OMNI-BRAND: THE PARADOX OF GLOBAL ACCEPTANCE AND LOCAL AUTHENTICITY
by
ELLEN SCHMIDT-DEVLIN Design and Innovation Fellow
Submitted in partial fulfillment of the requirements for the degree of
Doctor of Philosophy
Weatherhead School of Management
Designing Sustainable Systems
CASE WESTERN RESERVE UNIVERSITY
May, 2020
CASE WESTERN RESERVE UNIVERSITY
SCHOOL OF GRADUATE STUDIES
We hereby approve the dissertation of
Ellen Schmidt-Devlin
candidate for the degree of Doctor of Philosophy*.
Committee Chair
Casey Newmeyer, Ph.D., Case Western Reserve University
Committee Member
Kalle J. Lyytinen, Ph.D., Case Western Reserve University
Committee Member
Ayşegül Özsomer, Ph.D., Koç University, Istanbul, Turkey
Committee Member
Roger Best, Ph.D., Professor Emeritus, University of Oregon
Date of Defense
February 10, 2020
*We also certify that written approval has been obtained
for any proprietary material contained therein.
© Copyright by Ellen Schmidt-Devlin, 2020
All Rights Reserved. Dedication
In loving memory of my father, Norman A. Schmidt, and in honor of my beautiful mother, Charlotte Adele Schwab Schmidt. Their commitment to lifelong learning inspires me daily.
Table of Contents
List of Tables ...... viii List of Figures ...... x Abstract ...... xiii Chapter 1: Introduction ...... 1 Global—Local Brand Continuum ...... 2 Brand Paradox: Becoming Both Global and Local ...... 4 Research Problem ...... 5 Research Purpose and Setting ...... 6 Research Design and Methodology ...... 9 Dissertation Organization ...... 15 Chapter 2: Literature Review ...... 16 Globalization ...... 16 Glocalization/Hybridization ...... 17 Global and Local Branding ...... 18 Glocal/Hybrid Branding...... 19 Global Marketing Approach ...... 20 Omni-brand Characteristics ...... 22 Perceived Brand Globalness ...... 23 Innovation ...... 24 Product Performance Quality ...... 24 Brand Authenticity ...... 26 Local Iconness ...... 27 Local Insights ...... 27 Originality ...... 28 Consumer Culture ...... 29 Chapter 3: Theoretical Framework ...... 32 Paradox of Globalization ...... 32 Paradox as a Meta-Theory ...... 34 Chapter 4: Study 1 – QUAL – Building Globally Accepted Local Brands and Locally Authentic Global Brands ...... 36 Abstract ...... 36 Introduction ...... 37
v Research Question ...... 39 Literature Review...... 40 Research Design ...... 54 Findings...... 61 Discussion ...... 71 Limitations ...... 79 Implications...... 80 Future Research ...... 81 Chapter 5: Study 2 – Quan – Omni-brand Orientation Framework: Two Routes to Building Strong Brands...... 83 Abstract ...... 83 Introduction ...... 83 Literature Review...... 86 Theoretical Framework ...... 90 Mixed Methods Methodology...... 92 Study 1 ...... 93 The Omni-brand Orientation Framework ...... 96 Study 2 ...... 109 Discussion ...... 119 Theoretical Implications ...... 122 Limitations and Further Research ...... 124 Chapter 6: Study 3 – QUANT – Development of Measurement Scale for Omni-brand ...... 125 Abstract ...... 125 Introduction ...... 125 Theoretical Framework ...... 129 Limitations of Global Branding Literature ...... 129 Defining Omni-brand ...... 133 Methodology ...... 140 Data Collection and Screening ...... 141 Analysis...... 142 Paradox Theory ...... 167 Discussion ...... 170 Theoretical Contributions ...... 177 vi Managerial Implications ...... 177 Limitations ...... 178 Future Research ...... 179 Chapter 7: Conclusion...... 180 Integrated Findings ...... 180 Implications...... 182 Brand Roadmaps ...... 189 Limitations and Further Research ...... 192 Appendix A: Quotes from Brand Leaders (From Qualitative Research) ...... 195 Appendix B: Survey Instrument ...... 197 Appendix C: Survey Demographics – U.S...... 198 Appendix D: Pattern Matrix...... 199 Appendix E: SmartPLS Model First-, Second-, and Third-Order ...... 201 Appendix F: SmartPLS Model with Only First- and Second-Order ...... 202 Appendix G: Top Themes from 50 Interviews ...... 203 Appendix H: Demographics on 50 Executive Interviewees ...... 204 Appendix I: Global to Local and Local to Global ...... 205 Appendix J: Interview Protocol ...... 206 Appendix K: Details on Qualitative Research Collection ...... 209 Appendix L: Participant Characteristics ...... 210 Appendix M: Qualitative Interview Questions ...... 211 References ...... 212
vii List of Tables
Table 1: Dissertation Research Journey ...... 8 Table 2: Global Acceptance and Local Authenticity Constructs ...... 23 Table 3: Global Acceptance Concepts and Near Concepts ...... 26 Table 4: Local Authenticity Concepts and Near Concepts ...... 28 Table 5: Number of Executives by Business, Brand, and Demographic ...... 55 Table 6: Quantitative Survey Items ...... 111 Table 7: Model Correlations and Descriptive Statistics ...... 114 Table 8: Local Authenticity and Global Acceptance CFA Model Fit Indices ...... 115 Table 9: Estimated Path Coefficients of Local Authenticity and Global Acceptance Models ...... 117 Table 10: Demographics of Quantitative Research, n=259 Participants, 96 Different Companies ...... 121 Table 11: Scholarly Approaches to Categorization – Brand/Firm ...... 131 Table 12: Scholarly Approaches to Brand Categorization (Consumers) ...... 132 Table 13: First-, Second- and Third-Order Constructs ...... 139 Table 14: Model Validity Measures Among First-Order Factors ...... 145 Table 15: First-Order Factors Averages and Second-Order Factors Composite Scores ...... 147 Table 16: Two-Segment Results: K-Means Clustering ...... 149 Table 17: Two-Step Cluster Analysis ...... 150 Table 18: Brand Global Acceptance and Local Authenticity Scores and Clusters ...... 151 Table 19: Validating 2nd-and 3rd-order Formative Constructs ...... 153 Table 20: Latent Variable Correlations ...... 154 Table 21: Heterotrait-Monotrait Ratios ...... 155 Table 22: Paths Coefficients for Low Omni-brand/High Omni-brand with p-values ...... 156 Table 23: Parametric Multi-Group Analysis High Omni-brand vs. Low Omni-brand ...... 157 Table 24: ANOVA for Brand Power (K-Cluster Results for High/Low Omni-brand) ...... 157 Table 25: ANOVA for Brand Power (Two-Step Cluster Results for High/ Low Omni-brand) ...... 159 Table 26: First-Order Factors Weighted and Averaged into Second-Order Constructs ...... 161
viii Table 27: Second Order Constructs Weighted to create Weighted Omni-Brand Construct ...... 162 Table 28: Comparison of Second-Order Model and Third-Order Model ...... 172 Table 29: SmartPLS Algorithm Effects Comparing Original Model to Modified Model 1 ...... 173 Table 30: SmartPLS Algorithm Effects Comparing Original Model to Modified Model 2 ...... 174 Table 31: Omni-brand Questions, Comparing Long Version and Short Version ...... 175 Table 32: SmartPLS Algorithm Effects Comparing Original Model to Short Version Model ...... 176 Table 33: Examples of the Paradox Theory from the Qualitative Data ...... 184 Table 34: Scores for Each Category ...... 190 Table 35: Scores for Each Brand ...... 191
ix List of Figures
Figure 1: Omni-brand: Global Acceptance and Local Authenticity ...... 10 Figure 2: Antecedents from Study 1 and Hypothesized Model from Study 2 ...... 11 Figure 3: Study 3 Omni-brand Prototype ...... 13 Figure 4: Mixed Methods Research Design...... 14 Figure 5: Paradox as a Meta-Theory ...... 35 Figure 6: Themes Discovered from Qualitative Research ...... 40 Figure 7: Coding Summary ...... 60 Figure 8: Omni-brand Orientation ...... 61 Figure 9: Omni-brand Orientation Framework for Global Brands ...... 73 Figure 10: Omni-brand Orientation Framework for Local Brands ...... 77 Figure 11: Exploratory Sequential Mixed Methods Design ...... 93 Figure 12: Omni-brand Orientation Framework ...... 97 Figure 13: Hypotheses SEM Results ...... 118 Figure 14: Higher-Level Omni-brand Prototype-Reflective and Formative Constructs ...... 134 Figure 15: Scatterplot of 33 Brands ...... 148 Figure 16: K-Means Cluster Analysis ...... 149 Figure 17: One-Way ANOVA High Omni-brand vs. Low Omni-brand (K-Cluster High and Low Omni-brand Segments) ...... 158 Figure 18: One-Way ANOVA High Omni-brand vs. Low Omni-brand (Two-Step Cluster High and Low Omni-brand Segments) ...... 160 Figure 19: Scatter Plot of the 33 brands using weighted Global Acceptance and Local Authenticity ...... 163 Figure 20: ANOVA for Social Media Brand Factor (1= High Omni-Brand; 2= Low Omni-Brand) ...... 165 Figure 21: Social Media Use Factor Relationship with High/Low Omni-Brands (1= High Omni-Brand; 2= Low Omni-Brand) ...... 166 Figure 22: ANOVA for Net Promoter Score (NPS) relationship with Weighted Omni-Brand Factor (1= High Omni-Brand; 2= Low Omni-Brand) ...... 167 Figure 23: ANOVA for Innovation/Local Insights and Brand Power ...... 169 Figure 24: ANOVA for PBG/Local Iconness and Brand Power ...... 170 Figure 25: Steps to Develop Omni-brand Scores and Analysis with the Scores ...... 171 Figure 26: Brands Classified into Four Quadrants ...... 189
x Acknowledgments
It takes a village to finish a Ph.D. degree program, and my village has expanded during this four-year process. The vision for this journey came from Roger Best, who believed that I could offer more to academia and practice with this additional credential.
Thank you, Roger, for your friendship and partnership. Next, Daryl Jones, a former Nike employee and fellow Case Western Reserve University Doctor of Management student, introduced me to Casey Newmeyer in 2016. I knew immediately she was the right person to guide me through the twists and turns of 18 courses, one year of Ph.D. seminars, and this dissertation. Thank you, Casey, for being my advisor, teacher, and friend. Next,
Ayşegül Özsomer, who agreed to read my paper in 2017, which led to hosting me at
Koch University in Istanbul, as well as inspires the progress to publish this work. Thank you, Ayşegül, for your guidance and friendship. And finally, thank you to the brilliant
Kalle Lyytinen, who advises, instructs, and serves on my committee.
Next, thank you to the incredible professors who guided me through this four-year adventure, teaching me to think and behave like a practitioner-scholar. I could not have done this without the extra efforts of Phil Cola and James Gaskin. They were always there for me, providing the answers to questions and helping shepherd me through the quantitative software changes. And, thank you to the staff at Case Western Reserve
University, Weatherhead School of Management DM program, Sue Nartker, Marilyn
Chorman, and Shelley Muchnicki. Also, a big thank you to my classmates in the DM
Class of 2019 and the Ph.D. Class of 2020 for a community of friendship, support and encouragement during this four-year journey.
xi On the personal side, I want to thank my family, starting with my husband, Fred
Devlin. He has anticipated my needs, loved me, and has supported this ambitious
endeavor. I could not have done this without his wise counsel and constant backing. My
children, Erin Devlin, her husband, Jonathan Thaher, Kaitlyn Devlin, Sean Devlin, and his partner, Nicholas Pardon, have been supportive, motivating, and encouraging all along the way. They made many sacrifices during the last four years, and I thank each of them for their patience and for helping me accomplish something I have always wanted to do. And my granddaughter, Molly Devlin, who has been a refreshing reminder to keep things in perspective, and to love always.
Next, my mother, Charlotte Adele Schwab Schmidt, has been an amazing listener and advisor during this journey. Throughout my life, she has believed in me, and inspiring me to go farther and faster than I had ever thought possible. Also, my sisters and brothers have been uplifting, LuAnn Schmidt, Ric Schmidt and his wife Lynette,
Frank Schmidt and his wife Tina, Jacob Schmidt and his daughter, Mary, Carolyn Hatefi and her husband Brian, Donna Teach, and her husband Jeff, Amy Webber, and her husband Mark, Sarah Berger, and her husband Noel, and Marti Burroughs and her husband Matt, my sister-in-law, Elaine Miller, and my brother-in-law, Bob Devlin and his wife Kathryn.
Finally, I thank my friends, Kate Mountain, Susie Jacobson, Anita Palodichuk,
Darcy Winslow, Ann Marie Lei, Juliet Moran, Hisako Esaki, Shelly Gourlay, Jennie
Leander, Rachel Todd, Damian Vaughn, John Eberle, Lindsey Holts, Hong Yuan, Sarah
Nutter, Dennis Howard, Heather Deibele, Monica Painton, Raevyn Rogers, Merryn
Roberts Huntley, Elizabeth Brock Jones, Frances Bronet, and Steve Bence.
xii Omni-brand: The Paradox of Global Acceptance and Local Authenticity
Abstract
by
ELLEN SCHMIDT-DEVLIN
The traditional distinction between global and local brands is losing salience driven by globalization and digital technology. Using the paradox theory, this dissertation investigates a third option: brands that are both global and local—something paradoxical.
The space is currently called glocal or hybrid, but it has not been investigated to the extent of its adjoining areas of global and local, remaining a gap in the literature. There is a need to address this gap as the internet changes the interaction between cultures, which reduces the traditional distinction between global and local brands and breeds new forms of hybridization (Edelman, 2010). The question I initially sought to answer was in this context: “What is driving success for global and local brand leaders?” The first study included interviews with 50 global and local brand leaders and analyses using the
Grounded Theory Method. The study found leaders struggling with a brand paradox— attempting to become both globally accepted and locally authentic. I named this construct
Omni-brand. The next question I sought to answer was: “What antecedents identified in
Study 1 have significant effects on global acceptance and local authenticity?” In Study 2,
259 professionals representing 96 brands were surveyed, and I used structural equation modeling to validate the antecedents of Omni-brand. In Study 3, I asked the question:
xiii “How is Omni-brand measured as perceived by consumers?” To this end, a quantitative study was conducted which evaluated 33 well-known brands with 729 survey respondents to formulate a third-order Omni-brand construct for customer perception.
The model was constructed using second-order construct global acceptance with components of innovation, product performance quality and perceived brand globalness, and second-order construct local authenticity with components of brand authenticity, local insights, local iconness and originality. The study gives each of the 33 brands an overall score for both global acceptance and local authenticity and factors the brands into
either a high or low Omni-brand category. Finally, because the sequence of three studies
demonstrates how to conduct a mixed-methods design to discover, validate, and measure
a new construct, I integrate the findings of three studies guided by the question: “What
benefit does Omni-brand offer?” The research finds that high Omni-brands have
significantly more brand power than low Omni-brands. In aggregate, the dissertation fills
a current gap in the literature on how paradoxical global and local brands interact, as well
as provides invaluable guidance to brand managers in their quest to successfully navigate
brands in the global and digital marketplace.
Keywords: globalization; global brands; local brands; authenticity; paradox theory
xiv CHAPTER 1: INTRODUCTION
We have to find the right balance of when do we talk globally about the Olympics and stand for that around the world versus when do we create things that are very unique and connect with the consumer on a local basis and how do we dial that up and down. — VP, Sales and Marketing
Li-Ning, a local Chinese sports brand, named after a 1984 Olympic champion and
one of the most famous athletes in China, was forecasted to be the “leading contender to
become China’s first truly global brand” (Madden, 2010: 1). On August 8, 2008, Mr. Li
was given his country’s highest honor, as he was lifted by a wire above the Olympic
stadium to light the cauldron flame during the Opening Ceremonies of the 2008 Beijing
Summer Games. This ambush of Adidas, the official Olympic sponsor, witnessed by a
global audience of 2 billion people, announced that Li-Ning was ready to compete.
Taking advantage of this window of opportunity, Li-Ning opened a hi-tech innovation design center in 2008 and a concept store in 2010 (Madden, 2010). Both facilities were in Portland, Oregon, purposely positioned within miles of the two biggest global sports brands, Nike and Adidas (Brettman, 2011). After growing its revenue by
32.4% to USD$593.4 million and winning the 2009 Ad Age China’s Marketer of the
Year Award, Li-Ning was given a “sporting chance at becoming a global brand”
(Madden, 2010: 1).
Unfortunately, four years after this grand entrance, the Li-Ning brand started to falter in China. They announced a net loss in 2012 of USD$318.78 million, a 24.5% decline (Wen, 2013). The brand was faced with low brand acceptance in markets outside of China (Euromonitor, 2018; Wen, 2013). Many observers inside and outside of the company blamed the lackluster financial results on the resources being spent on the
1 global expansion, and the belief by some key leaders that the Li-Ning brand was being
hurt by trying to be global and local at the same time.1 In 2012, after only four years of
struggles, Li-Ning declared a failure, and closed both their Portland innovation center and
store, and retreated back to China (Brettman, 2012).
Global—Local Brand Continuum
Traditionally, brands are categorized on the global–local continuum (Alden,
Steenkamp, & Batra, 2006). Li-Ning is considered one of the leading local sports brands
in China (Euromonitor, 2018). Local brands are described as “available in a specific
geographical region” or “a concentrated marketplace” (Dimofte, Johansson, &
Ronkainen, 2008: 120). Local brands find success through unique perceived value,
cultural capital, and positioning of localness (Ger, 1999). The advantages for local brands
are being responsive to local market needs, having strong consumer relationships, and
being well-known in their markets (Bartlett & Ghoshal, 1989).
In contrast, global brands, such as Nike, Toyota, and Amazon (BrandZ, 2019),
are defined as “marketed in multiple countries and generally recognized as global in these
countries” (Steenkamp, Batra, & Alden, 2003: 54). Global brands share characteristics
such as worldwide awareness, availability, desirability, and revenue (Özsomer, Batra,
Chattopadhyay, & ter Hofstede, 2012; Schuiling & Kapferer, 2004; Steenkamp et al.,
2003). Global brands have advantages over local brands because of consumers’
perceptions of superiority (Shocker, Srivastava, & Ruekert, 1994), quality (Holt, Quelch,
& Taylor, 2004) and promise of abundance (Holton, 2000).
1 Qualitative research 2017 interview with a former Li-Ning Executive. 2 On the global–local continuum, the space between the two extremes is called
“glocal” or “hybrid.” Glocal can be defined as combining global and local (Strizhakova,
Coulter, & Price, 2008), and the “interpenetration of the global and local resulting in
unique outcomes in different geographic areas” (Ritzer, 2003: 193). “Hybrid,” another
term used for this space, is described as a blend of global and local symbols (Alden et al.,
2006) and a merging of cultural differences (Holton, 2000). Navigating a brand to be both global and local at the same time has been claimed to offer a successful market approach
(Swoboda, Elsner, & Morschett, 2014), but it has significant challenges (Steenkamp,
2017). These challenges include managing the tensions and contradictions of being both
old and new, the same and different, or a brand paradox (Brown, Kozinets & Sherry,
2003).
While the majority of academic researchers recognize similar definitions for
global brands and local brands, there is less agreement about the definition of glocal
brands. Some researchers suggest glocal replace global (Robertson, 1995), and others
consider glocal the future of the local (Swoboda, Pennemann, & Taube, 2012). The term
hybrid does little to clear up the confusion being defined as a mixture of two cultures, and
inauthentic (Pieterse, 2001). Researchers agree that compared to the concepts of global
and local, the concept of glocal is least precisely defined (Alden et al., 2006), noting that
little research has focused on the “experiences of glocalization” (Thompson & Arsel,
2004: 631). This provides a gap in the literature and the opportunity for this dissertation’s
contribution.
This gap has widened as the internet blurs the line between global and local
because it enables immediate interaction between cultures (Wasserman, 2002). Starting in
3 the mid-1990s, e-commerce and global media were expanding, creating ‘digital natives’
(Prensky, 2001). They became the emerging generation increasingly empowered (Tiago
& Veríssimo, 2014) as the internet changes both brand engagement and consumer tastes
(Edelman, 2010).
This dissertation, through a comprehensive literature review and an exploratory
mixed methods approach, examines a new form of glocal/hybrid and its manifestations.
In this new form of glocal/hybrid, two key components are integrated: global acceptance
and local authenticity. This research exposes these contradictory interconnected global
and local market demands which is called a brand paradox (Smith, Binns, & Tushman,
2010). Research has found that paradox can offer brands a sustained competitive
advantage (Heracleous & Wirtz, 2014; Lewis, Andriopoulos, & Smith, 2014) so, the
thesis offers theoretical tools and models to successfully navigate the paths to become a
globally accepted/locally authentic brand—a situation called an Omni-brand. This
research concludes with the integrated finding of high Omni-brands having more brand
power than low Omni-brands.
Brand Paradox: Becoming Both Global and Local
Ambidexterity is the ability to pursue two contrasting strategic directions at the same time rather than picking between two alternatives (Melewar & Nguyen, 2014). For
example, brands need to be both consistent over time and relevant (and hence varying) to
current market needs (Beverland, Wilner, & Micheli, 2015). But to remain consistent and also become locally relevant is a tension which is hard to navigate, as demonstrated by the Li-Ning brand failure. The Li-Ning leaders needed to manage the opposing forces of global and local in their quest to move a local brand to a global one. An effective framing
4 of understanding and analyzing competing demands is utilizing the concept of paradox
(Jules & Good, 2014). Paradoxes are defined as “contradictory yet interrelated elements that exist simultaneously and persist over time” (Smith & Lewis, 2011: 382). They are
“dualities, that are oppositional to one another yet are also synergistic and interrelated within a larger system” (Smith & Lewis, 2011: 386).
Paradox tensions signify “two sides of the same coin” (Lewis, 2000). Managing paradox requires presenting tensions not as either/or but as both/and alternatives, fostering novelty, creativity, and long-term sustainability (Jules & Good, 2014; Lewis,
2000). Paradoxes are two alternatives that are not separate, but interdependent and complementary (Farjoun, 2010). Researchers have found paradox to be an important aspect of the consumer-brand relationship, and more specifically, brand paradox is the challenge of creating consistency and authenticity (Brown et al., 2003). This dissertation
focuses on how to balance and manage the paradox of Omni-brand; that is, navigate the
need for a brand to have global acceptance and local authenticity.
Research Problem
Brand leaders are focused on building successful brands. Past academic
researchers found two distinct paths toward brand success, with the first route requiring
constructing a brand that is perceived as a global brand, while the second road to success
being shaping a brand to become “an icon of the local culture” (Steenkamp et al., 2003).
Beyond these two different paths, researchers are discovering there may be a third
avenue, using both the dialectic between global and local. For example, researchers are
discovering global markets addressing local demands (Lewis et al., 2014), brands
offering globally consistent services and also responding to varied local needs (Marquis
5 & Battilana, 2009), global integration along with local adaptation (Fredberg, 2014), global brands taking on local elements (Ger & Belk, 1996), and local brands adopting global traits (Alden et al., 2006). This recognition of a third way is increasing in importance because of the discovery that if a brand becomes global and local at the same time it can lead to more success (Fredberg, 2014), and being both globally integrated and locally responsive can also lead to success (Luo & Rui, 2009).
The problem from an academic standpoint is the glocal/hybrid brand concept has not been as well researched as the concepts of global brands and local brands in separation. The current global branding research mainly compares and contrasts global brands to local brands, such as global versus local brand purchase decisions (Davvetas &
Diamantopoulos, 2018; Strizhakova & Coulter, 2015), investigates consumer attitudes toward global versus local products (Euromonitor, 2018; Steenkamp & de Jong, 2010), seeks to determine brand preference between perceived brand globalness/localness
(Halkias, Davvetas, & Diamantopoulos, 2016), and the influence of regulatory focus on preference for global versus local (Westjohn, Arnold, Magnusson, & Reynolds, 2016).
None of them look at global and local as integrated but rather as separate and substitutable elements of a brand.
Research Purpose and Setting
The overall question addressed by this thesis is: “Are there benefits to being an
Omni-brand—both globally accepted and locally authentic?” Scholars recommend readers accompany the researcher on the journey, “not only observing results but understanding the alternatives” at various states to help produce research with “high
6 standards” (Gefen, Rigdon, & Straub, 2011: iii). The below narrative provides a closer
examination of the research.
With the digital revolution and the evolution of globalization, I was curious about
how this was impacting global and local brands. This led to the germinal question of:
“What is driving success for global and local brand leaders?” The first study draws on
interviews with 50 brand leaders. Paradoxically, the majority of the lived experiences
recalled by global brand leaders were about local authenticity, while local brand leaders’
experiences were about becoming globally accepted. The leaders recalled stories about
tensions, conflicts, and successes finding global brand leaders describing successes in the
marketplace centered on the times they demonstrated their understanding of the local
market and provided authentic experiences to consumers. For example, one leader talked
about gauging consumer needs down to the temperature differences between cities in
China. This was matched with local brand leaders lamenting about building their brand’s
global awareness and acceptance. Study 1 combines the two main themes of global
acceptance and local authenticity and names it Omni-brand. The name originates and generalizes the Omni-channel idea—the new method brands use to sell their products through multiple channels (Brynjolfsson, Hu, & Rahman, 2013).
The next question to answer was: “Is there statistical evidence to support Study 1
findings?” Study 2 validates the direct effects of the antecedents of global acceptance and
local authenticity—Omni-brand. The findings from Studies 1 and 2 are interesting, with
leaders explaining the happenings, internal to their brand.
Study 3 shifted to the consumer. I wanted to better understand: “How can Omni-
brand be measured?” A model was constructed using a higher-order constructs including
7 a new second-order global acceptance construct with antecedents of innovation, product
performance quality and perceived brand globalness, and a new second-order local
authenticity construct with antecedents of brand authenticity, local insights, local iconness, and originality.
The final step of this dissertation is to integrate the findings from the three studies. The question investigated was: “Are there benefits to being an Omni-brand?”
This step found high Omni-brands have significantly more brand power than low Omni-
brands. This dissertation will help fill the current gap in the literature, as well as provide invaluable guidance to brand managers in their quest to successfully navigate brands in the digital global marketplace. Table 1 outlines the research journey.
TABLE 1: Dissertation Research Journey
Overall Research Question: Are there benefits to being an Omni-brand?
Research Question “What is driving “Is there statistical “How can Omni-brand success for global and evidence to support be measured?” local brands? Study 1findings?” Unit of Analysis Global and Local Brand Brand Leaders and Consumers – USA Leaders Managers – USA Research Method QUAL QUANT QUANT Research Data One-on-one Survey Survey Collection and Source Interviews/Network Instrument/Network Instrument/MTurk Data Data N=50 brand leaders (25 N=259 brand leaders N=729 Consumers (33 Global/25 Local) and managers (96 brands) (24 brands) brands)
This dissertation attempts to define a new kind of notion of glocal/hybrid brands
which I named Omni-brands. To address these research questions, the study focuses on
the sports, outdoor, and fashion industries for several reasons. First, my 27 years at Nike,
8 gave me access to global leaders, while my experience founding the Sports Product
Management master’s program at the University of Oregon provided the opportunity to query leaders around the world. Second, the sports and outdoor industry has strong dominant global brands, such as Nike, Adidas and Patagonia, with a set of emerging local brands, mainly from China, including Li-Ning, Anta, Xtep, Peak, and 361 degrees. In a sense, the industry is experiencing the rise of Asian local brands.
The third reason for choosing sports, outdoor, and fashion industries was the opportunity to examine a broader family of related global industries. Euromonitor reports these industries as sportswear and designer footwear and apparel. The brands overlap because of the convergence of the industry in addressing the athleisure trend
(Euromonitor, 2018).
Research Design and Methodology
The research journey includes a series of questions concluding with the overall question focused on whether this new phenomenon named Omni-brand benefits brands.
The research employs mixed methods, the combination of qualitative and quantitative methods with “complementary strengths and non-overlapping weaknesses” (Brewer &
Hunter, 1989; Johnson & Turner, 2003). This dissertation utilizes an exploratory, sequential three-phased mixed methods research design (Teddlie & Tashakkori, 2009).
Sequential means that data collected and analyzed at one phase is used to inform the next phase of the research (Teddlie & Tashakkori, 2003). The reason for using mixed methods is because of the complexity of the questions I was attempting to answer.
The general purpose of this mixed methods research study was for development, using one methodology (qualitative) to develop and inform the another methodology
9 (quantitative) (Greene, Benjamin, & Goodyear, 2001). The goal is to deliver research that has both design quality and interpretive rigor in order to evaluate the validity of the findings of the research (Teddlie & Tashakkori, 2003). The approach used for analysis and reporting was integrated during both analyses and interpretation (Green et al. 1989).
Study 1 utilizes grounded theory methodology to investigate the global marketplace through the lens of global and local brand leaders. This study uncovered the brand paradox of newly named constructs: global acceptance and local authenticity.
Research shows “no precise method can be stated to outline the domain of variables for a construct properly…the theorizing process is necessarily intuitive” (Nunnally &
Bernstein, 1967: 88). Grounded theory methodology provided the ability to theorize a model of the key findings from the qualitative study (Figure 1).
FIGURE 1: Omni-brand: Global Acceptance and Local Authenticity
Study 2, while primarily a quantitative study, it also is a mixed-methods study, using the findings from Study 1 to “provide conceptual and methodological grounds for the next one in the chain” (Tashakkori & Teddlie, 1998). Study 2 utilizes a purposive sampling technique with the objective of asking a larger number of sports and outdoor
10 industry leaders and managers to answer a quantitative survey (Teddlie & Yu, 2007).
Study 2 was developed by utilizing the categories (antecedents) discovered in Study 1 interviews to identify key characteristics to build constructs (MacKenzie, Podsakoff, &
Podsakoff, 2011) that could be statistically tested (Figure 2). The statistically equation modeling used in Study 2, reviewed the direct effects of the factors found in Study 1. For this dissertation, it is important to note that in Study 2 local authenticity is represented by the brand authenticity factor (Morhart, Malär, Guèvremont, Girardin, & Grohmann,
2015), while global acceptance is portrayed using the perceived brand globalness factor
(Steenkamp et al., 2003).
FIGURE 2: Antecedents from Study 1 and Hypothesized Model from Study 2
Study 3 is the third phase of this exploratory, sequential three-phased mixed methods research design (Teddlie & Tashakkori, 2009). Data collected in Phase 1, the qualitative grounded theory study, was used to develop Phase 2, the quantitative SEM study, then used to develop this third phase of data collection and analyses (Teddlie &
Tashakkori, 2003, 2009). Study 3 is a scale development study, utilizing a quantitative
11 research method. There are limitations to current scale development practices, and
differences between developing scales with formative indicators and reflective indicators
(MacKenzie et al., 2011). Study 3 followed the methodology used by Batra, Ahuvia, and
Bagozzi (2012) in their Journal of Marketing thesis, which utilized a prototype to
demonstrate the formation of second-order constructs and built a third-order construct of
brand love.
In Study 3, I used a probability sampling technique to select a large number of
people from the population in a random way (Teddlie & Tashakkori, 2003, 2009). Using
MTurk, I collected 729 usable survey respondents answering questions about 1 of 33
brands. The analysis focused on creating a scale to measure each of the brands.
Constructs being utilized conceptually in scale development require identification
(MacKenzie et al., 2011; Podsakoff, MacKenzie, Lee, & Podsakoff, 2003); therefore,
global acceptance is represented by the union of the sub-dimensions of perceived brand
globalness, innovation and product performance quality, while local authenticity is
formed by brand authenticity, local iconness, local insights and originality. These sub-
dimensions are not substitutable, as they are formative indicators instead of reflective
indicators (Jarvis, MacKenzie, & Podsakoff, 2003); the decision was made to add them
together to form the second-order constructs of global acceptance and local authenticity.
But do I use an additive or multiplicative approach to build the third-order construct? As the first-order characteristics are necessary and sufficient to build the meaning of the second-order constructs, the decision was made these two concepts would be added together to form the focal construct of Omni-brand (Goertz, 2006) (Figure 3).
12 FIGURE 3: Study 3 Omni-brand Prototype
As the general purpose of this mixed-method research study was for development
(Greene, Caracelli, & Graham, 1989) with the goal to deliver a quality design and interpretive rigor (Teddlie & Tashakkori, 2003), the final step was to integrate all three studies to answer the question of: “Are there benefits to being an Omni-brand?” Figure 4 outlines the exploratory, sequential mixed-methods dissertation, with respective research questions, procedures and outcomes.
13 FIGURE 4: Mixed Methods Research Design
14 Dissertation Organization
This dissertation is organized in a chapter format with Chapter 1 focused on the introduction and providing background on the research journey. Chapter 2 is a literature review. Chapter 3 is the paradox theory, followed by the three studies in Chapters 4, 5, and 6. The concluding chapter, Chapter 7, includes the integrated findings across the three studies, theoretical and practical implications, limitations, ideas for future research and final thoughts.
The dissertation uses both singular pronouns (e.g., I, me) and plural pronouns
(e.g., we, us, our). The studies represented in Chapters 4 and 5 have been submitted to several different marketing journals. Studies 1 and 2 use reflective factors—the global acceptance construct is represented by the factor of perceived brand globalness—while the local authenticity construct uses the factor of brand authenticity. In Study 3, I use formative constructs; therefore, global acceptance is formed by perceived brand globalness, innovation and product performance quality, while local authenticity is constructed by local authenticity, local iconness, local insights and originality.
This thesis utilizes one category for its investigation, as past research has found the importance of focusing on product category when studying global and local brand management (Davvetas & Diamantopoulos, 2016). The category chosen is footwear and apparel in the sports, outdoor and fashion industry.
15 CHAPTER 2: LITERATURE REVIEW
This literature review sets context by reviewing the relevant literature about the concepts of globalization and glocalization. Next, the thesis reviews the global branding literature, with particular interest in glocal branding, continues with a discussion about the global strategy marketing approach, and next defines the concepts and near concepts used in this thesis. Finally, this section concludes with a closer inspection into the motivation of consumers through a review of consumer culture. Efforts were made to minimize the redundancies between this literature review and the reviews in each of the three studies represented in Chapters 4, 5 and 6.
Globalization
Globalization has been defined as the “emergence of the global human condition” as the world becomes a single place (Robertson, 1987). It could be argued that globalization has existed in some form for many centuries, as the process of cultures influencing each other through trade, travel, and the exchange of information. It can be attributed to a series of different factors including technology advancements, such as the internet, as well as the growth of global media which allows worldwide marketing of brands (Özsomer & Simonin, 2004; Steenkamp & Ter Hofstede, 2002). Globalization is believed to have entered the academic field in the 1960s as a component of the social science debate about the impact of emerging telecommunication on people’s lives
(Jackson, 2004). It can be described as a process of “accelerated connectivity”
(Tomlinson, 1999) and cultural connection by digital technology (Arnett, 2002).
The debate within the scholarly literature is which direction globalization is taking the world –toward homogenization or heterogenization. Levitt and Ritzer’s
16 argument supports homogenization—the process of making things uniform or similar.
Theodore Levitt’s seminal article on the globalization of markets states that technology
would drive the market to commonality (Levitt, 1983), with the internet and global media
moving the global marketplace toward more similarities than differences (Ritzer, 2007).
For example, the homogenization of the marketplace leads to consumers substituting
global brands, which can be the same around the world, for local brands which can be
different in each market (Strizhakova, Coulter, & Price, 2012).
There is an argument against homogenization made by demonstrating heterogenization—the process of making things different, through the persistence of
“local” cultures of consumption (Jackson, 2004). Interestingly, other academics recognize
a simultaneous increase in homogeneity and heterogeneity, these converging and
diverging tendencies (Maynard & Tian, 2004) with an interplay between global and local
as the outcome (e.g., Ger & Belk, 1996; Hermans & Kempen, 1998; Özsomer, 2012;
Wilk, 1995). A different term—glocalization—is used to describe bringing together
cultural homogenization and heterogenization. This will be further investigated in the
next section.
Glocalization/Hybridization
Glocalization is the combination of global and local, and the interaction between
globalization and localization (Maynard & Tian, 2004). The term glocalization is
believed to have originated from the Japanese notion of “global localization” (Robertson,
1995:40). Interestingly in 1995, Roland Robertson, a premier globalization theorist, shifts
his thinking and states that “glocalization,” defined as the two opposing trends of
homogenization and heterogenization, better captures what he had previously termed
17 globalization (Robertson, 1995). He contends that “the forces of globalization are
thoroughly interpenetrated and co-shaping, therefore the effects of globalization on
everyday cultural like –via global brands, fashion and mass media—are more accurately
described as a process of glocalization” (Robertson, 1995: 631).
And although there is the emergence of more brands demonstrating glocal/hybrid characteristics, the global branding literature continues to largely treat global and local branding as separate endeavors (e.g., Özsomer, 2012; Steenkamp et al., 2003;
Swaminathan, Page, & Gürhan-Canli, 2007). Therefore, the next section will briefly
review global and local branding, followed by a review of glocal/hybrid branding.
Global and Local Branding
A considerable amount of research has been done on branding, specifically global
branding (Holt et al., 2004; Özsomer, 2012; Steenkamp et al., 2003), and local branding
(Batra, Ramaswamy, Alden, Steenkamp, & Ramachander, 2000; Ger, 1999; Ger & Belk,
1996). Global brands, such as Nike, Coca-Cola, Samsung or Apple, can be defined as
brands using the same name and logo in many different countries; recognized and
accepted as global in these markets (Özsomer & Altaras, 2008; Steenkamp et al., 2003).
Global brands are characterized by worldwide awareness, availability, desirability, and
revenue and by the use of standardized and centrally coordinated marketing strategies
across the world (Özsomer et al., 2012; Schuiling & Kapferer, 2004; Steenkamp et al.,
2003). Research has found that global brands create a perception of brand superiority
(Shocker et al., 1994), high quality (Holt et al., 2004), and high prestige/status (Batra et al., 2000; Holt et al., 2004; Steenkamp et al., 2003) and credibility (Özsomer et al., 2012;
Steenkamp et al., 2003). Other key features for global brands include global image,
18 standardization, and social responsibility (Dimofte et al., 2008; Holt et al., 2004;
Johansson & Ronkainen, 2005; Strizhakova et al., 2008). Global products give younger
consumers a connection to success and a feeling of belonging to a global community
(Steenkamp & de Jong, 2010). For global brands, their value is obtained by their
customer/consumer interface, marketing, organizational and economic benefits and
transnational innovation (Steenkamp, 2014, 2017).
