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Globalization and Localization and Cultural Influences

1. USA Today published an interview with David Novak, CEO of Yum Brands which owns KFC, Pizza Hut, Taco Bell, A&W and Long john Silver's. When asked about doing business in China, where the company opened its 1500th KFC franchise in Shanghai in 2005, Novak admits having a "visible brand" helps with consumer recognition and acceptance in this market, the key strategy for success being that "we have Chinese people running our business".
Novak believes in acting locally. He said, "Any company that wants to do business with another country is always better off with people from that country". When it comes to direct management communication, Novak applauds the Chinese team led by Sam Su, soon to be inducted into the Yum Hall of Fame. Novak said, "Last year, I made the decision that China was so self-sufficient that Su should report directly to me".

In a Newsday interview, Su said, "In many parts of China, the local municipal governments actually view the arrival of KFC as a sign of the city coming of age" (Jones, 2005).

• Discuss the influence of globalization and localization when it comes to marketing brands.
• Would the same success be achieved with a less-visible brand? Explain your rationale from the receiver's perspective.
• What steps might you take to achieve the same kind of success with an almost unknown brand?

2. You are meeting with an international client in the Middle East and want to make sure you have addressed any cultural issues that might impact the success of your meeting.
Numerous theorists discuss cultural concepts. Using this information as a basis, discuss the concepts you would want to analyze and evaluate in order to prepare you and other company executives for the upcoming meeting.

• Which of the concepts you discussed would be the hardest to analyze? Why?
• Describe a worst case scenario involving the muddling of culture concepts.
• What steps could you (or your company) take to ensure something similar never happens to you?

Solution Preview

1. When beginning with a new product or brand that has no brand recognition, localization is the best way to market that product and to begin building brand recognition and customer loyalty. Globalization is basically taking the product or band and moving it off shore to either have it made at a cheaper price or to sell it. Developing a global brand is one way to ensure success. There are many different brands that have had global success. One example of a global brand is Michael Jackson. Michael Jackson was known in all corners of the world, and his brand translated internationally. McDonald's is also a global brand that has found success not only in American but in over 119 nations. One ...

Solution Summary

Best practices for building brand recognition for a new product locally, globally, and cultural influences that need to be considered.

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