Strong brands are increasingly recognized as a competitive asset, according to a new survey of 145 senior executives around the world by the Economist Intelligence Unit. However, managing brands effectively across multiple markets is proving to be a significant challenge, with half of executives stating that brand consistency is becoming harder to maintain as their firms enter new markets. Executives also reveal that cultural barriers (63%) and language and translation issues (44%) have become the two primary challenges in brand management. Localization of the brand does pay off though: two-thirds of survey respondents agreed that efforts such as translation and cultural adaptation had a positive impact on sales in those regions.

The findings are published today in Guarding the brand, a briefing paper written by the Economist Intelligence Unit and sponsored by SDL International. It finds that companies are responding to the challenges of brand management by focusing their resources on a smaller number of stronger brands, while also relying more than ever on technology to improve the brand experience.

“Just as brands become more crucial, they’re also getting harder to manage, as firms grapple with a proliferation of new channels and an increasingly global marketplace,” said James Watson of the Economist Intelligence Unit, the editor of the report. “In response, firms are focusing on fewer, stronger brands, which can be used more flexibly in a variety of markets.”

Key findings of the report include the following:

• Globalization is making brand management harder, but more vital than ever. Firms today are highly globalized: nine out of ten firms surveyed for this report are generating at least 10% of their revenue from outside their home market. To avoid being just another commoditized rival competing solely on cost, strong brands are crucial. However, operating in an international environment provides companies with considerable challenges. Forty-nine percent of firms agree that brand consistency is getting harder to achieve as they enter new countries. 
   
• An explosion of channels is adding to the challenge. Technology is introducing a plethora of new channels that marketers must deal with, from mobile phones and e-commerce sites, to newer variations, such as blogs, wikis and podcasts. Forty-five percent of firms polled for this report agree that it is difficult to deliver a consistent customer experience across both online and offline channels, while 33% describe themselves as ineffective when it comes to online marketing. Almost 10% of executives polled for this report believe their global, regional and country-specific websites are entirely inconsistent. Only one-third of respondents believe their company’s brand is maintained consistently across all customer touch-points.
  
• Firms are putting their resources behind a few star brands. Maintaining a large stable of brands is no longer financially feasible for most companies, with the majority choosing to focus their marketing spending on a few star brands. Companies surveyed for this report also see their corporate brands as being more important than individual product brands. Eighty-one percent rate their corporate brand as critical, while just 64% think the same about their product brand.
  
• Technology is helping to facilitate better brand management. For many firms, a range of communication and collaborative technologies are helping them to manage their brand experience across multiple channels and geographies. For example, companies can effectively manage the life-cycle of brand-related materials, such as advertising posters or customer-facing websites, from creation in one language to publication in many different languages, using the Internet to facilitate consensus without losing control.
  
• Brand issues are being led from the top, but middle management support is often lacking. Considering its importance to the firm, there is little surprise that nine out of ten of those surveyed for this report say their chief executive takes active consideration of brand issues across the company. However, there are warning signs that the same enthusiasm may not extend to all levels of the business: 41% agreed that senior executives in their organization simply pay lip service to brand considerations.

"This research illustrates the paradox of managing global brands,” commented Mark Lancaster, chairman and CEO of SDL International. “On the one hand, economic and technological advances make global trade easier; on the other hand, managing global information for different languages and cultures is a complex and difficult business issue.

New technologies and best practices are now addressing these global brand management challenges to achieve consistent, high-quality and revenue-generating local language communications.”

Guarding the brand is available from Nicola Bogle: +44 (0)1628 417225 or nbogle@sdl.com.

Notes for editors:
Guarding the brand is an Economist Intelligence Unit briefing paper, sponsored by SDL International. The research is based on a survey of 145 executives from across the globe, conducted by the Economist Intelligence Unit between March and April 2006, as well as in-depth interviews with senior brand executives at six firms worldwide.

About the Economist Intelligence Unit
The Economist Intelligence Unit is the business information arm of The Economist Group, publisher of The Economist. Through our global network of over 650 analysts, we continuously assess and forecast political, economic and business conditions in 200 countries. As the world's leading provider of country intelligence, we help executives make better business decisions by providing timely, reliable and impartial analysis on worldwide market trends and business strategies.