With the bulk of research focusing on global brands, local brands have received
less attention, and, therefore, they are less specifically defined (Alden et al., 2006;
Schuiling & Kapferer, 2004). In most work, local brands are characterized as being
focused on the unique needs of their local markets, with revenue primarily generated in
their home country (Özsomer, 2012; Steenkamp & de Jong, 2010). Local brands tend to
concentrate on local activities with limited availability outside their home country
(Dimofte et al., 2008). Local brands possess strong brand awareness and long-standing relationships with local consumers (Schuiling & Kapferer, 2004). They can become icons of the local culture (Ger, 1999; Steenkamp et al., 2003) and express national identity
(Swaminathan et al., 2007). Thus, they create value by building a local identity and promoting the local culture by tailoring products to local tastes and needs (Özsomer,
2012; Schuiling & Kapferer, 2004).
Glocal/Hybrid Branding
Scholars have recognized the space between global and local brands although
much less research has been done in this area (Pieterse, 2001; Ritzer, 2003; Steenkamp &
de Jong, 2010). Glocal branding happens when global brands take on local elements (Ger
& Belk, 1996; Miller, 1998) and local brands adopt global traits (Alden et al., 2006). And
19 there is a glocal brand consumer, described as part of the young adult population
grounded in both global and local cultures (Strizhakova et al., 2012). An interesting
example to demonstrate the concept of glocal is soccer/football. It has both a global
nature (e.g., World Cup) and local nature (e.g., National teams and event location) and has been described as glocalization, or the “global-local nexus” (Steger, 2003). This is a powerful example of glocal, as more countries belonging to FIFA, the global governing body of soccer/football, than the United Nations (Ghemawat, 2007).
Hybrid, with origins from biology, has been broadened to include a cultural definition of “blending of traits from diverse cultures or traditions” (Stross, 1999: 254). It also describes the blending of global and local cultural influences (Hermans & Kempen,
1998; Holton, 2000). Some academics consider hybridization as the space between global and local brands, where global brands take on some local traits (Pieterse, 2001) and local brands communicate their global successes (Özsomer, 2012). Also, integration of local culture symbols (e.g., brands) with global components has been recognized as the hybridization approach (e.g., Alden et al., 2006). Researchers found global brands benefit from a hybrid approach in advertising by featuring both global attributes (e.g., quality) with local language, visuals and themes (Hung, Li, & Belk, 2007; Kates & Goh, 2003).
And, there is evidence that new forms of hybridization are emerging because of digital marketing and e-commerce (Özsomer, 2012; Ryan, 2016).
Global Marketing Approach
Two approaches in global marketing are global strategy (standardization) and multi-domestic strategy (adaptation). Starting with global strategy, research has found it primarily focused on finding similarities between countries, in order to standardize across
20 national markets (Yip, 2002). Standardization includes using common products, pricing,
distribution, and marketing programs across the global marketplace (Jain, 1989). While
standardization could be looked at unfavorably like a “one size fits all,” it is normally applied much more strategically. By focusing on sameness, brands homogenize their products and services and implement a strategic marketing plan worldwide (Johansson &
Yip, 1994; Kotabe & Helsen, 2009; Steenkamp & de Jong, 2010).
Multi-domestic strategy, also known as adaptation or customization, detects differences between countries and uses these to adapt marketing strategies and programs to better meet the needs of specific markets (Yip, 2002). The multi-domestic strategy differs from the global strategy, by allowing decisions to be made locally with field offices leading the on-the-ground actions, such as making marketing and product decisions to meet the local market’s needs which often requiring adaptation (Johansson &
Yip, 1994; Kotabe & Helsen, 2009; Steenkamp & de Jong, 2010).
Some academic research has found both global strategy and multi-domestic strategy can drive performance (Özsomer & Prussia, 2000). Other research has found standardization attractive because similarities are more important than differences when expanding to new markets (Kotabe & Helsen, 2009). For example, studies done on the car industry found that global strategy (standardization) practiced by Japanese brands created more success than multi-domestic strategy (adaptation) used from European car brands (Grein, Craig, & Takada, 2001).
There is a third option, semi-global strategy, that mixes global and multi-domestic strategies (Douglas, Craig, & Nijssen, 2001). This combined strategy allows brands to determine the desired degree of standardization or adaptation for branding, advertising,
21 and sales promotion (Riesenbeck & Freeling, 1991). Since total standardization is uncommon with many brands adapting color, sizing, and pricing by country or region
(Quelch & Hoff, 1986), the majority of brands choose this third option. Much literature on standardization and adaption has found this middle space driving success as brands can remain authentic in their home country, as they expand to other countries (Bianchi &
Arnold, 2004; Bianchi & Ostale, 2006; Hultman, Robson, & Katsikeas, 2009; Shoham,
Brencic, Virant, & Ruvio, 2008).
The challenge in today’s connected marketplace is deciding how to combine global and local strategies into a true glocal or semi-global strategy (Steenkamp, 2017;
Steenkamp & de Jong, 2010)—an Omni-brand strategy. While many academics have identified the benefits of local relevance and the returns to global acceptance (e.g.,
Steenkamp, 2017), research has remained silent on “how to get there.” Thus, the next section describes the characteristics needed to become an Omni-brand.
Omni-brand Characteristics
This dissertation frames the new phenomenon, Omni-brand, by utilizing the building blocks discovered in the studies and guided by existing literature. Omni-brand is a focal construct made up of the two formative sub-dimensions of global acceptance and local authenticity. As this is an exploratory, sequential mixed methods thesis, each study is utilized to build the next study. The global acceptance and local authenticity constructs in Studies 1 and 2 represent the factors of perceived brand globalness and brand authenticity. These are different in Study 3, as the previous studies’ findings and literature supports forming global acceptance by utilizing three different factors: perceived brand globalness, product performance quality and innovation while local
22 authenticity was developed by the forming of four different factors: brand authenticity,
local iconness, local insights, and originality, outlined below in Table 2.
TABLE 2: Global Acceptance and Local Authenticity Constructs
The next section will detail the constructs with explicit terms, consistent with
prior research and explain how they differ from related concepts (MacKenzie et al.,
2011). I will review the global acceptance factors, followed by the local authenticity
factors. Below is a review of the three reflective factors—perceived brand globalness,
innovation and product performance quality—that make up the second-order construct of
global acceptance.
Perceived Brand Globalness
Perceived brand globalness (PBG) explains consumers’ perceptions that a brand is marketed and sold in many countries (Alden, Steenkamp, & Batra, 1999; Steenkamp et al., 2003). More specifically, PBG is consumers believing “that a brand is recognized as global in these countries” with this perception driven by global media, travel, and global event exposure (Steenkamp et al., 2003). Some will argue that this concept existed prior to the identification of the PBG construct (Shocker et al., 1994), but once identified it has been studied by many academics. PBG has a positive influence on brand purchase
23 intentions mediated through enhanced perceptions of brand quality and prestige and
moderated by consumer ethnocentrism (Davvetas, Sichtmann, & Diamantopoulos, 2015).
Also, researchers have found consumers are more likely to buy brands perceived as
global because of quality, and they are more likely to pay more because of prestige
(Alden et al., 1999; Steenkamp et al., 2003). Conversely, some negative perceptions have been associated with PBG because of its connection to globalization (Zhou & Belk,
2004). And researchers have found PBG benefits retailers in emerging markets (Swoboda
et al., 2012), specifically China (Steenkamp et al., 2003). In fact, they uncovered the
perception of “glocal” where global and local were combined.
Innovation
Innovation is defined as any introduction of a new or improved design or
technology into the market (Griffith & Rubera, 2014). Researchers have found innovation
increasingly important for brands competing in the global marketplace (Lee & Zhou,
2012; Rubera & Kirca, 2012; Sun & Lee, 2013). Past research has shown that global
innovation capability builds a competitive advantage for brands (Subramaniam &
Venkatraman, 2001), and global brands have an edge in the area of innovation (Knight &
Cavusgil, 2004; Steenkamp, 2017). Innovation is essential to a company’s survival and
leads to success, particularly in today’s hyper-competitive global marketplace (Lee &
Zhou, 2012; Rubera & Kirca, 2012).
Product Performance Quality
Quality is defined broadly as superiority or excellence (Zeithaml, 1988). New
product quality is measured by its reliability and customer satisfaction (Atuahene-Gima
& Li, 2004). Past academic studies have found consumers buy global brands, at least in
24 part, because they believe that the quality and performance will be better than those of
local brands (Özsomer, 2012; Steenkamp, 2017) with global brands benefiting over local
brands because they have a perception of higher quality (Holt et al., 2004). Consumers
attribute higher quality to a brand that is globally available because quality is perceived
as critical to “global acceptance” (Kapferer, 1997; Steenkamp et al., 2003).
The constructs in the table below in Table 3 reflect the concepts and near concepts of global acceptance utilized in this thesis.
Next, the four reflective factors—brand authenticity, local iconness, local insights and originality—that make up the second-order construct of local authenticity will be
reviewed.
25 TABLE 3: Global Acceptance Concepts and Near Concepts
Construct Concept/ Definition/Measurement Primary Citation Near Concept Product Quality Near Concept to Product Quality is measured as quality is Atuahene-Gima and Product Performance comparable, more reliable, higher quality, Li (2004) Quality better benefits than its competitors. Innovative Near Concept to Innovative Product Design is measured by Moon, Park, and Kim Product Design Product Performance aesthetic attributes (appearance), feature (2015) Quality attributes (performance), and ergonomic feature (user-centric). Product Concept Product Performance Quality is measured Adapted Performance as quality that is superior, more reliable, Atuahene-Gima and Quality higher performance, and providing better Li (2004); Moon et benefits than its competitors. al. (2015)
Firm Near Concept to Firm Innovativeness is openness to new ideas Calantone, Cavusgil, Innovativeness Innovation as a part of company culture, willingness to and Zhao (2002) try out new ideas, seeking new ways to do things, being creative in methods of operations and the rate of product introductions. Product Near Concept Product Innovation Ability is measured by Subramaniam and Innovation To Innovation frequency of new product introductions, Venkatraman (2001) Ability Capability (Study 1) being first to market, ability to introduce new versions in several markets at the same time, ability to respond to the unique requirements of different countries and ability to penetrate new overseas markets Innovation Concept Innovation is defined as a brand that is Adapted often first to market, frequently tries new Calantone et al. ideas, seeks new ways to do things, is (2002); creative, introduces new products around Subramaniam and the world at the same time, and often risks Venkatraman doing things differently. (2001)
Attitude toward Near Concept People’s associated dreams of success and Steenkamp and de Global Products global citizenship relate to younger, high on Jong (2010) (AGP) stimulation, and low on ethnocentrism. Perceived Brand Concept Perceived brand globalness is the Ger (1999); Globalness perception that the brand is marketed in Steenkamp et al. many countries and is generally (2003) recognized as global in these countries. It is defined as a brand (e.g., name, logo, products) that is recognized as a global player with a global reach.
Brand Authenticity
The term authenticity can be defined as genuineness and relevance (Beverland,
2006). Some research suggests that authenticity is “the cornerstone of contemporary marketing” (Brown et al., 2003: 21). Consumers desire authentic experiences (Leigh, 26 Peters, & Shelton, 2006) and an increasing number of consumers are searching for
authenticity in brands (Arnould & Thompson, 2005; Brown et al., 2003). Brand
authenticity is defined as a “subjective evaluation of genuineness ascribed to a brand by
consumers” who create an authentic self and reconnect with culture through the use of
brands” (Napoli, Dickinson, Beverland, & Farrelly, 2014: 1091). Brands represent authentic cultural resources (Holt, 2002). And authenticity is more closely aligned with local culture and values than with global culture (Nijssen & Douglas, 2011; Peñaloza,
2000), as it can fuel growth in the local marketplace (Eggers, O’Dwyer, Kraus, Vallaster,
& Güldenberg, 2013).
Local Iconness
Brands can achieve competitive success through the use of local cultural capital, heritage, as well as by using strategies that demonstrate understanding of local identity, culture and needs (Ger, 1999). Local iconness is a brand reaching iconic status because of its connection with the local country and culture (Ger, 1999; Özsomer, 2012). In line with
the previous findings, some brands become “icons of the local culture” (Swoboda et al.,
2012). A similar concept has been identified and named Perceived Brand Localness
(PBL), defined as being recognized as a local player and a symbol or icon of local culture
(Ger, 1999; Steenkamp et al., 2003).
Local Insights
One of the critical elements of market orientation is the concept of local insights
(Narver & Slater, 1990). The focus of market orientation is the needs of the local market,
which involves obtaining information from local consumers (Kohli & Jaworski, 1990),
called local insights in this dissertation. Prior research has noted the importance of
27 meeting the needs of local markets to grow a strong business worldwide (Douglas et al.,
2001; Quelch & Hoff, 1986; Steenkamp, 2017; Taylor & Okazaki, 2015).
Originality
Originality is the ability to think creativity in order to produce novel solutions
(Saeki, Fan, & Van Dusen, 2001). Brand originality is defined as utilizing fresh perspectives, prioritizing original ideas, creating original products, and risking doing things differently (Kirton, 1976). Prior research has shown that originality is associated with consumers’ quest for authenticity (Leigh et al., 2006). Research found that local brands can be perceived as more unique and original than global brands (Schuiling &
Kapferer, 2004; Swoboda et al., 2012). Aligned with the literature, several of the Study 1 brand leaders emphasized the importance of local brands needing to get away from the imitation of global brands and move toward doing more original products.
The constructs in the tables below in Table 4 outline the local authenticity concepts and near concepts for local iconness, local insights, brand authenticity and originality.
TABLE 4: Local Authenticity Concepts and Near Concepts
Construct Concept/ Definition Primary Near Concept Citation Iconic Brands Near concept to Iconic brands are defined as consumer brands that carry “consensus Holt et al. Local Iconness expression of particular values held dear by some members of a (2004) society.” (p.4) Local icons Near concept to Brands that become local icons achieve dominant positions in part Torelli, Keh, Local Iconness because of their high levels of group symbolism and the associations and Chiu with a group and its culture (2010) Perceived Near concept to Perceived Brand Localness is defined as being recognized as a local Ger (1999); Brand local iconness player and a symbol or icon of local culture Steenkamp Localness et al. (2003) (PBL) Local Concept Local Iconness is a brand reaching iconic status because of its Ger (1999); Iconness connection with the local country and culture. Özsomer (2012) 28
Market Near concept to Market orientation is a competitive advantage because of Narver and Orientation Local Insights understanding and addressing consumers’ needs. Slater (1990) Local Insights Concept Local Insights is defined by a brand considered locally relevant, Input from a brand that understands the needs of the local market, a brand Study 1 & that listens to the voice of the local consumer, and a brand that 2, and has a competitive advantage based on understanding local adopted consumers. Narver and Slater (1990)
Perceived Near Concept Perceived Brand Authenticity, symbolism, is a brand that adds Morhart et Brand to Brand meaning to people’s lives, reflects important values people care al. (2015) Authenticity Authenticity about, connects people with their real selves and connects people to (Symbolism) what is really important. Perceived Near Concept Perceived Brand Authenticity, credibility, is a brand that will not Morhart et Brand to Brand betray you, a brand that accomplishes its value promise, and an al. (2015) Authenticity Authenticity honest brand. (Credibility) Perceived Near Concept Perceived Brand Authenticity, integrity, is a brand that gives back to Morhart et Brand to Brand its consumers, a brand with moral principles, a brand true to a set of al. (2015) Authenticity Authenticity moral values, and a brand that cares about its consumers. (Integrity) Perceived Near Concept Perceived Brand Authenticity, continuity, is a brand with a history, a Morhart et Brand to Brand timeless brand, and a brand that survives trends and times. al. (2015) Authenticity Authenticity (Continuity) Brand Concept Brand Authenticity is defined as a brand that adds meaning to Adapted Authenticity people’s lives, reflects the important values people care about, Morhart et connects people to their real selves, connects people with what is al. (2015) really important and gives back to its consumers
Adaptive Near Concept Adaptive Innovation is having original ideas, proliferating ideas, Kirton Innovation to Originality coping with new ideas at the same time, fresh perspectives on old (1976) (Study 1,2,3) problems. Originality Concept Originality is defined as utilizing fresh perspectives, prioritizing Input from original ideas, creating original products and risking doing Study 1 & things differently. 2, and adapted Kirton (1976)
Consumer Culture
To better understand why consumers generalize their attitudes toward global and local products, we need to investigate consumer culture literature (Arnould & Thompson,
2005; Slater, 1997). Consumer culture has been described as “an irresistible form of
29 cultural authority” (Holt, 2002: 72), and it is centered on the belief that our core identities can be defined by the consumption of products and services (Holt et al., 2004). Other research has confirmed that beyond identity, people also attempt to add meaning to their lives through the act of consumption (Tomlinson, 1999). As we view the consumption phenomena through the lens of complexity, we find that culture exists “within the broader sociohistorical frame of globalization and market capitalism” (Arnould & Thompson,
2005: 869).
Consumer culture theory underlies the cultural drivers of Global Consumer
Culture (GCC); the global dissemination of consumption signs (e.g., brands) and behaviors (Alden et al., 1999). It is connected to the concept of global citizenship and
belonging to a “global village” (Strizhakova et al., 2008). Some would argue that GCC
was created by the spread of globalization through the internet and global media (Alden
et al., 1999; Holt et al., 2004), and that GCC is dominated by Western meanings
(democracy, modernity, progress, prosperity) with the U.S. the lead player (Holton,
2000). GCC is a collection of familiar signs and symbols (e.g., blue jeans, Nikes) with a
common understanding but not necessarily a shared meaning with youth around the
world (Alden et al., 1999). And, consumers can take liberties with the global consumer
segments, fitting them into a local context (Kjeldgaard & Askegaard, 2006).
From the Global Consumer Culture research thinking, Alden et al. (1999)
introduced new terms to describe brand positioning strategies—Global Consumer Culture
Positioning (GCCP), Foreign Consumer Culture Positioning (FCCP) and Local
Consumer Culture Positioning (LCCP). GCCP is defined as a strategy identifying the
brand as “a symbol of a given global culture,” with FCCP which positions the brand as
30 symbolic of a certain foreign culture and LCCP, connecting a brand with the local culture
(Alden et al., 1999). These positioning strategies have three key components: language, aesthetic style, and story themes (Alden et al., 1999).
31 CHAPTER 3: THEORETICAL FRAMEWORK
The contrast of seductive globalism and authentic localism is an extremely potent drama because it has no solution—it is an eternal struggle, where each pole defines its opposite, where every value carries its own negation. (Wilk, 1999: 248)
Paradox of Globalization
Richard Wilk dramatically summarizes in the above quote, the tension recognized between the global and the local. This dissertation examines the “seductive globalism” and the “authentic localism” (Wilk, 1999: 248) of brands by reframing these competing demands as a paradox, allowing the expansion into scholarly inquiry (Jules & Good,
2014). Prior researchers have used paradox to describe contradictory global demands and local markets (Smith et al., 2010) and the “complementary and interpenetrative of what was conventionally called the global and the local” (Robertson, 1995: 40). By considering paradox, researchers can move beyond polarized notions such as global and local and begin to recognize the complexity and ambiguity of business (Cameron &
Quinn, 1988; Quinn, 1988).
This thesis examines brands through the theoretical lens of paradox. Paradox is considered the heart of many of today’s successful brands (Brown, 2006). In Study 1, I examined the success of global and local brands, discovering global leaders seeking local authenticity, and local leaders making attempts to become globally accepted.
Traditionally, global branding researchers categorize brands as either global or local, with consumers identifying with one or the other (Özsomer, 2012; Steenkamp & de Jong,
2010). These brand leaders’ lived experiences avoid the either/or, but instead consider a both/and option (Jules & Good, 2014). This study aligns with the paradox of
32 globalization, the mixing of global and local (Fredberg, 2014), finding brand paradox—
global acceptance and local authenticity. This new phenomenon was named Omni-brand.
Prior research on paradox identifies the conflicting, yet interwoven needs of
global and local market demands (Smith et al., 2010). In this thesis, the research guided a
path toward global acceptance through perceived brand globalness, innovation and
product performance quality, and a road to local authenticity utilizing brand authenticity,
local insights, local iconness, and originality. Additional paradoxes were found between
several of these dimensions. First, prior research has found perceived brand globalness
and local iconness offer different paths to brand success (Steenkamp & de Jong, 2010),
and when combined, provide success for brands in emerging markets but not advanced markets (Özsomer, 2012). Second, the paradox of innovation is the tension between local insights (need to stay close to the consumer) and innovation (creating new opportunities, freedom) (Andriopoulos & Lewis, 2009).
Prior researchers have found paradox appears to be a “highly relevant and
resonant concept for advancing knowledge of contemporary consumer behavior” (Mick
& Fournier, 1998: 142). Paradox is an important aspect of the consumer-brand
relationship, and more specifically, brand paradox can be described as the challenge of creating consistency and authenticity (Brown et al., 2003). The tensions arise when
brands are consistent around the world but struggle to be authentic locally or brands are
locally authentic but have difficulty becoming consistent worldwide. The Li-Ning
example from the introduction demonstrates a locally authentic brand that failed in its
attempt to become globally accepted.
33 Paradox as a Meta-Theory
The paradox theory has four critical themes: locus of paradoxical tensions, dynamic relationships, power and multiplicity (Fairhurst et al., 2016). For this study, finding the origin of the tensions was the first critical step taken. These tensions have been found to emerge from two different sources. First, paradox can emerge in the role of the individual’s emotional and cognitive experiences (Capra, 2010; Smith & Berg, 1987) or second, the tensions can be embedded within structural elements or social systems
(Ford & Backoff, 1988; Poole & Van de Ven, 1989). For this thesis, the locus of paradoxical tensions is emerging from the experiences of the individual recognized by brand leaders in Studies 1 and 2, and consumers in Study 3.
The second critical theme of the paradox theory is dynamic relationships.
Paradoxes emerge as cyclical relationships with human emotional and cognitive responses to tensions fueling two types of cycles: vicious and virtuous (Schad, Lewis,
Raisch, & Smith, 2016). Vicious cycles are seen when people behave defensively when faced with contradictory demands, creating conflict (Lewis, 2000). In contrast to vicious cycles, virtuous cycles appear as individuals accept the paradoxical situation, and engage the conflicting demands at the same time. Vicious cycles demonstrate competing elements persisting but not being resolved, while the leaders in the virtuous cycles find resolution to conflict. Vicious cycles can be detrimental while virtuous cycles can create value (Sundaramurthy & Lewis, 2003).
The third critical theme in paradox theory is power (Fairhurst et al., 2016). Power is part of the foundation of paradoxes, as researchers need to consider the role of power and not assume equal influence of the opposing sides (Schad et al., 2016). Power is a key
34 element in arguments about paradox (Fairhurst et al., 2016), and in this dissertation, it is important to understand the relationships between Omni-brand and brand power. For example, the sequential mixed methods approach of this thesis shows Study 1 finds the concept of brand power, Study 2 measures the relationships between brand power and global acceptance and local authenticity, and Study 3 investigates the relationship between Omni-brand and brand power.
This dissertation employs paradox as a meta-theory. Study 1 uncovered the type of paradox as globalization, and Study 2 investigates the nature of the relationships centering on global acceptance and local authenticity. Study 2 also finds paradox in the relationship between perceived brand globalness and local iconness, as well as local insights and innovation. The individual approach includes both brand leaders and consumers. The thesis concludes as Study 3 investigates the impact of Omni-brand on the outcome of brand power. Paradox as a meta-theory is reviewed in Figure 5.
FIGURE 5: Paradox as a Meta-Theory
35 CHAPTER 4: STUDY 1 – QUAL – BUILDING GLOBALLY ACCEPTED LOCAL BRANDS AND LOCALLY AUTHENTIC GLOBAL BRANDS
Abstract
In academic literature, brands have been categorized as either global or local,
driven primarily by the distance their businesses reach beyond their national borders.
This difference is evaporating with the advent of digital marketing and e-commerce.
Academics clearly recognize this changing landscape and have researched the impacts on
consumer perceptions and identities, but literature has provided less strategic direction for
global and local brand leaders as they compete head-to-head in the fast-paced global marketplace. This qualitative study of fifty executives in the global/local sports product industry reveals distinctly different paths taken by global brands toward local authenticity and local brands to becoming globally accepted. This research offers a new framework called the Omni-brand Orientation. This construct suggests ways to help guide global
brands toward local authenticity by focusing on local insights, multi-cultural teams,
learning organization, social networking and positive affect while showing local brands a
path to gain global acceptance through design innovation, originality, brand power and
performance. The Omni-brand Orientation framework suggests a new construct for
further academic research as well as guidance for both global and local brand leaders as
they grow their businesses internationally.
Keywords: global brand; local brand; Omni-brand orientation; local authenticity;
global acceptance; multi-cultural teams; originality; learning organization; social
networking; positive affect; design innovation
36 Introduction
All local companies aspire to be global, and all global companies pretend to be local. — CEO Local Brand
Powerful global brands such as Apple, Nike, Rolex, Samsung, and McDonald’s dominate shopping locations, making markets from Berlin to Beijing look virtually the same. Theodore Levitt’s (1983) seminal article on the globalization of markets recognized that technology would drive the market to global commonality. Add migration, e-commerce, and global media, and the international marketplace is quickly becoming more similar than different (Ritzer, 2007). With consumers around the world digitally connected, markets are now accessible to both global and local brands (Freeman
& Cavusgil, 2007; Freeman, Edwards, & Schroder, 2006). Leaders at both global and local brands are trying to quickly determine how to succeed internationally (Burgess &
Steenkamp, 2006). With the global market valued at USD $74 trillion (Desjardins, 2017;
The World Bank, 2017), and most of the economic growth in the next decades forecasted to come from emerging markets (Özsomer, 2012), the stakes are high.
Multinational enterprises (MNEs)—firms that do business in the global marketplace—have been found to utilize a multi-domestic or global strategy when seeking to maximize their profits (Johansson & Yip, 1994). The multi-domestic approach allows decisions to be made locally with on-the-ground operations determining the actions required to meet the local market’s needs (Johansson & Yip, 1994; Kotabe &
Helsen, 2009; Steenkamp & de Jong, 2010). Alternatively, MNEs that use a global strategy implement the identical strategic plan worldwide, offering the same products and services in every country with limited opportunity for adaptations to match local
37 consumer tastes (Johansson & Yip, 1994; Kotabe & Helsen, 2009; Steenkamp & de Jong,
2010).
To drive efficiencies, speed, and profitability, many MNEs are moving from the traditional multi-domestic approach to a global strategy (Johansson & Yip, 1994; Kotabe
& Helsen, 2009; Steenkamp & de Jong, 2010). This is creating more similarities between
markets and fewer opportunities to address the specific needs of local markets. These two
business approaches provided leaders a strategic framework for planning their global
business. But today, the complexity of the global marketplace requires a much more
granular approach to strategic planning as local and global companies compete for the
same markets in a fast-paced, accessible marketplace.
This research study is focused on how to effectively grow both local and global
brands in the international marketplace. This thesis considers prior global and local
academic literature as well as highlights the business opportunities on the global—
hybrid—local continuum (Alden et al., 2006). In the literature review, scholars have
primarily studied global brands, leaving local brands less specifically defined (Alden et
al., 2006; Schuiling & Kapferer, 2004). Also, the majority of the academic research in
this area focuses on consumers (Özsomer, 2012; Steenkamp & de Jong, 2010;
Strizhakova & Coulter, 2015; Westjohn et al., 2016; Xie, Batra, & Peng, 2015), with the
bulk of theories based on a U.S. context (Steenkamp, 2005). This creates a research gap
for this study which will further define the global—hybrid—local continuum from an
international perspective and pivot from a consumer-focused study to international
business strategy research. With this in mind, this research dives into the “choppy water”
between global and local marketing (Steenkamp, 2017).
38 Sports product brands provided the business lens for this study. Sport represents an important part of the approximately USD$1.7 trillion worldwide footwear and apparel business (Euromonitor, 2017a). Current market leaders Nike and Adidas (Euromonitor,
2017a) are experiencing threats from U.S.-based Skechers and Under Armour (Low,
2016b; Richardson, 2016), as well as emerging Chinese challengers such as Anta and Li-
Ning (Beam, 2014; Li-Ning, 2012). One of the biggest competitive advantages in this industry is branding (Tong & Hawley, 2009), and sports is recognized as a universal language (Melnick, 1993; Rajan & Premkumar, 2013); this industry is an ideal choice for global and local brand research.
The study utilized a qualitative research method based on grounded theory
(Glaser & Strauss, 1967). It focused on learning from executives’ lived experiences in global and local brands around the world. This study provides a new understanding of how to effectively compete in the global marketplace. It found distinctly different paths for global brands trying to become locally authentic compared to local brands moving toward global acceptance. This can be better understood using a new framework identified in this research and named the Omni-brand Orientation. This discovery of the distinctly different paths taken by global brands and local brands will benefit scholars by building on existing global and local strategy research. It will also assist practitioners who will benefit from the guidance offered in planning their global and local brand businesses.
Research Question
What are the paths leading global brands to become locally authentic and local brands to be globally accepted? How and to what extent do multi-cultural teams, local
39 insights, learning organization, social networking, and positive affect influence global brands, and design innovation, originality, brand power, and performance influence local brands? This is outlined below in Figure 6.
FIGURE 6: Themes Discovered from Qualitative Research
Literature Review
This dissertation was informed by psychology, sociology, anthropology, and management and marketing literature. The researchers reviewed academic and business literature pertaining to global and local brands, global branding (Buzzell, 1968), global strategy (Ghoshal, 1987), country of origin, born-global brands, design innovation and authenticity. In the literature, five different theories were of interest to the researchers.
The review of theories included the Consumer Culture Theory (Arnould & Thompson,
2005), Social Identity Theory (Tajfel, 1974), Organizational Learning Theory (Nelson,
2009), Social Network Theory (Granovetter, 1983, 1985) and Schema Theory
(DiMaggio, 1997).
40 Global and local brands. Brands are known to be “a name, term, sign, symbol, design” which identifies products and/or services for a company (Kotler, Jatusripitak, &
Maesincee, 1997) and is used to differentiate between competitors. Global brands can be defined as brands using the same name and logo in many different countries; they are generally recognized and accepted as global in these markets (Özsomer & Altaras, 2008;
Steenkamp et al., 2003). Research has found that global brands create a perception of
brand superiority (Shocker et al., 1994), higher quality (Holt et al., 2004), and higher
prestige/status (Batra et al., 2000; Holt et al., 2004; Steenkamp et al., 2003) and
credibility (Özsomer, 2012; Steenkamp et al., 2003).
Other key features for global brands include global image, standardization, and social responsibility (Dimofte et al., 2008; Holt et al., 2004; Johansson & Ronkainen,
2005; Strizhakova et al., 2008). Global products give younger consumers a connection to success and a feeling of belonging to a global community (Steenkamp & de Jong, 2010).
And researchers found consumers in developing countries preferred nonlocal brands for reasons beyond quality (Batra, Ramaswamy, Alden, Steenkamp, & Ramachander, 2014).
On the other hand, local brands have limited availability outside their home country (Dimofte et al., 2008). Local brands can possess strong brand awareness and long-standing relationships with local consumers, and the majority of their marketing investment is made in their home market (Schuiling & Kapferer, 2004). These brands become “icons of the local culture” (Swoboda et al., 2012). Research found “local iconness” built the perception of prestige in different markets (Özsomer, 2012).Brand localness creates value by modeling local identity, encouraging the local culture, and tailoring the brand to local tastes and needs (Özsomer, 2012; Schuiling & Kapferer,
41 2004). Researchers found that local products tended to be favored by older people who value tradition and conformity (Steenkamp & de Jong, 2010).
If we compare the local brand advantages against the disadvantages of global brands including centralized decision making and slow market response (Schuiling &
Kapferer, 2004), the opportunities for local brands begin to emerge. Regardless of this fact, research shows businesses are eliminating their local brands (Schuiling & Kapferer,
2004). Companies may make the incorrect assumption that big global companies always have the advantage in the marketplace, while research has shown otherwise (Kirca, Roth,
Hult, & Cavusgil, 2012).
A tremendous amount of academic research is devoted to comparing global and local brands through the lens of consumers (Batra et al., 2000; Llonch-Andreu, López-
Lomelí, & Gómez-Villanueva, 2016; Özsomer, 2012; Steenkamp & de Jong, 2010;
Strizhakova & Coulter, 2015; Swoboda et al., 2012; Talay, Townsend, & Yeniyurt,
2015). Both global and local brands create unique and very different consumer experiences (Ritzer, 2004).
Product category is important to consider when trying to understand consumers’ choices between global and local brands. Existing research suggests the interplay between global and local brands depends on the product category and consumer segment
(Özsomer, 2012). For example, a study on automobile brands found that when global brands were competing with local brands, they performed better in the marketplace
(Talay et al., 2015). As another example, in the food and drink categories, researchers found local brands having an advantage because of strong cultural connections and local and regional tastes (Schuh, 2007). Another study found global brands were perceived as
42 better than local brands in functional product categories, and also when consumption was
visible because consumers feared criticism for purchasing a local brand (Davvetas &
Diamantopoulos, 2016).
Academics have also taken a closer look at the space between global and local brands. This area has been identified in the literature as homogenization, with global brands taking some local traits (Levitt, 1983; Pieterse, 2001). It has also been called hybridization, homogenization or glocalization (Holton, 2000). New forms of hybridization have recently been observed; driven by the internet, mobility and cultural diversity (Özsomer, 2012). Research has found that global and local brands do not sit at opposite ends of the same continuum; because global brands could be seen as local due to their domestic origin or their ability to adapt to the local market (Dimofte et al., 2008;
Halkias et al., 2016). Consumers can identify with either global or local brands, but many consumers also fit into this “unipolar pattern” with connections to both global and local
(Steenkamp & de Jong, 2010). Interestingly, forward-looking women who value materialism prefer a combination of local and global products (Alden et al., 1999;
Steenkamp & de Jong, 2010).
Global branding. The field of global branding, also known as international branding, has developed in scholarly research over many decades. There is an abundance of research focused on building knowledge and understanding about global branding (de
Mooij, 2013; Knight & Cavusgil, 2004; Kotabe & Helsen, 2009; Kumar & Steenkamp,
2013; Park & Rabolt, 2009; Steenkamp, 2017; Steenkamp, 2005; Talay et al., 2015;
Taylor & Okazaki, 2015). The literature review found three different research streams.
43 The first recognized area of academic research is called Global Branding
Literature (GBL) and includes international branding strategy, brand positioning,
brand/country origin, brand concept-image and brand performance (Chabowski, Samiee,
& Hult, 2013). A second field of literature is cross-national research (CNR), considered one of the oldest approaches to experimental investigation (Chabowski, Samiee, & Hult,
2017). Using the CNR approach to better understand international business is often applied in the fields of sociology and psychology (Chabowski et al., 2017). A third sphere of academic literature is called Global Marketing Strategy (GMS) which researches the performance of global firms and the direct relationship with the Global
Marketing Strategy (Zou & Cavusgil, 2002). One GMS study found businesses that identified consumer segment similarities in Europe, Asia and the United States used a different set of strategies than they would have developed if they would have focused on the differences (Ko et al., 2012).
A comparison of two global brands competing in China may better illustrate the complexity of global branding in today’s marketplace. For more than a decade,
McDonald’s has been integrating local food preferences in its restaurants around the
world (Alden et al., 2006). They compete against KFC and Pizza Hut, owned by Yum
China, who have demonstrated a higher degree of local market authenticity. For example,
KFC and Pizza Hut are proud to employ Chinese managers from the local neighborhoods
in order to build relationships with the business community, and they also use menus
specifically tailored for the tastes of consumers by city (Mellor, 2017). With 7,600
restaurants across China, they are growing at a double-digit operating profit, opening a
new restaurant every 16 hours (Symington, 2017). At the same time, the poster child for
44 globalization—McDonald’s (Ritzer, 2004)—is struggling in China with 2,200 locations; and has recently made the decision to sell a majority stake to Citic, a Chinese financial firm (DeFotis, 2017). These drastically different business results between two global brands may come down to who authentically approached the needs of the local market across China (Ping, 2016).
Scholars are conducting more studies using countries in Asia. One reason for the interest is researchers find much different results when comparing advanced and emerging economies (Özsomer, 2012). Also, from a business opportunity standpoint,
Asia is one of the most important emerging regions (Frampton, 2016a). Since there isn’t one business model that will be viable across this massive region (Deshpande & Farley,
1999), each market will need to be considered when making strategic business decisions.
This becomes interesting as more Asian businesses, specifically those from China, move from locally known domestic brands to globally known international brands
(Euromonitor, 2017a; Interbrand, 2015). With the exception of Japan, global brands from
Asia-Pacific countries are seldom found (Dong & Tian, 2009).
There will be challenges for brands rising from China and other emerging economies. Research has found that multinationals from developed countries do exercise an advantage over firms from emerging markets in the areas of funding, labor markets, regulatory environments, open trading, and less corruption; which all lead toward positive effects on performance (Geleilate, Magnusson, Parente, & Alvarado-Vargas,
2016). This may slow down the brands emerging from developing countries, but the size of the USD$74 trillion global marketplace could provide opportunities for local and global brands from both advanced and emerging economies.
45 Global strategy. An ongoing debate in the international marketing literature for
more than 50 years (de Mooij, 2013) is between brands utilizing the global strategy framework (Ghoshal, 1987) and brands applying the multi-domestic strategy construct to their global businesses (Yip, 2002). Global strategy is primarily focused on finding the similarities between countries and standardize across national markets, while the multi- domestic strategy detects the differences between countries and makes adaptations to meet the needs of each specific market. The standardization and adaptation concepts have been studied across many different markets on a plethora of different product categories
(Boddewyn, Soehl, & Picard, 1986; Buzzell, 1968; Levitt, 1983; Ogunmokun & Li, 1999;
Samiee & Roth, 1992) including cars, food, clothes, etc.
Academic research focused on the concept of standardization initially used the lens of advertising (Elinder, 1965). Over the years, the international marketing strategy literature has built on the definition of standardization to include the use of common products, pricing, distribution and promotion programs across the global marketplace
(Jain, 1989). While standardization could be “one size fits all,” it can be applied much more strategically. For example, research found merit in standardizing the strategic resource mix, competitive strategy and structure across the U.S., Canada, UK and
Western Europe (Szymanski, Bharadwaj, & Varadarajan, 1993).
On the other hand, adaptation has been found to be a powerful process that literally can change the marketers and the marketplace (Peñaloza & Gilly, 1999). Also known as customization, adaptation is practiced in the majority of businesses, as total standardization is uncommon (Quelch & Hoff, 1986). Researchers have contrasted standardization and adaptation strategies in many different situations. For example, two
46 studies investigated the different approaches implemented in Japanese and European car companies. The first thesis found similarities were more important than differences when businesses were trying to expand into new markets (Kotabe, 1990). The second study supported this thinking, finding that standardization strategies applied by the Japanese car companies created more success in the marketplace over a three year time period than the adaptation approach of the European car companies (Grein et al., 2001).
There have been contradictory results found in this body of research as well.
