American Brands in Developing Countries

Abstract

American brands Coke, McDonald's, Levi's and Kellogg's are known all over the world. They command high mind and market shares in the US and Europe and are leaders in their categories. They can therefore be called "High Power Brands" (HPBs). However, their performance in the developing countries has not been as impressive as expected. This paper investigates the reasons for their subdued performance and recommends an action plan. At the root of the indifferent performance of HPBs lies inadequate grasp of the realities in emerging markets. This leads to two fundamental limitations that the HPBs suffer from namely, value dysfunctionality and image dysfunctionality. Value dysfunctionality is the inability to deliver what is of importance to the consumer. Image dysfuntionality is the inability to communicate the right signals about the brand. The sources of value dysfunctionality are largely incorrect assessment of consumer needs, inadequate appreciation of buying habits and inaccurate evaluation of market opportunities. Image dysfunctionality can be tracked back to lack of communication of functional values, inadequate communication of the larger good done by the brand to the society and using of American advertisements directly in developing countries. The paper elaborates on how to avoid these pitfalls and build strong brands in developing economies.

Keywords: High Power Brand (HPB), value, image, dysfimctionality, developing countries