What are foreign brands doing right, and where are they going wrong?
Foreign brands are doing a lot right. In general, it’s hard to think of one foreign brand that isn’t actively preferred vis-à-vis local competitors due to inherent “cool” and reliability factors. Any time status projection is in question, foreign brands rule the day, particularly in categories – e.g., mobile phones, fashion, automobiles, even shampoo – that are consumed in public. Some international brands – Starbucks, KFC and Haagen Dazs to name a few – have restructured their entire business model to drive public consumption and it has worked. Local brands often dominate in-home categories such as appliances, food and furniture, although, as incomes rise, this is changing slowly. Foreign brands, with the exception of a few skillful marketers such as Procter & Gamble, have been less successful in extending “aspirational” brands downwards, via sub-brands and/or portfolio extension, to generate both profit margin and scale. But here, too, progress is being made.
