Journal of International Marketing (2015), 23 (1), 1-22.
Yuliya Strizhakova and Robin A. Coulter
As globalization has ensued, consumers around the world are increasingly making choices between global brands (sold under the same name in multiple countries around the world), and local brands (sold under a given name in one country or local region). Historically, local brands, particularly in emerging markets, were viewed as low quality and unappealing, but with the increased prevalence of global brands, local brands have become more competitive alternatives that signal originality, local cultural connections, pride and prestige. Notably, local brands are steadily gaining market share in India, China, Russia, and Brazil.
Strizhakova and Coulter examine consumer choices between local and global brands, and argue that two streams of research are key to this choice. First, consumer perceptions of the quality and identity signaling abilities of brands are key determinants of brand choice. As contemporary consumer culture have evolved, consumers increasingly are attuned to both quality and identity cues of both local and global brands. Second, consumers’ values, particularly those associated with localization (consumer ethnocentrism; that is, a preference for buying domestically product goods) and globalization (global connectedness; that is, having a globally-focused identity) are important determinants of choice between local and global brands. Drawing upon this work, Strizhakova and Coulter propose a contingency model such that the effects of the local-global values of consumer ethnocentrism and global connectedness are dependent upon country-level of economic development and by the degree of symbolism of specific product categories. They test their model using survey data from over 2100 respondents from the emerging markets of Brazil, Russia, India and China and developed markets of Australia, U.K., and U.S., and country-level per capita product category sales volume data and local brand market share data derived from Euromonitor’s Global Market Information Database.
Results provide marketing managers with important insights about consumer choices between local and global brands. First, consumers in emerging (vs. developed) countries have lower levels of consumer ethnocentrism and higher levels of global connectedness, suggesting that they should be interested in global brands, yet this only expectation holds only for India and China, not for Brazil and Russia where consumers report an equal preference for local and global brands. Second, consumer choice of local relative to global brands varies by product category. Specifically, local companies in emerging markets selling local brands of markets selling local brands of low symbolic products (e.g., food) should leverage their local cultural associations, whereas multinational firms may be better served by purchasing local brands and continuing to market them under their local brand names rather than introducing global brands. Coca-Cola has been very successful around the world following this strategy in the bottled water category. Alternatively in highly symbolic categories (e.g., clothing), managers need to consider consumers’ ties to the global world which favor global brands, and suggest a strategy for linking brands to global discourses. Further, a clear understanding of the consumer target’s age, gender, and consumer frequency of traveling abroad is necessary, as these characteristics are important predictors of both the quality and identity functions of local (relative to global) brands, as well as purchases of local (relative to global) brands.