Jack at home but king abroad: How economy brands position as premium on international markets!!!!

From shy to outspoken, gloomy to vibrant, precocious to spontaneous, personality change is not only adopted by humans, brands also morph to a new environment. Be it Peroni’s success story in UK, Skoda Fabia’s repositioning in UK or Netflix in USA, companies have successfully pursued a strategy of premium positioning to command better margins and higher image from home markets. How do companies exploit this strategy?.

For Skoda, originally a Czech company and later acquired by Volkswagen what really worked was their promotional mix of TV and print campaign backed by direct mailings to the existing Skoda customers in UK. By imbibing the Volkswagen model, they were able to change the customer’s perception about Skoda from a “cheap” car to “value for money” car. Skoda’s desperation for rebranding was so extreme that they went as far as using “The Fabia is a car so good that you won’t believe it’s a Skoda”slogan in their ad campaign.Well, the desperation finally paid off because the campaign increased sales of Fabia as well as another model named Octavia by 29% when compared to previous year.

Peroni’s story is little different than that of Skoda’s. Peroni’s aid of “Golden Italian Days” in UK was the real spark behind the success. It gave the UK customers a feel of Italy by depicting the images of Italy of sixties. By invoking nostalgic feelings, Peroni was able to charge premium price for its beer.Netflix, has used “Playful Kiss” drama to attract viewers globally. Burberry of London, for Spanish markets created a premium positioning by adopting a strong classic element and improved fabric and other materials.

The strategy works when the customers are richer, but not well informed. Cultures which associate higher value to tradition, and heritage are the market where the strategy works more effectively, especially for hedonic products. Markets with colonial connections work best for some home brands and can actually lead to international success. British Dyson Vacuum cleaner exploited its British inventor origin and Britain connection to make an entry into Malaysian market and successfully compete with Electrolux and other brands. A grand old strategy perfected by many economy brands like Vichy, Thalion, Lancome in most part of Africa and Asian markets. 

The strategy also works when there is a culture wave. Take for example, Korean beauty brands which have discovered great internationalization opportunity in the wake of Gangnam Style shakes and hallyu. Korean companies with French sounding names like Mamonde, Laxara, Laneige have found a niche in China’s market by targeting people who like Korean Soap Opera or younger hipsters who croon to K-pop numbers.  What is common for all these brands is they have successfully used a local positioning global brand strategy, there by their marketing communication can reflect the local hues and required flavor. 

Ajita Poudel, Young Dolphin Fellow

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