Developing Local Meaning: Presenting a Locally Relevant Face to Global Brands Is Essential to Success
Presenting a locally relevant face to global brands is essential to success
The allure of Indonesia as a growth market for multinational businesses is clear, as evidenced by the sizeable investments being made by the owners of some of the world's biggest brands.
The scale of this opportunity for ambitious, multinational businesses is neatly summed up by Vismay Sharma, president of L'Oréal Indonesia:
"Indonesia is one of the most promising markets for L'Oréal. We've got more than 240 million consumers, and these consumers are making more money every year. As these consumers make more money, they look towards aspirational brands and effective products."
But bringing a globally successful brand to this complex and fast-changing market requires sensitivity and the ability to build a connection with consumers that has local relevance and meaning.
As the market matures, brands are playing an increasingly important role in the lives of consumers – and that is fundamentally changing the consumer-brand relationship. Indonesia has evolved from a market where brands can win through saliency alone, to one in which they must establish a meaningful link with consumers' lives.
But what does this mean for multinational businesses seeking to build meaningful brands in Indonesia? Can international brands ever hope to build as strong a connection with consumers as the emerging local giants?
Millward Brown research suggests that international brands certainly can build strong connections with Indonesian consumers, but only by finding a locally relevant articulation of their brand proposition. Comparing the average Meaningful Index of the top 10 most powerful international brands in Indonesia and the top 10 most powerful Indonesian brands, we see that the local brands are only marginally more meaningful.
The Futures Company has identified an inherent tension that drives many of the brand decisions made by Indonesian consumers. Their research has found that 65 percent of Indonesian consumers claim to be "always looking for different cultural experiences and influences that will broaden my horizons". But this sense of adventure co-exists with 73 percent worrying "that the values and traditions that I most appreciate about my country are being eroded by other cultural/global influences".
The brands that help consumers to resolve these tensions, offering something different and aspirational, while not undermining traditional values, will be primed to succeed in the new Indonesia.
OUT-PERFORMING LOCAL BRANDS
The international financial services group Prudential ranks on the Millward Brown Meaningful Index as having the most meaningful connection with consumers of any insurer in Indonesia – outperforming local competitors such as Bumiputera-Commerce Bank and AXA Mandiri. It has achieved this by delivering a locally relevant expression of its global brand DNA.
In 2015, Prudential has been emphasizing its local heritage by celebrating its 20th year in Indonesia. The brand acknowledges local sensitivities and demands, offering Shariah insurance products to ensure that the brand is accessible to Muslim consumers.
Around the world, Prudential uses CSR initiatives to ensure that the business plays an active role in the local communities that it serves. Here, Prudential Indonesia in 2012 launched the "Million Hearts for A Million Dreams" campaign, which aimed to reach one million people by the end of 2014 with a range of programs focused on children, education, environmental preservation, and disaster relief. The company's broader mission is to help families towards a more secure financial future.
For every brand that gets it right in Indonesia, there's another that consumers reject for not tailoring its proposition to their needs.
Sandwich store network Subway has had huge success around the world, and the BrandZ™ Top 100 Most Valuable Global Brands 2015 saw Subway ranked 40th, with a value of over $22 billion. But one market that Subway has failed to capture is Indonesia.
In the early 2000s, the last of Subway's 10 franchised restaurants in Indonesia closed down. Subway's failure here revealed the dangers of not localizing a global brand proposition for local consumers.
The major barrier was the Subway menu itself. As one Indonesian consumer recalls on Quora.com: "There was once a Subway restaurant in Plaza Senayan, though it wasn't too popular because of Indonesian culture. We always want to have rice for lunch/dinner. A meal without rice is considered a snack." Other global food franchises, such as McDonald's, Burger King and KFC, have had more success in Indonesia by providing local rice and fried-chicken options alongside their global menu offerings.
ACTION POINTS FOR INTERNATIONAL BRANDS
- Focus brand strategy on building a meaningful connection with your consumers
- Resolve tensions for consumers – be aspirational and inspiring, but also align with local values and beliefs
- Embed a common understanding of your local brand mission among your staff and partner agencies in Indonesia
- Use the local expression of your brand DNA as the lens through which both proposition and product offer is defined.