Most of us probably regret and resent the process. It seems absurd that we should pay a premium for what is often no more than a name and some cute advertising. But if global brands are indeed going to continue to become more powerful, anyone who does not own one is faced with a grinding problem. How do you combat this "winner-take-all" effect? How do the little fish eat the big ones for a change?
I'm grateful for some ideas from a timely book - Eating the Big Fish by adman Adam Morgan, just published by John Wiley & Sons. The core of his argument is that if you are a second or third-ranker you cannot just imitate the first-rank brands. To do so is to play by the leader's rules, with less money. You have to change the rules.
But how? Morgan outlines eight principles that challengers might follow, starting with the idea of using inexperience positively and ending with the (equally radical) notion of learning to run an unstable company. To many people this might seem like typical ad agency-speak - clever ideas but hard to apply in practice - and in a way it is. But the examples he gives show how some of the world's most successful businesses have achieved their success by turning potential weaknesses into strengths.
Some examples may make this clearer. Richard Branson knew nothing about airlines when he founded Virgin Atlantic. If you were trying to find the least suitable background for running an airline I think you would be hard put to beat pop music. You don't want your pilots high on substances and the cabin crew trashing their hotel rooms. Come to think of it, running an airline must be about the world's worst background for entering financial services, as Branson has done. In America half the airlines seem to be in Chapter 11 bankruptcy, while in Europe they are being bailed out by governments - not ideal for asking people to entrust their savings with you.
Yet Branson managed to re- invent air-travel, partly by offering first-class space at business-class prices, and partly by making economy travel fun (well, sort of). He turned his lack of experience into a strength.
At the other end of the list comes the "flying unstable" idea. Large companies are organised in such a way as to be stable, or at least they try to be. So they hire people who fit in with the established culture and they have a planning structure which seeks to avoid serious mistakes. But unstable companies hire risk-takers and don't plan much - but respond with the speed of light to market signals. Managing the latter is much harder because you also need to identify dangers, and cope with them before they become serious. But if you are coming from behind you have little option but to do this.
Anyone with experience of watching businesses thrive and fail will have to acknowledge a certain reservation about this gung-ho, take-no-prisoners line of approach. I remember being told by a top American telephone executive a couple of years ago that there were two types of companies: those that adapted to the world and those that changed the world. She saw their company as one of the latter. I was less than popular when I replied that a US phone company, however big, was not going to have much impact on the big forces that would shape the world - like demographic change or the development of the European Union. I noticed a little item in the FT a couple of weeks ago, saying that she had resigned following a downturn in the company's performance.
A further criticism is that being a brilliant brander does not ensure corporate success if the underlying position of the company is too weak. Adam Morgan cites Nissan as a marketing success, and it did indeed do very well in the US. But the company as a whole is in such a catastrophic debt position that it has just had to sell a large stake to Renault. That liaison, incidentally, must top the league for "odd couples" and I suspect will eventually become a divorce.
But the core idea that a challenger company has to use positively the fact that is it coming from behind must be right. The Internet in particular seems to me to be changing the rules of marketing in ways which we are only beginning to glimpse, but which can be summed up in the idea that speed has become more important than size. (There is an example of this "speed instead of size" principle with Morgan's book. If you cannot be bothered to read it, you can get its 10 main points from its website, firstname.lastname@example.org.)
Looking 10 years ahead, the big question surely is whether Internet-related technologies reduce the entry cost into new businesses, or whether they simply give a first-mover (like Amazon.com) an ability to create a new global brand very swiftly. If they fundamentally and lastingly cut entry costs, it will become easier for anyone with a good idea to challenge the leaders. It will not be so much a question of eating the big fish. You will not really know who the big fish are: they may simply be small fish that happen to be very close to the viewer. Anyone can become a big fish providing he or she uses the new communications opportunities.
If this is right, then there will indeed continue to be global brands, but there will also be global niche brands. Anyone producing a really great product or service in a very specialised area will be able to get that product or service into a high proportion of the potential market. The premium will be on knowledge of the specialist area.
For small and medium-sized businesses this is wonderful news. It will not be a question of challenging the global leaders. What they have to do is to become true experts in their particular corner and they can become a niche global brand for themselves.Reuse content