Complacency And U.S. Brands

Three years ago, a student in my department rushed into my office and thrust a piece of paper at me, bearing the details of a doctoral symposium to be held in Philadelphia on the topic of international business. He was writing his thesis on global marketing and pleaded for the research funds to buy a plane ticket to attend the event. Eventually, I consented and off he went to email his registration to the conference committee.

Hours later, he returned to my office, dejected. The event was funded by the US government and places were exclusively reserved for US students.

‘A conference about internationalism that excludes international attendees?’ I asked. He shrugged and left.

US business and, more specifically, marketing, is about as parochial as you can get, but it is hard to criticize the insular perspective of US marketers when they have proven superior at marketing for so long.

Anyone who has worked in the US will tell you that Americans are simply better at marketing, especially branding, than anyone else. Don’t believe me? Last year, the US accounted for 5% of the world’s population, 33% of global GDP and a whopping 58% of the world’s most valuable brands.

Myopia is clearly no handicap when you are the front-runner in a race with no hurdles.

Then there was a stumble.

Marketing News, the bi-weekly organ of the American Marketing Association, ran with the front-page headline ‘Fading dominance’. Inside, a US marketing professor had published the results of a small study, showing a very deliberate swing away from US brands toward those of a ‘non-domestic origin’ over the past four years.

The results fit wider trends that have many senior American marketers openly questioning the sustained global dominance of their nation’s previously unassailable brands.

To its east, the US is losing out to resurgent European competition.

Whether through the dominance of the luxury sector by companies such as Gucci or the introduction of design and creativity to the mass market by the likes of IKEA, European brands have taken an aesthetic, original and profitable path to success. In Dyson versus Hoover, and Audi versus Ford, it is the Europeans who are winning.

From the west, Asian companies are gradually changing focus from producing the latest technological commodities to a more brand-centric approach.

The rise of LG and Samsung in South Korea, for example, is as much a tale of branding as it is of research and development. As usual, China is the elephant in the Asian living room. Its growing market and industrial base are widely acknowledged, but within 20 years the emergence of the first great Chinese brands should be apparent.

Ultimately, the US is also an architect of its own decline. Its dominance of marketing during the 20th century meant that some waning of its fortunes was inevitable. This historical domination has also left many great US brands struggling to survive in this rapidly changing world. The demographic, economic and cultural factors that once nurtured and supported brands such as Coca-Cola and General Motors have evolved. A generation of US power brands, once thought invulnerable, are showing their age.

Brands such as Ford, Heinz, Kellogg, Quaker, Levi’s and American Express once typified the superior, buoyant, branded culture of US business. In the 21st century, it is still a resolutely American roll-call, but one that seems to be increasingly decrepit and out of step.

30 SECONDS ON … US BRANDING

– In Brand America: The Mother of All Brands, Simon Anholt and Jeremy Hildreth argue that the country itself has become a brand. They point to classic techniques such as an inspirational founder, a clear unique selling proposition and a powerful communications campaign (Hollywood) to make their case.

– Business schools have been the powerhouses of US marketing. In contrast to Europe, which had few of these institutions, most leading US business schools were founded at the start of the 20th century. The career path for US brand managers has always included a two-year MBA.

– Earl L Taylor, chief marketing officer of the Marketing Science Institute, says that ‘pessimists make the decline in US brands about US foreign policy, but it’s a small part of the equation. It’s the growth of global brands and the growing quality of local brands.’

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