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That well-known Chinese PC manufacturer, IBM

In a recent post about New York Times columnist Thomas L. Friedman's book, 'The World Is Flat', SwelledHead surmised that in a global market we should not expect to wait long to see up and coming nations purchase 'our' brand names. The reason is simple: if Chinese, Indian or South Korean companies want to gain fast share of lucrative Western markets, it's easier if they sell to us under names we know and trust.

Well, it's already happening. Take a look at this article in today's New York Times to find out which well-known brands are now, or may soon be, in Chinese hands. Less is said about other fast developing nations, but the tech and automotive sectors in India and South Korea are highly active and just as ambitious as the Chinese.

Brand owners beware. Just because companies from these nations are newer to international markets, don't expect them to anything less than tough. Indeed, with a zeal to build a global presence in super quick time, many could be downright ruthless - witness the errors of judgment made by British carmaker MG Rover.

And if you're a brand marketer - agency or in-house - get ready for business in the East. Time to open Austin Lawrence Shanghai, perhaps?

GM makes sense of Saab

At the beginning of March, SwelledHead wrote about the disregard General Motors has had for its Saab brand. The decision to reintroduce Cadillac to Europe will mean these two GM brands will compete head on. I maintain that it's an ill-conceived approach for a business that's struggling to gain share against other premium makers and suffering from a horrifying degree of internal competition.

Having both Saab and Cadillac chasing BMW in Europe will dilute GM's impact on the market. The car range of the two brands also has too much overlap. Indeed the forthcoming Cadillac BLS is often nicknamed by industry watchers as the Cadillac 'Bit-Like-Saab', such are its similarities. That the quality of Cadillac's products continues to fall well below the standards expected in Europe hardly seems worthy of mention.

It was heartening then, to read that GM is to open a new Saab brand centre in Sweden.

"From a designer’s perspective, Saab has such a rich history to build upon," said Bryan Nesbitt, executive director of GM Design Europe. "Therefore, we plan to ensure that future Saabs maintain this DNA, accentuating their aircraft heritage and the Scandinavian design aesthetics that have helped Saab challenge the mainstream for nearly 60 years."

The centre will have designers, engineers and marketers who will collaborate to build and strengthen the Saab brand consistently worldwide. Hopefully they will be given full portfolio and not simply continue to have ideas foisted upon them from Detroit to be 'Saabised'.

The brand centre is exactly the sort of thing GM needs to be doing to pull itself out of its current woes. However, the ability of the company to get its house in order remains to be seen. Robert Farago's excellent 'GM Death Watch' series in the popular blog, The Truth About Cars, provides wry commentary on the company's ongoing machinations. There's a lot more that needs fixing.

How British are you?

Fancy becoming British?

OK, so this post isn't exactly intrinsic to transatlantic marketing, but I couldn't resist. Perhaps it will provide our American readers with a useful insight into British culture.

With so many foreigners wanting to huddle on our windswept isle, and amid concerns that there's not enough Union Jack waving as it is, the British government has - in its wisdom - published a new book for prospective citizens. Entitled 'Life in the United Kingdom', its contents form the basis of a new test which those after a passport bearing the British Coat of Arms must pass.

I got nine out of a possible fifteen - not very impressive. But then this whole idea seems rather ridiculous to most people who are British already.

Have a go yourself here.

Selling class to Americans

Coming from "Old Europe", one tends to see America as a classless society. Not so; having lived there for a period I know that class is as big an issue as it is anywhere this side of the Atlantic. The notion of what class means and involves may be different, but Americans are arguably more consumed about raising their status than anyone else.

That's largely because they can. In Britain, where we still have a highly visible monarchy and a title before your name still cuts some serious mustard, our class system is decidedly more rigid. This is changing, but money remains less intrinsic to social mobility than in the US. Indeed, it was refreshing to experience that sense of opportunity held by all Americans - the famous 'American Dream' - that enables people there to believe in and achieve huge personal success.

That fluidity in class structure means that the Dream is not a fixed target. Falling prices and rising credit have enabled even average earning Americans to buy into a life that was the preserve of the few only a couple of decades ago. The result is that the nature status symbols - those things that people use to show off their social significance - has begun to change. Big houses, flashy cars and high-end electronics are no longer something special. Today's elite define their status through a more complex mix - something I can only describe (unsatisfactorily) as "lifestyle".

This trend creates some interesting challenges for those marketing luxury products and services in today's America. And, if you're in charge of a high-end European brand, it presents some real food for thought.

If this is your job, then this recent article from the New York Times is essential reading. As Americans seek new ways to be rich, the time is ideal for European brands to translate themselves for some outstanding new market opportunities.

Pure Americana

Early last December I was doing my Christmas shopping at Bluewater, the UK's giant shopping mall in Kent, south east of London. A new store, positively glistening with light and colour, caught my eye. It was the latest branch of Krispy Kreme doughnuts. I've been to the US many times and, though I'd heard of the brand, I'd never actually tasted any of its products. In fact, my impression of the company was a poor one. Typing 'Krispy Kreme' into the search function of BBC News Online makes for pretty dismal reading.