While some companies have found standardization driving their success, other companies have found adapting marketing strategies to local markets as a way of enhancing performance (Özsomer & Prussia, 2000). Researchers have also found that multinational companies using global strategy for their business should focus on creating uniqueness in order to successfully compete globally (van der Lans, van Everdingen, & Melnyk, 2016).
Despite which studies were reviewed, it would appear that both standardization and adaptation strategies can benefit companies expanding globally (Grein et al., 2001;
Özsomer & Prussia, 2000). The academic literature, while providing important knowledge on the advantages and disadvantages of standardization and adaptation, gives less than a clear path forward for businesses expanding globally.
Another stream of research encourages companies to look beyond global strategy to more semi-global marketing strategies (Douglas et al., 2001). This area of research is called Global Brand Architecture (GBA), and it erases national borders in order to advantage MNCs competing in the global marketplace (Talay et al., 2015). GBA is divided into four categories called global, multi-regional, regional and domestic
(Townsend, Yeniyurt, & Talay, 2009).
47 Finally, there has been an increase in scholarly interest in international strategic management (ISM) research. ISM is the intersection between International Business and
Strategic Management and studies both the environmental and organizational factors that contribute to a company’s ability to compete in the global marketplace (White, Guldiken,
Hemphill, He, & Sharifi Khoobdeh, 2016).
Country of origin. The researchers reviewed country of origin (COO) literature that might apply to the global and local brands (Balabanis & Diamantopoulos, 2004,
2008; Dinnie, 2004; Elliott & Cameron, 1994; Gabrielsson & Gabrielsson, 2011; Gerke,
Chanavat, & Benson-Rea, 2014; Gürhan-Canli & Maheswaran, 2000b, 2000a; Kinra,
2006; Klein, Ettenson, & Morris, 1998; Lim & O'Cass, 2001; Mandler, 1982; Peterson &
Jolibert, 1995; Roth & Romeo, 1992; Schooler, 1965; Tse & Gorn, 1993; Verlegh &
Steenkamp, 1999).
Research was discovered during the literature review that brought together global branding and COO, demonstrating home country impressions still play a significant role in consumers’ attitudes toward brands (Halkias et al., 2016). The COO effect was equally pertinent and it had a more marked effect on the consumer product evaluation when compared to a well-known global brand (Tse & Gorn, 1993). COO is not without controversy, with debates about whether this area of academic research will become obsolete in a world of global brands (Samiee, 2011; Usunier & Cestre, 2008).
A quantitative meta-analysis found greater COO effects on perceived quality than on attitude toward the product or purchase intentions (Verlegh & Steenkamp, 1999). The differences in a country’s economic development were also an important factor underlying the COO effect (Verlegh & Steenkamp, 1999). Studies also showed that
48 consumers often don’t know the COO for different brands and regularly associate brands
with the wrong country of origin (Balabanis & Diamantopoulos, 2008, 2011). Strong
brands are not immune from misidentification by consumers, with the outcome leading to
negative effects on brand assessments and purchase intentions (Balabanis &
Diamantopoulos, 2011).
A consumer’s bias in favor of domestic vs. international products is dependent both on the distinct COO and the exact product category (Balabanis & Diamantopoulos,
2004). Taking a closer look at the product category of sports, research confirmed that
COO image, together with category-country associations, enabled the creation of brands
in sport product categories (Gerke et al., 2014). Staying in the sport product category,
research found Japanese consumers evaluated bicycles from Japan most favorably, while
U.S. consumers evaluated them as more favorable only if they were superior (Gürhan-
Canli & Maheswaran, 2000a). Studies have also found that the effect of COO on
consumers’ choices across a range of product categories suggested that COO was
significantly less important compared to product quality and price (Elliott & Cameron,
1994).
Born global. Academic research has emerged over the last couple of decades
focused on brands that internationalize their business almost immediately after being
founded (Falay, Salimäki, Ainamo, & Gabrielsson, 2007). With the advent of digital
marketing and e-commerce, brands no longer need to wait to go beyond their national borders. Born-global companies were found to effectively use networks and alliances to grow their businesses (Freeman et al., 2006).
49 The literature reviewed considers the option of existing firms becoming “born-
again” global firms (Bell, McNaughton, & Young, 2001). This would allow firms to take
advantage of the international market even if they initially had not considered it an
option. Research shows that the born-again phenomenon normally focuses on companies
as they get started in the market, and these companies tend to be small (Autio, Lummaa,
& Arenius, 2002).
Authenticity. What is real and genuine? The term authenticity in academic
literature is described as genuineness, reality, and truth (Bendix, 1992). It is studied not
as an attribute built-into a product, but as an evaluation in a specific context (Grayson &
Martinec, 2004). Authenticity can be related to ancient products such as religious artifacts
in Europe (Phillips, 1997), as well as original art in Tibet (Bentor, 1993). It has been
interpreted as the coming together of the past and the present (Jacknis, 1990).
As it relates to business, academic researchers have studied this concept and
found brands represent authentic cultural resources (Holt, 2002). Global brand
authenticity is based on consumer culture theory (Özsomer & Altaras, 2008). More
broadly, the concept of original and consumers’ desire for authentic experiences also
describes authenticity (Leigh et al., 2006). One particular area of interest to researchers is
understanding authenticity as it relates to the tourism experience (Wang, 1999). Although
it has been studied to a degree, authenticity is still not very well understood (Peñaloza,
2000).
Design innovation. Academic research has found innovation essential to success and survival in the hyper-competitive global marketplace (Lee & Zhou, 2012; Rubera &
Kirca, 2012). Just as the internet and connectivity are changing access to the marketplace,
50 it is also changing how companies access design innovation. Recent research has found something counterintuitive; companies may assume more access to ideas would result in more innovation. This study found that a company’s global network can help them with incremental product launches but can also hurt them on breakthrough innovations (Fang,
Lee, Palmatier, & Shunping, 2016). Another study showed that for MNC’s, the knowledge available in their country offices does not necessarily influence the product innovation ability of headquarters (Sheng, Hartmann, Qimei, & Chen, 2015).
Positive affect. Positive affect or positivity represents attitudes and feelings that are pleasant (e.g., appreciation, love) (Fredrickson & Losada, 2005). Research has found good feelings alter an individual’s mindset, boosts attention, and increases creativity and intuition (Fredrickson & Losada, 2005). Positive affect was found to be related to innovation for entrepreneurs, as well (Baron & Tang, 2011). The broaden-and-build theory states that positive emotions build over time producing personal resources such as increased mindfulness and decreased illness symptoms (Fredrickson, 1998).
Consumer culture theory. Consumer Culture Theory (CCT) relates to a group of theoretical viewpoints that concentrate on the relationships between consumer actions, the market, and cultural understandings (Arnould & Thompson, 2005). CCT, rather than viewing culture as a homogenous system, view it as many cultures overlapping around the world (Arnould & Thompson, 2005). The CCT provides the theoretical framework to understand how consumer attitudes can generalize across global and local product domains (Steenkamp & de Jong, 2010). Reviewing additional consumer research as it relates to global and local consumers, the researchers found some key literature for consideration. Perceived brand globalness (PBG) and perceived brand localness (PBL)
51 are one construct based on the consumer culture theory (Özsomer & Altaras, 2008). This
construct can affect global brand attitude and global brand purchase likelihood (Özsomer
& Altaras, 2008).
The Global Consumer Culture (GCC) found the consumers of global brands
aspired toward superiority in their national cultures (Holton, 2000) and wanted to be
global citizens (Ritzer, 2007; Strizhakova et al., 2008). Research has shown a trend
toward global consumer culture positioning (GCCP), thus allowing global brands to lean
toward more standardization across markets (Taylor & Okazaki, 2015). GCCP has been
contrasted against Local Consumer Culture Positioning (LCCP), where a brand is
connected locally, as well as Foreign Consumer Culture Positioning (FCCP), where a
brand uses a specific foreign culture (Alden et al., 1999). Two examples seen in the U.S.
marketplace would be Marlboro using an image of a cowboy (LCCP), and Guinness beer
using an Irish pub image (FCCP). Research results found a majority of brands use GCCP
vs. LCCP or FCCP; findings that suggest this may be one way for brands to be perceived
as global (Alden et al., 1999).
Research has been done on Chinese brands compared to Western brands. Results
from one thesis showed Chinese young adults preferring fashion apparel with Western
origins over brands with Asian origins (O'Cass & Siahtiri, 2013). The reasons for the
preference were western fashion apparel communicated status and wealth better than
Asian brands (O'Cass & Siahtiri, 2013).
Social identity theory. Social identity theory categorizes people according to the
groups that bring them pride and self-esteem (Tajfel, 1974). Brands connect people with
groups and have a role to play in social identity. For example, research has found that the
52 responsiveness to GCCP and LCCP is strongly related to the collective identities of global and national identification (Westjohn, Singh, & Magnusson, 2012). This same study found global identity linked to the personality traits of openness (Westjohn et al.,
2012). Other researchers found consumers that connect to global identity preferred global products, while those connected to local identity preferred a local product (Zhang &
Khare, 2009). (Tomlinson, 1999). Also tied to this theory, research has found global brands impact consumers through brand prestige, trust, and affect, and this was more influential than local brands which operate through “brand identity expressiveness” (Xie et al., 2015).
Organizational learning theory. The theory of Organizational Learning considers firms that learn from their previous missteps and adjust their strategy and actions accordingly (Nelson, 2009). It is studied in International Strategic Management Research but not specific to the internal operations of a company (White et al., 2016). This theory also considers learning from failures (Pangarkar, 2009), and learning from and among partner companies (Nielsen & Nielsen, 2009; Simonin, 2004). International research also discovered equity between two parties leads to positive effects of learning from prior experiences (Arikan & Shenkar, 2013).
Social network theory. The Social Network Theory has experienced steadfast growth in academic research about global strategy (White et al., 2016). This theory is studied primarily in the field of sociology and considers how organizations are affected by social relations. For example, research has been conducted to better understand the advantages and disadvantages of having closer ties (aka friendships) versus weaker connections to people (Granovetter, 1983, 1985). Applied to global strategy, research has
53 considered relationship quality for teams that are not physically located together, finding
perceived proximity was more important than physical proximity on work relationships
(O'Leary, Wilson, & Metiu, 2014).
Schema theory. A schema (plural schemata or schemas) is used to explain a pattern of thought or behavior that organizes categories of information and the relationships among them (DiMaggio, 1997). Research has shown that schemata can build a better understanding of the world within accelerated changing environments
(Nadkarni & Narayanan, 2007). People can organize concepts into schemata at a fast rate,
as it does not require complex thinking (Nadkarni & Narayanan, 2007).
Research focused on product-category indicates that the consumer-based equity of a brand is specific to the category (Pappu, Quester, & Cooksey, 2006). Researchers have used the schema theory and found that product categories (e.g., cars, electronics, sports) are not equally receptive to global and local brands (Davvetas & Diamantopoulos, 2016).
Consumers make their decisions between global and local brands by developing a conceptual framework (Davvetas & Diamantopoulos, 2016). Another study found cultural differences and similarities driving higher levels of recall for “schema- inconsistent” information (Aaker & Schmitt, 2001).
Research Design
Methodology. This qualitative research followed the grounded theory method based on the seminal work done by Glaser and Strauss utilizing theoretical sampling
(Glaser & Strauss, 1967). The methodology guided the researchers to focus primarily on the data to discover the themes and categories, making comparisons within the same time period that led to theory building (Glaser & Strauss, 1967; Strauss & Corbin, 1990,
54 1998). As concepts emerged from the qualitative interviews, adjustments were made to guide the research process (Maxwell, 2012).
Sample. The population identified for this research were current and past sports product industry executives working in the U.S., Europe, and Asia. The researchers solicited leaders from their personal and professional networks. There was a total of 50 leaders interviewed for this study (Table 5). The research participants each worked at a brand with a one-to-one relationship with their business. The different functions of the participants included management, design, marketing, sales, e-commerce, product development, supply chain, costing, sustainability, innovation, manufacturing and operations. Their job titles comprised of CEO, CMO, Senior VP, VP, GM, Senior
Director and Director.
TABLE 5: Number of Executives by Business, Brand, and Demographic
No. of Executives No. of Variables (N=50) Companies Primary Business focus West (Germany, Canada, U.S.)* 27 16 East (Japan, China, HK, Singapore)** 23 8
Primary Brand Classification Global Brand^ 25 7 Local Brand^^ 25 17
Ethnicity Caucasian/European 34 African-American 2 Asian 14 Gender Male 36 Female 14 *West = Participant’s job primarily focused on business in western countries. **East = Participant’s job primarily focused on business in eastern countries. ^Global = 30+% of business outside home country. ^^Local= primary focus for business is inside home country. 55 Data collection. The interviews and observations were conducted over a seven- month period from February to August 2017. In total, 50 interviews were managed across
24 different organizations in 10 different countries. The study used theoretical questions in order to see the processes and connections between the concepts (Strauss & Corbin,
1998).
In keeping with the grounded theory approach to collecting data, no preconceived ideas or hypotheses were being tested (Glaser & Strauss, 1967; Strauss & Corbin, 1990,
1998). During the interviewing process, many executives were not identifying with the term “local;” therefore, adjustments were made (Van de Ven, 2007) to include more small and medium companies. This change was made at approximately the midpoint in the data collection process, showing the flexibility of the research design rather than just following a decision made prior to the start of the research (Maxwell, 2012; Strauss &
Corbin, 1998).
All interviews were recorded and transcribed. Memos were written throughout the research project to capture ideas as well as the experiences surrounding the interviewing and coding processes (Maxwell, 2012; Saldaña, 2015). The researchers used an analysis computer software, Vivo, to organize the data, code the transcriptions, and aid in the analyses. Additional memos were written as categories and themes started to emerge from the data (Maxwell, 2012). A visual and written journal was created to capture the interview experiences, as well as the visits to companies and the ethnographic observations being made during the company visits as well as in Europe and Asia
(Charmaz, 2006).
56 The interview protocol became more specifically focused on global and local
brands as these themes began to emerge in the research (Strauss & Corbin, 1998). The preferred format for interviews was face-to-face (37 interviews), but to capture some executives, both SKYPE (video conference) (9 interviews) and telephone (4 interviews) were used. The locations for the face-to-face interviews included Herzogenaurach,
Germany; Hong Kong; Portland, Oregon; Shanghai, China; and Singapore. The SKYPE and telephone interviews were with interviewees based in Italy; Xiamen, China; Beijing,
China; Hong Kong; and Portland, Oregon. The 50 transcribed interviews totaled 3050 minutes. They varied from 35 to 90 minutes with a 61-minute mean. The interviewees’ averages included age- 50.8, years in the industry- 22.72, and years outside of their home countries- 4.83. All interviews were conducted in English.
No incentive or compensation was given for participation in the research.
Interviewees were solicited using email and LinkedIn. Prior to the interviews,
participants were asked to give verbal or written permission for the interview and the
recording. All interviewees agreed to the requests. Five additional interviews were
conducted but were not included in the data for the following reasons: 1) interviews
conducted prior to IRB approval, 2) interviewee distracted with numerous business phone
calls, 3) difficult to understand with strong accent, 4) poor Skype connection.
The interviewees’ identities are guarded by an interview protocol. The interviews were semi-structured and began with a question about the respondents’ personal and
work histories. Open-ended questions were asked to bring forward lived experiences. The
interviewees were asked to recall brand, business, product or other experiences that were
both successful and less than successful. The probes included questions about global and
57 local brand and business experiences. Audio recordings of each interview were transcribed into a word document by professional transcriptionists.
Additionally, ethnographic observations were made during a trip to Munich,
Germany, New York City, and Baltimore, as well as a month-long visit to Bangkok,
Shanghai, Singapore, Hong Kong, Taipei, and Hanoi. The Asia trip included a one-week stay in Singapore as a guest of the Asia Consumer Institute at Nanyang Technological
University where the research was discussed with professors there. Some examples of the informal market observations included SOHO in NYC, the Harbor in Baltimore, the night market in Taipei and Central World in Bangkok, the ninth largest mall in the world.
Data analysis. The researchers used the analysis method of theoretical comparisons to inspire new thinking (Charmaz, 2006; Strauss & Corbin, 1998; Van de
Ven, 2007). More specifically, the researchers used the Flip-Flop Technique which entails looking at opposites to bring out compelling characteristics in the research
(Strauss & Corbin, 1990). For example, the researchers considered global brands becoming locally authentic to better understand how local brands could become globally accepted. This allowed for a more creative approach to the data analyses and helped examine research biases that may exist (Strauss & Corbin, 1998).
After the interview, the researchers listened to each recorded interview at least once while reading through the transcription. Next, NVivo was used in the coding process to keep the information organized, giving the researchers the ability to analyze the data electronically. The first phase of open coding created 2,064 unique codes with
15,424 coded moments. This coding process required a line-by-line reading of each transcription. In this stage, the researchers coded words and phrases that might have
58 potential significance (Saldaña, 2015). As concepts started to emerge from an interview, they were reviewed; then compared with the prior interviews (Glaser & Strauss, 1967;
Strauss & Corbin, 1998). This step supported the discovery of patterns (Strauss & Corbin,
1998).
The second phase of coding was axial coding (Saldaña, 2015). In this phase the researchers refined the categories, using some new labels to distinguish between subcategories and categories. This process moved the 2,064 codes into 105 categories with subcategories. The third coding phase was selective coding, where the researchers were identifying the key constructs and findings of the data. This process moved the information from a lower level of concept development (open coding) to emergent patterns, categories and themes (Saldaña, 2015). The process moved from 2,064 codes in opening coding, to 105 sub-categories, to 26 categories in axial coding, and finally to 10 themes (Figure 7).
The researchers used memo writing throughout the data analyses to capture observations and insights, as well as emerging themes, which helped provide additional insights to the research (Maxwell, 2012; Saldaña, 2015). The researchers reached saturation when no new concepts were emerging (Strauss & Corbin, 1998) prior to the 50 interviews. However, additional interviews in Asia helped to build a better understanding of the Asian marketplace by meeting with key advisors in the region (Van de Ven, 2007).
This additional data assisted in the further refinement of the emerging ten themes
(Charmaz, 2006).
59 FIGURE 7: Coding Summary
60
Findings
The data was divided into two groups with leaders at global brands in one group and leaders at local brands in a second group. This allowed for discoveries by comparison
(Strauss & Corbin, 1998). The researchers defined global brands as brands that sell more than 30% of their products outside their home country, while local brands were defined as having the primary focus for business being inside their home country. Examples of global brands included Tiffany, WWE, Nike, and Adidas; and local brands were Danner
Boots, Anta, Bolt Threads, Li-Ning and Looptworks.
Finding #1: There are distinctly different paths of global brands toward local authenticity and local brands becoming globally accepted. Twenty-two of the twenty-five leaders at global brands referenced “locally authentic.” And sixteen of the twenty-five leaders at local brands referenced “globally accepted.” This can be better understood using a new framework called the Omni-brand Orientation (Figure 8).
FIGURE 8: Omni-brand Orientation
The data suggests leaders at local and global brands differing in their perspectives on how to effectively grow their brands and businesses. The study found that global
61 brands were trying to become something we named “locally authentic” while local brands were seeking to move toward becoming something we termed “globally accepted.” For this analysis, the term locally authentic included codes such as insights, genuine, and relevant while term globally accepted included the codes of approved, recognized, adopted and accepted. This new framework was coined the Omni-brand Orientation.
Global brands becoming locally authentic.
I wouldn't say that we're truly a global company until we start to see more local people in positions of leadership, until we start to see more people from Vietnam that are working in Thailand or wherever that are having senior jobs in Portland or whatever but the thinking is much more global than it was before. — Global Brand Interviewee SPM022
We've got to find the right balance of when do we talk globally about the Olympics and (global athlete) and stand for that around the world versus when do we actually create things that are very unique and connect with the consumer on a local basis and how do we dial that up and down. — Global Brand Interviewee SPM005
Local brands being globally accepted.
(Local Brand) is Chinese sport brand. They want to build the brand more like global awareness so I think that's why they try to design this brand. At the end, they build their own store during May and open their own store in Beijing…So this is almost one of the goal you want to build the right collection and then try to make a success... — Local Brand Interviewee SPM032
So, you have limitations on technology, scale, pricing. There's a lot of limitations on local versus global. But then there's a lot of benefits for local as well. Then, when you get into the commercialization side of it, the internet has basically changed everything and everybody's global at this point because you can go to any website anywhere in the world and buy something if you want. — Local Brand Interviewee SPM011
62 Finding #2: The themes of local insights, learning organization, multi-cultural teams, social networking and positive affect emerged more prominently from leaders at global brands.
a. Leaders at global brands referenced a “local insights” theme more often than
leaders at local brands.
Fifty of the fifty leaders referenced consumer, athlete, and market insights. The overall data showed 1,356 references of insights with 54% from leaders at global brands.
When the global brands get this right, they are rewarded; but if they get it wrong, they are assumed to not respect the local culture, or they are accused of being ignorant.
In China, we ended up getting (brand) to make an outdoor version of, not the exact shoe (star NBA athlete) wore when he played…but we had a different shoe that was intended for outdoor use, that we could use his likeness, use his name, use his logos, but it was very much created for the China market because we're still at the point where 90 plus percent of the kids are playing outdoors. If they wore his game shoe outdoors, it would get destroyed pretty quickly, so influencing global to expand the range of product so that you could leverage (sic) the celebrity, basically you could leverage the athlete and talk about something that had an end use that was very locally targeted. — Global Brand Interviewee SPM030
For me, I had a good 7 or 8 years here as the global product leader for sport bags, duffel bags, shoulder bags, backpacks, and there is a universality of every consumer and every marketplace needs some kind of a carry solution that is particularly relevant to sports…. Again, you have to have this balance of having a point of view in the positioning of your brand but also gather insights from all over the world. We didn't find that one size fits all in every geographic marketplace. Being able to work with colleagues in different marketplaces and getting insights from their consumers, getting insights from their salesroom information, leading a virtual team across the world and leading a global team that created a product for various geographies, it was successful and rewarding. — Global Brand Interviewee SPM012
Insights can definitely be global, and they can also be geo specific. They can be city specific. A lot of those are more like I said, are performance insights. Let's say outsoles are performance insights, but if you go to the ‘what inspires them’ versus ‘what inspires somebody in North America,’ and ‘how does that affect the form of the product...the color, material, detail?’, those are often different. You can have different insights from Shanghai and Beijing. They're different cities. They're huge. They 63 separated. They have a health competition. Their (product) briefs are going to be different of what they think is cool versus what somebody else thinks are cool. — Global Brand Interviewee SPM031
So, we did a lot of research, a lot of back and forth, and basically went, "Okay, let's do it," and built a couple different price points... Very well done, the shoes were not great margin, but we were making a little bit of money on them, so it wasn't a loss leader that built a business that you could never make money on. …It was a failure. It failed because as we went into the markets and researched, and talked to kids ... They were generally in the big cities. It was in Beijing, Shanghai, Guangzhou, and Shenzhen. I don't think we even did any research out in Rohan, or Chengdu in the central part of the country. What kids said when they looked at the shoes, they just said that number one they were counterfeit. They weren't really sure they were really (brand). Number two, they didn't look like (brand). If they were going to spend their money on a (brand), they wanted it to look like a (brand). So, they would rather buy counterfeit. — Global Brand Interviewee SPM050
b. Leaders at global brands referenced a “learning organization” theme more
often than leaders at local brands.
Data indicates that leaders in global brands are focused on learning from new
experiences and using mistakes to gain more knowledge. The “learning organization” theme included codes such as learn, ask questions, informal education, leadership, and strategy. The data found fifty of the fifty leaders referencing “learning organization.”
There was a total of 1,543 coded references for the learning organization theme with 60%
coming from leaders at Global Brands.
Whether I'm mentoring someone. Whether I'm learning something. What I love about my job is I learn something new every day. How many people at a senior level at this age and say they truly learn something new every day because I'm working with so many cultures that are so different. — Global Brand Interviewee SPM046
So, it's like this really inspiring space where brilliant ideas can come together and at the end of their rotation, after they've kind of completed that then they go back to their home location and their job is to really pay it forward and how do I take the experience and some elements of what I've learned, in this two to three months’ rotation in (to the design center) and 64 carry that back with me and share that with my other colleagues who haven't yet had a chance or an opportunity to go. — Global Brand Interviewee SPM023
... Why it was so successful for us, was we basically set our pride off to the side and said we need to learn what it means to make a really good soccer boot. And so, we took the time and we engaged with experts in places where soccer was birthed in terms of the soccer boots and how they were crafted and all that goes in. So, we invested in trying to understand how they approach it, and I think there we learned some things that not only were applicable to our particular category, but more generally applicable to all the products we make. — Global Brand Interviewee SPM007
c. Leaders at global brands referenced a “multi-cultural teams” theme more
often than leaders at local brands.
The “multi-cultural teams” theme included the codes of culture, teams, and diversity. The data shows more global leaders emphasizing the importance of teams, not necessarily defined by their physical location. For example, a team could exist across geographies but still consider themselves on the same team. Fifty of the fifty leaders referenced the “multi-cultural teams” theme. It had 2,239 coded references; 59% of them from leaders at global brands.
Our innovation team is completely global. We're mirrored almost exactly at the two headquarters in the USA and Europe…. We created this setup with global directors, because we have three main centers of excellence…We decided to set up one global leader, didn't matter which location they're in, that oversaw equal teams on both sides. It sounds very simple, but what that created was this really powerful global team between the two… — Global Brand Interviewee SPM001
So, when I first present the project scheme or whatever that we are going to do, even though I felt myself as a part of their (European) team and this person who gave me this project was also, he was welcoming me as part of his team, regardless of I'm from global or not, but their team was not ready. That's what I didn't catch before. So, when I first present this project, after 30 minute of project explanation and all the analysis that I have done to prepare it, first question was, ‘Why do we need global for this project?’ It was really, so that was really surprising. So, this guy, this vice president and 65 I was like, ‘What?’ like this, and I could actually feel that he was also very surprised because he was also quite new in that organization at that time…. we call it in Korea, ‘we didn't close the button from the beginning’…No one really opened their heart and was willing to work together, so it was quite hard and not really successful, the project. — Global Brand Interviewee SPM027
d. Leaders at global brands referenced a “social networking” theme more often
than leaders at local brands.
The social networking theme emerged in the data and encompasses the codes of connections, partnerships, relationships, and networks. Forty-nine of the fifty leaders mentioned the “social networking” theme. The data showed 59% of the 827 codes came from leaders at global brands.
…it's still all about relationships at the end of the day. It's really about being able to form a connection with a person or group, a team, a geography, whatever it might be. Form that connection, then authentically deliver whatever message, directive, whatever it is and have belief and faith that that's going to be of benefit to whoever you're delivering it to. I just think that's relationships, that's having people trust you, having confidence and when you're working in a complex environment like that, that crosses every dimension of the organization, having those relationships in place that you could count on, that you can rely on and having that faith back in me was really important. That all came down to relationships. — Global Brand Interviewee SPM003
I think when you are at the global level, you're very much in the matrix as we like to describe it…It’s much less about decision making and power in control. It’s much more around influence and building networks in terms of how you might create that influence structure. — Global Brand Interviewee SPM005
We also have very strategically set up partnerships, exclusive partnerships with key partners who helped us strategically to overcome some of the major hurdles that were in our way… Utilize a global team as a network of strength. — Global Brand Interviewee SPM002
Getting away from the traditional way that we've designed and developed with normal materials, and really looking at open source partnerships, and having the power to change lives in the world has been fantastic. It's not just 66 about sport and life, it's about sport, life, and world. — Global Brand Interviewee SPM024
e. Leaders at global brands referenced a “positive affect” theme more often
than leaders at local brands.
When the leaders talked about the positive affect theme, they tended to become excited, happy and demonstrated positive emotions such as laughing, joking, and smiling.
The codes included love, passion, enjoyment, emotion, fun, excitement, happy, dreams and purpose. Fifty of the fifty leaders referenced the positive affect theme. The data coded reference 984 times, with 62% coming from leaders at global brands.
…it was like I said, leading that category's a lot of pressure and a lot of expectations and we had great people, and it was a highlight for sure. Not just for me, but for lots and lots of people. Not just the team but people we invited to be part of it, like those customers we mentioned, consumers. Seeing people feel inspired and like they were part of something bigger than them was ... There aren't too many things I look back on my career and I'm like, ‘Wow, you won't see that again.’ It was that awesome. — Global Brand Interviewee SPM033
I went to business school, yet I loved the product side, so you know, having spent time working with designers, product developers, and merchandisers, and understanding the financial side of the margin piece, and how to grow a business. That's what I enjoyed was being exposed to both and living in the current ... You know, having a job where you were dealing with current issues as well as planning for the future. I have a passion for sport. I have a passion for athlete innovation consumer, and this was able to fulfill that, you know? And I think beyond my wildest dreams… — Global Brand Interviewee SPM017
If there's a way that we can go in and support, and usually it's very ... People feel like we're friends, I think of it in a way. And to us, we provide a service…we provide services to even internal business units. And together to create the impact, could be financially, could be just emotionally, just feeling good. Could be both. Both will be great. — Global Brand Interviewee SPM036
67 Finding #3: The themes of design innovation, originality, brand power, and performance emerged more prominently from leaders at local brands.
a. Leaders at local brands referenced “design innovation” more often than
leaders at global brands.
Design innovation was defined by local leaders as bringing technology and newness to the marketplace in a well-designed product, process or business approach.
Forty-seven of the fifty leaders referenced design and innovation. The coded references totaled 688, with 57% coming from leaders at local brands.
I think people tend to think of innovation as product innovation and think of designers and engineers as people who are supposed to innovate, and I think that what I've learned and the culture that we've tried to put in place at (brand) is that innovation can be applied to anything, and that the real magic happens when you can combine wisdom with innovation. — Local Brand Interviewee SPM026
As long as the consumer’s tastes are changing, there's always going to be a requirement for innovation. You've got to look at innovation from a product perspective, from a process perspective …Try to understand what's the crocks of the issue and/or problem that's trying to be solved…for example, a few weeks ago my boss and I were at (brand). We were talking to them about innovation. They were saying, ‘We're so glad you're here to talk to us about innovation.’ — Local Brand Interviewee SPM014
… my boss ... his idea was to start what we call the global innovation center in Portland, rethink how we want to approach for our design, bring those concepts back in. That's why he made me head of footwear because I was to bring all that innovation back into the main engine and try to change the main engine. Didn't quite work. Timing wasn't right, and the team that we brought in ... We literally took the entire Portland based team with the head designer, head developer; we brought them to Beijing and said, ‘Okay, now run and take everything apart and rebuild,’ while this train is going. You're trying to change out a cylinder when the car is running at 60 miles an hour, and it ended up breaking the engine in the meantime. — Local Brand Interviewee SPM037
b. Leaders in local brands referenced an “originality” theme more often than
leaders at global brands. 68 The leaders at local brands were focused on how to make their brand and products original. Originality to the interviewees was mentioned as not-copied and not-fake.
Thirty-four of the fifty leaders mentioned “original” in their interviews. There were 80 coded references, with 55% coming from leaders at local brands.
It allows our designers to create product concepts and literally run out the door, and be in the back country within 20 minutes and try it out, and frankly beat it up and take it to the extreme to see if it works... It is a big part of who we are and we continue to be. That keeps us grounded, it does keeps us grounded when sometimes we come onto decisions on whether we should introduce a certain product or not. It's a good filter for us to say, "No, actually let's make sure we remember where we came from. — Local Brand Interviewee SPM020
We've got an office or a studio full of young Chinese footwear designers who are just passionate about footwear and loved footwear. We are trying to figure out how to train them, how to teach them how to do footwear. We are also trying to just figure out what is a Chinese brand? How do they do footwear? What is their aesthetic? Because up to that point it was very much about just knocking off all the western brands. If Nike had a hot running basketball shoe, there were a slew of Chinese companies that would have sometimes a very blatant knock off of that. — Local Brand Interviewee SPM044
We personally take care of doing quite a bit of effort to make sure we respect other people's information, but in general, if I just walk out on the street and I see things that clearly have a similarity (laughing) to other brands. That's something that's different about the two. That's what I mean, your competition, when you're competing in America or Germany… you won't have to compete against something that looks exactly like yours, but if you're competing in an Eastern market, you know that you likely will be copied. If you do something that's new, you will get copied. — Local Brand Interviewee SPM032
69 c. Leaders at local brands referenced a “brand power” theme more often than
leaders at global brands.
The strength of a brand is critical to the success of a business (Aaker, 2012). The theme of “brand power” includes influence, global brand, local brand, as well as marketing. Fifty of the fifty leaders referenced the “brand power” theme. The total number of coded references was 1,472 with 57% coming from leaders at local brands.
From the meeting, I know, Mr. X, he has a very, very long ambition. And most importantly, he is Chinese. He understands what we are thinking. We want to become Westerners. But he knows (Chinese Brand) will never become Western, so how about I acquire some Western brand, then I change the shade, I change the grading, I change the way the color will look, you know, to just help our customer, help their customer to have a better choice… — Local Brand Interviewee SPM045
For many Asians companies, the brand is often seen as just a trademark. It's just a label, a name for the business. So, many companies sell their products under the name of the founder, or the name of the family... they lack the brand management knowledge to really grow the brand. To make sure that the consumers are able to associate the brand with a lot more things than just the company's name or the founder’s name. — Local Brand Interviewee SPM048
I think what was most interesting for the brand in terms of where they were able to go as a result (of a new marketing campaign), it really showed how much elasticity the brand had, which is incredible in terms of permission to go into different categories, what that meant. It was a real critical moment for the brand in terms of everybody at the company saying, ‘Wow, we can be a little bit more impactful, a little bigger and a little more global than maybe we thought we could.’ — Local Brand Interviewee SPM008
d. Leaders at local brands referenced a “performance” theme more often than
global leaders.
Performance was defined as athletic performance, product performance, business performance, and quality. Forty-one of the fifty leaders referenced “performance.” There were 238 references to performance, with 58% of these coming from local brand leaders. 70 We actually came up with several patents, starting from scratch, some of them, from basic research, and then we turn it into applied research, identify a new product concept and we launch it in the market and then some of them actually ... the (local brand) company is still using the products because those are really true athletic performance products and they've actually spent time and are quite sustainable, because those are for real, not just from the look. It provides you with an authentic functional experience, as well. — Local Brand Interviewee SPM043
So, that also is the big difference when they do the apparel, you know, because they are also talking about the cost of the apparel. If you are selling the retails at that margin and then because as a business they would think about that. So, what we did was we choose more like a basic fabric instead of a performance fabric, so we have the aesthetic. The outfit may not be similar but somehow the benefit they may have not the different functions. — Local Brand Interviewee SPM034
So, that's the difference. There's just a difference in the way the brand is perceived at that level. Because, let's face it. (Local Brand) started as, and they still are, a lifestyle brand. But now we created this division eight years ago, that's Performance, and now we're trying to teach and educate the consumer that, ‘No, we're performance as well.’ There are challenges that go with that. So, there is a mindset that needs to be changed and we're still changing that every day. — Local Brand Interviewee SPM015
Discussion
The researchers found in this study distinctly different paths for global brands toward local authenticity versus local brands seeking to become globally accepted. Prior to this research, the differences in strategic direction for global and local brands were not clearly defined and may have been assumed to be the same. The researchers named this new phenomenon the Omni-brand Orientation.
The first physical observation of this framework occurred at the Shanghai Airport.
Near Delta’s International check-in area, there are two adjacent red and white restaurants.
The first one is a global brand, KFC, and the second is a local Chinese brand, Kungfu.
Despite the visual similarities, it became apparent that there was something interesting
71 happening in the marketplace (Appendix C). While KFC is a global brand with “finger lickin’ good chicken” by a Kentucky Colonel, Kungfu, a restaurant founded in
Guangzhou, China, is a local brand that sells bowls of rice with meats gave hungry travelers an opportunity to choose their fare. KFC is clearly on their path toward local authenticity with local staff and the majority of their menu being local, while Kungfu, by its physical location and aesthetics, is trying to move their brand from local to global acceptance.
Current academic research on global strategy does not provide a clear path for either of these companies. For example, the literature supports the use of global strategy/standardization by MNCs by discovering merit in it (Szymanski et al., 1993), finding similarities more important than differences (Kotabe, 1990), and creating success in the marketplace (Grein et al., 2001). On the other hand, the literature supports the multi-domestic/adaption approach because it enhances performance (Özsomer & Prussia,
2000), considers the cultural differences (Pinto, Serra, & Ferreira, 2014) and because brands can create uniqueness in the marketplace to successfully compete globally (van der Lans et al., 2016).
To navigate the “choppy waters” between global and local brands (Steenkamp,
2017), something different is needed. This research introduces a new framework, called the Omni-brand Orientation. The framework recognizes the distinctly different paths of global brands toward local authenticity and local brands to becoming globally accepted.
The Omni-brand Orientation can build on academic literature on the global—hybrid— local continuum (Alden et al., 2006) by further defining the center of the continuum for both global and local brands.
72 Global brands. Utilizing the Omni-brand Orientation, the research showed a new
path for global brands. The themes of local insights, learning organization, multi-cultural
teams, social networking, and positive affect emerged that suggest a correlation to increased local authenticity for global brands (Figure 9).
FIGURE 9: Omni-brand Orientation Framework for Global Brands
Authenticity. Academic researchers have found that brands represent authentic cultural resources (Holt, 2002). The data collected found global brands seeking to become locally authentic. Interviewees mentioned hiring and promoting more local people which should lead to organizations thinking more globally. Leaders from global brands talked about how this is a balancing act, as a strong global brand needs to be seen globally as a consistent experience, but it also needs to connect to the local consumer.
Interviewees mentioned trying to figure out when to dial it up (more consistency across markets) versus when to dial it down (allow the local market to guide).
73 Local insights. Much has been written about how global brands can best meet the
local needs in order to grow a strong worldwide business (Douglas et al., 2001; Quelch &
Hoff, 1986; Taylor & Okazaki, 2015). The interviewees demonstrated strong emotion as
they discussed the best ways to listen to the local consumers. They mentioned the need to
not only be local but to demonstrate a deeper degree of local understanding today versus
in the past. The term “city-specific” was mentioned by several of the leaders, as insights
are becoming more and more specific in the marketplace. One leader mentioned his brand
actually follows the specific weather in different cities to ensure their products match the current needs of consumers.
The interviewees also talked about the penalty of getting this wrong. Data suggests the two biggest markets, U.S. and China, were critical to the success of the brands. The leaders said the understanding of the local market needs fell on the shoulders of the local offices. Data suggests that input from the local market is sometimes considered, but the global positioning of the brand remains the driving force for strategic direction. The leaders said this determined if and when local input is listened to or considered. The interviewees mentioned the deeper level of insights can work beyond the local market. For example, one leader said a product inspired by Chinese history was working well both inside and outside of China.
