Branding Strategy Insider welcomes and answers marketing questions of all types. Today's question comes from Petra, a third-year marketing student in Copenhagen, Denmark. She asks:
“For a key assignment I must uncover why many of the top brands in the world are American. Please tell me, is there something within the American culture that gives brands an edge? Are the market conditions different? How come American brands are so successful?”
Petra, thanks for asking, this is a very interesting question. I will give you several hypotheses to explore as you write your paper. Distribution is a key contributor to strong brands because it drives awareness and accessibility (two of the five brand insistence drivers per our BrandInsistenceSM brand equity measurement model). It also leads to economies of scale. The first brands to have aggressively gone global will have several advantages in the marketplace. And, having a large domestic market makes it easier to successfully take a brand global.
Consumer understanding through marketing research is another area to explore. A brand that can anticipate consumer needs and appeal to consumers emotionally, experientially, self-expressively and regarding the alignment of core values will do better than brands that have not uncovered and exploited these consumer insights. Generally, I believe US brands do a good job of leveraging these types of consumer insights, which gives them an advantage.
Next, I would look at the percent of a brand’s revenues that are devoted to marketing. I would compare this by country. I think the stronger US consumer brands understand that brand building is an investment that requires significant funding. A smaller brand that spends 5% of its revenues on brand building will have a very difficult time of gaining mindshare over a larger brand that spends 10% of its revenues on brand building, especially if the larger brand is at least as sophisticated and effective in its marketing spend as the smaller brand is.
I would also explore the history of advertising. While brands and marketing have been around (in one form or another) since the beginning of recorded history, it wasn’t until the industrial revolution, which blossomed in the US, that modern day mass advertising came into existence. For instance, many American brands (such as Coca-Cola and Marlborough) pioneered the 30-second television commercial decades ago.
I hope these areas of exploration will help you answer your paper’s central question. I wish you much success with the assignment. I would be interested in reading about your conclusions if you are willing to share them.
To our readers, what do you think? Why are many of the world's leading brands American?
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Thanks for your comment Lincoln. It’s a valid point if Petra were asking about National Brands. Her question is about Global Brands. According to Interbrand’s 2011 list, the top 10 are American, with the first foreign entry being from Japan at #11 — Toyota.
Best,
Derrick
Hi Lincoln, coming back to you and my earlier comment. If you’re saying that US brands are on top because of bias by the companies ranking the global brands I don’t think that holds weight, in my opinion both the BrandZ and Interbrand metrics are tried and true.
It would be interesting to see who the top global brands would be from an Indian or Chinese perspective. Would there be a brand that tops Coke?
Thanks again,
Derrick
I think a contributing factor to this is the fact that American brands have been around for a long time. The advantages of merely existing for 100 years in terms of awareness and distribution is tough to beat, especially if the brand can claim to be #1. They’re simply more established already, and this is a huge advantage.
Many of the World’s top brands are American for all the reasons you outline, but there is one more which rocketed them from awareness to insistence around the world.
As an adman, naturally I agree that advertising in general and TV commercials in particular, played a large part.
However, the real sell happened long before the advent of TV. It sold the American Dream with its attendant values and lifestyle.
It hooked people at an emotional level like never before and made everything from smoking, hamburgers, jeans, skyscrapers, and big cars cool.
It was…Hollywood. Hollywood sold America and American products to the world long before the phrase, “Product Placement ” was coined.
One reason is American brands attract better marketers — leading brands always do. Another reason, which a case can be made for, is that American’s are better marketers in general. I say this fully recognizing there are brilliant marketers of other nationalities.
America is the land of innovation!
From innovated products and services come innovative leading brands. The American capitalist system is the most favored environment on this earth to foster innovation, creativity, freedom, risk and reward.
And it is out of this social and economic framework that the most favored brands are American.
Why are the world’s top brands American?
1.The free market
2. the rise of consumerism
3. booming working and middle classes
4. early mover advantage
Then….
1. US expansion beyond its own borders over 2 world wars
2. US impact on media, particularly movie stars, musicians etc
3. in the 40′s, 50′s, 60′s, 70′s (Pre-Reagan) the impact of US culture on the rest of the world
4. Pop music and MTV
5. The beginnings of the new communication age and new technologies
Then….
1. The tech boom
2. Global TV and Media
3. The internet
4. American film and gaming industries
5. American Idol and the X Factor
Brad & Derrick,
In short, the USA is a massive and massively powerful greenhouse in which brands fight it out for leadership, build mass, momentum and expertise and then burst beyond their borders with huge resources behind them into the minds, mouths, hands and homes of a waiting world.
Few brands have achieved similar success other than one or two Dutch brands, English ones and a handful of Asian.
American brands tend to do better in the mass market. Euro brands tend to do better in premium.
Hope this helps Petra.
Rob (a marketer from New Zealand)
Hi Brad and Derrick,
Thank you and your audience for your answers – I am very excited to start the project! I will let you know my results when I am done.
Best regards,
Petra
Why are the top brands American?
From offshore two reasons stand out.
1: The American culture of bravado, bullishness, and dare I say it, natural arrogance are a perfect fit with marketing. So combine the American culture with established well refined expertise and there is a strong starting point for a new brand.
2: With a population of 350 million if you get your strategy right domestically, and have the growth to prove it, you have a massive advantage over smaller countries when stepping up to go global. The size of local ‘test bed’ affects everything from establishing logistics, communications & branding strategies, communication delivery methods etc, to controlling speed of growth and diversification. Its not the design side of branding that is so successful it is the whole business package, through to the resulting positive customer perception.
3: If you are successful domestically – with such a large population behind you, then you have the cash and resources to expand properly into the global arena.
Size matters…
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A better answer would be that most studies come from america and are designed for americans. In a study from China or India where the population dwarfs that of the US, you’ll find that the “top brands” list is remarkably different.