CENTRALIZED MARKETING IS OLD-VIEW MARKETING
Brands that control all marketing through centralized command and control are committing brand suicide. True the world is becoming more global. However it is also becoming more local and more personal at the same time. The challenge is how to market at the intersection of increased globalization, increased localization and increased personalization. Insisting that the center knows best and imposing its will on the world is a formula for failure. Global standardization of marketing was once the accepted dogma. Theodore Levitt, a Harvard professor, popularized global standardization in 1983. With few exceptions, the attempts to create monolithic, standardized brands based on a homogenized view of customers were not effective. The rationale was on reducing marketing costs and not on increasing marketing effectiveness. The simplistic marketing efficiency approaches from the 1980’s are even less relevant today. It is a symptom of organizations that place cost management over brand management.
The global marketing view of the 1980’s was to have one standardized, global brand for a globally standardized product supported by standardized communications to a standardized customer. Establish a centralized marketing structure in the head office and dictate directions to the world. Local satellites existed only to execute the global directives. It was cost efficient. It was very popular. It was wrong.
Professor Levitt fervently believed in global homogeneity that would blanket the planet generating power and profitability. However, as efficient as the globalized, centralized, homogenized approach was, it fostered an environment of “lowest common denominator” thinking where ideas are acceptable everywhere, and especially relevant nowhere.
As the 1980’s transitioned into the 1990’s global marketing evolved to make the management of global brands more sensitive to local/regional cultures. Organizations searched for ways in which brand promises could be both globally standardized and locally relevant. The new mantra was “Think Global. Act Local.” (TGAL).
In theory, TGAL was the best way to build, and broaden, global brand appeal in local/regional ways. However, appeal of centricity often prevailed over local marketing relevance. TGAL became just another way to keep the real power at the center. TGAL came to mean that the center was responsible for the important strategic thinking and creativity. Then, the center handed over the thinking and creative template to the regions for execution. The regions were accountable for results but not really responsible for the marketing strategy to produce those results.
The regional marketing management executed the strategy dictated by the center. If a strategy failed, the regions blamed the strategy dictated by the center. It was wrong for the local market. The corporate center would blame the failure on poor local execution.
So what happened? Over time, the tensions between the regions and the center became intense. In the January 28, 2017 issue of The Economist discussed this approach as “decades-old.” Globally centralized, standardized, homogenized marketing is outdated. As the world becomes more global, local and personal, the failure to respect and reflect local wants and needs, centralized marketing is less effective. As The Economist pointed out, “Many industries that tried to globalize seem to work best when national or regional.”
Global brands have to contend with a three-way tug of war: how can a brand maintain its global, standards while reflecting local relevance and complementing personal differentiation? McDonald’s is one of the world’s biggest global brands. Yet, its marketing is becoming increasingly localized and personalized. The menu not only varies from country to country. It also varies from region to region within countries. A global hotel brand can have global safety and cleanliness standards, a common global reservation system, common global brand identification, while localizing the restaurant menu reflecting local culture, and personalizing the guest experience by customizing the in-room bar, the types of pillows and the newspapers you prefer.
Excessive centralization and standardization is yesterday’s marketing approach. Of course, brands must have global standards of coherent brand commonality. But excessive centralization aiming for reduced costs and increased efficiencies is slinking back into a cost-cutting cave that has no relevance for today. It is a formula for failure. Fractionalization, personalization, and localization have shattered the comfort of standardization. Globally standardized marketing is an outdated anachronism in today’s business environment.