Learning organization. The theme found in the data named learning organization aligns with existing Organizational Learning Theory research. This theory connected to international strategic literature which has not previously focused on the internal operations of the company (White et al., 2016). This data focused on how brands operate globally through the process of learning and growing. There was strong emotion
74 demonstrated by the leaders using terms such as love, pride, and pay-it-forward. The
leaders could explain how they learn from their current or past international experiences
and from people from different cultures. They also mentioned that sharing what was
learned could advantage the business as it spreads in the organization (e.g., different
categories, colleagues, etc.)
Multi-cultural teams. Research found that firms that do business globally are
integrating multi-cultural workforces (Zettinig & Vincze, 2011). This aligns with the data
that suggests multi-cultural teams are critical to becoming locally authentic for global
brands. In contrast, one study was found that disagreed with the use of multi-functional
teams finding cultural relatedness produced better business results than rather than
cultural differences (Palich & Gomez-Mejia, 1999).
The data suggests that multi-cultural teams were the way business was being done at global brands. The leaders talked about building organizations that also build an equal voice for different locations. Leaders revealed both the successes and failures related to multi-cultural teams. The majority of the failures mentioned across the interviews related to multi-cultural teams not working well together. The leaders could see the value of
multi-cultural teams, but they also recognized the challenges involved with managing
global teams. One leader stated that his legacy would be the teams he had coached during
his time in the industry.
Social network. Current academic literature has researched perceived proximity
to physical proximity finding it more important to relationships quality (O'Leary et al.,
2014). In this data, leaders used the terms relationships, partnerships, friendships,
networks and connections to explain how they navigate the complex global brands’ work
75 environments. The leaders mentioned influencing being a key skillset needed to accomplish their jobs. The influencing described seemed less about power and more about being connected, liked, respected and trusted by others. The term family was used often by the leaders. They described the group they worked with as “like a family” and told stories about all staying in the same house when working on big events around the world. The leaders talked about being authentic in this social network by forming really connections with people they work with around the world. Leaders mentioned these comments with high levels of emotion, such as excitement.
Positive affect. Research has found good feelings alter an individual’s mindset, boosts attention, and increases creativity and intuition (Fredrickson & Losada, 2005). The data suggests more global brand leaders were positive using emotional words such as love, happy, dreams and purpose. The interviews were fun; the leaders enjoyed the interviews and many of them used positive humor while answering questions. Global leaders talked about their luck in working in an industry where they were able to combine their passion (sports) with their profession (sports products). Creativity was a topic many of the leaders talked about during the interviews. The global leaders mentioned creativity being a big part of their job, regardless if they were the CMO, VP of Innovation or the
Director of Design.
Omni-brand orientation: Local brands. Utilizing the Omni-brand Orientation, the research suggests a new path for local brands. The themes of design innovation, originality, brand power, and performance emerged, that suggest a correlation to increased global acceptance for local brands (Figure 10). With local brands having been researched less and therefore less specifically defined (Alden et al., 2006; Schuiling &
76 Kapferer, 2004), this newly defined framework can help practitioners better understand
how to effectively manage local brands.
FIGURE 10: Omni-brand Orientation Framework for Local Brands
Design innovation. Research also shows that global brands have an edge in the area of innovation (Griffith & Rubera, 2014; Sheng et al., 2015). The concepts of
innovation have been well studied through the lens of the consumer in the global
literature (Knight & Cavusgil, 2004; Steenkamp, 2017). Design Innovation was a strong
theme throughout the data, with additional words offered by leaders such as exploration
and experimentation. The leaders at local brands talked about innovation as a right or
privilege they were trying to earn. Innovation was talked about from a scientific
standpoint or the need to discover something new to improve the athletes’ performances.
The local leaders mentioned needing to change their company culture to allow them to
find innovative solutions across their business.
77 Originality. From an academic research standpoint, original connects to
consumers’ quest for authenticity (Leigh et al., 2006). Global brands are, according to this research, being counterfeited and knocked off by the local brands. The term “fake” was used by leaders as they described competitors or their own companies. The leaders defined originality as local brands not copying global brands but having their own
identity. The data shows concern for this issue in developing countries such as China
with the speed that an innovation can be copied. “Competing against something that
looks exactly like yours” was an issue for brands. The research suggests this only
happens in one direction—local brands copying global brands. This was something
leaders felt needed to stop if local brands were going to have the chance to be accepted in
the global marketplace.
Brand power. Local brands can possess strong brand awareness and long-
standing relationships with local consumers, and the majority of their marketing
investment is made in their home market (Schuiling & Kapferer, 2004). These brands
become “icons of the local culture” (Swoboda et al., 2012). Leaders at local brands
mentioned their brands, while strong at home, are often not accepted beyond their home
country. They mentioned access to global markets is available via e-commerce, but few
consumers are interested as they don’t have enough brand power. While there are some
products that reach the “icon” level because of their connection to local culture, these are
often U.S. brands leveraging American sports culture which is often desirable as it is considered the “best.”
Performance. The academic literature shows that consumers buy global brands
because they think the quality and performance will be better than local brands (Hellofs
78 & Jacobson, 1999; Steenkamp, 2017). Product excellence was a strong theme in the data.
Leaders talked about local brands preferring profitability over performance. Leaders mentioned the quality of local products not being equivalent to global products. The data suggests local brands primarily focus on low prices and this hinders their efforts to offer products that deliver quality and performance which are required to be globally accepted.
Finally, this study extends global and local brand research by focusing outside the
U.S. and concentrating on building understanding around strategy instead of consumers.
The majority of the current literature is U.S. (Steenkamp, 2005), and consumer-focused
(Özsomer, 2012; Steenkamp & de Jong, 2010; Strizhakova & Coulter, 2015; Westjohn et al., 2016; Xie et al., 2015).
Limitations
The sample group of 50 executives was identified through a professional network with 30 of the 50 working or had worked at one or two of the same companies. This may have created more similarities between local and global brands in the data than actually existed. Also, the sample set had a low number of women (14), African-Americans (2), and Asians (14). And, although many of the executives in the sample group have lived outside the U.S., the sample may have an over-representation from the U.S. with 26 of 50 executives from U.S.-based companies.
While interviewing in Asia, the researchers began to see a small deviation from the sport product category with some executives working for fashion, luxury, or entertainment brands. And, the researchers found several executives moving from company to company, with two of the participants consulting rather than directly working
79 for a brand. Also, there are clear limits to the generalizability of the research, as primarily
only one category, sports products, was used in the research.
This research suggests a better way to approach strategy for leaders at global and
local brands. Some local and global brand leaders will not be interested in changing their
current strategy. There could be local brands that are happy to be local as well as global
brands that have determined the savings from their global efficiencies outweigh the
benefits of being more responsive to local needs. These two mindsets would not benefit
from this research.
Implications
This research builds on prior academic research in the global branding literature.
This research is attempting to join the conversation with academics who are seeking to build knowledge in the area of global—hybrid—local continuum. Academics who have focused on this area may find value in the proposed Omni-brand Orientation. This new construct suggests distinctly different paths of global brands seeking to become locally authentic and local brands trying to be globally accepted. The new framework suggests a possible correlation between building local authenticity at global brands and the following factors: local insights, learning organizations, multi-cultural team, social networking, and positive affect. It also indicates becoming globally accepted by local brands could include the following factors: design innovation, originality, brand power and performance.
Utilizing the schema theory, this study suggests that the blurring of the lines between the well-researched construct of global brands and the less researched constructs
80 of hybrid and local brands could be leading to a new construct. The Omni-brand
Orientation can provide a new schema for the scholars and practitioners to utilize.
For the practitioner community, the new framework gives direction beyond the
standard global strategy or multi-domestic approach previously used by businesses. This research study provides more defined business strategy guidance for both global and local brands as they approach a marketplace that is digitally available to all brands. With these
findings, global brands and local brands can both compete but with different strategies.
Businesses around the world could be aided by this study’s findings as they navigate the
global marketplace.
Future Research
The sports product industry provided these researchers with the opportunity to
grow a deeper understanding of global and local brands in this product category
(Davvetas & Diamantopoulos, 2016). Additional research in different product categories
would provide the opportunity to determine the generalizability of these findings. The
categories that would align well with past academic research would be food, electronics
and cars.
Also, additional quantitative and mixed method research studies would be
essential to determine the correlation suggested in the Omni-brand Orientation
Framework. Finding out how the key factors of local insights, learning organization, multi-cultural teams, social network, and positive affect relate to building local authenticity would be a good next step for global brand research. And determining how design innovation, originality, brand power, and performance possibly increase global acceptance could help fill the gap in the area of local brand research.
81 This could help build a better understanding of the respective brand journeys as well as potentially assist in determining the importance of each factor as well as any sequencing in the Omni-brand Orientation framework.
And, moving toward consumer research to determine in this new approach to strategy leads to better or different consumer engagement, would be an interesting direction for future studies. Testing some of the existing consumer models (e.g., Global
Consumer Culture, Attitude toward Global Product (AGP) and Attitude Toward Local
Product (ALP) with the Omni-brand Orientation Framework could build additional understanding as the digital marketplace accelerates its pace of change globally.
Finally, a longitudinal study following global brands and local brands on their
Omni-brand Orientation journey could offer valuable insight on how to effectively manage business internationally.
82 CHAPTER 5: STUDY 2 – QUAN – OMNI-BRAND ORIENTATION FRAMEWORK: TWO ROUTES TO BUILDING STRONG BRANDS
Abstract
The traditional distinction between global and local brands is losing salience as the world’s marketplace becomes a level playing field, accelerated by the growth of digital technology. We employ a mixed-methods approach to develop and validate a new framework called Omni-brand orientation for global brands to become locally authentic and local brands to become globally accepted. The results show that global brands use local insights, learning orientation, social networks, and positive affect to build local authenticity, while local brands use innovation capability, brand power, and product performance quality to gain global acceptance. First, we identify the building blocks of local authenticity and global acceptance through qualitative interviews with top managers from global and local sport brands. Second, we validate the framework with quantitative surveys from 363 managers covering 115 brands. The Omni-brand orientation framework can provide invaluable guidance to brand managers in their quest for local authenticity and/or global acceptance.
Keywords: global brands; local brands; authenticity; ambidexterity
Introduction
In 1999, Nike introduced the $10 “World Shoe” in an attempt to capture the Asian market. The shoe failed miserably, as consumers believed they were counterfeit (Hart &
Sharma, 2004). In 2008, Li-Ning, a local Chinese sport brand, opened a design/ innovation center and retail store in Portland, Oregon, less than 10 miles away from
Nike’s World Headquarters. Four years later, the company closed both the office and
83 store, returning to China (MarketLine, 2016a). In 2014, the National Basketball
Association (NBA) created controversy in the global Chinese community because its commemorative Chinese New Year jerseys were considered “Chinky,” a Western perception of China (Campbell, 2015). In 2016, China’s sport brand, 361 Degrees, sponsored the South African Olympic team, and fans criticized the uniforms as being
“ugly, oversized, and outdated” (Makinana, 2016). For decades, global brands have misunderstood local markets, and local brands have tried to learn about and gain acceptance in advanced markets (Steenkamp et al., 2003) but have often failed.
The current global marketplace is replete with mishaps in which a global brand tries to increase its local relevance, or how the brand demonstrates their understanding of the local market; a local brand attempts to become globally accepted, specifically is the brand accepted by consumers beyond the country or region of origin. Yet, there are no frameworks for understanding how to manage global and local brands in the current hyper-competitive environment. Most research identifies the benefits of local relevance and the returns to global acceptance (e.g., Steenkamp, 2017) but is silent on “how to get there.” The objective of this thesis, therefore, is to contribute to the literature by building and validating a framework that captures the processes to emphasize, the routes to take, and the capabilities to nurture in managing global and local brands.
Furthermore, to a large extent, the literature has treated global and local branding as separate endeavors (e.g., Özsomer, 2012; Steenkamp et al., 2003; Swaminathan et al.,
2007). However, many emerging markets such as China are also building brands (e.g.,
Alibaba, Haier) that are succeeding in global markets (Chattopadhyay, Batra, &
Ozsomer, 2012), while global brands competing in these markets are increasingly trying
84 to enhance their local relevance and authenticity by introducing local variants and
incorporating local characteristics (e.g., Starbucks’s coffee-flavored moon cakes in China
and local tea in Turkey) (Xie et al., 2015). Thus, a study of the competitive brand arena
needs to allow for both global and local brands to pursue local authenticity and global acceptance. Moreover, as Xie et al. (2015) correctly note, modern consumers search for and adopt both global and local identities, necessitating that brands deliver on both simultaneously. The real challenge is combining global and local strategies into a true glocal strategy (Steenkamp, 2017; Steenkamp & de Jong, 2010). This study attempts to answer the question facing today’s leaders: how can global and local brands succeed in today’s connected marketplace?
The global sport product industry, which includes apparel, footwear, and equipment, provides an ideal context for our study for several reasons. First, the industry is ultra-competitive (Low, 2016a; Richardson, 2016) and sufficiently large. Sportswear represents an important part of the USD$1.7 trillion worldwide footwear and apparel
business (Euromonitor, 2017a), with current market leaders Nike and Adidas
experiencing threats from U.S.-based Skechers and Under Armour (Low, 2016b;
Richardson, 2016). Second, one of the greatest competitive advantages in this industry is
branding (Tong & Hawley, 2009). Third, sport is recognized as a universal language
(Melnick, 1993; Rajan & Premkumar, 2013), making its brands both globally and locally
relevant. Finally, some local brands from emerging markets have achieved significant
awareness, familiarity, and preference in global markets. For example, locally known
Chinese brands such as Anta and Li-Ning have entered the global marketplace (Beam,
2014) and are becoming well-known regionally, if not globally (Euromonitor, 2017a;
85 Interbrand, 2015). Li-Ning was the first Chinese sportswear company to go public, has sponsored former NBA Chinese superstar, Yao Ming, as well as current NBA star,
Dwayne Wade, while Anta is the biggest Chinese sports brand in China, and has set an audacious goal to surpass Nike in China (Adrian, 2018).
Literature Review
Research defines brands as local if they focus on the unique needs of their local markets and generate revenue primarily in their home country (Ger, 1999; Özsomer,
2012; Steenkamp & de Jong, 2010); regional, if they have sales in multiple markets in the same region; multi-regional, if they have sales in multiple markets in at least three major regions without a standardized marketing plan (Townsend et al., 2009); and global, if they have a high level of awareness and generate revenue around the world (de Mooij,
1998; Steenkamp, 2017). Global brands are characterized by worldwide awareness, availability, desirability, and revenue and by the use of standardized and centrally coordinated marketing strategies across the world (Özsomer, 2012; Schuiling & Kapferer,
2004; Steenkamp et al., 2003). The globalized world economy has put global brands on center stage. The total brand value of the BrandZ Top 100 Global Brands in 2018 grew by 21%, adding USD$750 billion to raise the aggregate value of these top brands to $4.4 trillion.
How can global brands create so much value? Research shows that global brands create a perception of brand superiority (Shocker et al., 1994), higher prestige and status
(Batra et al., 2000; Holt et al., 2004), and credibility (Özsomer, 2012; Steenkamp et al.,
2003). Global brands give consumers a sense of connection with success and a feeling of belonging to a global community (Steenkamp & de Jong, 2010; Strizhakova et al., 2012).
86 As passports to a global community, global brands have a desirable image. The
standardization of all or some elements of the marketing mix facilitates the establishment
of this global image (Jain, 1989). Global brands also strive to behave in a socially
responsible way in the markets in which they operate (Dimofte et al., 2008; Holt et al.,
2004; Johansson & Ronkainen, 2005; Strizhakova et al., 2008).
With the bulk of research focusing on global brands, local brands have received
less attention, and therefore they are less specifically defined (Alden et al., 2006;
Schuiling & Kapferer, 2004). Yet, as noted, they are characterized as being focused on the
unique needs of their local markets, with revenue primarily generated in their home
country (Özsomer, 2012; Steenkamp & de Jong, 2010). Local brands tend to be focused
on local activities (such as Bauer Hockey in Canada), and they have limited availability
outside their home country (Dimofte et al., 2008), and because the majority of marketing investments are made in their home market, they possess strong brand awareness and long-standing relationships with local consumers (Schuiling & Kapferer, 2004). Local brands can become icons of the local culture (Ger, 1999; Steenkamp et al., 2003) and can serve to express national identity (Swaminathan et al., 2007). Thus, they create value by building a local identity, encouraging the local culture, and tailoring products to local tastes and needs (Özsomer, 2012; Schuiling & Kapferer, 2004).
Scholars have also closely examined the space between global and local brands.
The literature identifies this area as homogenization or hybridization, with global brands taking on some local traits (Levitt, 1983; Pieterse, 2001). Looking at the effects of globalization namely global brands and global media, we find some local cultures going through a process of “glocalization” For example, research has found global brands, such
87 as Starbucks, exerting influence on local culture and lifestyle patterns through which consumers are experiencing glocalization (Thompson & Arsel, 2004). And, new forms of hybridization have recently emerged, driven by the Internet, mobility, and cultural diversity (Özsomer, 2012). Research has found that global and local brands do not sit at opposite ends of the same spectrum, as some global brands are also perceived as local because of their ability to adapt to a local market (Dimofte et al., 2008; Halkias et al.,
2016). Consumers identify with either global or local brands, but many contemporary consumers also fit into a “unipolar pattern,” feeling connected with both global and local brands (Steenkamp & de Jong, 2010).
A stream of research has explored global brands within the global strategy framework in general (Ghoshal, 1987) and the standardization versus adaptation decision in particular (Levitt, 1983; Samiee & Roth, 1992). Global strategy is primarily focused on finding similarities across national markets to implement a strategic plan worldwide, standardizing products and services with limited opportunity for adaptations to match local consumer tastes (Johansson & Yip, 1994; Kotabe & Helsen, 2009; Steenkamp & de
Jong, 2010). The multi-domestic approach differs by allowing decisions to be made locally with on-the-ground operations determining the actions required to meet the local market’s needs which often require adaptation (Johansson & Yip, 1994; Kotabe &
Helsen, 2009; Steenkamp & de Jong, 2010).
The concept of standardization was initially studied using common advertising across different countries (Elinder, 1965). Scholars later studied the use of common products, pricing, distribution, and promotion programs across the global marketplace
(Jain, 1989) as well as finding merit in standardizing strategic resource mix and
88 competitive strategy (Szymanski et al., 1993). And adaptation, also known as customization, is practiced in the majority of businesses, as total standardization is uncommon (Quelch & Hoff, 1986). While some companies have found standardization driving their success, other companies have found adapting marketing strategies to local markets as a way of enhancing performance (Özsomer & Prussia, 2000). Despite which studies were reviewed, it would appear that both standardization and adaptation strategies can benefit companies expanding globally (Grein et al., 2001; Özsomer & Prussia, 2000).
Global brands are driving toward standardization to move faster and build their profitability (Johansson & Yip, 1994; Kotabe & Helsen, 2009; Steenkamp & de Jong,
2010), and they are competing against local brands with strong local brand awareness
(Schuiling & Kapferer, 2004) and have access to the global marketplace through e- commerce and social media. For example, Asia is one of the most important emerging regions (Frampton, 2016b), and specifically, Chinese brands are quickly moving from locally known domestic brands to global known international brands (Euromonitor,
2017a; Interbrand, 2015). Interestingly Chinese brands on the Top 100 Global Brands in
2018 grew at double the pace of U.S. Brands (WPP, 2018).
How can global and local brands succeed in today’s connected marketplace?
While providing important knowledge on the advantages and disadvantages of standardization and adaptation, academic literature has offered less than a clear path forward for businesses expanding globally. With both standardization and adaptation strategies found to benefit companies expanding globally as well as drive success in local markets (Grein et al., 2001; Özsomer & Prussia, 2000), brand leaders have no clear direction for building strategy. The goal of this study is to provide global and local brand
89 leaders more guidance as they navigate the global marketplace by utilizing prior research on global branding and international marketing strategy to build and empirically test theory.
Theoretical Framework
The concept of ambidexterity at the organizational level means aligning to current business needs while adapting to change (Tushman & O’Reilly, 1996). Terms often used in ambidexterity literature are exploration and exploitation (He & Wong, 2004), as well as evolution and revolution (Tushman & O’Reilly, 1996). These are contradictory forces
(Raisch & Birkinshaw, 2008) and therefore create an issue when attempting to achieve both simultaneously (O'Reilly & Tushman, 2013). For example, organizations need to exploit their current strengths and simultaneously explore new strengths to exploit in the future (Duncan, 1976), thus striking a balance between these two activities. Scholars have used this concept to help explain why organizations should not choose one path but proceed with multiple avenues simultaneously to be successful (He & Wong, 2004). For example, according to Luo and Rui (2009), to achieve the greatest success, organizations need to become both globally integrated and locally responsive.
Brands seeking to be both global and local. Scholars of the concept of globalization have found interplay between global and local (Wilk, 1995). For branding, research has found global brands adapting by taking on local significance (Ger & Belk,
1996; Miller, 1998). Some brands represent this ambidextrous approach, with global brands taking on some local elements and local brands adopting some global traits (Alden et al., 2006). One reason is that segments of the young adult population tend to be grounded in both global and local cultures (Strizhakova et al., 2012). The theory of
90 ambidexterity emphasizes the fulfillment of two different, and sometimes competing, alternatives, rather than forcing a choice between the two options (March, 1991; Raisch
& Birkinshaw, 2008). While conducting interviews in Asia, two different leaders explained the concept of global and local brands wanting what the other has by saying:
All local brands aspire to be global, and all global brands pretend to be local. — CEO, Local Brand
It seems to be a niche where it’s the Chinese brands looking to get out, and it’s the outside brands trying to get in. — VP/GM, Global Brand
As we become aware of this new phenomenon, we started to see physical evidence. In the Shanghai International Airport, we sited what appeared to be two identical red and white restaurants. Upon further inspection, we found two very different establishments—KFC, a global brand, with “finger lickin’ good chicken” by a Kentucky
Colonel, and Kungfu, a local Chinese brand founded in Guangzhou, selling rice and noodles. Hungry travelers could choose their fare. KFC is on a path toward local authenticity employing Chinese managers from the neighborhoods in order to build relationships with the business community and using menus specifically tailored for the tastes of consumers by city (Mellor, 2017). The global brand, KFC, is finding success with this strategy with over 7,600 restaurants across China, they are growing at a double- digit operating profit, opening a new restaurant every 16 hours (Symington, 2017). While
Kungfu, the local brand, is attempting to woo international travelers by mimicking KFC’s store colors (white and red), using English on the menu, and its physical location.
Academics have applied the concept of ambidexterity to brand management.
Specifically, brand ambidexterity is the ability to pursue two contrasting strategic directions at the same time rather than picking between two alternatives (Melewar &
91 Nguyen, 2014). For example, brands need to be both consistent over time and relevant to current market needs (Beverland et al., 2015). The competing concepts of consistency and relevancy are difficult for brands to achieve (Beverland et al., 2015). This requires brands to take the long-term view and also be flexible enough to change the market through innovation (Aaker, 2012). This thesis extends the theory of brand ambidexterity to apply to the concepts of global and local branding. Global branding is focused on consistency (standardization), while local branding is focused on relevancy (adapting to local needs) (Boddewyn et al., 1986).
In this thesis, we will present the qualitative research results from 50 interviews with brand leaders (25 global brands, 25 local brands), supporting it with empirical research results from 259 global and local brand leaders who answered a comprehensive survey. We will present the qualitative methods section, followed by 9 hypotheses built around the findings. We follow this by a quantitative methods section, ending with the results, discussion and business implications. In our study, we found evidence that leaders recognize that in order to succeed in today’s complex marketplace, global brands need to demonstrate local authenticity, while local brands must become globally accepted. By supplying a more granular strategic approach to brand leaders through the
Omni-brand orientation framework, we offer a guide for brands trying to survive and thrive in the global marketplace.
Mixed Methods Methodology
Starting by using the grounded theory method (Study 1), we explore the strategies global and local brands utilize to become successful. Once we uncover them, the quantitative study using SEM (Study 2) will statistically test the results in an attempt to
92 demonstrate significance to the findings. Our methods approach is a sequential
qualitative–quantitative design (Tashakkori & Teddlie, 1998) that leverages qualitative
research to develop theoretical models for quantitative study. We will utilize the
qualitative study to explore and uncover the paths to success, and the quantitative study
as a complement to the first study, in order to strengthen the overall findings. This
method is also considered mixed-methods and is outlined in Figure 11.
FIGURE 11: Exploratory Sequential Mixed Methods Design
Study 1
Study 1 is a qualitative examination of the global and local sport product brands and uses field interviews with 50 brand leaders. The objective of this examination is to provide a prescribed roadmap that extends the current standardization/adaptation literature (Levitt, 1983; Samiee & Roth, 1992; Yip, 2002).
Qualitative sampling procedures. This qualitative research study uses constructivist grounded theory (Charmaz, 2006; Strauss & Corbin, 1990) and theoretical sampling, a method based on the classic work of Glaser and Strauss (1967). Theoretical
93 sampling is non-random sampling used in an effort to include participants who can offer unique knowledge and expertise on a topic (Homburg, Jozić, & Kuehnl, 2017). The data collection involved two stages. In the first stage, data collection included sampling of leaders from global and local sport product brands. We classified global brands as brands recognized and accepted in multiple regions of the world (de Mooij, 1998; Steenkamp,
2017) and local brands as brands primarily focused on their home country and less known outside their local region (Ger, 1999). Insights gleaned from the interviews in this stage informed decisions about interviewees in the second stage. The second stage employed selective sampling in an effort to include an equal representation of global and local brands, as well as U.S. and non-U.S. brands, to maximize the generalizability of the study findings (Strauss & Corbin, 1998) to consumer product brands. The sampling process continued until we reached saturation, with no new insights emerging from the data
(Glaser & Strauss, 1967; Strauss & Corbin, 1998).
During a nine-month period from January 2017 to September 2017, we conducted in-depth interviews with sport product industry executives. This provided us with a sample size adequate for exploratory research (McCracken, 1988). The interviews totaled
3,050 minutes and transcribed into more than 700 pages of text. The sessions varied from
35 to 90 minutes, with a mean length of 61 minutes. The research included 50 interviewees (25 leaders from global brands and 25 leaders from local brands) across 24 unique organizations from seven different locations—Italy, Vietnam, China, Singapore,
Hong Kong, Canada, and the United States. The research participants worked at well- known global sport product brands and lesser-known local sport product brands and represent a range of functions, including management, design, marketing, sales, e-
94 commerce, product development, costing, sustainability, innovation, and operations.
Participants’ job titles included chief executive officer (CEO), chief marketing officer
(CMO), senior vice president (VP), general manager (GM), senior director, and director.
On average, the interviewees were 50.8 years of age, had spent 22.7 years in their
industries, and had spent 4.8 years aboard.
Qualitative interview protocol and observational procedures. The interviews
were semi-structured and included theoretical, open-ended questions intended to build new understanding and to make connections between the concepts mentioned by the interviewees (Strauss & Corbin, 1998). The executives were asked to recall and discuss both successful and less-than-successful experiences for their brand. The questions are available in Appendix B, and an example includes “Can you tell me about an experience that you would consider successful (less than successful)?” The interview protocol became more specific as themes began to emerge in the research (Strauss & Corbin,
1998). The theme of global and local branding emerged early in the first stage, and we probed this topic in the stage two interviewing process. (Additional information
Appendix A).
Analysis. We explored the drivers of success for global and local brands through
three phases of coding. Using the procedure Strauss and Corbin (1998) outline to analyze
the data, in the first phase of the analysis, we coded the 50 interviews using an open-
coding process that resulted in 2,064 unique codes with 15,081 coded moments. Each
word and phrase was reviewed and considered for its potential significance (Saldaña,
2015). As concepts began to emerge from an interview, we reviewed and compared them
with categories gleaned from prior interviews (Charmaz, 2006; Glaser & Strauss, 1967;
95 Strauss & Corbin, 1998). For the second phase of coding, we used an axial coding process, to identify the relationships between the categories and subcategories (Saldaña,
2015). The final phase of the coding process involved selective coding, in which we identified key constructs and notable findings (Saldaña, 2015).
Our analysis found two distinctive categories we named local authenticity and
global acceptance, which emerged from the data. Two leaders—one global and one
local—attempt to explain:
We have to find the right balance of when do we focus globally versus when do we create things that are unique and connect with the local consumer and how do we dial that up and down. — VP, Global Brand
The bad news—most people don't know who we are. The good news— when people were exposed to a little bit about who we are—our history, our heritage, our products, those types of things—there was a dramatic bump in their affinity for our brand and their purchase consideration. — VP, U.S. Local Brand
Next, we analyzed the coded moments using frequency of responses. Nine themes
emerged: local insights, learning orientation, social network, positive affect, innovation
capability, originality, brand power, product performance quality, and multi-cultural
teams. We related these to the two categories—global acceptance and local
authenticity—according to frequency of responses by global and local leaders.
Combining this information into a model, we are proposing a new framework called
Omni-brand orientation.
The Omni-brand Orientation Framework
In the qualitative research, we found global brands seeking local authenticity and
local brands enjoying the benefits of being domestic and striving toward global
acceptance. This qualitative research highlights that brands are no longer exclusively
96 global or local—but global and local. We named the new framework “Omni-brand orientation” to describe the distinct paths global brands and local brands travel (Figure
12). The interviews revealed global brands’ routes to local authenticity through local insights, learning orientation, social network, and positive affect. For local brands, the path toward global acceptance included innovation capability, originality, brand power, product performance quality, and multi-cultural teams.
FIGURE 12: Omni-brand Orientation Framework
Local authenticity. Authenticity is the search for what is real (Berger, 1973), and a key component for today’s consumers (Grayson & Martinec, 2004). Both academics and practitioners realize the importance of authenticity for branding (Beverland, Farrelly,
& Quester, 2010; Gilmore & Pine, 2007; Holt, 2002; Leigh et al., 2006; Newman &
Dhar, 2014; Rose & Wood, 2005). Brands that are genuine, relevant, original and true are considered authentic (Arnould & Price, 2000; Beverland, 2005; Brown et al., 2003).
Brand authenticity refers to consistency of style, image, and quality, as well as a relationship to a location (Beverland, 2006). Connection with a specific location can 97 capture authenticity in marketing offerings (Özsomer, 2012). Researchers have found
consumers renewing their connections to place and culture including focus on a brand
(Arnould & Price, 2000; Brown et al., 2003). Our field data suggest that successful global and local leaders understand their brands must be authentic locally. Local brands use
strategies focused on building authenticity in their local markets (Ger, 1999). Several
local brand leaders explain local authenticity:
What every brand hopes to have is something that's authentic and relevant to a particular group. Then, other groups that are outside of that core purpose, they respect it and then [your brand] becomes part of the culture. — VP, Local Brand in China
The tan high tops from Australia that somehow became cool in LA because a shoe that's made for not getting snake bites all of a sudden is the number one shoe of the summer in the early 2000s in LA. Makes no sense, but because it was authentic and specific to their own brand, it got adopted. — Former VP, Local Brand in China
Global brands have a challenge, as distance can signal insincerity to consumers
(Beverland et al., 2010). The data show that as leaders develop a deeper understanding of
local markets, global brands have the opportunity to be perceived as more authentic. All
too often, though, global brand leaders fail in their attempts which makes their brands
appear inauthentic. For example, one leader from a U.S.-based global brand recalled:
We did some research in China. ‘Red is royalty, prosperity and distinction.’ We decided ‘Okay, the color red is going to be our focal point.’ Through the lens of cultural relevancy, we completely blew it.... We missed something … they said they couldn’t sell the product. — Director, U.S. Global Brand
Local insights. Prior research has noted the importance of global brands meeting the needs of local markets to grow a strong business worldwide (Douglas et al., 2001;
Johanson & Vahlne, 1977; Taylor & Okazaki, 2015). More specifically, field offices are
98 important to help interpret and communicate local market needs to headquarters
(Johanson & Vahlne, 1977). The following quotations from a leader at a U.S. global
brand illustrates the value of on-the-ground resources in order to benefit the overall company.
There is value to the insights of the local team and the work they do at a grass root level because they are the people closest to the moment of truth at retail. There are some insights that can be leveraged in a global business. — VP, U.S. Global Brand
Many leaders at global brands found effective ways to be locally authentic and to leverage this for their brand. These two brand leaders demonstrate location and activity insights.
Insights can definitely be global, and they can also be geo specific. They can be city specific. [Each] location is different in what they think is cool. — VP, U.S. Global Brand
We partnered with a local skate shop, the first skate shop in Shanghai. We created collaborative product. The shoe was co-created by a global brand designer and the owner of the shop, one of the first skaters in Shanghai [who is] very iconic for this industry. — VP, U.S. Global Brand in China
Many global brand leaders also noted that they often gain insights and develop new strategies through connections with local markets. Leaders who described successful projects frequently talked about local insights that influenced the global marketplace. One leader described her formula for success as:
You have to have this balance of having a point of view in the positioning of your brand but also gather insights from all over the world. We didn't find that one size fits all in every geographic marketplace. Being able to work with colleagues in different marketplaces and getting insights from their consumers, it was successful and rewarding. — VP, U.S. Global Brand
One of the critical elements of market orientation is the concept of local insights
(Narver & Slater, 1990). One consequence of market orientation is using market
99 intelligence to better meet the needs of target markets (Kohli & Jaworski, 1990) So, through local insights, brands can better understand the needs of each market and they can offer products and services that are more locally authentic. Therefore, a brand’s focus on local insights will increase the local authenticity of the brand.
Hypothesis 1. Local insights are positively associated with local authenticity.
Learning orientation. According to organizational learning theory, people learn from their past experiences (Arikan & Shenkar, 2013), and previous missteps lead to adjusting strategies and actions (Nielsen & Nielsen, 2009). Our field data suggest that brands achieve success, at least in part, through the process of learning both from different markets and from other brands. As two global brand leaders explained how several different ways to learn, they said:
[I learned by] living in another place, [interacting with] different cultures, and seeing how different people interact, and the way that they go about problem solving, or what they find important. It was amazing, just a life- changing event. — VP, U.S. Global Brand
So, it was great for me to learn from people who became mentors. Watching them present, watching them communicate, story-tell, and the level of professionalism they brought. How they dug, and got insights, and I think the learning was so important to the brand. — VP, U.S. Global Brand
Worldwide learning is a global strategy used by brands to achieve their global growth goals (Bartlett & Ghoshal, 1995). This strategy integrates learning about the markets around the world (Grewal, Chandrashekaran, & Dwyer, 2008). Academic literature advocates learning to become market-oriented and market-driven (Slater &
Narver, 1994). As brands continuously learn about the market, they develop and adapt to the needs of respective markets (Narver, Slater, & Tietje, 1998). Therefore, increasing the learning orientation of brand management teams will increase global acceptance.
100 Hypothesis 2. Learning orientation is positively associated with global acceptance.
Social network. Social network focuses on how individuals and groups are
affected by social relations and has been increasingly emphasized in global strategy
research (White et al., 2016). Research has found social structure in the competitive arena
in which each player has a network of contacts to engender trust, dependency, and
obligations to support one another (Granovetter, 1983). Interviewees noted that they rely
on relationships, partnerships, friendships, networks, and connections to navigate
complex global work environments. They described the importance of being connected,
liked, and trusted by others. One leader even shared a story about being “like a family”
when everyone stayed in the same house when working on a big sport event. Other
leaders talked about the importance of building connections in order to be successful.
It's really about being able to form a connection with a person, a team, a geography. From that connection, then authentically delivering ... that's having people trust you, having confidence when you're working in a complex environment. It all came down to relationships. — VP, U.S. Global Brand
I think when you are at the global level, you're very much in the matrix. It’s much less power in control. It’s much more around influence and building networks in terms of how you might create that influence structure. — VP, U.S. Global Brand
We have very strategically set up exclusive partnerships with key partners who helped us to overcome some of the major hurdles that were in our way … utilize a global team as a network of strength. — VP, German Global Brand
Research has found that connection and belongingness are antecedents to authenticity (Beverland et al., 2010). A social network is defined as a specific set of connections between the people in a group (Christakis & Fowler, 2009). Since
connections are antecedents to authenticity, we anticipate we will find social networks 101 leading to a positive effect on authenticity. With social networks playing a role in cultural
diffusion (Granovetter, 1983), we hypothesize this authenticity will be specific to local
markets. Therefore, increasing the social network at brands will increase the local
authenticity.
Hypothesis 3. Social networks are positively associated with local authenticity.
Positive affect. The concept of positive affect or positivity represents positive attitudes and pleasant feelings, such as appreciation and love (Fredrickson & Losada,
2005). Research has found that positive feelings often alter an individual’s mindset, boost attention, and increase creativity and intuition (Fredrickson & Losada, 2005). Research has shown that among entrepreneurs, positive affect is related to innovation (Baron &
Tang, 2011). Many of the global leaders in this study used positive affect words, such as
“love,” “happy,” “dreams,” “fun,” and “purpose.” Many leaders spoke about their good fortune in working in an industry in which they are able to combine their passion with their profession.
People feel like we're friends, together to create the impact, could be financially, could be just emotionally, just feeling good. — Director, U.S. Global Brand
We will help you make your dream come true. I want more consumers to experience what I experience, and let's share it, let's celebrate it. — VP, U.S. Global Brand
Seeing people feel inspired that they were part of something bigger than themselves. It was awesome. — Director, U.S. Global Brand
I have a passion for athlete innovation for consumers, and it was able to be fulfilled beyond my wildest dreams. — VP, U.S. Global Brand
Experiences of positive affect motivate individuals to explore new situations
(Fredrickson, 2001). Positive emotions have the ability to broaden what people believe
102 they can accomplish while building physical and intellectual resources for these people
(Fredrickson, 1998). People with positive emotions tend to choose a global or “big picture,” suggesting a broadened pattern of thinking (Fredrickson, 2003). Positive affect has been found to increase credibility that a product will be successful (Kahn & Isen,
1993). One of the dimensions of brand authenticity is credibility (Morhart et al., 2015).
Since authenticity includes a “relationship with place” (Beverland, 2006: 253), we
hypothesize that positive affect will have an effect on local authenticity.
Hypothesis 4. Positive affect is positively associated with local authenticity.
