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Research Insight | Optimizing Global Branding by Combining Local and Foreign Elements

Founded in 2013, the Beijing-based Chinese fashion brand, Heaven Gaia, has been praised as the “Most Valuable Growth Brand in the Industry” and a “Fashion Pioneer Brand.” Heaven Gaia attributes much of its success to its ability to combine Chinese art and Western techniques of expression, resulting in a positive brand image that is both “restrained and fashionable.” Drawing on the results of seven studies conducted in China and the United States, researchers show that global brands in many different consumer-facing industries can similarly benefit by using balanced local and foreign elements in the same marketing campaign/material, a phenomenon known as the “coalescence effect.” The resulting increase in perceived brand globalness can maximize the impact of a global firm’s branding efforts.

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What You Need to Know

  • Global brands often struggle with branding in international markets.
  • Brand positioning that is perceived high in globalness is beneficial for branding purposes.
  • Building a brand image with balanced local and foreign branding elements leads to more favorable brand and product evaluations compared to either local or foreign appeals alone.
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Abstract

Prior research in international markets has yielded two seemly opposing views regarding customer engagement with local/domestic versus foreign-made brands: a preference for foreign brands based largely on country-of-origin effects or a preference for local/domestic brands based primarily on consumer ethnocentrism. In the present research, the authors contextualize the investigation across international markets and propose that, in two national markets with different cultural characteristics, a combination of local and foreign appeals leads to more favorable brand and product evaluations, compared with either local or foreign appeals alone, due to a heightened level of perceived brand globalness, a phenomenon called “the coalescence effect.” The authors report results from seven studies conducted in China and the United States and discuss ways to design branding strategies that enhance customer engagement in an era of intensified global competition.