As if lifted straight from 1950's America to be supplanted into modern Britain, everything about the brand and its identity had been expertly recreated. The staff spoke with British accents of course, but the "service with a smile" was warm, genuine and just how those of us in The Land of Hope and Glory like to think of life in The Land of the Free. And how did the doughnuts taste? Reading the Krispy Kreme website, and its history of how the doughnuts are produced, I can only assume they're exactly the same on both sides of the Atlantic - that is to say, delicious.

On this blog, you may have noted that Ken - the American brain in SwelledHead - has often remarked that his countrymen, whether they admit it or not, are all Anglophiles. While it's probably not politically correct to say so in the current political and social climate, I think the reverse is pretty much true. Hollywood, Disney, Man on the Moon and Route 66 - we Brits love a bit of Americana. This got me thinking about that other famous US brand of doughnuts, Dunkin' Donuts. The company exists in thirty countries around the globe, but oddly not in Britain.

Why haven't the doughnuts of the Dunkin' variety taken the same trip as Krispy Kreme and opened up shop in Blighty? With UK obesity rates getting close to those in the States, arguably we're the prime European audience for new junk food brands. In fact, other famous franchises have been surprisingly slow to enter the UK. Subway has only just arrived, we don't have Taco Bell, Denny's is unknown and IHOP's supposed internationalism has only spread as far as Canada.

I'm not sure why this is, but I believe it's worthy of some investigation. Watch this space.

So the world is flat?

In his new book “The World Is Flat”, esteemed New York Times columnist Thomas L. Friedman argues that the emerging era of globalisation is levelling the economic playing field like never before. Anti-globalisationalists watch out; if he’s right then the contention that it only benefits wealthy Western nations starts to look a little shaky. SwelledHead has been more interested in what a flat world means to international brands and their marketers, especially those coming out of the US and UK.

Who’s afraid of some healthy competition?

Following on from his last book on the same subject, “The Lexus and the Olive Tree”, Friedman’s latest analysis has been both commended and criticised. You can check out an excerpt and two reviews here: Excerpt, US review, UK review.

In the US, where he is a well known opinion leader on foreign affairs, and where outsourcing of jobs to the East has become a political hot potato, his account appears to make sense to a nation more fearful than ever of external threats. In Britain, a combination of closer historical ties to the East and a stronger economy reducing the impact of jobs lost overseas, means there is less trepidation about outsourcing as competition. And in common with everywhere else in the world, the British often equate globalisation with Americanisation.

Friedman argues that the developing world wants to adopt US style free-market capitalism and that the US and other Western nations will soon be competing head to head with companies in China, India et al. This notion has a flaw; it’s true that developing nations will happily accept Western investment, and imitate Western business practice when doing so, but China especially is showing that it will go its own way. It would be foolhardy to expect other nations not to exhibit different patterns of behaviour.

What does this mean for transatlantic brands?

In a new flat world, brands can come from anywhere. Japan, South Korea and now Eastern Europe have proven that. In the future we can expect new ones to emerge from China, India and other fast developing nations.

The notion that the US, the UK and other major Western economies are more sophisticated in branding is probably true today, but it’s not an ability that only we can possess. The US and UK share a long history of riding roughshod over foreign cultures, but we shouldn’t be surprised to find that these cultures themselves may in fact be more sensitive to our local needs when entering new markets because, unlike us, they expect the process to be difficult.

The thing to remember is that local relevance for any product and brand is critical. Increasing competition is only likely to heighten the need to be culturally applicable. British and American brands trading even within Western nations will need to be smarter than ever if they are to fend off new challenges.

And there’s every reason to expect that developing nations may take on ‘our’ brands to enable them to trade using local values. Consider that Chrysler is now German owned, US favourites Dr Pepper and Holiday Inn have been purchased by the British, and treasured British brands Rolls Royce and Bentley have too been snapped up by the Germans. Nothing major as yet has been bought by the Indians or Chinese, but recent interest in MG Rover by China demonstrates that there is both the understanding and ambition to proceed in this way.

And for marketing consultancies?

Marketing talent isn’t confined to the West, but the ability to market to Western consumers probably is. Language and more importantly, culture, are significant barriers and probably enough to make outsourcing of this nature too complex to be worthwhile.

The argument that high end of product design is now being outsourced overseas, and that other intellectually demanding tasks could follow, holds water. Yet when it comes to communicating the nuances of the meaning of products and services to culturally dissimilar peoples, there will always need to be local adaptation at the very least.

This is something Austin Lawrence Group, the brains inside SwelledHead, has always maintained. Through our Brand Translation Service™, we wouldn’t recommend going without local experience and expertise even when simply crossing the Atlantic. For brands coming from cultures even further afield (socially, if not geographically), the notion of brand translation is just as relevant. The irony is that developing nations may actually comprehend this better than those of us sharing a language and with pretty similar daily lives.

A new world view

Friedman’s view that globalisation is a greater threat to Western economies that we realise is almost certainly true, but this is hardly a great revelation. The reality is likely to be much more complex, affected by cultural and macro-economic influences along the way. Even the concept of The West may cease to be relevant, as Brian Walden, the astute political interviewer who's stepped into radio slot previously occupied by Alistair Cooke's "Letter from America", contends in his latest musing for the BBC.

For transatlantic and international marketers, the future may not be a flat world, but one which demands a much greater ability to see beyond the miasma of ones own borders to appreciate and adapt to new foreign market opportunities.