While there are many pros to global branding, there are also reasons to avoid global branding. It will be up to the company if the pros are worth the cons.
Global Means It’s as big as the Globe
While it is ambitious to think on a global scale, some goods and services do not translate on a global scale. One-on-one services such as CPA or masseuse would not pursue global branding. It just does not make sense. Some companies may salivate at the idea of increasing their market and may jump into an area that does not even have a demand for their products.
A Market for your Products Might not Exist
Just because your product sells well in your local market does not mean it will succeed on a global level. Cultural, economic, and political barriers provide many challenges that may require great localization. This can greatly alter the product and even a company’s values. It is difficult enough to have a product that sells well nationally in the United States. Global reach provides many different hurdles.
Immense Financial Risk
It takes an immense amount of capital to extend your global reach. A lot of time, energy, and research must be conducted to create an effective strategy. If a comprehensive plan is not employed, then you can lose money very quickly. American retailer, Target, believed they could jump into Canada without doing much research. There was the misconception that Canada was like the United States. Ultimately, Target lose $2.1 billion in their venture due to their lack of planning.
Different Rules and Customs
A marketing strategy is not a one size fits all. It must adapt to the different rules and customs. Just because Google is popular in the United States, does not mean it is popular in Asia. Yahoo is very popular in Japan while South Korea favors their native search engine Naver. How words translate will need to be carefully thought out as well. English idioms might translate awkwardly into a different language.
Different customs also have a different set of values. A great way to analyze this would be through Hofstede’s five dimensions: power distance, individualism, masculinity, uncertainty avoidance, and long-term orientation.
Global branding offers several challenges, however that does not mean a company should not consider it. If global branding is a viable option it has the opportunity to provide many benefits. It takes time to do the research for an effective strategy.