It is ironic that the word glocal was introduced by none other than Japanese giant Sony in the 90s, when they wanted to capitalise on the ‘think global, act local’ philosophy. Years later, Sony has lost market share to Samsung in home entertainment (Trinitron and Bravia), to Apple and Samsung in mobile phones (Xperia, Sony Ericcson) and to Apple again in sound driven products (Walkman and Discman). While Sony and Nokia have missed the bus in a globalised environment, there are several examples of global giants not being able to capture a local insight in time or in the right way.
In my previous article for Aurora on co-branding, I wrote about how Engro Foods captured a local insight and then partnered with Rooh Afza to introduce a rose flavoured milk drink, an insight that Nestlé and other beverage companies failed to pick up on. Although it may be too early to judge the impact of Olper’s Rooh Afza on Engro’s P&L, the nature of the innovation and the way it resonated with consumers is praiseworthy. About a decade ago, when I was working on a consultancy project for a local sugar mill, the idea of packaging sugarcane juice was discussed. Gannay ka rass (sugarcane juice) for most Pakistanis is synonymous with freshness. Yet, so far no juice manufacturer, be it Nestlé or Engro, has been able to leverage this insight.
The problem with thinking global and then acting local can be tricky, especially for multinational companies, which are often compelled to fit global initiatives into a local context. There are also examples of multinational companies having adopted local consumer insights, although they tend to happen more in the food sector than in any other category. For example, Pizza Hut’s launch of a tikka flavoured pizza, Lay’s chatni flavoured offering and Maggi’s aata noodles. Here are two more examples of multinational companies successfully adopting a local insight into their strategy.
Tang with lemon and pepper
This was a case of a local company – Hilal Foods – having captured a local insight before a multinational giant like Kraft Foods did. In 2006, Kraft’s brand Tang was heavily dependent on its orange flavour as it was contributing 97% of Tang’s total volume. Tang was therefore struggling to diversify its range of flavours. In the meantime Hilal had developed a product suited to the local market and aptly named it Limopani. They also created a jingle based campaign which resulted in a 15% share loss for Tang in the non-carbonated beverages segment. At Tang, we (I was working there as assistant brand manager) had two options. Either to launch a lemon variant or look for another flavour variant that would click with local consumers. We decided to do both. We started developing a lemon flavour and also launched a mango flavour. Tang had previously launched a mango flavoured drink which was imported from the Philippines and was very sour in taste. Pakistanis take their mangoes seriously and can differentiate their chaunsas from their langras and their sindhris from their ratols. A Filipino based version of mango was never going to work and it did not. The new mango flavour we developed was ratol based and the pulp was sourced in Pakistan. Lemon was a different story; we launched a lemon flavour, but with a black pepper twist. Research had showed that most Pakistanis add black pepper to their homemade lemonade. Although I left the company before the launch, Tang was able to capture significant market share in the lemon flavoured drinks category, pushing Limopani back to a single digit market share, while Tang Mango also captured about a four percent share in the non-carbonated beverage category. This is an example of cutting a diamond with a diamond; countering a local insight with another local insight.
Persil and abayas
Abayas are an integral part of an Arab woman’s wardrobe, whether she is a student, a homemaker or a working woman. Saudi women are paying more and more attention to fashion and with emphasis on their abayas. Abaya customisation and care is one of the few ways Saudi women have of expressing themselves. Henkel was able to cater to the requirements of Arab women who did not have a special detergent for their abayas but did not want to ruin their treasured possessions by sending them to the laundry. As a result Henkel came up with Persil Abaya Shampoo, a product specifically suited for the needs of abaya wearing women in Saudi Arabia. The launch of Persil Abaya Shampoo, also known as Persil Black, was a huge step in moving consumers up the benefit ladder and creating a differentiation in a fast commoditising detergents’ category. P&G followed with an abaya detergent under their Tide brand, as did Italian FMCG manufacturer Bolton Manitoba with Omino Abaya Shampoo. Both missed the mark by a big margin, one of the reasons being that both opted to use their globally designed colour packaging without taking into account local preferences and the fact that a black, rather than a pink bottle might have resonated better when it came to marketing a black detergent. In fact, despite heavy ATL presence and in-store activation, Tide was only able to capture a two percent market share in the black wash detergent segment in the Middle East in the two years following the launch. Now, while P&G is looking for an exit strategy from this segment and focusing more on universal liquid detergents, Persil Black is enjoying a dominant 75% market share in the black wash segment. Earlier this year, Henkel launched the Persil Black Oud fragrance; once again based on a local insight whereby Arab women use the essence of oud on their abayas for special occasions and social gatherings. The launch led to further conversion to the abaya wash category, which is now driven single-handedly by Persil Black.
In terms of local insight driven innovation, there is Nestlé’s raita business, which is part of their chilled dairy portfolio and only exists in Pakistan. A couple of years ago Sunsilk launched a shampoo variant targeted at women who cover their heads, thereby providing a solution to a wide audience in Pakistan and the Middle East.
Here are two questions anyone thinking about bringing an innovation to a market should ask themselves. Firstly, are you a responsive innovator, because this is key to success. The innovation strategy should respond to local consumer needs as opposed to introducing global ideas to the local market irrespective of whether they fit the local context or not. Remember there is a fine line between a ‘blue ocean’ and a ‘niche’. Secondly, which matrix should you follow? Will the Forbes Innovation Matrix, which is the most commonly used innovation strategy, suit your objectives? Or are you forcing your strategy to fit into that matrix? Have you thought of using the Gunther Sonnenfeld Innovation Matrix which is more flexible and deals with culture and research as well as the intrinsic and extrinsic values of an organisation, and is precisely what is needed to ‘think local and act local’. Finally, manufacturers need to evaluate their capability to handle innovations at a local level, conduct research to identify consumer needs and last but not the least, they must have the local talent to identify those needs and stay close to the consumers.
Needless to say that a marketing guru sitting in Cincinnati cannot decide what a consumer in Islamabad needs.
Sami Qahar is a Dubai-based Pakistani looking for excuses to write. Aurora gives him a few. firstname.lastname@example.org