Sunday, March 29, 2009

Branding across borders: Reaching the global marketplace

Since man started trading, we have searched to reduce the world around us to make it more manageable. It’s not its size of course, but our perception as to what we can sell and buy as the main aspect of globalization is economic (without forgetting cultural as both are closely linked.)  Globalisation has sped-up in the past 100 years with the double advent of flight and the Internet creating an even smaller world where any item, luxury or otherwise, is available to any metropolis dweller. Globalisation, whether desired or not, is a constant and its impact on your marketing can be dramatic.

Whether you’re working with your own brand or representing a foreign one, let’s explore the different issues a luxury good company faces while developing its brand across borders.

Segmentation to save your life

Most luxury item are designed for the connoisseur, the High Net Worth Individual (HNWI)…or so we think. The past twenty years have seen the democratization of the term luxury where what was once the domain of the rich and super-rich is now been bought by the masses. The main difference is in the frequency of purchase however. While a HNWI would not wink while buying a new Rolex every 3 months, most will consider it a lifetime investment or a least one made for a really special occasion.

The past twenty years have changed your segmentation and if you add other demographics changes, changes in behavior, changes in media availability, etc. you end-up with thousands of mini-target segments (not quite reaching the level of 1to 1 marketing however.) These niches are your new segments and you need to analyse them (look to your sales forces as they know most of them) and develop the messages and campaigns to reach them.  

One point to note, using behaviour rather than demographics to define these segments is the way to go. Such segments are not easily recognizable but respond better to your marketing than more pervasive segments. It is today, the best way to develop a global strategy.

Message: Can you say the same thing to everyone?

By using behaviour as your segmentation strategy, you will be able to develop the right global message for the right niche. And whether you use emotional or mechanical triggers (see a Breguet ad vs. a Breitling or Blancpain) that are needed to sell a luxury product, they would work in the same way regardless of nationality or creed. Patek Philippe‘s current legacy ad strategy appeals to the same basic human need that we all feel but presents it in the context of an heirloom, a behavioral value that an HNWI would recognise faster than others (check the pictures and you’ll see what I mean.) So the question you must ask is simple: Does your message convey the behavioral value that your target segment will recognize and act on?

Take the youth market as another example. Luxury jewelry is not often seen as their realm. Step into Tiffany or Cartier and you’ll see different people with one common denominator: Age (I did not say old, but definitely above twenty.) In the case of Tiffany, the central message is clear and almost everyone will recognise the little turquoise box. Such distinctive featuer is what you’re looking for when deciding on your message (in this case, you could say the box is the message.)

Measuring Return Across the Globe

The next step in your strategy is to develop your objective. No objective, no results. Your objective has to be measurable, not just a bland statement of what you want to do but a clear summary of the metrics that will allow to define whether your marketing campaign is successful or not.

Marketing ROI is still in its infancy but if you develop your direct marketing knowledge, you’ll get a glimpse as to how you can measure all sorts of marketing medium. In today’s world, even HNWI respond to different medium in a different way and If you target the young HNWI, then you’ll end-up with marketing tools that are very close to any other tools the youth are using around the world (handphone, online, etc.)

The simple step you can implement is to treat every marketing activity, local or global, as a campaign. The campaign becomes your unit of measurement. And even if some of your campaigns go across multiple borders or several months, their business effectiveness have to be measured against simpler campaigns. Who knows, the simpler campaigns could reach your target better and more cost effectively than more complex ones. Balanced with the long term effect of branding, your selection of the best return will help you realise measurable benefits from your marketing.

Strategy & Tactics

There are many strategies to reach your target market globally and behaviour will once more show you what works and what doesn’t work, regardless of location. At the core, you need to decide whether you want to use a pure-brand strategy vs. a pure sales-strategy. This selection will clearly depend on what you believe "Brand" means.

A pure-brand strategy is almost equivalent to the old pull strategy where you send your message to the public and pull them into your shops. It still has its value and the amount of luxury good advertising you see today is a proof of that. It’s main role however is to create the right emotion with a certain amount of hope that the customer will finally act and buy the watch or jewel you’re promoting.

A pure-sales strategy is a lot more focused on pushing to the public what you want to sell. The campaigns are almost direct-response like and every single activity is tracked for results and dumped if proven to not work. There is a connection between the day of the ad and the day-sales. The content is less emotional and a lot more short term.

We can’t argue that a brand has to create an emotion to reach its target and be remembered. We further can’t argue that you should focus more of your efforts in measurable marketing. Like always, the truth lies in between but there are two secrets that both strategies use to succeed: Reach and Frequency.

The first secret is quite clear: If you don’t reach the right people, you won’t get the benefits. It couldn’t be simpler but if you check the amount of marketing which is reaching you while you live your life, you’d be amazed how much of it is wasted. There is so much of it, It looks like marketers do not seem to know how to segment properly. This couldn’t be further from the truth. The best marketers are expert at segmentation and if you think that the Mont Blanc or Faberge add in your life-style magazine is wasted on you, I would say two things: One, you’re not the target market but another reader is and two, you might eventually become the target market if you have the right characteristics (and that’s add will count as one in the frequency of advertising that lead you to buying that item.) The latter being the second secret: Frequency.

Depending on who you believe, you need a frequency of three, seven or eleven before your ad is even noticed. That’s a sizeable investment just to be noticed but thanks to the breakdown of media in the past decade, each impact doesn’t have to be just done through advertising. You can leverage multiple points of impact either in a very short period or spread over several weeks to reach the desired effect. The factor that joins these two together and makes them powerful has already been mentioned: Measurement.

The attraction of global marketing is a powerful one. The idea that there can be more and more prospects beyond your shore is very attractive but, and there is a but, while many of your customers will be the same around the world, only their behaviour will truly tell. Once you know and understand what drives them, your marketing strategy will be more effective. You simply can’t escape it. Knowing your customers is the simple and first focus that you should have when venturing globally.

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