Global acceptance. Global awareness, acceptance, and desirability distinguish local brands from global brands (Özsomer & Altaras, 2008). Local brands are challenged
with how to make being “local” acknowledged globally (Ger, 1999). A leader of a local
brand seemed to recognize this limitation and used food to illustrate his point:
For Singapore brands, for example [selling] chili crab in China, they shout the fact that it is Singaporean. [This] helps to present the brand as something very interesting; Singapore is a small country; it's doing well so it's interesting to people. But it kind of limits the acceptance, the global acceptance of the product. — VP, Singapore Local Brand
One leader talked about how China’s brand image is changing, and how Chinese brands
will emerge quickly by saying:
I think there will come a time when you'll start to see Chinese brands, especially consumer brands with the general world's acceptance. Ten years is a long time in China and things move so fast. I think in the next 10 years you are going to see an emergence of even more Chinese brands on the global stage. — Director, Hong Kong Local Brand
A leader from a Chinese sport company recognized his company’s desire to be global, as
they attempt to find a way to be accepted. He stated:
Li-Ning is a Chinese sport brand. They want to build the brand more like global awareness so I think that's why they try to design this brand. At the 103 end, they build their own store during May … they want to build the right collection and then try to [succeed]. — VP, Chinese Local Brand
While local Chinese brands are trying to be accepted outside of China, U.S. brands are attempting to break into the Chinese market. One leader at a U.S. local brand said:
China's domestic market being strong and domestic consumers maturing and more and more innovation in design and original ideas come to materialize in China are factors. The global markets are starting to accept China as not just a copycat. It is indeed a place where original and good technology and innovation and design could come into very good products. — VP/GM, Local U.S. Brand
In today’s global marketplace, brand leaders are experiencing a difference between global
availability via e-commerce and global acceptance of their brand in the marketplace. The
leaders recognized the absence of global brands from certain emerging markets. One
leader commented:
There really isn't such a thing as a Chinese or Indian global brand. These are the two big markets for the next 50 years, but where are Asian global brands. There's a lot of Japanese and Korean global brands but they were in the marketplace pre-internet. Post-internet, who knows what will happen. — CEO, Hong Kong Local Brand
Innovation capability. Prior research has shown that innovation is essential to
companies’ survival and leads to success, particularly in today’s hyper-competitive
global marketplace (Lee & Zhou, 2012; Rubera & Kirca, 2012). Researchers have found
a direct, positive relationship between innovation, market orientation, and performance
(Han, Kim, & Srivastava, 1998). Innovative capabilities depend on the knowledge in the organization (Subramaniam & Youndt, 2005). The theme of innovation capability was found throughout our field interviews. Many of the local brand leaders discussed innovation capability from a scientific standpoint, focusing on the need to discover new innovations that would improve athletes’ performances. Leaders also described
104 innovation capability by using words such as “exploration” and “experimentation” and
spoke about innovation as a right or a privilege that they were trying to earn. They
mentioned needing to change their internal culture to allow them to find innovative
solutions.
The culture that we have tried to put in place is that innovation can be applied to anything, and that real magic happens when you can combine wisdom with innovation. — CMO, U.S. Local Brand
As long as the consumer’s tastes are changing, there's always going to be a requirement for innovation from a product and process perspective.… We were talking to another global brand about innovation. They said, “We're so glad you're here to talk to us about innovation. — VP, Taiwanese Local Brand
Innovation capability is focused on the introduction of unique products to different markets around the world (Subramaniam & Youndt, 2005). Global brands have an edge in the area of innovation (Knight & Cavusgil, 2004; Steenkamp, 2017), and multi-national innovation capability builds a competitive advantage for brands
(Subramaniam & Venkatraman, 2001). With this advantage, we hypothesize that a brand’s innovation capability will increase their global acceptance.
Hypothesis 5. Innovation capability is positively associated with global acceptance.
Originality. Prior research has shown that originality is associated with consumers’ quest for authenticity (Leigh et al., 2006). Findings from the current study indicate that originality is indeed a weakness among local brands and that many local brand leaders conceptualized the image of their brands or their local competitors as
“fake.” Local brand leaders described a need to develop their own identity without having to copy the work of global brands. They indicated that the duplication of global brand efforts needed to stop if local brands were to have the chance to be accepted in the global 105 marketplace. As such, many leaders at local brand companies are focused on how to make their brands and their products original (i.e., “not copied” or “fake”). As two local brand leaders explained:
We have a studio of young Chinese footwear designers who are passionate about footwear. We are trying to figure out how to teach them. Before it was about knocking off the Western brands. If Nike had a hot shoe, Chinese brands would knock it off. — Director, Chinese Local Brand
When you're competing in America or Germany … you won't have to compete against something that looks exactly like yours, but if you're competing in an Eastern market, you will be copied if you do something new. — VP, Chinese Local Brand
The experiences for consumers lack originality and a sense of place with the lines blurred between real and fake with inauthentic products appearing authentic (Baudrillard,
1988). When a product is an accurate reproduction of the original, it can be considered authentic (Leigh et al., 2006), and creativity is the ability to produce novel and original ideas (Saeki et al., 2001). As brands create new and different products, their originality increases. As brands deliver these products to the marketplace, the brand will be received as more authentic. Therefore, increasing the originality will increase the local authenticity of a brand.
But, originality can also create a negative effect on global acceptance by confusing consumers and creating inconsistency for the brand. If every market is allowed to make the product that works “just for them,” there will be many different views of the brand. Therefore, originality will have a negative effect on global acceptance.
Hypothesis 6. Originality is positively associated with global acceptance.
Brand power. Academic research has found that strong brands provide a competitive advantage and they are powerful tools in marketing (Aaker, Kumar, & Day,
106 1998; Keller, 1993). The strength of the brand is critical to the success of the business
(Aaker & Joachimsthaler, 2012). Brands have two types of power: brand awareness
power and brand image power (Bong Na, Marshall, & Keller, 1999). Local brand leaders discussed brand power as it relates to influence, as well as the ability to successfully execute marketing strategies. Many noted that their brands, while strong at home, are often not recognized and/or accepted globally. They described how some products reach an iconic level because of their connection with the local culture. They noted that this often occurs for U.S. brands leveraging an “American icon” sport culture. Furthermore, local brand leaders mentioned that few consumers are interested in accessing their brands via e-commerce because of inadequate brand power. They talked about understanding their limitations, while creating a vision for the future. Two brand leaders represented this by saying:
For many Asians companies, the brand is often seen as just a trademark, a label, a name for the business. So, many companies sell their products under the name of the founder, or the name of the family.... They lack the brand management knowledge to really grow the brand. — VP, Singaporean Local Brand
I think what was most interesting for the brand in terms of where we could go as a result [of a new marketing campaign], it really showed how much elasticity the brand had. It was a real critical moment for the brand to say we can be more impactful, bigger and more global than we thought we could. — VP, U.S. Local Brand
As brands increase their brand power, their image and awareness increases, and they become more well-known globally. Brands that are more well-known are usually more accepted in the marketplace. Therefore, increasing the brand power will increase the global acceptance of a brand.
Hypothesis 7. Brand power is positively associated with global acceptance.
107 Product performance quality. Research has shown that consumers buy global brands, at least in part, because they believe that the quality and performance will be better than those of local brands (Hellofs & Jacobson, 1999; Steenkamp, 2017). Local brand leaders discussed their brands’ performance in terms of athletic performance, product excellence, and quality. These leaders emphasized profitability over performance and noted that some local brands focus on low prices, hindering their efforts to offer products that deliver quality and performance on a globally acceptable scale.
We came up with several patents from basic and applied research, identifying a new concept and launched it in the market.... The [local brand] company is still using the products because they are true athletic performance products. It provides an authentic functional experience. — Director, Chinese Local Brand
Another brand leader took on a completely different approach saying:
We not only focus on creating quality performance durable products that last a long time, and a lot of that through materials, choices, construction techniques, but we also design products that we feel are timeless. — VP, Canadian Local Brand
Product performance is about designing performance quality products. As brands design more performance quality in their products, their products will perform better, and in turn, the brand will be considered more global. Therefore, increasing the product performance quality will increase the global acceptance of a brand.
Hypothesis 8. Product performance quality is positively associated with global acceptance.
Multi-cultural teams. Research has found that firms that do business globally integrate multi-cultural workforces into their processes (Zettinig & Vincze, 2011). Our field data confirm that multi-cultural teams are common within global brands. Many
108 global leaders emphasized the importance of teams with members from around the world.
One leader said:
You can walk out through the door and you'll see it. I really believe the [sport product] industry, just because of the global nature of the markets and the athletes we serve around the world, forces us to become so multi- cultural. — VP, German Global Brand
However, multi-cultural teamwork is not without its challenges. Leaders also recognized
the problems and failures involved with managing multi-cultural teams. For example, one
Korean leader working with a European team said:
Even though I felt myself as a part of the team when I presented this project, after 30 minutes, the first question was, ‘Why do we need global for this project?’ That was really surprising.… No one really opened their heart and was willing to work together, so it was quite hard and not really successful. — Director German Global Brand
Multi-cultural teams with people having many different perspectives and from a variety of different countries provide diversity (Nederveen Pieterse, van Knippenberg, & van Dierendonck, 2013). As brands utilize more multi-cultural teams, they can bring many different understandings and perspectives to the table.
There will be challenges with using multi-cultural teams, and we hypothesize that both quantitative and qualitative research matters to better understand this complex topic.
As the brand increases the number of multi-cultural teams, their ability to move toward global acceptance increases.
Hypothesis 9. Multi-cultural teams are positively associated with global acceptance.
Study 2
In this quantitative study, we are attempting to complement our qualitative study by statistically testing the antecedents we discovered. More specifically, do the
109 antecedents of local insights, social network, positive affect and learning organization
lead to local authenticity, and do the antecedents of product performance quality, innovation capability, originality, brand power, and multi-cultural teams lead to global
acceptance? This Omni-brand framework is empirically tested in Study 2 using structural
equation modeling (SEM) to determine support for the hypotheses.
Procedure. We developed a survey instrument and elicited participation through
an online sport product industry newsletter with a reach of more than 12,000 employees
in global and local sport product brands such as Nike, Adidas, Under Armour, Li-Ning,
Anta, and Columbia Sportswear. This method, which included two follow-up reminders via email and LinkedIn, netted 524 people who started the survey; of these, 259 people from 96 different global and local brands completed the survey (49% usable survey rate).
Women represented 31% of the respondents; this mirrors the rate found within the higher ranks of the sport and outdoor product industry (Parker, 2018; Parkin, 2018).
The survey consisted of previously tested scale items to measure the constructs of
local insights, learning orientation, social network, positive affect, innovation capability,
originality, brand power, product performance quality, and multi-cultural teams. We also controlled for ethnocentrism, a recognized bias among consumers for local products
(Shimp & Sharma, 1987); this bias measures a preference for brands with robust local connections (Zambuni, 1993). This latent variable is important when analyzing global and local brand research because it is a latent variable that could affect the other variables. Table 6 provides a detailed list of the survey items.
110 TABLE 6: Quantitative Survey Items
Survey Questions Scale Citation Global Acceptance (Cronbach’s Alpha 0.939) To me, this is a global brand Strongly I think consumers overseas buy this brand Agree/Disagree (5- Batra et al. (2000) This brand is sold all over the world point Likert Scale) Product Performance Quality (Cronbach’s Alpha 0.925) The quality of our products is superior to competitors Our products are perceived by customers as more reliable than competitors' products Our products provide better benefits than our competitors' Strongly Atuahene-Gima products Agree/Disagree (5- and Li (2004); Consumers perceive our products as higher performance point Likert Scale) Moon et al. (2015) than competitors' products The product is uniquely designed to provide exceptional performance The product functions beyond consumers' expectations Innovation Capability (Cronbach’s Alpha 0.915) Frequency of new product introductions Being first in the market with new product introductions Ability to introduce new products simultaneously in Much worse/better Subramaniam and different markets than competitors (5- Venkatraman Ability to respond to the unique requirements of different point Likert scale) (2001) countries Ability to penetrate new overseas markets Originality (Cronbach’s Alpha 0.897) A brand that has fresh perspectives on old problems Much worse/better A brand that prioritizes original ideas than competitors (5- Kirton (1976) A brand that sees it as important to create original products point Likert scale) A brand that often risks doing things differently Brand Power (Cronbach’s Alpha 0.906) A brand that is well-known Much worse/better Bong Na et al. A brand that defines the industry than competitors (5- (1999) A brand with a strong influence on the industry point Likert scale) Local Authenticity (Cronbach’s Alpha 0.909) A brand that adds meaning to people's lives Strongly A brand that reflects important values people care about Morhart et al. Agree/Disagree (5- A brand that connects people with their real selves (2015) point Likert Scale) A brand that connects people with what is really important Local Insights (Cronbach’s Alpha 0.873) This brand understands the needs of the local market This brand is considered locally relevant Our leadership understands how local offices can help us Strongly Narver and Slater succeed Agree/Disagree (5- (1990) This brand listens to the voice of the local consumer point Likert Scale) Our competitive advantage is based on understanding local consumer needs Learning Orientation (Cronbach’s Alpha 0.924) I have opportunities to learn new things
111 I am encouraged to discover alternative solutions to problems Strongly Santhanam, At this brand, I am challenged to learn new concepts Agree/Disagree (5- Sasidharan, and I have the opportunity to extend my abilities with point Likert Scale) Webster (2008) challenging work I am encouraged to experiment and explore Social Network (Cronbach’s Alpha 0.876) Networking is important to our brand success We are good at building relationships that help our brand succeed Strongly Ferris et al. (2005); We have strong relationships with key partners Agree/Disagree (5- Ng and Feldman Our key partnerships are critical to the success of our brand point Likert Scale) (2010) We utilize a network of connections in order to succeed as a brand Positive Affect (Cronbach’s Alpha 0.905) Fun Strongly Keeping and Levy Happy Agree/Disagree (5- (2000) Excitement point Likert Scale) Ethnocentricity (Cronbach’s Alpha 0.895) Purchasing foreign-made products is bad for the country I live in People in the country I live should not buy foreign products Strongly Agree to because this hurts business and causes unemployment in Strongly Disagree Shimp and Sharma the country I live (5-point Likert (1987) It is not right to purchase foreign products Scale) A real patriot should always buy products made in his/her country
We tested both the local authenticity and global acceptance hypothesized models using SPSS version 25 and AMOS version 25. First, we conducted exploratory factor analysis (EFA) to ensure that the latent variables had a defined underlying structure
(Hair, Black, Babin, & Anderson, 2010). For brevity, we include details of this procedure in the Web Appendix. Second, we conducted a confirmatory factor analysis (CFA) before turning to the SEM.
CFA. We verified the measurement properties of the constructs using CFA. We used the two-pattern matrices developed from the EFAs to create the two CFA models
(local authenticity and global acceptance). We used the maximum likelihood to estimate population parameters from the data collected. We deemed the sample size of 259
112 respondents sufficient, in line with Hair et al. (2010). The maximum likelihood extraction method shows how closely the correlations among the indicators predicted by the EFA match the correlation matrix (Brown, 2014). We evaluated the models separately; we expected each to converge, as the factors are uncorrelated with factor 1, with values for the local authenticity model between –0.047 and 0.551 and those for the global acceptance model between –0.079 and 0.712. The correlations were good, as all were below the threshold of 0.700 (Hair et al., 2010) with one exception (brand power to innovation capability: 0.712). Panel A in Table 7 shows descriptive statistics and correlations for the local authenticity model, and Panel B shows them for the global acceptance model.
113 TABLE 7: Model Correlations and Descriptive Statistics
A: Local Authenticity Model
Learning Social Local Local Positive α AVE MSV M SD Ethno Orientation Network Insights Authenticity Affect
Learning Orientation 0.925 0.754 0.541 4.148 0.82485 0.868 Social Network 0.876 0.588 0.369 4.297 0.65256 0.561*** 0.767 Local Insights 0.873 0.582 0.369 4.048 0.6579 0.559*** 0.608*** 0.763 Local Authenticity 0.91 0.716 0.280 4.211 0.70043 0.520*** 0.483*** 0.529*** 0.846 Ethnocentricity 0.897 0.685 0.006 1.292 0.72529 -0.047 -0.042 -0.002 0.013 0.828 Positive Affect 0.908 0.766 0.541 3.934 0.92437 0.736 0.537 0.516 0.501 0.077 0.875
B: Global Acceptance Model Product Innovation Global Brand α AVE MSV M SD Performance Originality Ethno Capability Acceptance Power Quality Product Performance 0.925 0.675 0.451 4.045 0.85587 0.821 Quality Innovation Capability 0.915 0.683 0.633 3.532 0.77179 0.564*** 0.827 Originality 0.899 0.69 0.491 3.971 0.75343 0.672*** 0.701*** 0.831 Global Acceptance 0.949 0.862 0.273 4.335 1.07716 0.308*** 0.522*** 0.219** 0.929 Ethnocentricity 0.897 0.686 0.005 1.615 0.72422 -0.074 -0.001 -0.062 -0.029 0.828 Brand Power 0.907 0.764 0.633 4.001 0.93961 0.51 0.796 0.618 0.495 0.032 0.874
114
Both models in the CFA and in the full SEM met standard criteria for model fit
2 2 (χ global(279) = 2.518, p < 0.000; χ local(260) = 1.97, p < 0.000) (Niemand & Mai, 2018;
Tabachnick & Fidell, 2007). The root mean square error of approximation (RMSEA) is less than 0.8, indicating an acceptable model fit (Steiger, 2007). The comparative fit index (CFI) is close to 0.95, and the standardized root mean square residual (SRMR) score is less than 0.80, again indicating good fit (Hu & Bentler, 1999). Taking this information together, we conclude that all composite measures fit the data well. Although we could have improved model fit by eliminating several scale items, obtaining perfect model fit was not the objective of this research; rather, our goal was to explore the relationship between the constructs and outcomes of local authenticity and global acceptance. Table 8 provides the complete model fit indices.
TABLE 8: Local Authenticity and Global Acceptance CFA Model Fit Indices
Global Local Threshold Interpretation CMIN 675.499 511.871 -- -- df 260 260 -- -- CMIN/DF 2.598 1.969 Between 1 and 3 Excellent CFI 0.923 0.944 >0.950 Acceptable RMSEA 0.079 0.061 <0.070 Acceptable PClose 0.000 0.010 >0.050 Poor SRMR 0.0569 0.0464 <0.090 Excellent
We assessed reliability of the measures using Cronbach’s alpha measures, which ranged from 0.87 to 0.95 for both models, far above the threshold of 0.70 (Cronbach,
1947). We evaluated discriminant validity by comparing the average variance extracted
(AVE) with the squared correlations between the constructs (Fornell & Larcker, 1981).
All AVE values are greater than 0.5 (Hair et al., 2010), and the largest squared
115 correlation is 0.633. Therefore, we achieved appropriate discriminant validity
(MacKenzie et al., 2011).
To reduce the likelihood of common method bias, we guaranteed confidentiality
of the responses, varied the scale items, and reduced item ambiguity through pretests
(Podsakoff et al., 2003). However, we further assessed common method bias by using a
measured marker variable (Podsakoff et al., 2003). For brevity, we outline this method in
the Web Appendix. Overall, we determined that the CFAs for the local authenticity
model and the global acceptance model possessed goodness-of-fit, validity, and reliability.
SEM: Hypothesis testing. Using the composite items developed during the CFA analysis, we next employed the maximum likelihood estimation approach, a covariance- based SEM technique with the non-imputed variables using AMOS 25. We reviewed the model fit indices to determine goodness-of-fit for both the local authenticity and global acceptance models. We found good model fit outlined in Table 9.
Before conducting hypotheses testing, we tested for multivariate assumptions by running a Cook’s distance analysis to determine whether any (multivariate) influential outliers existed (Hair et al., 2010). In no case did we observe a Cook’s distance greater than 1 (Hair et al., 2010), and in most cases, the values were less than 0.15. To test for multicollinearity, we reviewed the dependent variable relationship to the independent variables and the control variable in both the local authenticity and global acceptance models. We examined variable inflation factors (VIF) for all predictors and observed no
VIFs greater than 5, which is far less than the threshold of 10 (Hair et al., 2010). The
VIFs for local authenticity varied from 1.039 (ethnocentrism) to 2.652 (learning
116 orientation), and those for global acceptance varied from 1.026 (ethnocentrism) to 4.033
(innovation capability).
TABLE 9: Estimated Path Coefficients of Local Authenticity and Global Acceptance Models
Local Global Hypotheses Authenticity Acceptance Hypothesis Model Model Local Insights Local Authenticity 0.263*** H1: Supported Learning Orientation Local Authenticity 0.180* H2: Supported Social Network Local Authenticity 0.139* H3: Supported Positive Affect Local Authenticity 0.157* H4: Supported Ethnocentricity Local Authenticity 0.010 control
Innovation capability Global Acceptance 0.516*** H5: Supported Originality Global Acceptance -0.414*** H6: Not supported Brand Power Global Acceptance 0.263** H7: Supported Product Performance Quality Global 0.156* H8: Supported Acceptance Multi-Cultural Teams Global Acceptance -0.010 H9: Not supported Ethnocentricity Global Acceptance -0.050 control Model Fit Χ2 702.4 511.9 df 279 260 RMSEA .077 .061 CFI .923 .944 SRMR .055 .046 *, **, *** denotes p < .1, .05, and .01, respectively.
117 With a visual of the results in Figure 13.
FIGURE 13: Hypotheses SEM Results
Local authenticity hypotheses. The model depicting the antecedents of local authenticity is significant (CMIN/df = 1.969, p < 0.000), with an R-squared of 0.379. H1 stated that local insights would have a positive direct effect on local authenticity. H1 is confirmed with the quantitative study (β = 0.263, p < 0.001), which supports the qualitative results. For H2, which predicted that learning orientation would have a positive direct effect on local authenticity, the quantitative results (β = 0.180, p < 0.100) support the qualitative results at the 90% confidence level. Thus, H2 is supported. H3 stated that social network would have a positive direct effect on local authenticity. The quantitative results confirm this prediction at a 90% confidence level (β = 0.139, p <
0.100) and supports the qualitative results. Thus, H3 is supported. H4, the last hypothesis for the local authenticity model, stated that positive affect would have a positive effect on local authenticity. We confirmed this relationship with the quantitative results (β = 0.157,
118 p < 0.100), which supported our qualitative results. Thus, H4 is supported. In addition, we find no significant effects of the control variable ethnocentricity (β = 0.010, ns).
Global acceptance hypotheses. The model depicting the antecedents of global acceptance is significant (CMIN/df = 2.518, p < 0.000), with an R-square of 0.358. H5 predicted a positive direct effect between innovation capability and global acceptance.
The quantitative results showed a positive, significant effect (β = 0.516, p < 0.001) and confirmed the qualitative results. Thus, H5 is supported. For H6, which predicted a direct effect of originality on global acceptance (β = –0.414, p < 0.001), we found a significant, negative effect. Thus, H6 is not supported, as the quantitative findings show that originality is negatively associated with global acceptance. For H7, we tested the relationship between brand power and global acceptance. The quantitative results (β =
0.263, p < 0.100) support for the positive direct effect between brand power and global acceptance, which confirms the qualitative results. Thus, H7 is supported. H8 predicted a direct positive effect of product performance quality on global acceptance; the quantitative findings (β = 0.156, p < 0.100) confirm the qualitative results. Thus, H8 is supported. Finally, for H9, we tested for the direct effect between multi-cultural teams and global acceptance. The findings of our quantitative study show no support (β = –
0.010, ns) for the relationship between multi-cultural teams and global acceptance. Thus,
H9 is not supported. Ethnocentricity, our control variable, does not have a significant effect on global acceptance (β = –0.050, ns).
Discussion
Study 1 (qualitative) set up the framework for the new Omni-brand orientation, which outlines the antecedents to local authenticity and global acceptance. This was 119 followed by Study 2 (quantitative), which found statistical support for all four local authenticity antecedents and three of the five global acceptance antecedents. First, we show that global brands’ route to local authenticity includes understanding and acting on local insights, using a learning orientation to help the people managing brand authentically grow, forming social networks to provide the right connections and build key partnerships, and ensuring positive affect (e.g., having fun) while on this journey.
Second, we find that three elements—innovation capability, brand power, and product
performance quality—are significant antecedents. Of note, we find two contradictions
between the qualitative and quantitative research studies. The first pertains to the concept
of originality, which we predicted would have a positive effect on global acceptance;
instead, it had a significant, negative effect. This result is puzzling because the qualitative
research clearly showed that local brands need to be original and not copy global brands.
The originality measurement in this research did not validate this finding. The reason
could be the type of questions used in the quantitative survey used a positive approach
(e.g., A brand that prioritizes original ideas), while the information gathered in the
qualitative was more negative (e.g., local brands knocking off, or copying global brands).
The second contradiction between the qualitative and quantitative results involved multi-cultural teams. Although the qualitative interviews emphasized their importance, we found no significant effect of multi-cultural teams on global acceptance in the quantitative analysis. This contradiction could be accounted for by the low level of
diversity in the teams of the participants in the quantitative study. More than 50% of the
participants in the quantitative study have 0–2 nationalities on their teams described in
120 Table 10. Maybe, they don’t have enough experience with multi-cultural teams to connect the concept to building global acceptance.
TABLE 10: Demographics of Quantitative Research, n=259 Participants, 96 Different Companies
Gender Number % Female 80 30.90% Male 179 69.10% Age 0-29 40 15.4% 30-39 46 17.8% 40-49 48 18.5% 50-59 94 36.3% 60 or over 31 12.0% Job Position Worker 45 17.40% Manager 58 22.40% Director 81 31.30% VP 36 13.90% C-Suite 23 8.90% Other 16 6.20% Locale Headquarters 208 80.30% Field Office 27 10.40% Other 24 9.30% Residency North America 220 84.94% Europe 10 3.86% Asia 28 10.80% Latin America 1 -- Team Size 0-2 11 4.20% 3-5 53 20.50% 6-8 67 25.90% 9+ 115 44.40% No Team 13 5.00% Team Diversity 0-2 132 51% 3-5 90 35% 6-8 14 5% 9+ 10 4% No Team 13 5% Brand Type Global Brand 143 Local Brand 116
121 Theoretical Implications
This research builds on the theory of ambidexterity, or the ability to pursue two
strengths at the same time (Luo & Rui, 2009), although the strengths are in conflict with
each other. Traditionally, research has treated global branding (Steenkamp, 2017) and
local branding (Ger, 1999) as two distinct paths. In order to be global, brands needed to
demonstrate consistency, and in order to be local, brands needed to demonstrate a strong
understanding of the local market. This research builds on theory by crafting a new path
for brand success that incorporates both local authenticity and global acceptance. This
new path is increasingly relevant in today’s digitally connected, customer-empowered markets. Our findings suggest that ambidextrous brands need to balance the demands of the global market and the needs of local consumers.
We found the antecedents that lead or don’t lead to global acceptance and local authenticity, and we realize that navigating a brand to be both global and local can produce significant issues (Steenkamp, 2017). Academics that have researched the theory of ambidexterity realize the challenges brands will have is balancing two very conflicting areas (Melewar & Nguyen, 2014). The new Omni-brand orientation framework offers structured guidance by defining the distinct paths for global brands toward local authenticity and for local brands toward global acceptance.
The framework shows a possible correlation between global brands building local
authenticity and four factors: local insights, learning organization, social network, and
positive affect. It also recommends that local brands seeking global acceptance should
focus on three factors: innovation capability, brand power, and product performance
quality. The factors represent exploitation (learning organization, positive affect, and
122 product performance quality), as well as exploration (innovation capability, local
insights, social network, and brand power). Balancing these factors can build brand
ambidexterity, allowing both local and global brands the ability to succeed.
Managerial applications. For practitioners, the Omni-brand orientation
framework provides direction that goes beyond the global strategy and multi-domestic approaches that brands often use. To compete on a level playing field, the framework shows two distinct paths, one which includes elements that need to be integrated into local brand strategies to help achieve global acceptance, and one with elements that global brands can adopt to increase local authenticity. With our framework, leaders can now focus on determining which elements they need to improve on to either increase their local authenticity or strengthen their global acceptance. That is, the framework provides business strategy guidance for global and local brand leaders as they approach a marketplace that is digitally available to all consumers.
Brands cannot afford to make a mistake in this area. For example, the NBA’s need to get it right with its Chinese New Year jerseys held a steep price. More than 760 million people in China watched at least one NBA game on television in 2016 (Neumann,
2017). Thus, it is critical that firms have a framework to drive the right strategy for their brands. The Omni-brand orientation framework will help global and local brands compete with each other by employing strategies that are aligned with the unique positions they currently hold in the market, as well as the ideal positions they hope to own in the future.
123 Limitations and Further Research
The sport product industry provided us an opportunity to develop a deeper
understanding of global and local brands in this specific product category (Davvetas &
Diamantopoulos, 2016). The limitations of this study include the use of cross-sectional
data in the quantitative study, using only one category and global research with
quantitative data primarily from the U.S. We would recommend further research using
different product categories (e.g., food, electronics, automobiles) to help determine the generalizability of our findings.
In addition, consumer research would help shed light on the outcomes of and
consumer engagements experienced by brands that implement the Omni-brand
orientation framework. Testing some of the existing consumer models (e.g., global
consumer culture, attitude toward global product, attitude toward local product) with the
Omni-brand orientation framework would provide additional insight as the digital
marketplace accelerates its pace of global change. This study would be different from
previous studies, as it would be focused on testing the antecedents to local authenticity
and global acceptance in the context of existing consumer models. Finally, a longitudinal
study that follows global and local brands on their Omni-brand orientation journey would
offer valuable guidance on how to effectively manage business internationally in the
quickly changing global marketplace.
124 CHAPTER 6: STUDY 3 – QUANT – DEVELOPMENT OF MEASUREMENT SCALE FOR OMNI-BRAND
Abstract
In the field of global branding, research has been focused on either global or local brands, with little research on the space known as glocal or hybrid. Using paradox theory, this dissertation argues that there is a need to build an understanding of brands that are both global and local. This research offers a method to describe these brands who are seeking to be both globally accepted and locally authentic, with a new term—Omni- brand. Using consumer survey data to create a higher-order structural model, this research shows Omni-brand as a third-order construct derived from the second-order constructs of global acceptance and local authenticity and the first-order constructs associated which each. The first order constructs for global acceptance are perceived brand Globalness, innovation and product performance quality, while local authenticity is constructed by brand authenticity, local iconness, local insights and originality.
Subsequently, a multi-group analysis finds greater brand power for high Omni-brands versus low Omni-brands. The thesis ends with a discussion of theoretical and managerial implications.
Introduction
It seems to be a niche where it’s the Chinese brands looking to get out, and it’s the outside brands trying to get in. — VP/GM, Global Brand
In 1994, the world’s busiest McDonald’s restaurant was located near Tiananmen
Square in Beijing, China. Without explanation, the Chinese government revoked
McDonald’s permission to operate (Watson, 2006) after consumers signed a petition
stating this globalization icon did not belong there (Ritzer, 2004). Again, in Beijing, but
125 in 2007, because of opposition from the government and consumers, Starbucks was asked to vacate its restaurant in the Forbidden City (Watts, 2007). Today, China is very different for both McDonald’s and Starbucks. McDonald’s is wildly successful in China and has found success by using more local talent and additional local menu items (Lam,
2017). Plans include doubling their current 2,000 restaurants to 4,500 locations by 2022.
For Starbucks, their plans are as aggressive. They currently have over 3,900 locations in
China, with aggressive plans of expansion, and interestingly, they were recently given permission to open a flagship “Reserve” store in Tianjin, China, “connecting customers with 100 years of modern Chinese history” (Starbucks, 2019).
Past researchers found two different paths toward brand success, with the first being perceived as a global brand and the second by becoming “an icon of the local culture” (Steenkamp et al., 2003). In contrast, rather than two different paths, researchers have discovered brands can manage global and local as two-sides of the same coin. For example, researchers are finding global brands taking on local elements (Ger & Belk,
1996), and local brands adopting global traits (Alden et al., 2006). More importantly, academic research discovered that becoming global and local at the same time can lead to more success in business (Fredberg, 2014). Brands are responding to young consumers who are combining global and local identities (Strizhakova et al., 2012; Zhang & Khare,
2009). Brands are responding to a change with consumers. They are finding young adults grounded in both global and local cultures (Strizhakova et al., 2012), and more consumers creating bicultural or hybrid identities by combining elements of global and local cultures (Arnett, 2000).
126 For brands, mixing global and local is often called glocal or hybrid. The term
‘glocal’ originated from Japan, adopted by businesses in the 1980s to describe a global outlook with local adaptations (Robertson, 1995). Researchers have defined glocal several different ways including the interpenetration of the global and the local (Andrews
& Ritzer, 2007), and the overlap between global and local positioning, which was found to create success (Swoboda et al., 2014). Glocal could be described as a brand paradox.
But researchers are not in agreement with what glocal means. Perhaps it is just global or local disguised, with research suggesting glocal should replace global
(Robertson, 1995), or that glocal is the future of the local (Swoboda et al., 2012). Or is glocal merely describing consumers who consume both global and local? (Steenkamp, de
Jong, & Baumgartner, 2010). Researchers found consumption clustering along a global— hybrid—local continuum with hybrid being a blend of global and local symbols (Alden et al., 2006). The term hybrid does little to clear up the confusion of the space between global and local. Hybrid has been defined as a mixture of two cultures, inauthentic, the space between global and local brands (Pieterse, 2001), and the concept that is least precisely defined (Alden et al., 2006). The marketplace is finding new forms of hybridization emerging, driven by the internet, mobility, and cultural diversity (Özsomer,
2012). One “new form” of glocal/hybrid is addressed in this thesis. This new glocal will combine two different states and satisfying them simultaneously (Brown, 2006). These two states are global acceptance and local authenticity with this study addressing the paradox.
Consumers around the world are interacting with brands both digitally and face- to-face through the “Omni-channel retailing” experience, where the “distinction between
127 the physical and online will vanish” (Brynjolfsson et al., 2013). This research presents a new term—Omni-brand—to describe brands facing the paradox of global acceptance and local authenticity. This study will utilize the paradox of globalization as the theoretical foundation to build new paths toward success for brands. In two earlier studies on Omni- brands (Study 1 and 2), the global acceptance and local authenticity constructs were identified as well as their antecedents. In this study (Study 3), I will build a greater understanding of the concept of Omni-brands, segment brands into two categories (high
Omni-brand and low Omni-brand), and model Omni-brand as a predictor of brand power.
This study surveyed 729 people in the U.S. asking questions about 33 different global and local brands. In the data analysis, the study presents Omni-brand as a third-order construct built on two second-order constructs—global acceptance and local authenticity.
These two constructs are formed by seven antecedents discovered in the earlier studies.
Each of the 33 brands was given a global acceptance score and a local authenticity score. The score for global acceptance is the average of three constructs—innovation, perceived brand globalness and product performance quality, while the local authenticity score is the average of four constructs: local insights, local iconness, brand authenticity, and originality. From these two scores, each brand is plotted on a scatterplot, as well as a cluster analysis is done dividing the brands into high Omni-brand and low Omni-brand.
Next, using the factors discovered in Study 1 and Study 2, I built a prototype model demonstrating the first-order constructs (from the past studies) are reflective, while the second-order (Global acceptance and local authenticity) and third-order (Omni-brand) are formative. The analysis utilizes a structural equation model of the Omni-brand prototype.
Omni-brand is built through a concrete foundation of reflective constructs (antecedents in
128 past studies), forming the two components (global acceptance and local authenticity) that form Omni-brand. The study demonstrates a way for brands to effectively address the paradox of global and local and increase their brand power.
Theoretical Framework
Brands function on a continuum along global–local dimensions with tension between the local and the global (Holton, 2000). The paradox theory will be used to provide a theoretical framework for this research. A paradox is defined as two alternatives that are not separate but interdependent and complementary (Farjoun, 2010).
The heart of paradoxical tensions is the ‘persistent contradiction between interdependent elements” (Schad et al., 2016: 10). Managing paradox requires seeing tensions not as either/or but as both/and alternatives (Jules & Good, 2014; Lewis, 2000). Paradox tensions signify “two sides of the same coin” (Lewis, 2000).
Paradox theory has previously been used to address the conflicting, yet interwoven needs of global and local market demands (Smith et al., 2010). While global branding has generally advocated consistency across markets and time (e.g., Özsomer &
Altaras, 2008), and local branding has focused on relevancy (Boddewyn et al., 1986), researchers have also identified the value of combining uniqueness with familiarity
(Brown et al., 2003). Paradox lies at the heart of many of today’s successful brands
(Brown, 2006). The brand leaders interviewed in Study 1 talk about the tensions, contradictions, and rewards of managing paradox.
Limitations of Global Branding Literature
Global branding literature focuses on management with a focus on the firm, and marketing, with a concentration on consumers. Both camps agree with the description of
129 global brands as “marketed in multiple countries and generally recognized as global in these countries” (Steenkamp et al., 2003: 54). They are characterized as having worldwide awareness, availability, desirability, and revenue (Özsomer et al., 2012;
Schuiling & Kapferer, 2004; Steenkamp et al., 2003). And researchers describe local brands as “available in a specific geographical region” or “a concentrated marketplace”
(Dimofte et al., 2008: 120) and as “local players” and “symbols or icons of the local culture” (Swoboda et al., 2012: 72). Local brands can be defined as those brands focused on the unique needs of their local markets that generate revenue primarily in their home country (Ger, 1999; Özsomer, 2012; Steenkamp & de Jong, 2010). While the majority of the academic research is comparing global and local, there is recognition of glocal/hybrid. Glocal has been described as the “interpenetration of the global and local resulting in unique outcomes in different geographic areas” (Ritzer, 2003: 193). And hybrid has been described as local brands adopting some global traits (Alden et al.,
2006).
Global branding: Firm. There is an ongoing 50-year debate in academic literature (de Mooij, 2013) between brands utilizing the global strategy framework, standardization—finding the similarities between markets (Ghoshal, 1987) and brands applying the domestic(local) strategy, adaptation—detecting the differences to build success (Yip, 2002). Literature is contradictory to some studies finding standardization strategies creating more success than adaptation strategies (Grein et al., 2001), with other thesis discovering local adaptation as a path toward enhancing performance (Özsomer &
Prussia, 2000). This absence of clarity creates confusion and insufficient guidance for brand leaders.
130 These are two methods to categorize brands that overlap between global and local. The first method was the Integration-Responsiveness Framework developed in the
1980s by Bartlett and Ghoshal (1989), Prahalad and Doz (1987). It focuses on Hi/Low global integration and Hi/Low local responsiveness. The second method utilized to categorize brands was “Global Brand Architecture” (Douglas et al., 2001; Talay et al.,
2015; Townsend et al., 2009). This method segments brands into four categories: Global,
Multi-regional, regional and domestic. An overview of both the firm studies is presented in more detail in Table 11.
TABLE 11: Scholarly Approaches to Categorization – Brand/Firm
Framework Model Explanation Citation Integration- High Global High GI/High LR Focused on firms-the pressures Bartlett and Responsiveness integration/low (Transnational) of global integration and the Ghoshal Framework local pressures for local (1989); responsiveness responsiveness. High global Prahalad and (Global) integration with low local Doz (1987); LOW GI/Low LR Low GI/High LR responsiveness is global; high Swoboda et al. (International) global integration and high (2014). (Multi-national) local responsiveness is called transnational; low global integration and low local responsiveness is names international; low global integration and high local responsiveness is multi- national. Semi-Global Multi-Regional Global GBA is divided into four Townsend et Marketing categories. al. (2009); Domestic Regional Strategies Douglas et al. (Global Brand (2001); Talay Architecture et al. (2015). GBA)
Global branding: Consumers. Several different methods for categorizing global, local and the combination of global/local are found when considering consumers’ attitudes and perceptions. The “Value-Based Framework of Antecedents of Attitude toward Global Products” (AGP), with the “Attitude toward Local Products” (ALP)
131 outlining four categories of consumers related to global and local including High Attitude toward Global Products/High (AGP) Attitude toward Local Products (ALP) (Steenkamp
& de Jong, 2010), High AGP/Low ALP, Low AGP/High ALP, and Low AGP/Low ALP.
