of cultural diversity, that is, ethnic groupings. In fact, most consumer markets around the globe are moving towards becoming multi-sector markets with the sectors decreasing fast in size. How far are we away from marketing packaged consumer products that are designed to meet the needs and requirements of a particular single individual?"