Think locally, market globally

4/17/2009 - Oreo may be “milk’s favorite cookie,” as Kraft International likes to say, but it wasn’t a favorite in China when the company introduced the snack there in 1996.

Chinese customers said the black and white cookie was too sweet and too big. Sales of the product were flat.

So in 2006, Kraft revamped its plan for the China market, connecting locally with customers by readjusting the recipe, packaging Oreos in wafer form and advertising on bicycles, T-shirts and buses, said Sanjay Khosla, president of Kraft International. Shortly after, Oreo became the top-selling cookie in China.

Khosla, who directs international marketing efforts for the company, shared the story with Kellogg students as an example of Kraft’s success in balancing an appeal to the local customer with the imperative to expand brands globally. The April 14 presentation, “Building Global Brands: the Balance between Hopelessly Local and Mindlessly Global,” was sponsored by the school’s International Business & Markets Research Center.

“The problem is building international brands with soul while recognizing that one country does not fit all,” Khosla said. “There are people out there who know customers need different things but they ignore the fact.”

Although Kraft is conscious of distinct market segments, it also recognizes the importance of maintaining that “soul or essence” of a brand, Khosla said. In Oreo’s case, the company made sure that Oreo’s custom of “twist, lick and dunk,” was made clear overseas, running variations of U.S. commercials that showcased the cookie’s trademark practice.

“We want to locally connect with customers but follow the same concept and ritual of the brand,” Khosla said.

Kraft International has developed a 5-10-10 strategy where it focuses on five categories, 10 brands and 10 markets. That approach has allowed the company to concentrate fully on these goals, rather than try to be everything to everyone, Khosla said.

“It’s not about planting flags all over the world, but having a strategic focus,” Khosla said.

Kraft also has a collaborative network for each brand through which managers in various markets can share ideas about what has or hasn’t worked in their regions, Khosla said. For Kraft’s Jacobs coffee brand in Europe, Ukrainian Jacobs brand managers attracted customers through a campaign that suggested that the coffee’s aroma drew people together to have chats that matter. That concept was used in campaigns worldwide.

“I find cultural diversity and functional diversity on a table is very powerful,” Khosla said. “We look for leaders that can work across businesses, and leaders that can transform.”