On the perception side, Perceived Brand Globalness and Perceived Brand
Localness are studied separately and together. Finally, Global, Local, and Foreign positioning have been studied, showing the value of being perceived as global. An overview of the consumer studies is presented in more detail in Table 12.
TABLE 12: Scholarly Approaches to Brand Categorization (Consumers)
Framework Model Explanation Citation Categorization of Low ALP/Low Low ALP/High AGP Focused consumers- Steenkamp and consumer’s AGP Homogenization Glalienation is the lack de Jong (2010) attitudes toward Glalienation of emphasis on either local and global Low AGP/High High AGP/High glocal or local products ALP- ALP—Glocalization— consumption (Slater 1999); Homogenization- Localization— Holton, 2000) is the positive attitude toward global combined with the negative attitude to local. (Alden, Steenkamp & Batra, 2006); Localization- prefer local consumption options because of greater (perceived) authenticity (Thompson & Arsel, 2004); Glocalization- Ritzer (2004: 163) “Rather than either one overwhelming the other, the global and local interpenetrate, producing unique outcomes.” Perceived Brand PBG and PBL Model combining PBG Halkias et al. Globalness and and PBL to test impact (2016) Perceived Brand on brand attitude and Localness purchase intentions Global/Local/ GCCP GCCP presents a Alden et al. Foreign Consumer LCCP pathway where brands (1999) Culture LCCP can become perceived as Positioning ‘global.’ This is contrasted to LCCP and FCCP.
132 This lack of agreement on how to categorize brands, as well as how to best drive success for brands using both global and local approaches, leaves a gap in academic literature. This study provides a roadmap to success for local brands through global acceptance utilizing innovation, perceived brand globalness and product performance quality, and a path for global brands toward local authenticity by applying local insights, local iconness, brand authenticity, and originality. These new paths lead toward a new concept named Omni-brand.
Defining Omni-brand
The existing branding literature is comprehensive in the approach to researching global brands and local brands, comparing them, and recognizing the combinations of global and local. While studies acknowledge the existence of a third option, using terms such as glocal and hybrid, little research has been done to understand the benefits of this condition for brands. Research suggests brands with both global and local tenets will be more successful (Fredberg, 2014), and young consumers identify with both global and local characteristics (Arnett, 2002). It is time to find a mechanism to build understanding and measure a brand with both global acceptance and local authenticity—an Omni-brand.
The omni-brand prototype. Without agreed-upon definitions of glocal/hybrid or measurement tools, this study will address this void by utilizing a prototype modeling approach. Prior research has shown that complex concepts such as emotion and love without clear methods to define them (Fehr, 2006) are best described as prototypes
(Rosch, 1975). A prototype is defined as a list of attributes that consumers would associate with a particular thing (Fehr, 2006). Prototypes are cultural models, and unlike standard definitions, which are precise (Fehr & Russell, 1991), prototype definitions tend
133 to be characterized with fuzzy boundaries (Shaver, Schwartz, Kirson, & O'connor, 1987).
This study will use a prototype framework, similar to that used to define brand love by
Batra et al. (2012), to describe Omni-brand.
The Omni-brand prototype has first, second- and third-order constructs to further define and measure this new concept. The first-order factors, constructed by reflective items, are formative antecedents of global acceptance and local authenticity. These second-order constructs are formative factors of the third-order Omni-brand latent variable. This prototype model is represented in Figure 14, with an outcome of brand power.
FIGURE 14: Higher-Level Omni-brand Prototype-Reflective and Formative Constructs
Concrete Abstract Formative Concrete Reflective Constructs Reflective Factor Factors
134 Elements of the omni-brand prototype. A prototype is conceived in terms of
antecedents, the phenomenon, and its consequences (Shaver et al., 1987). In this study, the
antecedents lead to global acceptance and local authenticity, the phenomenon is Omni-
brand, and the consequence is brand power. This prototype is hierarchically organized
with constructs of global acceptance, local authenticity and Omni-brand classified as
multi-dimensional from a conceptual perspective (MacKenzie et al., 2011).
Multidimensional is demonstrated by the essential characteristics of brand authenticity,
local iconness, local insights and originality describing the unique aspects of local
authenticity, while perceived brand globalness, innovation and product performance
quality describe global acceptance. Both local authenticity and global acceptance are
made up of formative indicators of these second-order focal constructs (MacKenzie et al.,
2011). The model includes the outcome of brand power (R squared = 0.238). The latent
variables in the prototype are further defined below.
Global acceptance. Global acceptance is found in literature along with global awareness and desirability, which is used to define global brands (Özsomer & Altaras,
2008). Brands that are perceived as available and purchased worldwide is considered a
globally accepted brand (Batra et al., 2000; Steenkamp et al., 2003). For this study, the
term, global acceptance, is a second-order construct formed by the factors of perceived
brand globalness, innovation, and product performance quality.
Local authenticity. Next, looking more closely at local authenticity, research has
found authentic brands are considered genuine, relevant, original, and true (Brown et al.,
2003), and location can capture authenticity for brands (Özsomer, 2012). For this
135 research, local authenticity is a second-order construct created by the combination of four factors: brand authenticity, originality, local insights, and local iconness.
Perceived brand globalness. Perceived Brand Globalness (PBG) is defined in literature as a brand (e.g., name, logo, products) that is recognized as a global player with a global reach (Ger, 1999; Steenkamp et al., 2003). Researchers have found consumers translate quality, prestige, and global myth as PBG; PBG leads to the positive effects of higher purchase likelihood, brand equity, and trust for a brand (Johansson & Ronkainen,
2005; Steenkamp et al., 2003). Özsomer, a strong voice in global branding research, found that local brands with perceived brand iconness benefited from Perceived Brand
Globalness in emerging markets, but negatively related in advanced markets (Özsomer,
2012), demonstrating the tension of brand paradox.
Innovation. Global branding researchers have discovered global brands having an edge in the area of innovation (Griffith & Rubera, 2014; Sheng et al., 2015), providing a competitive advantage to these brands (Knight & Cavusgil, 2004; Steenkamp, 2017).
Researchers have found a direct, positive relationship between innovation, market orientation, and performance (Han et al., 1998). Innovation is essential to companies’ survival and leads to success, particularly in today’s hyper-competitive global marketplace (Rubera & Kirca, 2012).
Product performance quality. Past academic research studies have used quality to demonstrate how consumers view global brands differently than local brands. For example, consumers buy global brands, at least in part, because they believe that the quality and performance will be better than those of local brands (Özsomer, 2012;
Steenkamp, 2017). And previous studies have found that global brands benefit over local
136 brands because they have a perception of higher quality (Holt et al., 2004; Steenkamp et
al., 2003).
Brand authenticity. The term authenticity in academic literature is described as
genuineness, reality, and truth (Bendix, 1992). Brands represent authentic cultural resources (Holt, 2002), with consumers desiring authentic experiences (Leigh et al.,
2006). Prior research has shown that originality is associated with consumers’ quest for authenticity (Leigh et al., 2006). Additionally, researchers have found brand paradox is
the challenge of creating consistency and authenticity (Brown et al., 2003).
Local iconness. Amplifying the connection with the local country and culture
may lead to building perceptions of local iconness for local brands (Özsomer, 2012). A
similar concept has been identified and named Perceived Brand Localness (PBL) defined
as being recognized as a local player and a symbol or icon of local culture (Ger, 1999;
Steenkamp et al., 2003). In line with the previous findings, some brands and their
products reach iconic status because of their connection with the local culture (e.g., Ger,
1999, Özsomer, 2012), and become “icons of the local culture” (Swoboda et al., 2012).
Local brands can achieve competitive success through the use of local cultural capital,
heritage, as well as by using strategies that demonstrate understanding of local identity,
culture, tradition, tastes and needs (Ger, 1999).
Local insights. One of the critical elements of market orientation is the concept of local insights (Narver & Slater, 1990). Prior research has noted the importance of meeting the needs of local markets to grow a strong business worldwide (e.g.,
Steenkamp, 2017) and much has been written about how brands can best meet the local
137 needs in order to grow a strong worldwide business (Douglas et al., 2001; Quelch & Hoff,
1986; Taylor & Okazaki, 2015).
Originality. Brand originality is defined as utilizing fresh perspectives,
prioritizing original ideas, creating original products, and risking doing things differently
(Kirton, 1976). Local brands use more originality in their approach to the market than
global brands (Swoboda et al., 2012). From an academic research standpoint, the concept
of original connects to consumers’ quest for authenticity (Leigh et al., 2006). Past research found that local brands are perceived to be more unique and original than global brands (Schuiling & Kapferer, 2004; Swoboda et al., 2012).
Brand power. In this study, brand power is defined by the level of brand
awareness (Keller, 1993), and the brand’s image or the influence it has on the industry
(Bong Na et al., 1999). Brand awareness includes recognition, recall, top-of-mind, brand dominance, brand knowledge, and brand opinion (Aaker, 1996). Consumer decision making is affected by brand awareness through influencing brand image (Keller, 1993).
Brand image is the perception of the brand in consumers’ memory (Keller, 1993) and a cultural resource (Holt, 2002). This power of the brand is critical to the success of the business (Aaker & Joachimsthaler, 2012). Strong brands provide a competitive advantage and they are powerful tools in marketing (Keller, 1993).
And finally, with Global and local the “two axial principles of our age”
(Tomlinson, 1999: 190), this research through the prototype defines a third-order
construct—Omni-brand, built from the second-order and first-order constructs. Table 13 outlines the first-, second-, and third-order factors with their definitions and citations.
138 TABLE 13: First-, Second- and Third-Order Constructs
Construct Order in the Definition Primary Source model Brand 1st-order – Brand Authenticity is defined as a brand that adds Adapted Morhart Authenticity Reflective meaning to people’s lives, reflects the important et al. (2015) Antecedent of values people care about, connects people to their Local real selves, connects people with what is really Authenticity important and gives back to its consumers Local 1st-order – The quest for iconness may be dampened when Özsomer (2012) Iconness Reflective its degree of originality and connection to a local Antecedent of origin is weakened by perceptions of global Local presence. Authenticity Local 1st-order – Local Insights is defined by a brand considered Input from Insights Reflective locally relevant, a brand that understands the Studies 1 & 2, and Antecedent of needs of the local market, a brand that listens to adopted Narver & Local the voice of the local consumer, and a brand that Slater (1990) Authenticity has a competitive advantage based on understanding local consumers. Originality 1st-order – Originality is defined as utilizing fresh Input from Reflective perspectives, prioritizing original ideas, creating Studies 1 & 2, and Antecedent of original products and risking doing things adapted Kirton Local differently. (1976) Authenticity Perceived 1st-order – Perceived brand globalness is the perception that (Steenkamp, Brand Reflective the brand is available in other markets around the Batra, & Alden, Globalness Antecedent of world. It provides direct product availability, 2003) (PBG) Global recognition, and reach information. Acceptance Innovation 1st-order – Innovation is defined as a brand that is often first Adapted Reflective to market, frequently tries new ideas, seeks new Calantone et al. Antecedent of ways to do things, is creative, introduces new (2002); Global products around the world at the same time, and Subramaniam & Acceptance often risks doing things differently. Venkatraman (2001) Product 1st-order – Product Performance Quality is measured as Adapted Performance Reflective quality that is superior, more reliable, higher Atuahene-Gima & Quality Antecedent of performance, and providing better benefits than Li (2004); Moon, Global its competitors. Park & Kim Acceptance (2015) Global 2nd-order – Formed by Perceived Brand Globalness, Acceptance Formative Innovation and Product Performance Quality
Local 2nd-order – Formed by Brand Authenticity, Local Iconness, Authenticity Formative Local Insights and Originality. Omni-brand 3rd-order – Formed by Global Acceptance and Local Formative Authenticity Brand Outcome Brand power is defined as a combination of brand Bong Na, Power awareness (Reliable, recognition), Brand Image Marshall, & (Benefits), and Brand Equity (Satisfaction, Keller (1999) loyalty, brand extension, gives confidence).
139 Methodology
In order to effectively build a measurement model, I followed the format used to develop a scale for Brand Love (Batra et al., 2012). Batra et al. (2012) constructed a prototype representing the first-, second- and third-order constructs of brand love starting with a ‘grounded theory’ approach in order to determine the nature and consequences of brand love. Following this guidance, I constructed a higher-order framework for a consumer prototype to further develop the Omni-brand concept identified through the
Grounded Theory Method in Study 1. For Study 3, I used structural equation modeling on the survey data to explore how these dimensions could be modeled to the higher-order structural model.
This study used a survey instrument asking each respondent a series of questions about a brand (Appendix B). The 33 brands—primarily sportswear and fashion brands— were identified using the Passport database (Euromonitor, 2017b). Based on market share, 20 global sportswear brands, 5 global fashion brands, and 8 local sportswear brands were chosen. The Amazon brand was included, as it ranked #1 in BrandZ Top 100
Most Valuable Global Brands (BrandZ, 2019). The list of brands was sent to 25 industry experts, and adjustments were made according to their advice. Next, a pre-test survey vetted the brands to measure brand familiarity and checking on the amount of variance.
This step was followed by the pretesting phase to measure the effectiveness of a 9 vs. 7- point Likert scale, check survey length, flow, randomization, and understanding of the consumer-directed questions. The pretest phase included four surveys sent through
MTurk, with each survey building on what was learned in the previous one. The total respondents to the pre-test surveys was 923 across four different surveys.
140 Data Collection and Screening
After the pre-testing, the survey was adjusted and launched in the U.S. The survey
was done in Qualtrics and administered through MTurk. To test brand familiarity, the
respondent starts with 5 brands randomly selected from the 33 brands. Next, they are
asked questions about one of the brands they marked as familiar on a 7-point Likert scale.
The survey consisted of previously tested but adapted scale items with strong Cronbach’s
alpha scores. The questions were focused on eight factors including local insights, local
iconness, brand authenticity, originality, innovation, brand power, product performance
quality, and perceived brand globalness, followed by six demographic questions. The
survey received 742 participants, netting 729 acceptable respondents, after data screening
for missing information, and inaccurate answers to the attention-getting questions. This
number of respondents is considered good for the analysis of eight variables (Hair,
Anderson, Tatham, & Black, 1998). The survey data has a varied number of respondents
per brand (from 6 to 97, with an average of 22). Survey demographics are available in
Appendix C.
The analysis used the descriptive statistics in SPSS to determine if the data are
normally distributed by reviewing both skewness and kurtosis, looking for values over
the absolute value of 1 (Hair et al., 1998). There was a fairly normal distribution for the
Likert scale indicators in terms of skewness and kurtosis (Klein et al., 1998; Kline, 2011).
The data was reviewed for possible outliers, but with all variables on short ordinal scales,
no outliers of concern were found. There were few missing values (Gender-3; Income-13;
Marital Status-11; City-2), but they were not a concern as these items represented less
141 than 5% of the total respondents (Hair et al., 1998). This concluded the data screening
and produced a clean dataset for the analyses.
Analysis
Determining how to measure Omni-brand is complex and this thesis splits the
analysis into 6 different steps: 1) build a prototype model with both reflective first-order
and formative second-, and third-order constructs (Batra, Ahuvia, & Bagozzi, 2012); 2)
validate first-order factors, second- and third-order constructs; 3) Measure the responses
for 7 factors providing 33 brands an Omni-brand score; 4) scatterplot of the 33 brands
utilizing the global acceptance and local authenticity scores; 5) cluster analysis using K-
means and two-step cluster analyses; 6) multi-group and One-way ANOVA analysis to
measure relationship between Omni-brand and brand power. With Omni-brand as a
formative endogenous higher-order factor, the study used the repeated indicator approach
and a causal model that used latent variable scores (Marakas, Johnson, & Clay, 2007).
The approach enables antecedents to predict higher-order formative measures without the
“flooding out” effect of repeated indicators (Gaskin, 2017).
Validating first-order measurement model. The first step, validating the first-
order constructs, used SPSS/AMOS version 26. The task was to assess the validity of the
first-order measurement model through the examination of convergent and discriminant
validity and reliability. The exploratory factor analysis “defines the underlying structure among the variables” (Hair et al., 1998). Utilizing IBM’s SPSS tool for the EFA selecting
Maximum Likelihood and the Promax oblique rotation method; this method, when used, examines the pattern matrix and provides more accurate and reproducible results
(Costello & Osborne, 2005). This is justified to use this tool, as the first-order constructs
142 use reflective indicators, which share a common theme and are interchangeable in a
factor (Jarvis et al., 2003). Also, the KMO and Bartlett’s Test of Sphericity are good tests
to show data adequacy (Bartlett, 1950; Dziuban & Shirkey, 1974) and these results were
strong in this study (KMO: 0.954) above the threshold of 0.800 and Bartlett’s Test of
Sphericity showed chi-square and degrees of freedom (Chi-Square=19805.774 df = 435)
and significance >0.001, indicating significant intercorrelation (Hair et al., 1998). There
were no issues with communalities, with scores ranging from 0.340 to 0.881, above the
threshold of 0.300 (Hair et al., 1998).
The next step in the analysis was evaluating the pattern matrix. It had 7 factors
with the Total Variance explained of 73.914% exceeding the threshold of 60% (Hair et
al., 1998), and having Eigenvalues over 1.0. The 7 factors had items all loading over
0.400 (loading from 0.527 to 0.996) (Hair, 2010). The Factor Correlation Matrix looked
reasonable with no values exceeding the threshold of 0.700 (Hair et al., 1998) (Available
in Appendix D). Also, the results showed nonredundant residuals (4: 0.0%) with absolute values greater than 0.05 below the threshold of 5.00% (Hair et al., 1998). The constructs were tested for reliability using Cronbach’s Alpha (Cronbach, 1947), with scores all well above the 0.700 threshold (Hair et al., 1998).
Next, assessing the validity of the first-order measurement model by examining
convergent and discriminant validity and reliability showed good results. The construct
correlation matrix in Table 14 provides the correlations between the first-order factors,
the Average Variance Extracted (AVE), and the composite reliability (CR). All factors
meet the threshold for convergent validity with AVEs greater than 0.500 (Kline, 2011). In
order to establish discriminant validity, the square root of the AVE needs to be more than
143 any correlation with another factor (Fornell & Larcker, 1981), and all these first-order factors met this criterion. Finally, to establish reliability, the CR must be greater than
0.700, which all these first-order factors met (Hair, Hult, Ringle, & Sarstedt, 2014).
144 TABLE 14: Model Validity Measures Among First-Order Factors
Product Perceived Brand Local Local CR AVE Innovation Performance Originality Brand Authenticity Iconness Insights Quality Globalness
Innovation 0.926 0.677 0.823 Brand Authenticity 0.934 0.738 0.636*** 0.859 Product 0.957 0.847 0.594*** 0.603*** 0.920 Performance Quality Local Iconness 0.943 0.806 0.559*** 0.723*** 0.517*** 0.898 Local Insights 0.912 0.721 0.615*** 0.663*** 0.545*** 0.644*** 0.849 Originality 0.887 0.665 0.756*** 0.637*** 0.563*** 0.540*** 0.543*** 0.816 Perceived Brand 0.840 0.644 0.354 0.204 0.290 0.250 0.249 0.271 0.802 Globalness Significance of Correlations: † p < 0.100 * p < 0.050 ** p < 0.010 *** p < 0.001
(Hu & Bentler, 1999) 145
Form second-order constructs from reflective first-order constructs. Following the guidance of Batra et al. (2012), I used the ‘grounded theory’ findings from Study 1, and literature, to determine which first-order factors should form the second-order factors of global acceptance and local authenticity. With this step, three factors (Perceived brand globalness, product performance quality, and innovation) formed global acceptance and four factors (Brand authenticity, local iconness, local insights and originality) formed local acceptance. Using the 729 responses to these factors, I averaged these first-level factors to create an average for the seven factors for each of the 33 brands. Next, I took the three factors for global acceptance and created a global acceptance average, followed by taking the four factors for local authenticity and created a local authenticity average.
Each of the 33 brands has two scores, one for global acceptance and one for local authenticity. Table 15 shows the first-order factors aligning with the second-order factors and the averages for each brand.
146 TABLE 15: First-Order Factors Averages and Second-Order Factors Composite Scores
Global Product Total Local Local Local Total # of Accept Innovation Performance Global Original Authentic Iconness Insights Local Brand Respondents Average Average Average Average Average Average Average Average Average Amazon 24 6.444 5.819 5.188 5.817 4.417 4.733 5.344 5.615 5.027 Jordan 23 6.290 4.900 5.380 5.523 4.750 4.948 5.152 5.152 5.001 SPEEDO 19 5.982 5.167 5.276 5.475 4.987 4.337 3.632 4.684 4.410 Adidas 33 6.414 4.955 4.939 5.436 4.477 5.055 4.515 5.189 4.809 Nike 15 6.333 4.544 5.083 5.320 3.850 3.933 4.167 4.000 3.988 ZARA 6 5.611 5.417 4.875 5.301 5.208 4.900 4.333 5.083 4.881 Timberland 20 5.733 4.675 5.388 5.265 4.538 4.880 5.025 5.250 4.923 Levis 25 5.907 4.300 5.410 5.206 3.910 4.824 4.990 5.230 4.739 Patagonia 7 5.667 4.905 5.143 5.238 4.107 4.514 3.579 4.607 4.202 Puma 25 5.867 4.667 4.640 5.058 4.140 4.616 4.170 5.030 4.489 UA 25 5.587 4.640 4.930 5.052 3.840 4.576 4.420 4.490 4.332 Tommy H 26 6.038 4.506 4.606 5.050 4.183 4.362 4.683 4.865 4.523 Skechers 26 5.795 4.692 4.500 4.996 4.173 4.569 4.135 4.990 4.467 The Northface 20 5.300 4.233 5.400 4.978 3.563 4.310 4.175 4.813 4.215 New Balance 22 5.561 4.614 4.625 4.933 4.318 5.391 4.989 5.136 4.959 Columbia 22 5.652 4.268 5.170 5.030 3.795 4.618 4.852 5.011 4.569 Lulu 18 5.407 5.056 4.889 5.117 4.958 4.967 4.306 4.750 4.745 VANS 16 5.167 4.750 4.906 4.941 4.922 4.600 4.344 4.781 4.662 BROOKS 97 5.285 4.747 4.966 4.999 4.479 4.794 4.492 4.905 4.668 Reebok 20 5.833 4.508 4.463 4.935 3.800 4.320 4.163 4.838 4.280 Champion 25 5.439 4.341 4.727 4.836 3.935 4.400 4.534 4.773 4.411 Converse 45 5.741 4.500 4.344 4.862 4.443 4.364 4.739 4.694 4.560 Polo RL 25 5.720 4.027 4.930 4.892 3.460 3.864 3.980 4.000 3.826 Quiksilver 8 5.250 4.729 4.500 4.826 4.406 4.375 4.000 4.688 4.367 Calvin Klein 15 5.644 4.411 4.400 4.818 4.033 3.813 4.383 3.967 4.049 Asics 21 5.556 4.421 4.571 4.849 3.964 4.286 4.226 4.595 4.268 Hurley 10 5.000 4.367 5.125 4.831 4.100 4.480 3.875 4.425 4.220 Mizuno 6 5.778 4.361 4.250 4.796 4.208 4.067 4.083 4.500 4.215 NBA 17 5.647 4.010 4.324 4.660 3.824 3.929 4.294 3.882 3.982 H&M 22 5.636 4.492 3.864 4.664 3.852 3.809 3.591 4.159 3.853 Fila 14 5.690 3.964 4.036 4.563 4.000 3.843 3.839 4.214 3.974 Wilson 27 4.914 3.689 4.574 4.392 3.769 4.422 4.139 4.481 4.203 Athleta 8 4.792 4.229 4.031 4.351 3.813 4.875 4.219 4.219 4.282
Now, with each brand having both global acceptance score and local authenticity scores, the 33 brands were plotted onto a scatter plot. Global acceptance scores were used on the X-axis with local authenticity scores used on the Y-axis (Figure 15).
147 FIGURE 15: Scatterplot of 33 Brands
Some of the brands scores were as predicted. For example, the Amazon brand was ranked #1 in BrandZ Top 100 Most Valuable Global Brands (BrandZ, 2019), and it measures as the highest Omni-brand. Also, other brands with Omni-brand scores that are on the BrandZ Top 100 Most Valuable Brands (BrandZ, 2019) list include Nike #21,
Zara #61, and Adidas #100. And, interestingly, Lululemon was only behind Instagram on the “Top Risers” index with a YOY increase of 77%.
K-means clustering. The next step in the analysis was to determine how the brands would cluster. The statistical analysis tool used was the k-means algorithm, which is a popular clustering method that minimizes the clustering error The study also used K-
148 Means Clustering (Likas, Vlassis, & Verbeek, 2003). The two-segment option was selected for the 33 brands (Figure 16).
FIGURE 16: K-Means Cluster Analysis
This option divides the brands into two segments of 42% and 58%, with SSE measurements totaling 3.5 (Table 16). This two-segment approach will be revisited in the later step of the multi-group and ANOVA analysis. The intention is to show the difference between brands with High Omni-brand scores and brands that have Low
Omni-brand scores.
TABLE 16: Two-Segment Results: K-Means Clustering
Cluster/Segment Number of Mean/Centroid Mean/Centroid Sum of Brands Global Acceptance Local Authenticity Squared Measures Measures Estimate of Errors (SSE) High Omni-brand 14 5.20 4.80 1.2 Low Omni-brand 19 4.88 4.22 2.4 Total/Average 33 5.05 4.43 3.5
149 Using the K-Means cluster analysis, 14 of the brands (351 respondents) were high
Omni-brand, and 19 brands (378 respondents) were low Omni-brand.
Two-step cluster analysis. With the importance of accurately analyzing the brand
data and to introduce additional rigor to the analysis, I also conducted a two-step cluster
analysis. The Two-Step Cluster Analysis procedure is an exploratory tool available in
SPSS, using an algorithm method that is designed to reveal the clusters (segments) within
a dataset. This analysis showed a cluster analysis with 2 clusters, with results reflected in
Table 17.
TABLE 17: Two-Step Cluster Analysis
High Omni-brand Low Omni-brand Predictor Importance Size of Cluster % 61.3% 38.7% Participants in Cluster 447 282 Number of Brands 16 17 Global Average 5.14 4.82 0.30 Local Average 4.69 4.14 1.00 Cluster Quality Good Good
The ratio of sizes between the large cluster to the small cluster was 1.59, which is
considered a good ratio (Cameron & Miller, 2015). Using both the K-Cluster and the
Two-step Cluster analyses to divide up the brands, Table 18 shows that there are only two brands (Converse and Skechers) that were different between these methods.
150 TABLE 18: Brand Global Acceptance and Local Authenticity Scores and Clusters
Two-Step Cluster Global Local Authenticity K-Cluster High/ Brand High/Low Omni- Acceptance Score Score Low Omni-brand brand Adidas 5.436 4.809 High High Amazon 5.817 5.027 High High Asics 4.849 4.268 Low Low Athleta 4.351 4.282 Low Low BROOKS 4.999 4.668 High High Calvin Klein 4.818 4.049 Low Low Champion 4.836 4.411 Low Low Columbia 5.030 4.569 High High Converse 4.862 4.560 Low High Fila 4.563 3.974 Low Low H&M 4.664 3.853 Low Low Hurley 4.831 4.220 Low Low Jordan 5.523 5.001 High High Levis 5.206 4.739 High High Lulu 5.117 4.745 High High Mizuno 4.796 4.215 Low Low NBA 4.660 3.982 Low Low New Balance 4.933 4.959 High High Nike 5.320 3.988 Low Low Patagonia 5.238 4.202 Low Low Polo RL 4.892 3.826 Low Low Puma 5.058 4.489 High High Quiksilver 4.826 4.367 Low Low Reebok 4.935 4.280 Low Low Skechers 4.996 4.467 Low High SPEEDO 5.475 4.410 High High The North Face 4.978 4.215 Low Low Timberland 5.265 4.923 High High Tommy H 5.050 4.523 High High UA 5.052 4.332 Low Low VANS 4.941 4.662 High High Wilson 4.392 4.203 Low Low ZARA 5.301 4.881 High High
151 SEM analysis. Structural Equation Modeling (SEM) is a multivariate data analysis method often used in marketing research because it has the ability to test theoretical linear, as well as additive causal models (Haenlein & Kaplan, 2004). SEM allows for the visual examination of the relationships between variables (Wong, 2014).
The software chosen for Study 3 was PLS path modeling. This tool is recommended for situations that are “data-rich but theory primitive” (Wold, 1985). Research that is a more exploratory phase performs acceptably in PLS (Gefen et al., 2011). This study utilized the partial least squared equation modeling tool called SmartPLS, as it allows for the combination of formative and reflective variables (Ringle, Wende, & Becker, 2015); an investigation of the hierarchical, higher-order Omni-brand prototype (Appendix E). The model has formative second-order factors: Global Acceptance formed by Perceived
Brand Globalness, Innovation, and Product Performance Quality; Local Authenticity formed by Brand authenticity, Local Iconness, Local Insights and Originality, and a formative third-order factor (Omni-brand formed by global acceptance and local authenticity).
With Omni-brand as a formative endogenous higher-order factor, the study used the repeated indicator approach and a causal model that used latent variable scores
(Marakas et al., 2007). The approach enables antecedents to predict higher-order formative measures without the “flooding out” effect of repeated indicators (Gaskin,
2017). Utilizing the SmartPLS bootstrap (1,000 samples) analysis tool, the study found all betas substantial, all t-statistics large, all p-values below 0.001. These results indicate construct validity for the formative factor of Omni-brand and its global acceptance and local authenticity dimensions. Table 19 shows the results of this analysis.
152 TABLE 19: Validating 2nd-and 3rd-order Formative Constructs
To test for multicollinearity, we reviewed relationships between the variable. We examined variable inflation factors (VIF) for all predictors and observed no VIFs greater than the threshold of 10 (Hair et al., 2010).
Convergent and discriminant validity. To establish convergent and discriminant
validity, if the factors were reflective would be to produce a correlation matrix, but in this
situation, indicators of a formative construct need not be correlated (Marakas et al.,
2007). So, this study, following guidance on the analysis of formative models, created a
correlation matrix using weighted indicators and latent variable scores (Marakas et al.,
2007). To establish divergent validity, correlations among the factors of the same
construct should be significant. They are all significant, therefore indicating validity as
demonstrated in Table 20.
153 TABLE 20: Latent Variable Correlations
Product Brand Brand Global Local Local Local Omni- Innovation Originality PBG Performance Authentic Power Acceptance Authenticity Iconness Insights brand Quality Brand Authentic 1.000 Brand Power 0.285 1.000 Global Acceptance 0.640 0.457 1.000 Innovation 0.588 0.359 0.907 1.000 Local Authenticity 0.893 0.384 0.751 0.710 1.000 Local Iconness 0.677 0.324 0.573 0.526 0.847 1.000 Local Insights 0.617 0.388 0.610 0.576 0.809 0.599 1.000 Omni-brand 0.839 0.441 0.912 0.847 0.956 0.778 0.775 1.000 Originality 0.584 0.289 0.687 0.697 0.751 0.499 0.489 0.777 1.000 PBG 0.192 0.399 0.500 0.340 0.259 0.230 0.219 0.377 0.231 1.000 Product Performance 0.573 0.386 0.833 0.567 0.633 0.491 0.512 0.764 0.521 0.267 1.000 Quality
154
For discriminant validity, the correlations among indicators should be stronger within the
constructs than across them. The assessment of discriminant validity between linked
factors at the different levels—first, second, and third levels, will use the heterotrait-
monotrait (HTMT) ratio. The HTMT is required to be less than 1.00 (Henseler, Ringle, &
Sarstedt, 2015). Table 21 shows all HTMT ratios are below the 1.00 threshold with the
therefore this model has discriminant validity.
TABLE 21: Heterotrait-Monotrait Ratios
Brand Global Innovation Local Local Local Omni- Originality PBG Authentic Acceptance Authenticity Iconness Insights brand Global Acceptance 0.671 Innovation 0.630 0.971 Local Authenticity 0.943 0.791 0.763 Local Iconness 0.720 0.605 0.562 0.887 Local Insights 0.666 0.651 0.626 0.871 0.645 Omni-brand 0.877 0.970 0.898 1.000 0.814 0.824 Originality 0.637 0.739 0.763 0.831 0.539 0.534 0.838 PBG 0.214 0.669 0.384 0.286 0.255 0.245 0.471 0.256 Product 0.607 0.863 0.602 0.666 0.515 0.546 0.790 0.564 0.292 Performance Quality
Testing the structural model. The next step was to estimate goodness of fit for the structural model. The Partial least squares method does not have the capability to fully estimate goodness of fit, but SmartPLS 3 includes the SRMR, which should be less than 0.08 (Hair et al., 2014). The SRMR for this structural model utilizing latent variables is 0.033 which indicates sufficient model fit.
Multi-group analysis. Finally, a multi-group analysis of SmartPLS was
conducted on the Omni-brand model. The analysis found significant positive
relationships for both high Omni-brands and Low Omni-brands across the model. Details
in Table 22.
155 TABLE 22: Paths Coefficients for Low Omni-brand/High Omni-brand with p-values
Path Path STDEV STDEV p-values p-values Coefficients Coefficients (High (Low (High (Low (High Omni) (Low Omni) Omni)) Omni) Omni) Omni) Brand Authentic → Local Authenticity 0.365 0.384 0.009 0.011 <0.001 <0.001 Global Acceptance → Omni-brand 0.456 0.436 0.013 0.012 <0.001 <0.001 Innovation → Global Acceptance 0.572 0.607 0.015 0.017 <0.001 <0.001 Local Authenticity → Omni-brand 0.610 0.635 0.012 0.012 <0.001 <0.001 Local Iconness → Local Authenticity 0.311 0.309 0.008 0.009 <0.001 <0.001 Local Insights → Local Authenticity 0.286 0.270 0.010 0.010 <0.001 <0.001 Omni-brand → Brand Power 0.515 0.397 0.045 0.042 <0.001 <0.001 Omni-brand → Net Promoter Score 0.713 0.711 0.029 0.026 <0.001 <0.001 Originality → Local Authenticity 0.242 0.253 0.009 0.012 <0.001 <0.001 PBG → Global Acceptance 0.196 0.161 0.017 0.022 <0.001 <0.001 Product Performance Quality → Global 0.450 0.456 0.014 0.013 <0.001 <0.001 Acceptance
All paths were significant for both high and low Omni-brand, and when comparing the differences utilizing the Parametric Test in SmartPLS (Ringle et al., 2015).
This analysis found one path (Omni-brandbrand power) for high Omni-brand (beta =
0.515; p-value < 0.001, compared to low Omni-brand (beta = 0.397; p-value < 0.001).
The difference between the high Omni-brands and low Omni-brands is significant
(Difference= 0.118; p-value = 0.054). The results show High Omni-brands have more brand power than low Omni-brands. Table 23 outlines the SmartPLS report for the difference between the high Omni-brand (351 respondents) and the low Omni-brand (378 respondents) for each relationship highlighting the path-coefficients difference and p- value for Omni-brand Brand Power.
156 TABLE 23: Parametric Multi-Group Analysis High Omni-brand vs. Low Omni-brand
Path Coefficients-diff p-value (High/Low) (difference High/Low) Brand Authentic -> Local Authenticity 0.019 0.207 Global Acceptance -> Omni-brand 0.020 0.271 Innovation -> Global Acceptance 0.035 0.129 Local Authenticity -> Omni-brand 0.025 0.138 Local Iconness -> Local Authenticity 0.002 0.879 Local Insights -> Local Authenticity 0.017 0.233 Omni-brand -> Brand Power 0.118 0.054 Originality -> Local Authenticity 0.011 0.458 PBG -> Global Acceptance 0.035 0.220 Product Performance Quality -> Global Acceptance 0.006 0.749
Non-weighted constructs. It was suggested that an ANOVA would be a better technique to test the difference between high Omni-brand and low Omni-brand for brand power then Multi-group analysis; therefore, a One-way ANOVA was done utilizing the
SPSS tool. As the K-Cluster and Two-Way Cluster analyses varied, the ANOVA analysis was conducted using both sets of results. The results below in Table 24 and Figure 17 are utilizing the K-Cluster Results, while the results in Table 25 and Figure 18 utilize the
Two-Way Cluster analyses results.
One-way ANOVA with non-weighted constructs using k-cluster: Brand power.
TABLE 24: ANOVA for Brand Power (K-Cluster Results for High/Low Omni-brand)
Brand Power N Mean Std. Deviation Std. Error High Omni-brand 376 5.9051 0.89878 0.04635 Low Omni-brand 353 5.7883 0.88075 0.04688
157 One-way ANOVA with non-weighted constructs using two-step cluster:
Brand power. For Brand power, the between-group sum of squares and Mean Square are
2.484, F score is 3.135, and significant is 0.077. For both the Welch and Brown-Forsythe
Robust Tests of Equality of Means, the statistic is 3.139, and significant is 0.077. The test of Homogeneity of Variances has the Levene Statistic for brand power at 0.525 (Based on Means), 0.529 (Based on Median), and 0.529 (Based on Median and with adjusted df), and finally 0.515 (Based on trimmed mean) with significant at 0.469-0.473. Levene’s test is non-significant so equal variances are assumed (Levene, 1960). These results match the multi-group tests, showing that High Omni-brands have more brand power than low
Omni-brands. Figure 17 shows the results.
FIGURE 17: One-Way ANOVA High Omni-brand vs. Low Omni-brand (K-Cluster High and Low Omni-brand Segments)
158 The results below in Table 25 and Figure 18 are utilizing the Two-Step Cluster High/Low
Omni-brand analyze results.
TABLE 25: ANOVA for Brand Power (Two-Step Cluster Results for High/Low Omni-brand)
Brand Power N Mean Std. Deviation Std. Error High Omni-brand 447 5.9119 0.87150 0.04122 Low Omni-brand 282 5.7483 0.91469 0.05447 Total 0.88844 0.03301
For brand power, the between-group sum of squares and Mean Square are 4.629,
F-test is 5.865, and significance is 0.016. For both the Welch and Brown-Forsythe Robust
Tests of Equality of Means, the statistic is 5.737, and significant is 0.017. The test of
Homogeneity of Variances has the Levene Statistic for brand power at 1.122 (Based on
Means), 0.769 (Based on Median), and 0.769 (Based on Median and with adjusted df), and finally 1.049 (Based on trimmed mean) with significant at 0.290-0.381. Levene’s test is non-significant so equal variances are assumed (Levene, 1960). These tests provide robustness against non-normal data while preserving statistical power (Derrick, Ruck,
Toher, & White, 2018). Figure 18 shows the results of the One-way ANOVA utilizing the Two-Step Cluster Analysis results.
