Question

1.What is the cost of creating and maintaining awareness and associations for a local brand versus a global one?

Answer 1

The answer lies in the question itself. What differs, is the extent of service/product reach. A global brand obviously has to maintain a higher outreach. Local brand needs to take care of the local market they cater to. Let's understand this with an example. There is a local soft drink brand called Bovonto in a particular region and they are the market leaders in that particular region. Their competitors are other soft drinks like Coca Cola and Pepsi. Coca Cola caters to the global market and their marketing strategies encompasses keeping global penetration in mind. Whereas Bovonto is not looking into the global market, they hence need to create strategies that cater to the local population. While creating a global market, each and every decision taken should take into account each and every section of the society and region, heavy costs might be involved and risks are higher. One section of the population might feel that something is not proper whereas the same thing would be considered positively by another section. So Risks are high, costs are high, people and resources involved are high for creating market, maintaining awareness and associations. One break in any of this would lead to defamation of the brand. For the local players, the job is a bit easier as they cater to only one section, they already would have an idea as to what that section looks for and hence can plan accordingly. Since the size of the market is less and they already understand the market, costs, resources will be lower compared to a global brand for creating and maintaining awareness and associations. In worst case scenario, if the product fails in a particular local market, they can still try to cater to a different market with the same product if they feel it would work. This is not the case with a global brand. Failure would be a global failure rather than regional failure