Winning in the Global Consumer Packaged-Goods Industry
In the ultra-competitive consumer packaged-goods industry, the most successful global brands are the ones that create strong relationships with customers across countries and cultures, says brand expert Nigel Hollis, who was at Tuck on January 19 for a panel discussion on the global consumer packaged-goods industry.
The chief global analyst at marketing consulting firm Millward Brown noted several American brands that have flourished by adapting to local tastes. Lays potato chips in Russia come in red caviar flavor, for instance, while McDonald's restaurants in India feature vegetarian items instead of some of the fast-food chain's standard fare.
Hollis and co-panelist John Jove T'89 shared these and other insights with Tuck MBA students at an event sponsored by Tuck's Center for International Business and the Career Development Office and moderated by marketing professor Peter Golder.
Both panelists agree that in the current global business climate, store brands, B-level brands, and local brands are redefining value in certain product categories and taking astounding market share in some areas of the world. Jove, vice president of international retail sales for PepsiCo, noted that "you can no longer talk about your brands with retailers. You have to talk about the category—for example, 'cola'—and then offer a holistic solution."
For global brands, winning customers in this competitive environment requires a compelling value equation. To sell their pricey blue jeans in India, for example, Levi's offered consumers a three-month payment plan. "So a lot more people could buy [the product] without undermining its place in the marketplace," says Hollis.
The stakes continue to rise as local manufacturers catch on—and catch up—to current best practices in marketing. Jove noted that "incumbent" brands such as Pepsi now face significant challenges from local brands that have "cracked the code," and delivered products that suit local tastes and budgets.
Those challengers are looking to get into the game just as diverse new markets are opening up. In addition to the BRIC countries of Brazil, Russia, India, and China, Hollis says that Indonesia, Mexico, and Peru, with their growing middle classes and large urban populations, are also ripe for the introduction of global brands.
For Tuck MBA students who are considering careers in global product marketing, the expanding marketplace is a good sign. International students, Hollis and Jove say, may find the combination of a U.S. MBA and a desire to return to their home countries to work particularly advantageous. The key to succeeding once hired? "It's critical thinking," says Jove. "Ask the right questions. It's the "soft" stuff that's hard. Leadership is critical. Communication is fundamental. Have a global mindset."
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