159 FIGURE 18: One-Way ANOVA High Omni-brand vs. Low Omni-brand (Two-Step Cluster High and Low Omni-brand Segments)
This analysis utilized two different methods of segmenting the brands (K-Cluster and Two-step Cluster) followed by two analysis methodologies (Multi-group and
ANOVA). The analyses being confirmed by the use of several different methods finds
High Omni-brands have more brand power than low Omni-brands.
Weighted constructs. An alternative approach to building the Omni-brand measurement model is to weight the factors used in the model. Using the betas from the prototype model, I created a weighted average for each first-order factor. The equation for Global Acceptance Weighted is as follows: (PBG Average X β = 0.178 + Innovation
Average X β = 0.590 + Product Performance Quality Average X β = 0.451) / (β = 0.178
+ β = 0.590 + β = 0.451). The equation for Local Authenticity weighted is as follows:
(Brand Authenticity Average X β = 0.372 + Originality X β = 0.246 + Local Iconness X
β = 0.306 + Local Insights X β = 0.276) / (β = 0.372 + β = 0.246 + β = 0.306 + β =
0.276). This information is detailed in the below Table 26.
160 TABLE 26: First-Order Factors Weighted and Averaged into Second-Order Constructs
Total Total Global Local # of Product Produce Total Global Acceptanc Brand Brand Local Local Local Local Local Authentici Responde PBG Innovation Innovation Performance Perform Acceptance e Not- Original Original Authentic Authentic Iconness Iconness Insights Insights Authenticity ty Not- Brand nts PBGAverage Weight Weighted Average Weight Weighted Average Weight Weighted Weighted Weighted Average Weight Weighted Average Weight Weight Average Weight Weight Average Weight Weight Weighted weighted Amazon 24 6.444 0.178 1.147032 5.819 0.59 3.43321 5.188 0.451 2.340 5.677 5.817 4.417 0.246 1.086582 4.733 0.372 1.760676 5.344 0.306 1.635264 5.615 0.276 1.550 5.027 5.027 Jordan 23 6.290 0.178 1.11962 4.900 0.59 2.891 5.380 0.451 2.426 5.281 5.523 4.750 0.246 1.1685 4.948 0.372 1.840656 5.152 0.306 1.576512 5.152 0.276 1.422 5.006 5.001 SPEEDO 19 5.982 0.178 1.064796 5.167 0.59 3.04853 5.276 0.451 2.379 5.326 5.475 4.987 0.246 1.226802 4.337 0.372 1.613364 3.632 0.306 1.111392 4.684 0.276 1.293 4.370 4.410 Adidas 33 6.414 0.178 1.141692 4.955 0.59 2.92345 4.939 0.451 2.227 5.162 5.436 4.477 0.246 1.101342 5.055 0.372 1.88046 4.515 0.306 1.38159 5.189 0.276 1.432 4.830 4.809 Nike 15 6.333 0.178 1.127274 4.544 0.59 2.68096 5.083 0.451 2.292 5.005 5.320 3.850 0.246 0.9471 3.933 0.372 1.463076 4.167 0.306 1.275102 4.000 0.276 1.104 3.991 3.988 ZARA 6 5.611 0.178 0.998758 5.417 0.59 3.19603 4.875 0.451 2.199 5.245 5.301 5.208 0.246 1.281168 4.900 0.372 1.8228 4.333 0.306 1.325898 5.083 0.276 1.403 4.861 4.881 Timberland 20 5.733 0.178 1.020474 4.675 0.59 2.75825 5.388 0.451 2.430 5.093 5.265 4.538 0.246 1.116348 4.880 0.372 1.81536 5.025 0.306 1.53765 5.250 0.276 1.449 4.932 4.923 Levis 25 5.907 0.178 1.051446 4.300 0.59 2.537 5.410 0.451 2.440 4.945 5.206 3.910 0.246 0.96186 4.824 0.372 1.794528 4.990 0.306 1.52694 5.230 0.276 1.443 4.772 4.739 Patagonia 7 5.667 0.178 1.008726 4.905 0.59 2.89395 5.143 0.451 2.319 5.104 5.238 4.107 0.246 1.010322 4.514 0.372 1.679208 3.579 0.306 1.095174 4.607 0.276 1.272 4.214 4.202 Puma 25 5.867 0.178 1.044326 4.667 0.59 2.75353 4.640 0.451 2.093 4.832 5.058 4.140 0.246 1.01844 4.616 0.372 1.717152 4.170 0.306 1.27602 5.030 0.276 1.388 4.500 4.489 UA 25 5.587 0.178 0.994486 4.640 0.59 2.7376 4.930 0.451 2.223 4.886 5.052 3.840 0.246 0.94464 4.576 0.372 1.702272 4.420 0.306 1.35252 4.490 0.276 1.239 4.366 4.332 Tommy H 26 6.038 0.178 1.074764 4.506 0.59 2.65854 4.606 0.451 2.077 4.767 5.050 4.183 0.246 1.029018 4.362 0.372 1.622664 4.683 0.306 1.432998 4.865 0.276 1.343 4.523 4.523 Skechers 26 5.795 0.178 1.03151 4.692 0.59 2.76828 4.500 0.451 2.030 4.782 4.996 4.173 0.246 1.026558 4.569 0.372 1.699668 4.135 0.306 1.26531 4.990 0.276 1.377 4.474 4.467 The Northface 20 5.300 0.178 0.9434 4.233 0.59 2.49747 5.400 0.451 2.435 4.821 4.978 3.563 0.246 0.876498 4.310 0.372 1.60332 4.175 0.306 1.27755 4.813 0.276 1.328 4.238 4.215 New Balance 22 5.561 0.178 0.989858 4.614 0.59 2.72226 4.625 0.451 2.086 4.756 4.933 4.318 0.246 1.062228 5.391 0.372 2.005452 4.989 0.306 1.526634 5.136 0.276 1.418 5.010 4.959 Columbia 22 5.652 0.178 1.006056 4.268 0.59 2.51812 5.170 0.451 2.332 4.804 5.030 3.795 0.246 0.93357 4.618 0.372 1.717896 4.852 0.306 1.484712 5.011 0.276 1.383 4.599 4.569 Lulu 18 5.407 0.178 0.962446 5.056 0.59 2.98304 4.889 0.451 2.205 5.045 5.117 4.958 0.246 1.219668 4.967 0.372 1.847724 4.306 0.306 1.317636 4.750 0.276 1.311 4.747 4.745 VANS 16 5.167 0.178 0.919726 4.750 0.59 2.8025 4.906 0.451 2.213 4.869 4.941 4.922 0.246 1.210812 4.600 0.372 1.7112 4.344 0.306 1.329264 4.781 0.276 1.320 4.642 4.662 BROOKS 97 5.285 0.178 0.94073 4.747 0.59 2.80073 4.966 0.451 2.240 4.907 4.999 4.479 0.246 1.101834 4.794 0.372 1.783368 4.492 0.306 1.374552 4.905 0.276 1.354 4.678 4.668 Reebok 20 5.833 0.178 1.038274 4.508 0.59 2.65972 4.463 0.451 2.013 4.685 4.935 3.800 0.246 0.9348 4.320 0.372 1.60704 4.163 0.306 1.273878 4.838 0.276 1.335 4.293 4.280 Champion 25 5.439 0.178 0.968142 4.341 0.59 2.56119 4.727 0.451 2.132 4.644 4.836 3.935 0.246 0.96801 4.400 0.372 1.6368 4.534 0.306 1.387404 4.773 0.276 1.317 4.425 4.411 Converse 45 5.741 0.178 1.021898 4.500 0.59 2.655 4.344 0.451 1.959 4.623 4.862 4.443 0.246 1.092978 4.364 0.372 1.623408 4.739 0.306 1.450134 4.694 0.276 1.296 4.552 4.560 Polo RL 25 5.720 0.178 1.01816 4.027 0.59 2.37593 4.930 0.451 2.223 4.608 4.892 3.460 0.246 0.85116 3.864 0.372 1.437408 3.980 0.306 1.21788 4.000 0.276 1.104 3.842 3.826 Quiksilver 8 5.250 0.178 0.9345 4.729 0.59 2.79011 4.500 0.451 2.030 4.720 4.826 4.406 0.246 1.083876 4.375 0.372 1.6275 4.000 0.306 1.224 4.688 0.276 1.294 4.358 4.367 Calvin Klein 15 5.644 0.178 1.004632 4.411 0.59 2.60249 4.400 0.451 1.984 4.587 4.818 4.033 0.246 0.992118 3.813 0.372 1.418436 4.383 0.306 1.341198 3.967 0.276 1.095 4.039 4.049 Asics 21 5.556 0.178 0.988968 4.421 0.59 2.60839 4.571 0.451 2.062 4.642 4.849 3.964 0.246 0.975144 4.286 0.372 1.594392 4.226 0.306 1.293156 4.595 0.276 1.268 4.276 4.268 Hurley 10 5.000 0.178 0.89 4.367 0.59 2.57653 5.125 0.451 2.311 4.740 4.831 4.100 0.246 1.0086 4.480 0.372 1.66656 3.875 0.306 1.18575 4.425 0.276 1.221 4.235 4.220 Mizuno 6 5.778 0.178 1.028484 4.361 0.59 2.57299 4.250 0.451 1.917 4.527 4.796 4.208 0.246 1.035168 4.067 0.372 1.512924 4.083 0.306 1.249398 4.500 0.276 1.242 4.200 4.215 NBA 17 5.647 0.178 1.005166 4.010 0.59 2.3659 4.324 0.451 1.950 4.365 4.660 3.824 0.246 0.940704 3.929 0.372 1.461588 4.294 0.306 1.313964 3.882 0.276 1.071 3.990 3.982 H&M 22 5.636 0.178 1.003208 4.492 0.59 2.65028 3.864 0.451 1.743 4.427 4.664 3.852 0.246 0.947592 3.809 0.372 1.416948 3.591 0.306 1.098846 4.159 0.276 1.148 3.843 3.853 Fila 14 5.690 0.178 1.01282 3.964 0.59 2.33876 4.036 0.451 1.820 4.243 4.563 4.000 0.246 0.984 3.843 0.372 1.429596 3.839 0.306 1.174734 4.214 0.276 1.163 3.959 3.974 Wilson 27 4.914 0.178 0.874692 3.689 0.59 2.17651 4.574 0.451 2.063 4.195 4.392 3.769 0.246 0.927174 4.422 0.372 1.644984 4.139 0.306 1.266534 4.481 0.276 1.237 4.230 4.203 Athleta 8 4.792 0.178 0.852976 4.229 0.59 2.49511 4.031 0.451 1.818 4.238 4.351 3.813 0.246 0.937998 4.875 0.372 1.8135 4.219 0.306 1.291014 4.219 0.276 1.164 4.339 4.282
161
Next, using the weighted averages for global acceptance and local authenticity, I
applied the betas for these two second-order constructs to create a weighted Omni-brand
average for each brand. The equation for Omni-brand Weighted is as follows: (Global
Acceptance Weighted X β = 0.445 + Local Authenticity Weighted X β = 0.621) / (β =
0.445 + β = 0.621). Details below in Table 27.
TABLE 27: Second Order Constructs Weighted to create Weighted Omni-Brand Construct
Global Local Total Global Local Acceptance Authenticity Omni-Brand Brand Acceptance Weight Authenticity Weight Weighted Weighted Score Weighted Weighted Twice Twice Amazon 5.677 0.445 2.526 5.027 0.621 3.122 5.298 Jordan 5.281 0.445 2.350 5.006 0.621 3.109 5.121 ZARA 5.245 0.445 2.334 4.861 0.621 3.018 5.021 Timberland 5.093 0.445 2.267 4.932 0.621 3.063 4.999 Adidas 5.162 0.445 2.297 4.830 0.621 2.999 4.968 Lulu 5.045 0.445 2.245 4.747 0.621 2.948 4.871 New Balance 4.756 0.445 2.117 5.010 0.621 3.111 4.904 Levis 4.945 0.445 2.201 4.772 0.621 2.964 4.845 SPEEDO 5.326 0.445 2.370 4.370 0.621 2.714 4.769 BROOKS 4.907 0.445 2.183 4.678 0.621 2.905 4.773 VANS 4.869 0.445 2.167 4.642 0.621 2.883 4.737 Columbia 4.804 0.445 2.138 4.599 0.621 2.856 4.685 Puma 4.832 0.445 2.150 4.500 0.621 2.794 4.639 Patagonia 5.104 0.445 2.271 4.214 0.621 2.617 4.585 Tommy H 4.767 0.445 2.121 4.523 0.621 2.809 4.625 Skechers 4.782 0.445 2.128 4.474 0.621 2.778 4.603 UA 4.886 0.445 2.174 4.366 0.621 2.711 4.583 Converse 4.623 0.445 2.057 4.552 0.621 2.827 4.582 Quiksilver 4.720 0.445 2.101 4.358 0.621 2.706 4.509 Champion 4.644 0.445 2.067 4.425 0.621 2.748 4.516 The North Face 4.821 0.445 2.145 4.238 0.621 2.632 4.481 Nike 5.005 0.445 2.227 3.991 0.621 2.478 4.414 Reebok 4.685 0.445 2.085 4.293 0.621 2.666 4.456 Hurley 4.740 0.445 2.109 4.235 0.621 2.630 4.446 Asics 4.642 0.445 2.066 4.276 0.621 2.655 4.429 Mizuno 4.527 0.445 2.014 4.200 0.621 2.608 4.336 Calvin Klein 4.587 0.445 2.041 4.039 0.621 2.508 4.268 Athleta 4.238 0.445 1.886 4.339 0.621 2.695 4.297 Polo RL 4.608 0.445 2.051 3.842 0.621 2.386 4.162 Wilson 4.195 0.445 1.867 4.230 0.621 2.627 4.215 NBA 4.365 0.445 1.943 3.990 0.621 2.478 4.146 H&M 4.427 0.445 1.970 3.843 0.621 2.386 4.087 Fila 4.243 0.445 1.888 3.959 0.621 2.459 4.078
162 The next step was to do a scatter plot of the 33 brands to determine if any brands
had changed positions between the weighted and non-weighted plots. The diagram below
(Figure 19) shows the scatter plot results. Although some of the brands slightly shifted,
there was no major changes compared to the non-weighted scatter plot.
FIGURE 19: Scatter Plot of the 33 brands using weighted Global Acceptance and Local Authenticity
Cluster analysis with weighted constructs: Two-step cluster. Utilizing the 2-
Step Cluster analysis method, with the weighted constructs provide a good cluster quality for two clusters. The High Omni-brand segment is 44.6% (12 brands; 325 respondents), and the Low Omni-brand segment is 55.4% (21 brands; 404 respondents). The ratio of sizes of largest cluster to smallest cluster is 1.24.
One-way ANOVA with weighted constructs: Brand power. For brand power,
the between-group sum of squares and Mean Square are 1.439, F-test is 1.813, and
163 significance is 0.179. For both the Welch and Brown-Forsythe Robust Tests of Equality of Means, the statistic is 1.791, and significant is 0.181. The test of Homogeneity of
Variances has the Levene Statistic for brand power at 1.401 (Based on Means), 1.259
(Based on Median), and 1.259 (Based on Median and with adjusted df), and finally 1.301
(Based on trimmed mean) with significant at 0.237-0.262. Levene’s test is non-significant so equal variances are assumed (Levene, 1960). These tests provide robustness against non-normal data while preserving statistical power (Derrick et al., 2018). While the non- weighted ANOVA showed high Omni-brand has significant higher brand power than low
Omni-brand, the weighted ANOVA analysis did not find this relationship significant.
One-way ANOVA with weighted construct: Social media brand. New forms of glocal/hybrid have been observed; driven by the internet, mobility and cultural diversity (Özsomer, 2012). The next step in the analysis was to test the relationship between a social media brand factor and Omni-brand. The ‘social media brand’ factor includes Q1. A brand that uses social media to stay connected to me.; Q2. A brand that uses social media to share information with me.; Q3. A brand that uses social media to develop a relationship with me.; Q4. A brand that uses social media to entertain me.
For social media brand factor, the between-group sum of squares and Mean
Square are 36.766, F-test is 13.825, and significance is >0.001. For both the Welch and
Brown-Forsythe Robust Tests of Equality of Means, the statistic is 13.812, and significant is > 0.001. The test of Homogeneity of Variances has the Levene Statistic for social media brand factor at 0.008 (Based on Means), 0.092 (Based on Median), and
0.092 (Based on Median and with adjusted df), and finally 0.008 (Based on trimmed mean) with significant at 0.762-0.927. Levene’s test is non-significant so equal variances
164 are assumed (Levene, 1960). These tests provide robustness against non-normal data while preserving statistical power (Derrick et al., 2018). The weighted analysis found significance in this ANOVA test, shown in Figure 20.
FIGURE 20: ANOVA for Social Media Brand Factor (1= High Omni-Brand; 2= Low Omni-Brand)
One-way ANOVA with weighted construct: Social media usage. The social media personal use factor (Please rate your personal hourly use of social media, in a typical 24-hour day, how many hours do you spend on the internet for activities other than work.) For social media usage, the between-group sum of squares and Mean Square are 97.291, F-test is 6.551, and significance is 0.011. For both the Welch and Brown-
Forsythe Robust Tests of Equality of Means, the statistic is 6.273, and significant is
0.013. The test of Homogeneity of Variances has the Levene Statistic for social media usage at 6.378 (Based on Means), 3.074 (Based on Median), and 3.074 (Based on Median and with adjusted df), and finally 4.709 (Based on trimmed mean) with significant at
0.012-0.080. Levene’s test is non-significant so equal variances are assumed (Levene,
1960). These tests provide robustness against non-normal data while preserving statistical 165 power (Derrick et al., 2018). The weighted high Omni-brand has significant higher social media usage than low Omni-brand. The weighted analysis found significance in this
ANOVA test, shown in Figure 21.
FIGURE 21: Social Media Use Factor Relationship with High/Low Omni-Brands (1= High Omni-Brand; 2= Low Omni-Brand)
One-way ANOVA with weighted construct: Net promoter score. The analysis discovered that the Net Promoter Score (NPS) (How likely are you to recommend the
____ brand to a colleague?) has a significant relationship with Omni-brand. Specifically, high Omni-brands have higher NPS than low Omni-brands. For NPS, the between-group sum of squares and Mean Square are 14.925, F-test is 24.050, and significance is > 0.001.
For both the Welch and Brown-Forsythe Robust Tests of Equality of Means, the statistic is 23.823, and significant is > 0.001. The test of Homogeneity of Variances has the
Levene Statistic for social media usage at 1.298 (Based on Means), 1.643 (Based on
Median), and 1.643 (Based on Median and with adjusted df), and finally 1.237 (Based on trimmed mean) with significant at 0.200-0.266. Levene’s test is non-significant so equal variances are assumed (Levene, 1960). These tests provide robustness against non-normal
166 data while preserving statistical power (Derrick et al., 2018). The weighted high Omni-
brand has significant higher Net Promoter Score than low Omni-brand. The weighted
analysis found significance in this ANOVA test, shown in Figure 22.
FIGURE 22: ANOVA for Net Promoter Score (NPS) relationship with Weighted Omni-Brand Factor (1= High Omni-Brand; 2= Low Omni-Brand)
Paradox Theory
Paradoxes present tensions not as either/or but as both/and (Jules & Good, 2014;
Lewis, 2000), not separate, but interdependent and complementary (Farjoun, 2010).
Paradox can be a “highly relevant and resonant concept for advancing knowledge of
contemporary consumer behavior” (Mick & Fournier, 1998: 142), with Brand Paradox
offering a sustained competitive advantage (Heracleous & Wirtz, 2014; Lewis et al.,
2014). Paradox is the conflicting, yet interwoven needs of global and local market
demands (Smith et al., 2010) as global branding has advocated consistency across
markets and time (e.g., Özsomer & Altaras, 2008), and local branding has focused on
relevancy (Boddewyn et al., 1986), the challenge is creating consistency and authenticity
(Brown et al., 2003).
167 Tension and contradiction: Innovation/local insights. Tension and contradiction
was found between innovation/local insights. Literature reports tension between local
insights (need to stay close to the consumer) and innovation (creating new opportunities)
(Andriopoulos & Lewis, 2009). The next step was to conduct a Two-Cluster analysis to
dividing the data into high and low innovation/local insights. Utilizing the 2-Step Cluster analysis method, for this analysis provides a good cluster quality for two clusters. The
High Innovation/Local Insights segment is 56.0% (408 respondents), and the Low
Innovation/Local Insights segment is 44.0% (321 respondents). The ratio of sizes of largest cluster to smallest cluster is 1.27.
The ANOVA to analyze the relationship between brand power and
innovation/local insights showed the between-group sum of squares and Mean Square are
117.986, F-test is 186.273, and significance is > 0.001. For both the Welch and Brown-
Forsythe Robust Tests of Equality of Means, the statistic is 172.584, and significant is
>0.001. The test of Homogeneity of Variances has the Levene Statistic for social media
usage at 40.587 (Based on Means), 33.576 (Based on Median), and 33.576 (Based on
Median and with adjusted df), and finally 38.998 (Based on trimmed mean) with
significant at > 0.001. Levene’s test is non-significant so equal variances are assumed
(Levene, 1960). These tests provide robustness against non-normal data while preserving
statistical power (Derrick et al., 2018). The high innovation/local insights has higher
brand power than low innovation/local insights. The analysis found significance in this
ANOVA test, shown in Figure 23.
168 FIGURE 23: ANOVA for Innovation/Local Insights and Brand Power
Tension and contradiction: Perceived brand globalness/local iconness. The next contradiction to analysis was found between perceived brand Globalness (PBG)/local iconness. high and low PBG/Local Iconness. Also, prior research showing PBG and local iconness offering different paths to brand success (Steenkamp & de Jong, 2010) or combined success in emerging markets but not advanced markets (Özsomer, 2012). The next step was to conduct a Two-Cluster analysis to dividing the data into high and low
PBG/Local Iconness. Utilizing the 2-Step Cluster analysis method, with the weighted constructs provide a good cluster quality to two clusters. The High PBG/Local Iconness segment is 52.3% (381 respondents), and the Low PBG/Local Iconness segment is 47.7%
(348 respondents). The ratio of sizes of largest cluster to smallest cluster is 1.09.
The ANOVA to analyze the relationship between brand power and PBG/Local
Iconness showed the between-group sum of squares and Mean Square are 100.00, F-test is 151.944, and significance is > 0.001. For both the Welch and Brown-Forsythe Robust
Tests of Equality of Means, the statistic is 147.954, and significant is >0.001. The test of
169 Homogeneity of Variances has the Levene Statistic for social media usage at 32.708
(Based on Means), 26.624 (Based on Median), and 26.624 (Based on Median and with adjusted df), and finally 30.523 (Based on trimmed mean) with significant at > 0.001.
Levene’s test is non-significant so equal variances are assumed (Levene, 1960). These tests provide robustness against non-normal data while preserving statistical power
(Derrick et al., 2018). The high PBG/local iconness has higher brand power than low
PBG/local iconness. The analysis found significance in this ANOVA test, shown in
Figure 24.
FIGURE 24: ANOVA for PBG/Local Iconness and Brand Power
Discussion
Omni-brands are paradoxes, two-sides of the same coin, and the “heart” of many successful brands (Brown, 2006). Balancing global acceptance with local authenticity, or managing consistency and authenticity (Brown et al., 2003), represents an Omni-brand.
While scholars have extensively studied global brands and local brands, less emphasis has been given to the space between global and local, or what was previously called
170 glocal or hybrid. This study suggests that a new name—Omni-brand—can be used for this space, as well as a new approach to brand positioning that includes both global acceptance and local authenticity. This study analyzes the data through a series of steps listed in Figure 25.
FIGURE 25: Steps to Develop Omni-brand Scores and Analysis with the Scores
This study builds a method to measure brands and assign them an Omni-brand score. It goes further to build additional understanding around the concept of Omni-brand by presenting a prototype model, doing a cluster analysis, and analyzing the data using a structural equation model to provide a closer look at the potential difference between high Omni-brands and low Omni-brands.
Additional confirmation steps. To confirm the need for a third-order model, I tested a second-order model, as well. The results were not as strong as the third-order model (Table 28), leading me to the conclusion that the second-order constructs of global acceptance and local authenticity are the building blocks for Omni-brand.
171 TABLE 28: Comparison of Second-Order Model and Third-Order Model (Appendices E & F show models)
Beta / Beta/ Second-Order Model Third-Order Model Significance Significance PBGOmni-brand 0.066*** Product Performance 0.183*** QualityOmni-brand InnovationOmni-brand 0.265*** Brand AuthenticityOmni- 0.239*** brand Local IconnessOmni- 0.181*** brand Local InsightsOmni- 0.181*** brand OriginalityOmni-brand 0.166*** Omni-brandBrand 0.483*** Omni-brandBrand Power 0.490*** Power PBGGlobal Acceptance 0.155*** Product Performance QualityGlobal 0.445*** Acceptance InnovationGlobal Acceptance 0.654*** Global AcceptanceOmni-brand 0.435*** Brand AuthenticityLocal Authenticity 0.377*** Local IconnessLocal Authenticity 0.286*** Local InsightsLocal Authenticity 0.287*** OriginalityLocal Authenticity 0.270*** Local AuthenticityOmni-brand 0.653***
The next step taken to confirm the model was to examine the relationships between first- and second-order factors. Literature and logic lead to the connection between the first-order perceived brand globalness and innovation relationships and the second-order global acceptance, as well as the first-order local iconness, local insights and brand authenticity and the second-order local authenticity. The two first-order factors that could shift would be originality and product performance quality; therefore, to further test the results, I shifted originality to a direct relationship with global acceptance instead of local authenticity, and product performance quality to a direct relationship with
172 local authenticity instead of global acceptance. Table 29 shows the comparison between the original model and the modified Model 1.
TABLE 29: SmartPLS Algorithm Effects Comparing Original Model to Modified Model 1
Original Model Modified Model 1 Third-Order Model Beta/Significance Beta/Significance PBGGlobal Acceptance 0.155*** 0.156*** Product Performance QualityGlobal 0.445*** Acceptance Product Performance QualityLocal 0.287*** Authenticity InnovationGlobal Acceptance 0.654*** 0.649*** Global AcceptanceOmni-brand 0.435*** 0.427*** Brand AuthenticityLocal Authenticity 0.377*** 0.374*** Local IconnessLocal Authenticity 0.286*** 0.279*** Local InsightsLocal Authenticity 0.287*** 0.282*** OriginalityLocal Authenticity 0.270*** OriginalityGlobal Acceptance 0.406*** Local AuthenticityOmni-brand 0.653*** 0.673*** Omni-brandBrand Power 0.483*** 0.483***
The results show that product performance quality has a stronger relationship with global acceptance (Beta = 0.445***) than local authenticity (Beta = 0.287***), confirming the original model’s assumptions. But this test also shows that originality has a stronger relationship with global acceptance (Beta = 0.406***) than local authenticity
(Beta = 0.270***). This indicates that originality has a relationship with both global acceptance and local authenticity. Next, to determine where originality fits best in the model, I did one additional analysis with product performance quality added back to the relationship with global acceptance and the results are in Table 30.
173 TABLE 30: SmartPLS Algorithm Effects Comparing Original Model to Modified Model 2
Original Model Modified Model 2 Third-Order Model Beta/Significance Beta/Significance PBGGlobal Acceptance 0.155*** 0.117*** Product Performance QualityGlobal Acceptance 0.445*** 0.338*** InnovationGlobal Acceptance 0.654*** 0.491*** Global AcceptanceOmni-brand 0.435*** 0.574*** Brand AuthenticityLocal Authenticity 0.377*** 0.468*** Local IconnessLocal Authenticity 0.286*** 0.353*** Local InsightsLocal Authenticity 0.287*** 0.353*** Local AuthenticityOmni-brand 0.653*** 0.528*** Omni-brandBrand Power 0.483*** 0.483*** OriginalityGlobal Acceptance 0.307*** OriginalityLocal Authenticity 0.270***
In the modified Model 2, the only adjustment to the original model was to add
originality as a first-order factor to global acceptance instead of local authenticity. This
option dampens the first-order factors impact on global acceptance compared to the
original model while increasing the first-order factors impact on local authenticity
compared to the original model. This model provides a somewhat more balanced
approach to the second-order constructs relationships with the third-order construct.
Model 2: Global AcceptanceOmni-brand (Beta= 0.574***); Local
AuthenticityOmni-brand (Beta=0.528) Vs Original Model: Global AcceptanceOmni-
brand (Beta=0. 0.435***); Local AuthenticityOmni-brand (Beta=0.653***). While it
could be argued this is a better model, the literature supports the connection between originality and consumers’ quest for authenticity (Leigh et al., 2006). Therefore, made the decision was made to continue to include originality as a factor of local authenticity.
Omni-brand prototype: Short version test. It was suggested that reducing the
number of questions needed to measure Omni-brand would provide more flexibility to 174 study additional outcomes in the future. Therefore, I modified the prototype by reviewing the strengths of the paths, and strategically reducing the number of questions targeting the paths with lower scores. After each reduction, I tested the model. At the conclusion of this process, 16 questions had been eliminated, leaving 14 total questions. The outcome and comparison between the 30 questions and the 14 questions are in Table 31.
TABLE 31: Omni-brand Questions, Comparing Long Version and Short Version
Long Short Survey Questions Version Version Perceived Brand Globalness (PBG) (Cronbach’s Alpha 0.805) To me, this is a global brand X X I think consumers overseas buy this brand X This brand is sold all over the world X X Product Performance Quality (Cronbach’s Alpha 0.957) The quality of this brand's products are superior to competitors X X This brand's products are perceived as more reliable than its X competitors. This brand's products provide better benefits than its competitors. X This brand provides higher performance products than its competitors. X X Innovation (Cronbach’s Alpha 0.923) This brand is often first to market with new products. X X This brand frequently tries out new ideas. X This brand seeks out new ways to do things. X This brand is creative X X This brand can introduce new products around the world at the same X time. This brand often risks doing things differently. X Originality (Cronbach’s Alpha 0.882) This brand offers original products X X This brand's products are considered novel. X This brand's products are considered unusual. X This brand's products are unique. X X Brand Authenticity (Cronbach’s Alpha 0.933) A brand that adds meaning to people's lives X X A brand that reflects important values people care about X X A brand that connects people with their real selves X A brand that connects people with what is really important X A brand that gives back to its consumers. X Local Insights (Cronbach’s Alpha 0.911) 175 This brand is considered locally relevant X This brand understands the needs of the local market. X This brand listens to the voice of the local consumer X X This brand has a competitive advantage based on understanding local X X consumers. Local Iconness (Cronbach’s Alpha 0.943) I associate this brand with things that are from the country I live in. X To me, this brand represents the culture of the country I live in. X To me, this brand is a very good symbol of the country I live in. X X To me, this brand represents what the country I live in is all about. X X
As the major finding of this prototype was high Omni-brands having more brand power than low Omni-brands, the next step was to determine if the shorter version would produce this same outcome. The original model is compared to the short version model in
Table 32.
TABLE 32: SmartPLS Algorithm Effects Comparing Original Model to Short Version Model
Original Model Short Version Model Third-Order Model Beta/Significance Beta/Significance PBGGlobal Acceptance 0.155*** 0.274*** Product Performance QualityGlobal Acceptance 0.445*** 0.466*** InnovationGlobal Acceptance 0.654*** 0.614*** Global AcceptanceOmni-brand 0.435*** 0.432*** Brand AuthenticityLocal Authenticity 0.377*** 0.337*** Local IconnessLocal Authenticity 0.286*** 0.273*** Local InsightsLocal Authenticity 0.287*** 0.322*** OriginalityLocal Authenticity 0.270*** 0.313*** Local AuthenticityOmni-brand 0.653*** 0.685*** Omni-brandBrand Power 0.483*** 0.508***
The PLS Algorithm effects are similar between the long and short versions, with the overall outcome of Omni-brand having a positive effect on brand power actually showing an increase in strength (0.483 vs. 0.508) in the new model.
176 Theoretical Contributions
Utilizing the paradox of globalization theory, this study frames a brand paradox into two concepts—global acceptance and local authenticity. Paradox allows the complementary (Chreim, 2005) and contradictory (Smith & Lewis, 2011) nature of global and local to co-exist, and this study provides a new term for this space—Omni- brand. The paradox theory has a background in both Eastern and Western philosophy
(Capra, 2010; Schneider, 1990; Smith & Berg, 1987), defined as “contradictory yet interrelated elements that exist simultaneously and persist over time (Smith & Lewis,
2011: 382). The “interrelated elements” in this research are global and local which is the nexus of globalization (Steger, 2003).
By using the paradox theory, branding can move beyond the polarization of the global and the local to full recognition of the complexity of the marketplace (Cameron &
Quinn, 1988; Quinn, 1988). Early philosophical writings depict Eastern thinking as emphasizing harmony and seeking to identify a “middle way,” while Western thinking stresses distinctions, contradiction, and opposition (Chen & Miller, 2011). Omni-brand is the new middle way for brands. When brands can become more global and local at the same time, they will be successful (Fredberg, 2014). Brands that develop paradox will have a sustained competitive advantage (Heracleous & Wirtz, 2014).
Managerial Implications
The worldwide market is a complex web of consumers, cultures, and competition.
This requires managers to find new approaches to effectively compete. A paradoxical approach to brand management can cross over to all aspects of the organization (Fairhurst et al., 2016). With most of the economic growth in the next decades forecasted to come
177 from emerging markets where local brands are strongest, global brands will need to be more locally authentic to compete. As local brands leverage their access to global markets via e-commerce, they will need to learn how to be globally accepted.
This study helps guide brands as they attempt to become both globally accepted and local authentic. As young consumers create identities that include both global and local (Arnett, 2002), they will lead the brands to create products and experiences that match. In the past, brands could decide on positioning themselves as either global or local. This research suggests that this thinking is replaced with a paradoxical approach to the marketplace, by replacing the either/or with an and/both. A recent example from
Samsung demonstrated that a low-cost manufacturer could also become a world leader in
R&D (Khanna, Song, & Lee, 2011). While traditional marketing would advise a brand to be either low-cost (e.g., Walmart) or high R&D (e.g., Apple), Samsung successfully evolved its business model to represent the paradox. This study found top brands becoming successful by managing the paradox of global acceptance and local authenticity. With a
$74 Trillion valued global marketplace, the stakes are high. The more profitable global strategy may be to 'blend' global and local symbols (Alden et al., 2006). Success is dependent on becoming more global and local at the same time (Fredberg, 2014), or becoming an Omni-brand, Brands will need guidance, and this study provides clear paths for today’s global and local brand leaders to take.
Limitations
This research focuses on managing the paradox and becoming both global and local. While this trend is happening in the marketplace, two additional trends are also being seen. The first is mega-global brands, and the second is hyper-local brands. While
178 these brand positions are also valid and visual in the marketplace, this research does not apply to these trends. Also, some leaders will choose to position their brands as either global or local, finding advantages in the marketplace from these positions, and will not find this study useful.
Another limitation of this research was the data collected. The data was from one country (U.S.), and the 33 brands only averaging 22 respondents each, with only four brands meeting the goal of more than 35 respondents per brand. This limitation may be impacting the study’s results.
Future Research
This study was focused on creating a way to measure Omni-brand utilizing 33 brands in two different industries. A new prototype tool was utilized requiring survey respondents to answer 30 questions. The analysis indicates the shorter version of 14 questions can be used instead of the 30 questions, which will allow scholars to research more outcomes such as willingness to purchase and amount willing to pay. It would be interesting to use this same mechanism to measure more industries, more brands, and more countries. Also, this study, while suggesting that social media and e-commerce have a large effect on brands, did not study this area in depth. More research should be done on the connections between social media and brand management. Finally, a two- to ten-year longitudinal study to test how young consumers’ approach to brands is evolving.
This could produce interesting and insightful results. The paradox theory is evolving quickly as a meta-theory and connecting brand paradox research to this brand research area should grow over the next decade.
179 CHAPTER 7: CONCLUSION
Whatever you do will be insignificant, but it is very important that you do it. ― Mahatma Gandhi
Integrated Findings
The final step of this dissertation was to integrate the findings across the three studies. The overarching finding was that successful brands in today’s digital marketplace need to be both global and local. Using this brand level information, I shifted to consumers to develop a comprehensive measurement tool for Omni-brand, ending with demonstrating its impact on brand power. The typology development method was utilized to establish a framework which was applied to analyze the data (Caracelli & Greene,
1993).
The research started with a Grounded Theory Method to understand, “What is driving success at brands today?” This approach was justified, as the advent of social media and e-commerce has likely changed the playing field, and investigating this with an exploratory approach would anticipate interesting insights. Also, the Grounded Theory
Method is used in many paradox studies (Fairhurst et al., 2016). Through the qualitative interviews and analysis in Study 1, the finding was the brand paradox—global acceptance and local authenticity—facing today’s brand leaders. One leader summed it up by saying:
All local companies aspire to be global and all global companies pretend to be local. — CEO, H.K. Brand
The leaders shared success stories as they effectively managed their brands to be both global and local at the same time. The next step was an extensive literature review, which found a gap in global branding research in the area of glocal/hybrid branding. This
180 led to Study 2 which is presented as a mixed methods paper, utilizing the Omni-brand framework discovered in Study 1. I used mixed-methods approach which provided provide conceptual and methodological grounds for the next study in the sequence
(Tashakkori & Teddlie, 1998). While the qualitative interviews with brand leaders in
Study 1 uncovered the brand paradox, the quantitative survey of brand leaders/managers in Study 2 statistically tests the direct effects of the antecedents of global acceptance and local authenticity. Study 3 is a measurement scale for Omni-brands utilizing the building blocks of global acceptance and local authenticity.
This next step in integration reveals a difference in brand power for global acceptance (Beta = 0.317***) and local authenticity (Beta = 0.178*). Brand power is further investigated in Study 3. The question asked was: “What benefit does Omni-brand provide?” The benefit investigated across the three studies was “brand power,” because research has proven that the strength of the brand is critical to the success of the business
(Aaker & Joachimsthaler, 2012). Brand power is defined as a combination of brand awareness (Reliable, recognition), Brand Image (Benefits), and Brand Equity
(Satisfaction, loyalty, brand extension, gives confidence). In Study 1, we heard about the benefits of a powerful brand. One leader summarized this well by saying:
I think what was most interesting was how much elasticity the brand had. It was a real critical moment for the brand to say we can be more impactful, bigger and more global than we thought we could. — VP, U.S. Local Brand
The brand power findings were supported in Study 2, as outlined earlier. They were also supported in Study 3, where the multi-group analysis and one-way ANOVA showed high Omni-brands have more brand power than low Omni-brands (difference in beta = 0.115***). Therefore, the integrated findings across the three studies support that
181 Omni-brand has an effect on brand power, which is critical to a successful business. The strength of the brand is critical to the success of the business (Aaker & Joachimsthaler,
2012) and strong brands provide a competitive advantage as they are powerful tools in marketing (Aaker et al., 1998; Keller, 1993). Therefore, brand power can clearly be seen as a benefit. The next step in the integration of the three studies is to utilize the lens of the paradox theory. This fits well with the brand power findings, as power is a key element in arguments about paradox (Fairhurst et al., 2016).
