Branding Across Globalization Stages
In today’s rapidly changing global marketplace, brands face the challenge of navigating consumer perceptions that vary significantly depending on the level of globalization in their respective markets.
Countries exhibit differing levels of economic, social, and political globalization (e.g., Canada is more globalized than China, and China is more globalized than Cameroon), along with different growth rates (e.g., China continues to globalize, whereas Canada’s rate of globalization is stagnating).
Countries in Asia, the Middle East, and South America continue to experience substantial growth and transformation, where consumers often hold favorable views toward globalization and its economic, social, and political benefits. Meanwhile, in many Western markets, a growing skepticism toward globalization has led consumers to re-embrace local values. This divergence presents a significant challenge for multinational corporations as they decide whether to focus on global branding strategies or to rejuvenate their local branding efforts.
Changing Perceptions of Global and Local Brands
Following the 2008 financial crisis, Western consumers became increasingly skeptical of market globalization. As a result, brand globalness (PBG) has come to symbolize the perceived downsides of globalization, such as market inequalities, cultural homogenization, and the loss of cultural identity.
Western consumers voice fears that unfair competition from foreigner destroys jobs at home, migration threatens culture and national identity, multinational corporations use foreign boltholes to dodge taxes, while small companies have a hard time surviving, or the rich are getting richer in the process.
Meanwhile, in markets that are still globalizing, public opinion about globalization and its effects—such as economic growth, reduced poverty, and improved human development—remains largely positive.
YouGov (2016) data shows that in still globalizing markets, such as India (83%), Thailand (76%), Vietnam (91%), and the Philippines (85%), more respondents agree that globalization is a “force for good.”
As a result, the effectiveness of PBG and brand localness (PBL) as signals of brand credibility likely differs between globalized and globalizing markets. Our research shows that in highly globalized markets like Germany, PBL is a more powerful signal of brand credibility than PBG. Conversely, in globalizing markets like South Korea, PBG remains a strong and equally important indicator of brand credibility alongside PBL.
The Influence of Brand Origin and Product Category
The study further reveals that the effectiveness of PBG and PBL as signals of brand credibility depends on the brand’s origin and the product category. In globalized markets, only domestic brands seem to benefit significantly from localness perceptions, while globalness offers less credibility. However, in globalizing markets, both domestic and foreign brands can leverage globalness perceptions, as these consumers continue to embrace the appeal of global consumer culture.
Moreover, the effectiveness of these brand perceptions varies by product category. In categories where social status is a key factor—such as luxury goods—PBG may have a stronger impact. Conversely, in culturally grounded categories, like food and beverages, PBL tends to be more effective in establishing brand credibility.
Strategic Implications for Marketers
For marketers, these findings underscore the importance of adapting branding strategies to the specific characteristics of each market. In globalized markets, where skepticism toward globalization is common, emphasizing localness can enhance brand credibility and build stronger consumer connections. On the other hand, in globalizing markets, a balanced approach that highlights both global presence and local relevance can more effectively resonate with consumers.
Our study contributes to the growing body of literature on the impact of anti-globalization sentiments and provides practical insights on how brands should (re-)position themselves in both globalized and globalizing markets. By understanding how globalness and localness influence brand credibility, marketers can develop strategies that align with consumer preferences and market conditions.
Disclosure: This blog post was created with partial assistance from AI tools.
Full reference: Mandler, Timo, Fabian Bartsch, and C. Min Han (2020), “Brand Credibility and Marketplace Globalization: The Role of Perceived Brand Globalness and Localness,” Journal of International Business Studies, 52, 1559–1590. https://doi.org/10.1057/s41267-020-00312-2
Cite for: Global brands, local brands, globalization, anti-globalization, shifts in consumption patterns, signaling theory, use of student samples, multi-group structural equation modeling, measurement invariance, price premium
