Global Product + Local Strategy = Winning Mantra

Tide, Hanes & Starbucks — Lessons from global market leaders

Globalization is defined as the development of an increasingly integrated global economy marked especially by free trade, free flow of capital, and the tapping of cheaper foreign labor markets.

The term has been in use since the early 20th century but came into popular use in the 1990s when the economies became increasingly global, and this globalization accelerated with the expansion of the Internet in the late 1990s.

However, as brands and companies go global, there is still a nuance that needs to be taken care of. This nuance lies in the diversity of the customer. An Indian consumer is drastically different than an American consumer or a Middle-eastern consumer.

While winning products usually work across geographies, the marketer’s job gets more and more challenging as you penetrate new international markets.

The R&D team’s job is done when the formula for a chocolate or a beverage or a toothpaste is perfected, but the marketing team needs to constantly find a way to sell it to a new audience in a new way.

The true success of international expansion comes with mixing localization with globalization — i.e. offering the global high-quality product, with localized messaging to the target market.

The good part is that there are a number of tools that you have at your disposal to achieve the optimal success for your expansion ambitions.

Let me elaborate on this with three winning examples of different marketing strategies that achieved success across geographies.

Tide — Targeting the Indian Homemaker

Tide — P&G’s master laundry detergent brand has been a leader in the US since 1949, with its launch dating back to 1946. It is also the world’s largest selling detergent brand.

It is by far the highest-selling brand in the US, with barely any competition that gets close.

However, Tide, was only launched in India, the 2nd most populous country in the world, in the year 2000. India is a difficult market to crack within the FMCG space, especially given the influence of the homemaker, who is in most cases a woman, and the nuanced nature of the market.

Yet, by 2019, the global leader, had managed to get a 13%+ market share, sitting pretty at 3rd place, behind local, cheaper brands Ghari and Nirma, which play in the popular segment. This is ahead of premium, global brands such as Ariel and Surf. It remains the clear leader in the mid-tier market.

How did Tide manage this feat?

Targeting the right audience — Most of the Tide campaigns were targeted at the Indian woman, who is the homemaker. A lot of laundry in India in mid-low-segment households is done via manual hand wash vs. washing machines. So, Tide introduced Tide Naturals, with ingredients that were less harsh on the hands.

Premium Brand, Affordable Price — Indian audiences are often “aspirational” and prefer branded products, but at the same time very price-sensitive. Tide tackled this perfectly by launching a global brand at a mid-tier price range, beating Surf / Ariel in the price war, and beating the local brands in the “brand” war.

Hanes — Inclusive Targeting & Brand Recall

The American and global leader in men’s underwear is yet another example of masterful marketing campaigns.

Hanes was founded in 1990 and has since become a global leader in the $36bn men’s underwear market. This wasn’t achieved overnight and there have been some clever campaigns around this.

How Hanes got here?

Inclusive Appeal to Broaden Audience — Hanes wanted to target every man they could, and hence they went with that theme. Most clothing is either about style or fit, and with underwear, the “style” factor significantly goes down given the nature of the product. So, Hanes targets the comfort and fit, and plays to a “something for everyone” thematic. Their “Every bod is happy in Hanes” campaign achieves just that by addressing most lifestyle/body types and showing how Hanes is meant for each of them.

Brand Recall in a Newer Market — In India, however, the underwear market is a tricky one to target, given the conventional and orthodox mindset of the mass audiences. So, Hanes did a clever play on the “tagless” nature of their underwear, and gave it a humorous spin.

The ad essentially shows a newly married Indian man, trying to cut an itchy inner tag from his underwear, and accidentally hurting himself, in front of his wife. Given the arranged marriage setting in India, this portrays an awkward situation on their first night together and essentially encourages men to avoid such situations by going for “tagless” Hanes.

The goal wasn’t really to target a specific target audience, but create a brand recall, that was achieved quite perfectly.

Starbucks — Building Local Trust Through Strategic Partnerships

Starbucks is pretty synonymous with coffee, at least in the US, and increasingly in other parts of the world.

However, this has been achieved via a clever strategy of localized strategic partnerships when launching into new markets.

How North America’s favorite coffee achieved its success?

Starbucks chose its target market extremely carefully and gradually expanded its reach, within America and outside.

Starbucks — Barnes & Noble Alliance — As early as 1993, Starbucks entered an alliance with Barnes & Noble Co. to exclusively supply coffee for the national bookstore retailer. This was the first big step in becoming a household coffee name in the US.

Starbucks — Pepsi Alliance — In 1996, Starbucks partnered with the beverage giant Pepsico to introduce the ready-to-drink coffee category with the iconic Frappuccino launch. What started as a nascent category has grown to be a more than $2 billion retail business and Starbucks is the leader in RTD coffee with 97 percent share.

Starbucks — United Airlines Alliance — First planned in late 1995, over the years the alliance strengthened and established Starbucks as a coffee-of-choice for the American traveler.

Starbucks — Tata Alliance — For their India launch in 2012, Starbucks partnered with India’s most trusted business conglomerate group, the Tatas to start their first store, which has since expanded and reached to more and more of the large Indian market. This was a 50:50 joint venture and gave the global brand the much-needed local expertise to crack a difficult, but massive new market.

Starting with the avid reader (Barnes & Noble), to on-the-go Americans (ready-to-drink), the frequent traveler (United Airlines), and more. Outside of the US, they entered the large market of India with another localized alliance. Starbucks has expanded its reach with a great product, offered to a global audience with carefully designed partnership strategies.

The above examples illustrate that despite having a strong product and brand doesn't necessarily translate into success globally when going for international expansion. There is a need for understanding the proposed target market of expansion and customizing your plan of attack accordingly.