Path finder

Whether we like it or not, we are all members of an interconnected global community. The internet may have been the final piece in the puzzle, but for decades the world has been shrinking; we have travelled more frequently, communicated more freely and cheaply, and outsourcing has re-distributed commerce around the globe.

A major driving force in the trend towards globalisation has been the emergence of strong global brands. Few members of the world's 6.5 billion population have not heard of Coca-Cola, for example, and just as many will have heard of Disney, Microsoft, McDonald's and IBM. These brand names are at the top of the 2004 list of the world's most valuable brands, published each year by BusinessWeek and calculated by global branding consultancy Interbrand.

While many similarities and differences can be seen in the business and marketing approach taken by the owners of these brands, one element is constant - branding defines how a company does business in the eyes of the public. Global brands are a company's public face, they are a core strength and impact on all other activities they engage in, both externally and internally, where they can play crucial roles in building corporate culture.

However, there are dangers in possessing powerful brands and balancing the benefits and risks is a critical task for today's business leaders. Should a company take its own name as its brand (nine out of 10 of the world's most valuable brands are company names) when a problem with a single product could spell danger? Should a company adopt a global brand model or instead focus on a regional or local approach?

Many firms have been incredibly successful without consistent global branding, and others have found success in a multi-pronged approach employing both mega-brands and a spread of smaller, local brands (The Coca-Cola Company is a prime example).

Brands meet pharma

When it comes to global brands and the pharma industry, unique challenges exist. The patchwork of highly variable and complex regulations governing medicinal products worldwide has, until more recently, made consistent branding seem impossible.

Despite these and other challenges, however, many large pharmaceutical companies have dipped their toes into the global branding pond in the past decade. Yet, global branding in the pharma industry is still largely an uncharted territory and, as is often the case with such things, it has attracted a multitude of opinions as business leaders seek a way forward.

John Quelch, senior associate dean of international development at the Harvard Business School, and Lincoln Filene, professor of business administration at Harvard, see three key benefits in global branding; the three Cs - consumer, cost and corporate culture.

Research indicates that consumers are willing to pay a price premium to buy a global brand because they believe that a global brand is of superior quality and represents significant innovation. In some cases, they also believe they receive social prestige, says Prof Quelch. In addition, owning or co-owning a global brand connects the consumer with the global village. The country of origin of a product is decreasing in importance - especially as outsourcing takes manufacture and assembly across the world. There was a time when you said perfume and people would think of France, cars and Germany would come to mind, but these national prejudices are gradually breaking down.

A global brand can also reduce company costs, notes Prof Quelch. Having a global brand makes it much easier and cheaper to launch new products, as distribution networks are already set up. For example, The Coca-Cola Company owns more than one hundred small national brands - not only do they have the benefit of a distribution network, but they can be used to supplement the appeal of the core global brands.

Coca-Cola is on to a winner as its portfolio of local and national brands means that it can reach segments of people who see no advantage in buying global brands, or even those who are antithetical towards them.

John Seifert, chairman of the Ogilvy global brand community, agrees with Prof Quelch's analysis of the importance of big brands.

A company's branding is central to its well-being. In the first age of branding, advertising and branding were synonymous, whereas now, in the second age of branding, it is so much more - it is defined by the importance of reputation.

Corporate aspirations today are to create a great company, a great place to work, not necessarily to make as much money as possible for shareholders, says Seifert.

However, care and attention have to be lavished on brands by the entire organisation, he says. Brands endure when they are sustainable, when everyone has a stake in their success. It has to start with the CEO who should see themself as a brand steward. After all, if the CEO isn't proselytizing, coaching internal and external stakeholders about the brand and the vision and values of the company, then the company has a problem.

New animal
Seifert believes that there is a new animal in the business world, the chief marketing officer or CMO; individuals who take a helicopter view of the business and its brands. Many of these new CMOs are women, notably Beth Comstock at GE, he says. Brands have emotional impact with the consumer so you need people with the emotional intelligence to understand the true nature of brands and clearly these women are showing they possess such talents.

The world has been turned upside down in the past decades. Research shows us that consumers no longer trust information when it is fed to them from `above'. Consumers now rate the information they receive from friends and family over sources seen as `authorities`, including government and commercial companies, he muses.

Informal networks are now the primary source of trusted information for consumers and at the heart of those networks is a whole new breed of consumer, the Influentials, who wield enormous influence.

The power possessed by an informed and empowered person should never be underestimated, says Seifert. However, even taking these new influencers into account, future success rests on a company's ability to nurture its brands.

What next?
It is the future that interests Sandra Lawson, senior global economist, at investment banking firm Goldman Sachs, who has carried out extensive research to help describe the business environment in 2050.

By mid-century, the world will be drastically different from the one we inhabit today. The most significant change will be the emergence of the BRIC countries - Brazil, Russia, India and China - whose economies will have boomed. For example, the Indian economy will grow by a factor of 35 from its size in 2005 and all four countries will overtake the current G6 economies (G7 minus Canada) by 2040, says Lawson.

However, while today's six largest economies will lose their dominance, their consumers will still be the richest, she notes. We will have reached a very different situation to that found today - the largest economies will not have the most affluent populations.

Lawson and colleagues at Goldman Sachs surveyed thought leaders in the academic, corporate and policy worlds to identify the criteria they considered would be important for success for the top global firms in the next 45 years (see below).