Implications
Contributions to scholarship. Globalization is “the emergence of the global human condition” (Robertson, 1987), a process of cultural connection that has accelerated with the advances in digital technology and the growing financial interdependence of the markets (Arnett, 2002). Globalization is a paradox, the interplay between global and local (Wilk, 1995). Global brands are taking on local elements (Ger
& Belk, 1996) and local brands are adopting global traits (Alden et al., 2006). Brands realize they need to keep pace with the evolving young consumers as they create bicultural or hybrid identities with combined elements of global and local cultures
(Arnett, 2000).
When looking more closely at branding, Brown et al. (2003) findings align with the Omni-brand orientation Study 1 and 2’s findings. They found brand paradox of familiarity and recognition (global acceptance) and uniqueness and exclusivity (local authenticity) with benefits by combining these contradictions (Brown et al., 2003). For brands, becoming more global and local at the same time can lead to success (Fredberg,
2014).
182 Philosophers from Aristotle to Plato to Zeno have used paradoxes as thinking exercises, describing paradox within the natural order. Paradox is two alternatives that are not separate but interdependent and complementary (Farjoun, 2010). Paradox is defined as “persistent contradiction between interdependent elements” with contradiction being the heart of paradoxical tensions (Schad et al., 2016: 10). Managing paradox requires the person to see these tensions not as either/or but as both/and alternatives (Jules & Good,
2014; Lewis, 2000). The paradox theory has four critical themes: locus of paradoxical tensions, dynamic relationships, power and multiplicity, that we will examine next as we position our research Study 3.
The locus of paradoxical tensions has been found to emerge from two different sources. Paradox can emerge in individual emotional and cognitive experiences (Capra,
2010; Smith & Berg, 1987), or it can be embedded with social systems (Ford & Backoff,
1988). It is important to use one of these lenses of either the role of structural elements or the role of the individual to help identify paradoxical tensions (Poole & Van de Ven,
1989). For Study 1, we interviewed brand leaders and learned through their lived experiences, while in Study 2, we surveyed a similar group of industry leaders. While they were commenting on a system, they were utilizing their own experiences. In Study
3, the unit of analysis will be consumers, who will utilize their individual experiences to answer the survey; therefore, the locus of paradoxical tensions in these studies emerge from the individual.
The next critical theme is dynamic relationships. Paradoxes emerge as cyclical relationships with human emotional and cognitive responses to tensions fueling vicious and virtuous cycles (Schad et al., 2016). Vicious cycles are seen when people behave
183 defensively when faced with contradictory demands, creating conflict (Lewis, 2000).
With the frequent use of grounded theory in many paradox studies (Fairhurst et al.,
2016), we align our Study 1 response to demonstrate this vicious cycle for both global and local brand leaders in Table 33.
TABLE 33: Examples of the Paradox Theory from the Qualitative Data
Examples of Paradox Leader Quote Theory
Vicious Cycles A lot of times the reason that we have these satellite design groups is to make sure that we're representing the region we're in or to bring in different ideas to influence. Sometimes you're sitting in these video conference meetings and they're showing their products they have been working on and they're proud of them and then the corporate executives are looking at a screen in another office and they're like, "Whoa, what's wrong with that line and how come you did it this way?" You can watch this person just get crushed in front of you…(it) brings down the morale and the whole group. — Local Brand Leader
So, when I first presented the project scheme, even though I felt myself as a part of their (European) team and this person who gave me this project was also, he was welcoming me as part of his team, regardless of I'm from global, but his team was not ready. So, when I first present this project, after 30 minute of project explanation and all the analysis that I have done to prepare it, first question was, "Why do we need global for this project?" It was really surprising. So, this vice president and I were like, "What?", and I could actually feel that he was also very surprised because he was also quite new in that organization as well. — Global Brand Leader
Virtuous Cycles The challenges with China were more just the distance and trying to get the global engine to do something for a local execution. My biggest challenge was to convince the global team that what we needed in China was much more comprehensive than what they were making in the global org. Fortunately, I was able to create a team in China, where we actually made the majority of the apparel that we sold in China. — Global Brand Leader
We're in this basically to win and so while it felt like a good competition between me making a decision at a global level or geography making a decision about a product at the marketplace level, that back and forth was really healthy for the final outcome of the category and ultimately I think for the brand. — Global Brand Leader
184 As the examples above demonstrate and literature confirms, vicious cycles can be detrimental, while virtuous cycles can create value (Sundaramurthy & Lewis, 2003).
The third critical theme in paradox theory is power (Fairhurst et al., 2016). Power is part of the foundation of paradoxes, as the researcher should focus on the role of power and not assume equal influence of the opposing sides (Schad et al., 2016). As power is a key element in arguments about paradox (Fairhurst et al., 2016), we utilized this as our integration point. Brand power was found in the Study 1 qualitative interviews, statistically tested in the quantitative Study 2, and shown to be greater in high Omni- brands compared to low Omni-brands in Study 3.
Two additional paradoxes found in the research were between innovation and local insights, as well as perceived brand globalness and local iconness. First, I reviewed the tension between local insights (need to stay close to the consumer) and innovation
(creating new opportunities (Andriopoulos & Lewis, 2009). In Study 1, this tension is expressed as:
Bring all that innovation back into the main engine and try to change it. — VP, Local Brand
Local Insights leveraged into global business. — GM, Global Brand
In Study 3, I tested the relationship of brand power to high innovation/local insights and low innovation/local insights, finding higher brand power in high Vs. low innovation/local insights.
Second, I reviewed the contradiction between perceived brand globalness and local iconness. Prior research showing PBG and local iconness offering different paths to brand success (Steenkamp & de Jong, 2010) or combined success in emerging markets
185 but not advanced markets (Özsomer, 2012). In Study 1, this contradiction is expressed by several brand leaders as:
Collectively, the brand would grow to much further heights than if 16 individual countries tried to map out their own growth. — VP, Global Brand
Create things that are unique and connect with the local consumer. — VP, Local Brand
In Study 3, I tested the relationship of brand power to high PBG/Local Iconness and low PBG/Local Iconness, finding higher brand power in high vs. low PBG/Local
Iconness.
Because of the complexity of globalization, researchers are encouraged to consider both the role of the firm and the role of the consumer (Akaka & Alden, 2010).
Following the first two studies with the unit of analysis, Study 3 focused on the consumer to help build a more comprehensive understanding of the Omni-brand concept. This allows the integrated findings to include different levels of tensions. Paradox theory researchers have been encouraged to consider tensions at different levels such as field, organization, senior leadership, middle managers, teams and individuals (Schad et al.,
2016). Past studies have found tensions nested (Andriopoulos & Lewis, 2009) as well as interwoven tensions (Lüscher & Lewis, 2008). The integration of this thesis with Study 1 at the senior leadership level, Study 2 at the senior leadership and middle manager level, and Study 3 at the individual level with consumers.
Contributions to practice. There are many different reasons businesses would seek to grow their brands beyond their national borders. For brands from emerging markets, research finds international expansion is a proactive approach to address strategic deficiencies (Rui & Yip, 2008) such as poor institutional environments at home 186 (Witt & Lewin, 2007; Yamakawa, Peng, & Deeds, 2008), or scarce natural resources
(United Nations, 2006). On the other hand, brands from developed markets generally
move beyond their borders to survive and grow (Townsend et al., 2009).
Technology has changed the game. In the past, brands could expand to new
markets, and if they made a mistake, that mistake was confined to the market it was
made. The emergence of the new digital generation, combined with the lack of research
in the glocal/hybrid space, practitioners are left with little guidance on how to most
effectively manage their brands. Brands are making mistakes. In November 2018, Dolce
and Gabbana, an Italian luxury fashion brand, produced three short videos considered by
many as racist or “D&G’s stereotyping China” (Xu, 2018). These videos shown on
Weibo, a popular Chinese social media platform, led to social media posts of
#boycottdolce and D&G canceling their runway show in Shanghai because hundreds of
Chinese actors and models withdrew from the event (Xu, 2018). Almost immediately,
China’s top e-commerce sites refused to sell the D&G brand (Wilkinson, 2018).
#DGTheGreatShowCancelled was read by 870 million people (Xu 2018), snowballing
into a viral scandal that echoed around the world (Segran, 2018). Reuters reported that
potentially a third of D&G’s global revenue is at risk because of this public gaffe
(Ferreira-Marques, 2018).
There is opportunity here for D&G. Prior research has noted the importance of global brands meeting the needs of local markets in order to grow a strong business worldwide (Douglas et al., 2001; Johanson & Vahlne, 1977; Taylor & Okazaki, 2015).
One of the critical elements of market orientation is the concept of listening to the local
consumer (Narver & Slater, 1990). As local insights is one of the dimensions of Omni-
187 brands, and country field offices can be used to interpret and communicate local market needs to headquarters (Johanson & Vahlne, 1977). Market intelligence or information from the local office should be used to better meet (and hear) the needs of the local market (Kohli & Jaworski, 1990). D&G quickly and painfully realized they didn’t understand how to be authentic in Asia. Brand leaders need guidance on how to effectively “navigate the choppy waters between global and local” (Steenkamp, 2017).
Because of digital marketing and e-commerce, we are witnessing global brands and local brands competing head-to-head in an ever flattening marketplace (Levitt, 1983;
Ritzer, 2007). The traditional distinction between global and local brand is losing salience and new forms of hybridization have been observed (Edelman, 2010). While most of the global brands have emerged from developed countries according to BrandZ (WPP, 2018), most of the economic growth in the next decades is forecasted to come from emerging markets, where local brands have traditionally been strong . For local brands, some have tried and failed to expand to developed markets (Brettman, 2011, 2012). And for global brands, a misstep, like D&G’s in China, devastate both brand and business (Ferreira-
Marques, 2018; Segran, 2018; Xu, 2018). With a global marketplace valued at $74
Trillion, the stakes are high.
For practitioners, the Omni-brand prototype provides direction for brand leaders as they face the new challenges of marketing to the digital generation. This prototype can provide guidance to both global and local brands as they grow. Typically, global brands would need to become locally authentic, and local brands would be seeking global acceptance, and the prototype provides the antecedents for both. It is critical that leaders have a framework to drive the right strategy for their brands. The Omni-brand framework
188 will help global and local brands compete with each other by employing strategies that
are aligned with the unique positions they currently hold in the market, as well as the
ideal positions they hope to own in the future.
Brand Roadmaps
Further development of the brand measurement tool can provide additional value
to brand leaders. Utilizing the scatter plot from Study 3, I put the 33 brands into four
categories: 1) Omni-brand: High Global Acceptance/High Local Authenticity; 2)
Globetrotters: High Global Acceptance/Low Local Authenticity; 3) Local Stars: Low
Global Acceptance/High Local Authenticity; 4) Strivers: Low Global Acceptance/Low
Local Authenticity showing the brands associated with each (Figure 26).
FIGURE 26: Brands Classified into Four Quadrants
189 For brand leaders, having their brand scores on a 0 to 100 scale instead of a 1 to 7
scale, would provide more variance, and better explain the difference between the quadrants. The 1–7 scores from the quantitative study were rescaled to a 100 index using the equation of (X-1)/6 * 100. Below are the scores for the four quadrants in Table 34.
TABLE 34: Scores for Each Category
Perceived Product Total Global Brand Total Local Total Global Acceptance and Omni-Brands Brand Innovation Performance Originality Local Iconness Local Insights Total Components Score Acceptance Authenticity Authenticity Local Authenticity Score Globalness Quality Omni-Brands 81.92 64.55 65.82 70.76 57.53 65.00 61.04 67.90 62.87 133.63 463.76 Globetrotters 83.03 69.45 71.27 74.58 66.45 55.62 43.87 61.40 56.83 131.41 451.09 Local Stars 78.42 61.80 65.32 68.51 55.41 59.57 55.18 63.04 58.30 126.81 438.74 Strivers 75.49 56.90 61.20 64.53 51.03 54.99 53.38 58.26 54.42 118.95 411.26
From the table, the four categories, Omni-brand, Globetrotter, Local Stars and
Strivers are differentiated by their global acceptance and local authenticity scores on the
0–100 scale. Reviewing the information shows that Globetrotters have a higher global
acceptance than Omni-brands, but lower local authenticity. This is reflective of the
current brand positioning of each brand. From a practical standpoint, brand leaders can
utilize this information to develop strategies to move from their current category to their
next category. For example, Globetrotters would be able to move to Omni-brand by
improving their local authenticity, while Local Stars would need to focus on their global
authenticity, and Strivers would need to increase both their global acceptance and local
authenticity to become an Omni-brand. The information is more informative for current
brand leaders when presented for each of the brands which can be found in the below
Table 35.
190 TABLE 35: Scores for Each Brand
Perceived Product Total Global Brand Total Local Total Global Acceptance and Omni-Brands Brand Innovation Performance Originality Local Iconness Local Insights Total Components Score Acceptance Authenticity Authenticity Local Authenticity Score Globalness Quality Amazon 90.73 80.32 69.8 80.28 55.3 73.18 66.48 68.93 65.98 146.26 504.74 Jordan 88.17 65 73 75.39 62.5 65.8 69.2 69.2 66.68 142.07 492.87 Adidas 90.23 65.92 65.65 73.93 57.95 67.58 58.58 69.82 63.48 137.41 475.73 Timberland 78.88 61.25 73.13 71.09 58.97 64.67 67.08 70.83 65.39 136.48 474.81 Zara 76.85 73.62 64.58 71.68 70.13 65 55.55 68.05 64.68 136.36 473.78 Levi's 81.78 55 73.5 70.09 48.5 63.73 66.5 70.5 62.31 132.4 459.51 New Balance 76.02 60.23 60.42 65.56 55.3 73.18 66.48 68.93 65.98 131.54 460.56 Lululemon 73.45 67.6 64.82 68.62 65.97 66.12 55.1 62.5 62.42 131.04 455.56 Tommy Hilfiger 83.97 58.43 60.1 67.5 53.05 56.03 61.38 64.42 58.72 126.22 437.38 Puma 81.12 61.11 60.67 67.63 52.33 60.27 52.83 67.17 58.15 125.78 435.50 Skechers 79.92 61.53 58.33 66.59 52.88 59.48 52.25 66.5 57.78 124.37 430.89 Average Omni-Brands 81.92 64.55 65.82 70.76 57.53 65.00 61.04 67.90 62.87 133.63 463.76
Perceived Product Total Global Brand Total Local Total Global Acceptance and Globetrotters Brand Innovation Performance Originality Local Iconness Local Insights Total Components Score Acceptance Authenticity Authenticity Local Authenticity Score Globalness Quality Speedo 83.03 69.45 71.27 74.58 66.45 55.62 43.87 61.4 56.83 131.41 451.09 Patagonia 77.78 65.08 69.05 70.64 51.78 58.57 42.98 60.12 53.36 124.00 425.36 UnderArmour 76.45 60.67 65.5 67.54 47.33 59.6 57 58.17 55.53 123.07 424.72 Nike 88.88 59.07 68.05 72 47.5 48.88 52.78 50 49.79 121.79 415.16 The Northface 71.67 53.88 73.33 66.29 42.72 55.17 52.92 63.55 53.59 119.88 413.24 Average Globetrotters 83.03 69.45 71.27 74.58 66.45 55.62 43.87 61.40 56.83 131.41 451.09
Perceived Product Total Global Brand Total Local Total Global Acceptance and Local Stars Brand Innovation Performance Originality Local Iconness Local Insights Total Components Score Acceptance Authenticity Authenticity Local Authenticity Score Globalness Quality Brooks 71.42 62.45 66.1 66.66 57.98 63.23 58.2 65.08 61.13 127.79 444.46 Vans 69.45 62.5 65.1 65.68 65.37 60 55.73 63.02 61.03 126.71 441.17 Columbia Sportswear 77.53 54.47 69.5 67.17 46.58 60.3 64.2 66.85 59.48 126.65 439.43 Converse 79.02 58.33 55.73 64.36 57.38 56.07 62.32 61.57 59.33 123.69 430.42 Champion 73.98 55.68 62.12 63.93 48.92 56.67 58.9 62.88 56.84 120.77 419.15 Average Local Stars 78.42 61.80 65.32 68.51 55.41 59.57 55.18 63.04 58.30 126.81 438.74
Perceived Product Total Global Brand Total Local Total Global Acceptance and Strivers Brand Innovation Performance Originality Local Iconness Local Insights Total Components Score Acceptance Authenticity Authenticity Local Authenticity Score Globalness Quality Quiksilver 70.83 62.15 58.33 63.77 56.77 56.25 50 61.47 56.12 119.89 415.80 Reebok 80.55 58.47 57.72 65.58 46.67 55.33 52.72 63.97 54.67 120.25 415.43 Asics 75.93 57.02 59.52 64.16 49.4 54.77 53.77 59.92 54.46 118.62 410.33 Hurley 66.67 56.12 68.75 63.84 51.67 58 47.92 57.08 53.67 117.51 406.21 Mizuno 79.63 56.02 54.17 63.27 53.47 51.12 51.38 58.33 53.58 116.85 404.12 Calvin Klein 77.4 56.85 56.67 63.64 50.55 46.88 56.38 49.45 50.82 114.46 394.18 Athleta 63.2 53.82 50.52 55.84 46.88 64.58 53.65 53.65 54.69 110.53 386.30 Wilson 65.23 44.81 59.57 56.54 46.15 57.03 52.32 58.02 53.38 109.92 383.13 Polo Ralph Lauren 78.67 50.45 65.5 64.87 41 47.73 49.67 50 47.1 111.97 383.02 NBA 77.45 50.17 55.4 61.01 47.01 48.82 54.9 48.03 49.7 110.71 381.78 FILA 78.17 49.4 50.6 59.39 50 47.38 47.32 53.57 49.57 108.96 376.44 H&M 77.27 58.2 47.73 61.07 47.53 46.82 43.18 52.65 47.55 108.62 373.38 Average Strivers 75.49 56.90 61.20 64.53 51.03 54.99 53.38 58.26 54.42 118.95 411.26
With this additional information, the Omni-brand scores can help guide brand leaders. For example, Nike, in the Globetrotter category, should consider building their local authenticity through brand authenticity, originality, local iconness and local insights, while a brand such as Champion, in the Local Stars category, could address their low scores in innovation and originality. With this measurement tool, brand leaders can identify their strengths and weaknesses and build brand strategy to build their brand power.
191 Limitations and Further Research
The sport product industry provides an excellent setting with its global nature and
strong global and local brands, providing an opportunity to develop a deeper
understanding of global and local brands in this specific product category (Davvetas &
Diamantopoulos, 2016). Given the objective of theory development with the qualitative,
in-depth, exploratory interviews the specific context is not a major concern (Bagozzi &
Phillips, 1982). Yet, the theory was tested with the quantitative survey, and the setting
becomes a limitation to generalizability of the findings (Bagozzi & Phillips, 1982).
Further research is recommended using different product categories with strong global
and local brands (e.g., food, consumer electronics, jeans, fast fashion, automobiles) to
help determine the generalizability of the findings.
In addition, research on the outcomes of and consumer engagements experienced
by brands that implement the Omni-brand framework would be useful. Testing some of
the existing consumer models (e.g., global consumer culture, attitude toward global
product, attitude toward local product) would provide additional insight as the digital
marketplace accelerates its pace of global change. This study would be different from
previous studies, as it would be focused on testing the antecedents to local authenticity
and global acceptance in the context of existing consumer models. Finally, a longitudinal
study that follows global and local brands on their Omni-brand orientation journey would
offer valuable guidance on how to effectively manage business internationally in the
quickly changing, hypercompetitive global marketplace.
Future studies at both the firm (brand) and consumer levels could utilize the identity theory. Prior research has shown that consumers access their global and local
192 identities differently. For example, Zhang and Khare (2009) found that consumers that
access their global identity above their local identity will prefer global brands and
products, while consumers that access their local identities first will prefer local brands
and products (Zhang & Khare, 2009). I would propose offering a third alternative, Omni-
brand, where the consumers are tapping into their ‘glocal’ cultural identity. A proposal
for this study would include determining the global, local and glocal identities in existing
global and local brands (firm level). To be successful, brands will need to study
consumers by location, and consider that the trend toward considering global cities (King,
2015) is a trend and preferred recognized global brands such as Adidas and Nike
(Interbrand, 2017; MarketLine, 2016b). Certainly using complexity as our lens, we can predict that the diversity of identities will grow to include global, local, bicultural, multicultural, and hybrid identities (Arnett, 2002). The interest will come in finding out what values can be connected with global, glocal and local in the presence of each other.
We would also be interested in willingness to purchase and amount willing to pay. This research should be done across four different industry sectors, including e-commerce, sportswear, electronics, fashion and cars. This should meet our needs as a scholar by expanding the generalizability of the findings and the needs of practice by allowing more industries access to the careful consideration of an Omni-brand approach.
Other studies we could conduct would include cultural diversity. We could combine a consumer question such as: How global, local, glocal (Omni) is this brand?
With a firm (brand) question such as: How culturally diverse are global, local, glocal
(Omni) brands? With new forms of glocalization or hybridization being observed, research has found that it is being driven by the internet, mobility and cultural diversity
193 (Özsomer, 2012). It should also be an interesting area in need of research with (Peñaloza
& Gilly, 1999)
Since cultural diversity on some occasions has represented a sensitive area of
research, perhaps by following Peñaloza and Gilly’s lead, we approach from both the
brand and the consumer side. This approach may have been considered then silenced in
the same year. In 1999, Leslie Palich and Luis Gomex-Mejia’s (1999) study on
Considering Effects of Cultural Diversity found the benefits of diversity may impede
efforts to merge activities between location at a brand/firm and that culturally related
international firms will enjoy greater efficiencies than culturally diverse firms. Already being in business, we can forecast that diversity will be a sensitive issue for companies and perhaps consumers to discuss, we will need to consider the past 20 years of changes to our world, as well as consider using a sequential mixed-methods approach allowing us
to learn from the qualitative and use these results in the quantitative. We should also
request the data sets for both the Palich and Gomex-Mejia study and the Peñaloza and
Gilly’s, as well as consider including them in the research proposal and execution.
194 Appendix A: Quotes from Brand Leaders (From Qualitative Research)
Global and Local All local companies aspire to be global, and all global companies pretend to be local. (CEO, Hong Kong Local Brand)
It seems to be a niche where it’s the Chinese brands looking to get out, and it’s the outside brands trying to get in. (VP/GM Global Brand)
Global Brands seeking Local Authenticity What every brand hopes to have is something that's authentic and relevant to a particular group. Then, other groups that are outside of that core purpose, they respect it and then [your brand] becomes part of the culture. (VP, Local Brand in China)
We have to find the right balance of when do we talk globally about the Olympics and stand for that around the world versus when do we actually create things that are very unique and connect with the consumer on a local basis and how do we dial that up and down. (VP, U.S. Global Brand)
We didn't find that one size fits all in every geographic marketplace. Being able to work with colleagues in different marketplaces and getting insights from their consumers, getting insights from their salesroom information, leading a virtual team across the world and leading a global team that created a product for various geographies, it was successful and rewarding. (VP, U.S. Global Brand)
Local Brands seeking Li-Ning is a Chinese sport brand. They want to build the brand more like Global Acceptance global awareness so I think that's why they try to design this brand. At the end, they build their own store during May and open their own store in Beijing…So this is almost one of the goal you want to build the right collection and then try to make a success. (VP, Chinese Local Brand)
There's a lot of limitations on local versus global. But then there's a lot of benefits for local as well. Then, when you get into the commercialization side of it, the internet has basically changed everything and everybody's global at this point because you can go to any website anywhere in the world and buy something if you want. (Director, Chinese Local Brand)
Innovation The culture that we have tried to put in place is that innovation can be applied to anything, and that real magic happens when you can combine wisdom with innovation. (CMO, U.S. Local Brand)
As long as the consumer’s tastes are changing, there's always going to be a requirement for innovation from a product and process perspective.… We were talking to another global brand about innovation. They said, “We're so glad you're here to talk to us about innovation. (VP, Taiwanese Local Brand)
Brand Power For many Asian companies, the brand is often seen as just a trademark, a label, a name for the business. So, many companies sell their products under the name of the founder, or the name of the family.... They lack the brand management knowledge to really grow the brand. (VP, Singaporean Local Brand)
195 I think what was most interesting for the brand in terms of where we could go as a result [of a new marketing campaign], it really showed how much elasticity the brand had. It was a real critical moment for the brand to say we can be more impactful, bigger and more global than we thought we could. (VP, U.S. Local Brand)
Product Performance We came up with several patents from basic and applied research, identifying a Quality new concept and launched it in the market.... The [local brand] company is still using the products because they are true athletic performance products. It provides an authentic functional experience. (Director, Chinese Local Brand)
We not only focus on creating quality performance but also durable products that last a long time, and a lot of that comes through materials, choices, construction techniques, but we also design products that we feel are timeless. (VP, Canadian Local Brand)
Originality We have a studio of young Chinese footwear designers who are passionate about footwear. We are trying to figure out how to teach them. Before it was about knocking off the Western brands. If Nike had a hot shoe, Chinese brands would knock it off. (Director, Chinese Local Brand)
When you're competing in America or Germany … you won't have to compete against something that looks exactly like yours, but if you're competing in an Eastern market, you will be copied if you do something new. (VP, Chinese Local Brand)
Local Iconness/ Local There is value to the insights of the local team and the work they do at a grass Insights root level because they are the people closest to the moment of truth at retail. There are some insights that can be leveraged in a global business. (VP, U.S. Global Brand)
Insights can definitely be global, and they can also be geo-specific. They can be city specific. [Each] location is different in what they think is cool. (VP, U.S. Global Brand)
We partnered with a local skate shop, the first skate shop in Shanghai. We created collaborative product. The shoe was co-created by a global brand designer and the owner of the shop, one of the first skaters in Shanghai [who is] very iconic for this industry. (VP, U.S. Global Brand in China)
You have to have this balance of having a point of view in the positioning of your brand but also gather insights from all over the world. We didn't find that one size fits all in every geographic marketplace. Being able to work with colleagues in different marketplaces and getting insights from their consumers, it was successful and rewarding. (VP, U.S. Global Brand)
196 Appendix B: Survey Instrument
Survey Questions Scale Citation Perceived Brand Globalness (PBG) (Cronbach’s Alpha 0.805) To me, this is a global brand Strongly (Batra, Ramaswamy, Alden, I think consumers overseas buy this brand Disagree/Strongly Steenkamp and Ramachander 2000) Agree (7-point This brand is sold all over the world Scale) Product Performance Quality (Cronbach’s Alpha 0.957) The quality of this brand's products are superior to competitors Strongly Adapted (Atuahene-Gima and Li 2004; This brand's products are perceived as more reliable than its Disagree/Strongly Moon, Park and Kim, 2015) competitors. Agree (7-point Scale) This brand's products provide better benefits than its competitors. This brand provides higher performance products than its competitors. Innovation (Cronbach’s Alpha 0.923) This brand is often first to market with new products. Strongly Adapted (Calantone, Cavusgil, & Zhao, This brand frequently tries out new ideas. Disagree/Strongly 2002) Agree (7-point This brand seeks out new ways to do things. Scale) This brand is creative This brand can introduce new products around the world at the same time. This brand often risks doing things differently. Originality (Cronbach’s Alpha 0.882) This brand offers original products Strongly Adapted (Li, Zhang, Wang, 2015) This brand's products are considered novel. Disagree/Strongly Agree (7-point This brand's products are considered unusual. Scale) This brand's products are unique. Brand Power (Cronbach’s Alpha 0.811) I can recognize this brand among other competing brands. I am aware of this brand. Some characteristics of this brand come to my mind quickly. Strongly Adapted (Bong Na, Marshall and Lane Disagree/Strongly Keller 1999) I can quickly recall the symbol or logo of this brand. Agree (7-point Scale) Brand Authenticity (Cronbach’s Alpha 0.933) A brand that adds meaning to people's lives Strongly Adapted (Morhart, Malär, Guèvremont, A brand that reflects important values people care about Disagree/Strongly Girardin and Grohmann 2015) Agree (7-point A brand that connects people with their real selves Scale) A brand that connects people with what is really important A brand that gives back to its consumers. Local Insights (Cronbach’s Alpha 0.911) This brand is considered locally relevant Strongly Comments from qualitative research This brand understands the needs of the local market. Disagree/Strongly and adapted (Narver and Slater 1990) Agree (7-point This brand listens to the voice of the local consumer Scale) This brand has a competitive advantage based on understanding local consumers. Local Iconness (Cronbach’s Alpha 0.943) I associate this brand with things that are from the country I live Strongly Adapted (Steenkamp, Batra, & Alden, in. Disagree/Strongly 2003) To me, this brand represents the culture of the country I live in. Agree (7-point To me, this brand is a very good symbol of the country I live in. Scale) To me, this brand represents what the country I live in is all about.
Demographics Gender, Age, Income, Marital status, City
197 Appendix C: Survey Demographics – U.S.
Gender Percent Female 349 47.90% Male 376 51.60% Other 1 0.10% Missing 3 0.40% Total 729 100% Income Below $25,000 147 20.20% Between $25,000-$50,000 236 32.40% Between $50,000-$75,000 203 27.80% Between $75,000-$100,000 72 9.90% Over $100,000 58 8% Missing 13 1.80% Total 729 100% Marital Status Single, never married 262 36.50% Married or domestic partner 391 54.50% Widowed 12 1.70% Divorced 49 6.80% Separated 3 0.40% Other 1 0.10% Missing 11 1.50% Total 729 100% Age 19-29 151 21% 30-39 288 40% 40-49 145 20% 50-59 69 9% 60-69 48 7% 70-80 13 2% Missing 15 2% Total 729 100%
198 Appendix D: Pattern Matrix
Factor 1 2 3 4 5 6 7 A1_Global_Acceptance_1 .866 A1_Global_Acceptance_2 .602 A1_Global_Acceptance_3 .941 A1_Local_Authentic_1 .774 A1_Local_Authentic_2 .861 A1_Local_Authentic_3 .800 A1_Local_Authentic_4 .895 A1_Local_Authentic_5 .776 A1_Local_Iconness_1 .915 A1_Local_Iconness_2 .942 A1_Local_Iconness_3 .816 A1_Local_Iconness_4 .786 A1_Local_Insights_1 .801 A1_Local_Insights_2 .955 A1_Local_Insights_3 .768 A1_Local_Insights_4 .829 A1_Originality_1 .703 A1_Originality_2 .789 A1_Originality_3 .645 A1_Originality_4 .980 A1_Innovation2_1 .783 A1_Innovation2_2 .888 A1_Innovation2_3 .946 A1_Innovation2_4 .585 A1_Innovation2_5 .522 A1_Innovation2_6 .872 A1_Product_Performance_1 .939 A1_Product_Performance_2 .899 A1_Product_Performance_3 .945 A1_Product_Performance_4 .871
199
Factor Correlation Matrix Factor 1 2 3 4 5 6 7 1 1.000 .591 .575 .526 .601 .716 .375 2 .591 1.000 .579 .672 .625 .612 .195 3 .575 .579 1.000 .494 .536 .548 .312 4 .526 .672 .494 1.000 .614 .503 .275 5 .601 .625 .536 .614 1.000 .525 .299 6 .716 .612 .548 .503 .525 1.000 .278 7 .375 .195 .312 .275 .299 .278 1.000
200 Appendix E: SmartPLS Model First-, Second-, and Third-Order
201 Appendix F: SmartPLS Model with Only First- and Second-Order
202 Appendix G: Top Themes from 50 Interviews
By Interview References
Global Local Total Leaders Leaders Themes N=25 N=25 N=50 Locally Authentic 22 Consumer and Athlete Insights 25 25 50 Learning Organization 25 25 50 Multi-Cultural Teams 25 25 50 Social Networking 25 24 49 Positive Affect 25 25 50 Globally Accepted 25 Design Innovation 23 24 47 Originality 15 19 34 Brand Power 25 25 50 Performance 20 21 41
By Overall Coded References
Leaders in Global Leaders in Local Rank Themes Brands N= 25 % of Total Brands N=25 % of Total 1 Multi-cultural Teams n=2239 1329 59% 910 41% Culture 320 343 Teams 546 320 2 Product Excellence n=2223 1110 50% 1113 50% Innovation 136 94 Design 160 298 Process 61 18 Sustainability 14 31 3 Global and Local n=2120 1154 54% 966 46% Global 485 379 Local 351 318 China 46 85 America/USA 129 86 4 Learning Organization n=1543 931 60% 612 40% Learn 246 195 Leadership 309 162 5 Brand Power n=1472 637 43% 835 57% Influence 53 61 Global Brand 22 68 Local Brand 19 20 6 Sport Performance n=1455 741 51% 714 49% Competition 182 126 Moment 106 102 Participation 45 14 7 Consumer and Athlete Insights n=1356 730 54% 626 46% Athlete Insights 117 51 Consumer Insights 373 413 8 Entrepreneurial Mindset n=1205 630 52% 575 48% New 242 215 Build 117 161 Create 65 50 9 Positive Affect n=984 609 62% 375 38% Love 112 103 Passion and Emotion 165 97 Fun 59 57 Excitement 66 32 10 Social Network n=827 487 59% 340 41% Relationships 260 155 Partnerships 91 47 Total n=15,424 8358 54% 7066 46%
203 Appendix H: Demographics on 50 Executive Interviewees
204
Appendix I: Global to Local and Local to Global
205 Appendix J: Interview Protocol
Sports Product Industry Interview Questions
Introduction (interviewer): “Thank you so much for taking the time to meet with me today. I’m grateful. Before getting started, there are a couple of things I would like to cover.”
Purpose and Format for the Interview (Interviewer): “As a current student in the Case Western Reserve University Doctor of Management (DM) program, I am interested in developing a greater understanding of the sports product industry. I will ask you a series of open-ended questions on this topic, and I will also ask one or more follow-up questions as you respond. The interview will last approximately 60 minutes.”
Confidentiality (Interviewer): “Everything you share in this interview will be kept in strictest confidence, and your comments will be transcribed anonymously – omitting your name, anyone else you refer to in this interview, as well as the name of your current company and/or past companies. Your interview responses will be included with all the other interviews I conduct."
Audio Taping (Interviewer): “To help me capture your responses accurately and without being overly distracting by taking notes, I would like to record our conversation with your permission. Again, your responses will be kept confidential. If at any time, you are uncomfortable with this interview, please let me know, and I will turn the recorder off.”
“Any questions before we begin?”
Interview questions
1. Please tell me about yourself
Probes: • education history • work/employment history • sports history • current position today (Role & Responsibilities) • Local and/or global roles? • Other companies you have worked? • Age range? • Position/Division-today • Nationality/Ethnicity • Years in industry • Have worked outside home country/When? Where? • What inspired you to work in the sports product industry?
206 2. Can you tell me what it is like to work in this industry?
Probes: • Is there a specific leadership experience you can share? • Are there differences leading locally and globally? • Who else was involved? • What did you say or do; what did you say or do next? • What were you thinking or feeling? • What was the outcome or result of the event? • Does global and local leadership differ? • How has it changed you? • Describe communicating with offices around the world. • Describe living abroad. • What was it like working for your company at WHQ, field office?
3. Can you tell me about an experience working on a specific product/project/category that you would consider successful?
Probes: • Describe the brand? What products? • Describe the business approach or objectives with this example • What specific products were successful? Why? • Were any brands unsuccessful? What were they and Why? • what were the challenges/successes overall? • Any surprises? • Performance in local markets? What markets exactly • Performance in global markets? What global markets exactly • How did that make you feel? • Could you give me another example of success at the local/global level?
4. Can you tell me about an experience working on a specific product/project/category that you would consider less than successful?
Probes: • Describe the brand? What products? • What challenges did you face? • Describe the business approach or objectives with this example • What specific brand products were not as successful as desired why? • Were any brand products successful at all? What were they and Why? • what were the challenges/success overall? • Any surprises? • Performance in local markets? What markets exactly? Success/failures in some markets but not in others • Performance in global markets? What global markets exactly? Success/failure in some markets but not in others?
207 5. Can you tell me about an experience being a global leader in this industry you would consider less than successful?
Probes:
• Can you give me an example? • What did success look like in your career? • Does it matter where the brand originated? • What processes are they following? • What role does innovation play? • How is this industry different than other industries? • How did you feel?
6. Can you tell me about an experience being a global leader in this industry you would consider successful?
Probes:
• Can you give me an example? • What did success look like in your career? • Does it matter where the brand originated? • What processes are they following? • What role does innovation play? • How is this industry different than other industries? • How did you feel?
208 Appendix K: Details on Qualitative Research Collection
We kept visual (e.g., pictures of observations, modeling of concepts) and written memos throughout the research project in an effort to capture the ideas that arose during the interviews, the contexts surrounding the interviews, and details about our visits to brands across key cities in the United States, Europe, and Asia (Maxwell, 2012; Saldaña,
2015). We engaged in ethnographic observations during a week-long trip to Munich,
New York City, and Baltimore, as well as a month-long visit to Asia (Bangkok,
Shanghai, Singapore, Hong Kong, Taipei, and Hanoi). The Asia trip included a one-week
stay in Singapore as a guest of the Asia Consumer Institute at Nanyang Technological
University, in which we discussed the research with professors at the university.
Examples of locations where we made our informal market observations include SOHO
in New York City, the Harbor in Baltimore, the night market in Taipei, and Central
World in Bangkok—the ninth-largest mall in the world.
209 Appendix L: Participant Characteristics
No. of Executives No. of Companies Variables (N=50) (N=24) Primary Business Focus Global Business 23 8 Developed Markets (e.g., U.S., Canada) 12 9 Emerging Markets (e.g., China, Vietnam) 15 12
Primary Brand Categorization Global Brand 25 7
Local Brand 25 17
Ethnicity Caucasian/European 34 n/a African American 2 n/a Asian 14 n/a
Gender Male 36 n/a Female 14 n/a
210 Appendix M: Qualitative Interview Questions
1. Please tell me about yourself.
2. Can you tell me what it is like to work in this industry?
3. Can you tell me about an experience working on a specific product/project/category that you would consider successful?
4. Can you tell me about an experience working on a specific product/project/category that you would consider less than successful?
5. Can you tell me about an experience being a global/local leader in this industry you would consider less than successful?
6. Can you tell me about an experience being a global/local leader in this industry you would consider successful?
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