Luse Saghatelyan

Anna Bakunts

Local Memoirs of a Global Manager

What Gurcharan Das has said in this article in 1987 is a major technique that we are now learning worldwide throughout the MBA programs. Not surprisingly, it is the importance of satisfying the customer needs. However, the main difference between us and Gurcharan is that while we are learning this solely from the books, he has based his article on his personal experience of working in India for the Vicks company. As we move on through the article, Gurcharan explains the importance of giving back to the society, staying focused on creating, retaining and satisfying consumers, realizing that it is the consumers who write the paycheck to the employees, having a clear position in the consumer s mind, building on the native customers rather than re-inventing, the importance of local passion, and thinking both local and global.

Home, Sweet Home

Having graduated from Harvard College, Gurcharan could have stayed in the West, having a very forward looking career, yet because he felt he had an obligation to serve, he decided to do it in his home country. He started from a trainee and moved towards becoming the CEO of Vicks Indian subsidiary, which was acquired by P&G in 1985. What he gained because of his experience both in the West and India was the ability to have an open mind and stay in touch with the local roots at the same time.

Stay Focused
One of the first lesson that Gucharan learned as a brand manager was that concentrating on one s core competencies is what should be at the utmost importance for a company. Interestingly enough, he said that if marketing a consumer product is what gives a company its competitive advantage, then all of the employees of the company should concentrate on creating marketing techniques and strengthening the brand perception in the minds of the consumers. What is important is to make sure that the employees are able to understand what the customers needs are, create and retain their perception about the product, and eventually satisfy those needs.

Don t Forget To Say Thank You

The next lesson that Gucharan learned from his experience was that what happens inside the company is not as important as the outside. What is meant here is that the employees are to never forget that it is the consumers that are paying their paychecks and not the company itself. How would the company be able to pay its employees of it wasn t the consumers buying the product. So, yet again we see that satisfying and thanking the consumers is what the employees should never forget. An interesting example of this would be how Gucharan had told its employees from every department to go out there and meet 20 consumers and 20 retailers or wholesalers to qualify for their annual raise. This way the employees are not only reminded of who their actual employers are, but will also be able to get new and innovative ideas and approaches to their product. As the author says, getting a global insight in your own backyard .

Would You Like a Chair To Write On?

Yet another point that should be considered is never mixing up functions. Companies should never try to change the position of the product in the consumer s mind. When Gucharan tried to expand the use of Vicks Vaporub, his boss immediately put a stop to it. In a simple nonmarketing example, the boss said that a chair is used to sit on and the desk is used to write on, and the opposite will not work in practice. Here, Gucharan learned that it is very important for the company to know who it is and not get carried away trying to fulfill all the different functions that the competitors are offering. Instead, the company should concentrate on where it is coming from and tap into its roots when it is unsure. Another factor was that the company should have reasonable prices that are within reachable limits to the particular target market. Having expensive products for the working middle-class is not going to pay out. At last, a company should always benchmark itself against the best in the world, as opposed to the local competitors only.

Should Be Build or Reinvent?

When it came to deciding what the appropriate channels of distribution are for the Vicks products, Gucharan chose to build on the native system. Instead of having Western style of distribution channels, the company chose to have stockists (local retailers) to distribute their products. As a result, P&G resulted having distributors who also served as the advocates and the ambassadors for the company.

Are You Passionate?

Be locally passionate about your product, says Gucharan. The lesson for global companies is to realize that if the local managers believe a product is theirs, then the local consumers will see the same. When foreigners enter a new market, they should be eager to learn and explore the new culture, make new friends, and why not even learn the language. In some cases local mentors can be of great help to the newcomer-managers adapt and enjoy the new culture. What happened with Vicks was that the local managers were so passionate about the product that 70% of the consumers perceived Vicks as a local brand, as opposed to the global brand that it was.

Open-mind As a Must
It would be wrong to say that a local approach to the global brand is enough for the brand s success. While we need to think and act locally, we also have to think globally. While having developed local approaches and insights to satisfy consumer needs, managers should not forget that they are representing a global brand. Fundamental human needs are the same worldwide, and if a problem arises, local managers of the global company should first seek a solution in the other subsidiaries worldwide. This is because a certain practice might have happened elsewhere, and the knowledge and expertise that comes from a specific case can be applied to the current solution. Learn from each other s successes and failures is what strategic global managers should do.

Additional Research
What makes up the consumers decision in picking a global brand versus the local one? Studies have shown that it has to do with the consumers inclination toward global or local mind-sets. The mind-sets are connected to people's desire for distinctiveness (local) versus their desire to be similar to others (global). 1 If the consumer believes that a local brand of a shampoo is of a better quality, he/she will not even search for the global brand. However, if the product has its customized, local perception in the market and is positioned clearly in the consumer s mind, then the consumer will be willing to try the shampoo of the global brand. What distinguishes the local brands from the global ones is also an important factor that needs to be looked at2. First and foremost, the local brands are able to meet the unique local needs or tastes of the consumers. While the global market tries to meet the consumer s needs, the local brands are at the advantage of already knowing what the consumer wants. Also, people are often used to the local brand they re using because of the nostalgia-they love/are used to being with the brand they grew up with. The local brands have a cultural identity. This is where
1 2

http://www.medicalnewstoday.com/releases/144605.php http://www.theglobalbrandonline.com/local-success/

the global brand needs to explore what the specific culture wants and needs are, and then satisfy them. In addition, local brands have strong community ties and local operational advantages. With all this said, what should we do? Keep the brands local? Go global? What s constant in the age of globalization is that the local and global co-exist, always in conversation and tension with each other3. What s distinguishing the local from the global is what the globals should try to achieve. Thinking both globally and locally is what we should do. Be passionate about the global brand, have local mentors , if needed, and be open to learning and exchanging. At the same time, the ability not to repeat the mistake that has taken in other subsidiaries worldwide or avoid them, based on the previous experiences, is also an important factor that a local manager of a global brand is to consider.

Happily Ever After or Conclusion

While going global, we should never forget that we are entering a market that has its local traditions and perceptions about certain products and services. Thinking both globally and locally and acting both locally and globally is what we should do. Knowledge and skills from different cultures should be exchanged and combined. Strategies should derive coming from both worlds. Global brands should never try to fulfill all of the consumer s needs, because that is simply impossible. Companies should never try to fix their weaknesses, rather than strengthening their successful points. Employees should be passionate about the brand and always remember that it is due to the consumer that they have their jobs. Compete with the best in the industry and not just the local market. Mix and match both global and local ideas, innovations, and strategies is what companies should do, while remembering that they are the guests to the locals and they should cherish and respect the local culture and traditions. Following all these, local managers of the global brands will be passionate and successful in satisfying the consumers needs and wants.

http://yaleglobal.yale.edu/content/global-brands-contend-appreciation-local