Branding was a criterion for nearly every respondent, she says. In fact, it was seen as so important that it was actually central to corporate success in the future. The other seven criteria were seen as important but branding impacts them all in some way.

However, Lawson and colleagues were surprised to find that there was little consensus on how the branding should be done. We went into this research thinking that everyone would think a consistent global approach was the right one, but actually we found a mixed message. While all agreed that global brands were essential to future business success, the picture we received did not tell us definitively what global branding would look like in 2050, she admits.

Brands in the pharmaceutical industry are far less global than many consumer brands says Prof Quelch. In healthcare, individual branding is still prevalent and global corporate brands are few and far between. One reason for this is country-specific regulation, which impedes synchronised global brand launches.

These regulations have created an environment where companies have to use push selling as the dominant commercial approach, is essentially local and which does not depend on global branding, he says.

He points out that although medicines are high involvement products, they are also 'grudge' purchases. It is difficult to create a positive emotional attachment between patients and their medicines; they know they need them and that they bring benefits, but they don't like them. They are seen as a necessary evil.

Prof Quelch believes that the pharmaceutical industry faces a raft of challenges for the future. Global brands work when they are mainstream, yet the industry is turning out fewer mass market blockbusters and more niche products with much smaller catchments of patients.

Another challenge is the need to start brand building early on in the new product development process, he says. Healthcare products take a long time to demonstrate efficacy and in the past this has slowed down the essential task of creating branding. Companies need to be bold and get involved in branding earlier.

With consumer empowerment on the march, the industry needs increasingly to put the consumer at the heart of things. Consumers want to be involved in the management of their own healthcare, and that will be good for branding.

The final challenge concerns the decision to brand the company or the product. There is a great deal of risk in a company branding all of its products under one name, but the cost efficiencies and rewards cannot be underestimated, he notes.

Taking the plunge
Regardless of the risks, many pharmaceutical companies have taken the decision to 'go global' in the last few years, including AstraZeneca, Eli Lilly & Co and Pfizer.

The challenge for all pharma companies is in creating a brand which clearly communicates the clinical benefits, as well as being desirable and meaningful to all markets. This, in turn, needs to be accompanied by consistent global implementation of the brand strategy. In order to create a truly powerful brand, understanding both the rational needs of patients and doctors, and the deeper emotional motivations and desires of everyone that touches or influences the brand is crucial.

Incorporating consumer insight into the branding process is a big part of Pfizer's branding strategy, and was incorporated into the Nicorette approach, according to Bruce Lifka, Pfizer's global director of tobacco dependence.

Nicorette started its life as a small global brand, but was important in the markets it competed in. The growth strategy concentrated on rolling out the business model into additional markets, rather than focusing on product innovation, he notes. Pfizer has a strong tradition of consumer learning so when it took over the brand, in addition to increased resource, we started listening to the patient, to drive growth.

By merging and analysing the data gained from consumers, Pfizer evolved its communication and product approach, Lifka adds.

We moved towards the concept of smoking management and control. We knew that many smokers felt as though they had lost control of their smoking and the concept of management allowed us to broaden the scope of our work and make it more relevant to the smoker.

Pfizer also standardised its product claims: It would have been extremely expensive to generate the data needed to support a number of different claims, so we focused on building a global platform that could be adapted locally - helping us build more, and stronger claims, Lifka explains.

Be consistent
Ensuring consistency of implementation is the other major challenge and most firms committed to global branding produce some form of toolkit designed to keep everyone moving in the same direction. Typically, these may include a brand book, some form of global group which acts as a guardian for the brand, along with brand templates, resources and support materials.

With the launch of erectile dysfunction product Cialis, Lilly/ICOS took a similar approach, says Mitch Tull, director of the Lilly Marketing Institute, a body created in the late 1990s to generate standards for brand building within the company.

We adopted a similar approach, producing branding materials and encouraging dialogue to ensure consistency. However, we considered flexibility to be a vital element of our strategy and, through the dialogue with the marketing organisations, we encouraged feedback as well as permitting some variability in the imagery used in the advertising.

The Lilly/ICOS branding materials contained a series of do's and dont's for marketers to follow, outlining the appropriate imagery. Cialis was in direct competition with Viagra and Pfizer had done a lot of work preparing the ground in this field. However, Viagra's marketing emphasised sexual potency through very masculine imagery and competitive sports. The Cialis branding was softer, more romantic and so guidelines were crucial so as not to convey the wrong message through the images on the advertisements.

Lilly/ICOS wanted to ensure that the branding would remain consistent for the entire life cycle of the product, so involving everyone to get their buy-in was important, Tull adds.

Standardising implementation was also vital for Pfizer's Lifka. To have a global brand, you need a global problem with a global solution, plus you need to build a consistent message. We analysed markets, placing each one on a gradient of development, then we divided them into four categories - from the least developed to the most developed market - and created `best in class' business models for driving growth. All approaches recognise the pragmatic business reality of the individual market, but are consistent with the overall category and branding strategy.

Key themes have emerged for companies taking the global branding challenge: the global team must win the confidence of the whole organisation; it's a good idea to include local country representatives in the process, and you must have senior level support and buy-in to make it happen at a global level.