x Abu Dhabi, UAESaturday 22 July 2017

Time to take on the big western brands

The Life: Professors Nirmalya Kumar and Jan-Benedict Steenkamp in their book Brand Breakout: How Emerging Market Brands Will Go Global argue that brands from China and other emerging markets will have a bigger share of consumer consciousness in coming years as these countries build their capabilities.

Brand Breakout: How Emerging Market Brands Will Go Global by Nirmalya Kumar and Jan-Benedict EM Steenkamp
Brand Breakout: How Emerging Market Brands Will Go Global by Nirmalya Kumar and Jan-Benedict EM Steenkamp

Emerging markets have provided factories for American and European brands for many years. In recent times, with China's increasing reliance on manufacturing, "made in China" has become a synonym for outsourced processes.

But recognition of brands from emerging countries - despite some of these being fast growing economies - is negligible compared to that of American and European ones.

Professors Nirmalya Kumar and Jan-Benedict EM Steenkamp argue that brands from China and other emerging markets will have a bigger share of consumer consciousness in coming years as these countries build their capabilities.

In Brand Breakout: How Emerging Market Brands Will Go Global, they argue that while currently these countries "share weak national images, poor marketing capabilities, low cost as the sole competitive advantage, and limited business models", they have ambitions to launch "global brands as a matter of national pride".

But the brands are constantly driven to go global not only by national pride but also as a necessity to survive global competition. They also face increased open market policies in their own countries in some sectors, and in some cases as a tool to counter a hostile business environment, as the authors point out.

Emirates Airline is an example, the book points out, of an emerging market brand that has successfully gone global. Launched to put Dubai back on the business map after Bahrain's Gulf Air cut back flights to the emirate in the mid-1980s, Emirates is now the Middle East's largest airline and has transformed Dubai into a global hub.

High cost of brand building is one of reasons for low recognition of emerging market brands globally, the authors say. But many of these brands already have a loyal consumer base in the domestic and neighbouring markets. Yet when a global company owns an emerging market brand, it often has not taken it global. The authors do not explain why.

 

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