instance, the development and global rollout of a new product will require, first, coherent innovation capabilities that can create breakthrough products; second, the ability to customize those products by geographic segment; and third, the consumer insight necessary to address diverse customer needs.
Category-Specific Views— Assessment of Global Brand Management by Category: Once a company understands how its approach to global brand management can support its overall strategy, it can begin to consider the benefits of its approach to individual categories. The type and magnitude of the benefits will vary widely. Opportunities for global coordination at the various steps of the value chain differ from one category to the next, depending on the intrinsic characteristics of each category and strategic priorities:
Similarity of consumer demand characteristics across geogra- phies presents the opportunity to coordinate consumer and shopper insights, key mes- sages, and, most important, the innovation engine. For global brands, where a consistent name and positioning are used around the world, aspects of marketing communication can and should be coordinated globally; of course, in some cases, strong local adaptation is critical—for language, at an absolute minimum. Typi- cally, investments in creative
development, digital media, and multicultural marketing can also be leveraged globally. Companies can use insights from each market in which they operate to understand what might appeal to consum- ers in comparable markets. One lens through which to see these insights is that of the life cycle of emerging markets: The consumption of staples like wheat reveals how consumers’ tastes change, following a pre- dictable pattern, as an economy matures (see Exhibit 4, page 8). First, wheat consumption rises (tracked here with the data for China and India), then it falls (China, Turkey, Brazil), and finally, levels off (Poland, Hungary). Companies that take a global view of their customer base can track how demand for their own products might follow similar trajectories.2 Recognizing these similarities can help companies better man- age the tremendous demand for resources in innovation and take a long-term approach to leveraging the output.
Similarity of product charac- teristics across geographies, in terms of underlying product formulation, process technology, or broader supply chain approaches, enables companies to leverage scale globally for activities such as product development, technology platforms, procurement, manufacturing, and logistics—even when consumer needs may vary. For example, flatbread may take
Alonso Martinez and Ronald Haddock, “The Flatbread Factor,” strategy+business, Spring 2007.
Booz & Company
the form of naan in India, tortillas in Mexico, and wraps in the United States—but these variations use largely the same ingredients, serve similar consumer needs, and even share similar processing approaches. Companies can use their knowledge of needs across the value chain—innovation, supply chain, packaging, partnerships, and shelf assortment—to determine and develop the capabilities that will support a winning strategy.
Powerful global retailers that dominate a particular category create a need for global coor- dination in the areas of supply chain, customer management, in-store marketing, and prod- uct development (especially for retailer-specific SKUs).
Analysis of the characteristics of a given category along these three dimensions gives an indication of where in the value chain the benefits of global coordination are greatest for a given category (see Exhibit 5, page 9).
Analyzing a category along these dimensions also provides guidance as to the best management model. For categories that are composed of highly similar products and that rely heavily on global brands serving similar consumer demand characteristics across geographies, a formal coordination system with powerful global category manage- ment is generally most effective. In contrast, categories with a range of highly diverse products mar- keted mostly through local brands are typically best coordinated