Top of Mind: How To Risk-Proof A Brand? Watch CNN

Top of Mind: How To Risk-Proof A Brand? Watch CNN

By the looks of things, Americans are still not making many friends overseas. According to recent studies, our global brands aren't having an easy time shaking off their "American-ness" as they aim to win over new audiences, either.

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Top of Mind: How To Risk-Proof A Brand? Watch CNN

BY THE looks of things, Americans are still not making many friends overseas. According to recent studies, our global brands aren't having an easy time shaking off their "American-ness" as they aim to win over new audiences, either. How can a brand manager feel protected?

"'Made in Saudi Arabia' is prominent on Tide packages. There's Arabic too."

The answer is to localize. Consider the following example: The day after President Bush held an extraordinary press conference about America's difficulties in Iraq earlier this spring, the headlines on and CNN couldn't have been more different. On, aimed at American audiences, the headline read: "Bush vows to finish job in Iraq." But's site led with: "Russia firms split on Iraq pullout," which announced that about half of Russian companies had decided to evacuate their contractors from the war-torn country. The Bush story wasn't even mentioned.

While some might accuse of tailoring the news to its audience, the truth is, such split coverage has been core to the broadcaster's approach to risk-proofing its brand in an era where, increasingly, consumer products and services companies find their brands under attack because of their home countries' foreign policies.

To hedge this new form of geopolitical risk, Atlanta-based CNN, and a handful of others have carefully localized their brands. You cannot localize your roots, but you can build strong national and regional companies. You can produce, distribute, package, brand and communicate on a local basis. CNN has done it by distancing its international news service, CNN International (CNNI), from American influence, and by branding local language stations in Europe, Asia and the Middle East.

One place to start localizing is by building partnerships with local firms or organizations that have solid reputations in their local communities, and to use them to develop strong relationships with local governments. In March 2003, CNN launched CNNj, a partnership between CNN and Japan Cable television (JCTV), which had been its distribution partner for 21 years. CNNj's English broadcasts with Japanese translation service reach more than 4.2 million households, hotels and government offices, 18 hours a day throughout Japan.

These sort of partnerships pay off in a crisis. During the Firestone tire recall in 2001, the government of Saudi Arabia impounded all American-made cars when they arrived at the shipping docks. But Saudi car dealers were able to get their unaffected imported vehicles out of customs by convincing the customs officials that it was they, the local businessmen, who were hurt by the authorities' actions, not the global car or tire manufacturer.

In countries without local partners, companies are wise to choose their government relations and regulatory people as carefully as they choose their general manager.

Where possible, companies should go the next step to produce locally, brand locally and shout about it. In Saudi Arabia, where many American products are threatened by boycotts, Procter & Gamble recently changed the packaging

for Tide, the leading detergent brand. Now, the words "Made in Saudi Arabia" appear prominently and the brand name itself is written in Arabic on one side of the package.

Journalists and consumers have also been invited to visit the plant. Even though Tide has been produced locally for decades by a Saudi company, few Saudis knew it. Algida (Unilever) customizes its brands in each market and disassociates them from its corporate name. In Europe, General Motors uses its Opel brand, which has strong German connotations, instead of its global brand.

In China, Starbucks positions its coffee shops as features of the local neighborhood. The Seattle-based chain has developed affordable snacks for local celebrations, like the annual mid-Autumn Moon Festival. When protests broke out in 1999 in response to a mistaken U.S. bombing of a Chinese embassy in Belgrade, Beijing protesters took a short cut through a Starbucks to the U.S. Embassy, and bought coffee en route. David Sun, then-chairman of Starbucks' 29-store Beijing franchise, said that sales actually rose that day.

CNN has also taken a localized route in Turkey and Spain since 1999, producing news with local journalists and local anchors via a locally branded service. Based in Istanbul, CNN Turk has extensive newsgathering resources across the country. CNN+, based in Madrid, goes a step further: It has bureaus staffed by Spanish journalists not only across Spain, but also in the U.S.

Of course, there are inherent dangers in going local, like pressures for censorship, which TV stations like CNN have faced in their coverage of the Middle East.

That said, multinationals that get involved with local communities effectively reduce risk. Consumers are more likely to overlook foreign ownership if a company plays a positive role in local development. Companies also deliver genuine value, especially in developing countries, by transferring technical skills and training employees.

CNN brings state-of-the art broadcast technology to its local partners and trains local journalists. Nestlé, with roughly half of its factories and people located in developing countries, invests millions to educate local employees, tailoring programs by country.

Finally, and perhaps most importantly, multinationals need to address their local communications directly to the local audience.

It would be naive today for any brand to have a single, global advertising campaign. Instead, brand stewards need to understand what is relevant to their target markets and to hire excellent local communicators to get this across.

By building equity in local distributors, brands and communities, global brands may even gain an edge over local brands: Soon after Sept. 11, British prime minister Tony Blair declined an interview with his own state-run BBC, but allowed CNNi to ask him questions.

Orit Gadiesh is chairman of Bain & Co., Boston, a multinational consulting firm.

Alan Colberg is managing director of Bain's Atlanta office. Contact via e-mail: orit.;


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