Should Filipino brands go global?

As the Asean Economic Community (ACE) kicks off next year, Filipino businesses need to build stronger, nimbler brands not only to stave off competitors, but also to be relevant to millions of new customers with different cultures and wants.“If you’re a Philippine brand just focused locally rather than expanding out, you will find yourself potentially losing out. There’s a lot more pressure to move out rather than protect what’s inside,” Jullian Barrans, managing director at Interbrand, said.Set for 2015, ACE will create a single market (a type of intergovernmental agreement) that encompasses 600 million people from the 10 country members of the Association of Southeast Asian Nations: Indonesia, the Philippines, Malaysia, Thailand, Singapore, Brunei, Laos, Cambodia, Vietnam and Myanmar.Boasting a population of 100 million and GDP growth pegged at 7.2% in 2013, Barrans said the Philippine is bright spot in this new open market, prompting locals to embrace all its opportunities and challenges it presents.While going global may seem inevitable for local brands, it’s not without caveats and involves a lot of homework. Barrans sat down with Marketing to talk about when global ambition is a bad idea and what brands usually get wrong.Are their cases when going global does more harm than good?It’s a bad idea for a brand if there’s no actual desire or need for that brand outside of the local market. All you are doing there is diverting your resources and divert your focus away from a successful local thing.What you need to think about is if it is worth to go outside, is there a market for what I have. It’s also has to work with your business model because your business strategy then gets translated to the brand strategy that needs to work as you go from one market to the other.Should “Pinoy” brands stay “Pinoy” outside the Philippines?With the ACE coming, many brands from around Asia will flood into this market and it pays to ponder whether you want to be a pinoy brand or an international brand. Take for instance Zara. Do people actually know they come from? It’s Spanish but it sells International fashion.If you do want to carry the flag with pride into a new market, what do you go out as? Will you go out as quirky, happy go lucky or maybe tough and underground like the Pacquiao base or singing or dancing? Yes, it’s incredible here but how do other people think about it outside?Are there industries that will have an easier time?Tech brands have been on the top of our Interbrand poll after growing very well in recent years. But five years back, Apple wouldn’t be in there, Samsung wouldn’t be there, Microsoft and HP would be there since they are more established brands. Coca-Cola and General Electric is up there, multinationals that have been good in doing their business well and translating their business strategy to their brand as they go to different countries.So you can do it even if you’re not a tech brand. Zara is on the list and it’s just another a retail brand. How do they do that? They recognized there was a major want for affordable fashion and a business model of catwalks and that leading fashion concept that couture people will be looking at done in a more affordable way.If you look at their presentations on stores they look as good as the higher-end store. So they used the benefits of being able to develop a new business model that taps into a new consumer want and deliver that in an effective way.One thing local brands should do first if they have global ambitions?Getting your home market right is very important to do. The first thing you can probably do is an audit of everything you are doing to check if you really understood the consumer, are they maximizing the opportunity they have that way, are they making sure that the brand is working across all touch points with consumers, are they making sure that the brand is understood by the company.That’s when you start asking if you need to take this overseas. Will I be disruptive in that market or can make changes and adapt?Starbucks is an efficient model in the US and has adapted to become a premium offering coming into Asian markets. Quite clever and probably making them a lot of money. And they can always go down from being premium – like they say, today’s premium is tomorrow’s mass market.Won’t brands risk losing sight of its values if they adapt?Adaptation doesn’t mean letting go of core values. Starbucks is still delivering on its business, it is just able to charge a higher price being premium in some places and get away with it. So you need to be true to your brand but you need to make sure that your brand has enough longevity going forward to be nimble and adapt to things that change.  Otherwise, you’ll be very short lived.Zara is not just cheaper. It’s actually quite disruptive on what it’s offering because there is nothing above it. Its saying “couture at affordable prices” and its skewing the market to a different place. H&M is doing the same thing and so is TopShop. They’re all tapping into that new want, this working to middle class that’s seeing all the same TV shows and they want to be part of that too. Why should fashion be something just for the rich?One thing most unsuccessful brands with plans to go global always get wrong?Usually, it’s when they think that things back at home is the same overseas. They haven’t done their homework right and failed to understand the culture of the market they are getting into. They also need to understand the competition they’re going to face. The biggest danger of going out from your home market is arrogance.