Europeans admire brands such as Ikea and Virgin because the companies cater to local tastes while maintaining a clear, stable global image.
That's what Y&R Inc.'s the Intelligence Factory, New York, found in a study of 250 individuals at Y&R companies--such as PR subsidiary Burson-Marsteller--and Y&R clients across Europe to determine which companies have succeeded in building pan-European brands.
Developed by CEO Ira Matathia and Marian Salzman, president of the Intelligence Factory (recently renamed from Brand Futures Group), the open-ended questionnaire asked participants to name the brands they admire and why. They also were asked to identify the three most exportable brands in each European country. Advertising spending and ranking in each country in which a company does business were examined as well.
TOP EURO BRANDS
Besides Ikea and Virgin, Adidas, DaimlerChrysler, Heineken, L'Oreal, LVMH, Nokia, Philips and Telefonica emerged as top pan-European brands.
These companies build local appeal while maintaining consistent corporate images regionally, Ms. Salzman noted. "'Glocalization' is very important now--it's a combination of a global perspective with a hyper-local outlook," she said.
For example, Swedish retailer Ikea positions itself as a democratic company that produces cheap, well-designed furniture and accessories. This theme applies across Europe, "where home decor and improvement has become an obsessive reaction to increasingly time-pressurized lives," according to the report.
In the same vein, Dutch brewer Heineken has a strict quality control program to ensure its beer is as good in the U.K. as it is in the Netherlands. Adidas has sponsored top world athletes with whom many consumers relate, such as English football star David Beckham, to successfully associate its brand with sporting excellence.
And Virgin has maintained its reputation as a brazen upstart across countries and products through the antics of founder Sir Richard Branson, who made headlines with his attempt to fly a hot-air balloon around the world.
Strong, visionary leaders such as Mr. Branson are a major contributor to the 10 companies' branding success, Ms. Salzman said. "This is an extraordinary time for charismatic leaders who are outside the establishment," she added. People such as Bernard Arnault, chairman of LVMH, and Juan Villalonga, chairman of Spanish telephone company Telefonica, are not afraid to make mistakes; they take risks and simply focus on proactively developing a master brand, she said.
U.S. COMPANIES MISSING
Interestingly, no U.S. company made the report because Europeans don't view their brands as pan-European, Ms. Salzman said. For example, although McDonald's Corp. has done well at localizing menus--its top-selling meal in the U.K. is a curry chicken sandwich--and transporting its brand worldwide, the company is seen as distinctly American, Mr. Matathia said.
For companies not highlighted in the report, entitled "The Pan-European Brand: Marketing & Branding Products Across Europe," the Intelligence Factory outlines issues they and their agencies should take into account when developing pan-European brands:
nIt's hard to appeal uniformly to European consumers because of cultural, linguistic and political differences. Creating extremely local advertising or targeting lifestyle groups across countries can counter this.
* Right now, it's good to be a nationalistic brand because Europeans are trying to assert their own identities. But this must be combined with a consistent message across Europe.
* Consumers are forming more holistic views of brands. They want to know what the company's politics, employment policies and social philosophies are.
* Consumers have more choices but less time, so they'll increasingly attach themselves to brands that can simplify their lives. However, they are controlling the flow of information, so branding is becoming more, not less, important.
Copyright July 2000, Crain Communications Inc.