FOR TOM MUTUNGA: Global Marketing: McDonalds

Global Marketing Communications and Strategic Regionalism

ROWAN WILKEN∗ & JOHN SINCLAIR∗∗

∗Swinburne University of Technology, Victoria, Australia ∗∗University of Melbourne, Victoria, Australia

ABSTRACT This article examines how ideas of global standardization, localization, and

regionalization are played out in relation to global marketing. Its aim is to deepen present

understanding of global marketing communications and corporate strategy through case

studies examining corporate responses to the issues of global standardization, localization,

and regionalization. To do this, a research project was developed: an exploratory analysis of

the advertising trade-press literature over a ten year period (1997–2007) mapping how three

major multinational corporations (MNCs)—Coca-Cola, McDonald’s, and Colgate-Palmolive—

engage with marketing from the global, to the local, and the regional.

From this exploratory analysis, two key developments emerge. The first is that, despite

individual variations in each corporation’s response to global marketing, in broad terms the

dominant global marketing approach is one of ‘glocalization’. The second key development and

key argument of this paper is that, while the reemergence of ‘regionalization’ in analyses of

global marketing and corporate strategy is becoming more prevalent, the term as presently

understood requires significant conceptual revision. Thus we propose and develop the concept

of ‘strategic regionalism’ as a valuable umbrella term for capturing some of the nuances of

regionalization as it pertains to and is practiced within global marketing communications and

corporate strategy.

Keywords: advertising, marketing communications, globalization, standardization, localiz-

ation, adaptation, regionalization, glocalization, region, strategic regionalism, McDonald’s,

Coca-Cola, Colgate-Palmolive

Correspondence Addresses: Rowan Wilken, Media & Communications, Swinburne University of Technology, John

Street, Hawthorn 3122, Victoria, Australia. Email: [email protected]; John Sinclair, ARC Professorial Fellow,

The Australian Centre, The University of Melbourne, 137 Barry Street, Carlton 3053, Victoria, Australia. Email:

[email protected]

ISSN 1474-7731 Print/ISSN 1474-774X Online/11/010001–15 # 2011 Taylor & Francis DOI: 10.1080/14747731.2011.544189

Globalizations

February 2011, Vol. 8, No. 1, pp. 1–15

Introduction

Multinational corporations (MNCs) have long been perplexed with the question of how to make

global marketing succeed. Historically, this issue generally pivots around whether, in what situ-

ations, and to what extent advertising across national borders should be ‘standardized’ across

markets or ‘localized’, that is, made specific (‘adapted’) to each market (Duncan & Ramaprasad,

1995), or ‘glocalized’, that is, a mixture of global standardization and local adaptation. More

recently, another approach has gained traction, in which the geographic region and ‘regionaliza-

tion’ are examined as key meso level concepts that mediate between the extremes of localization

and the extremes of globalization (Fastoso & Whitelock, 2008).

This article examines how ideas of global standardization, localization, and regionalization

are played out in relation to global marketing. Its aim is to deepen present understanding of

global marketing communications and corporate strategy through case studies examining cor-

porate responses to the issues of global standardization, localization, and regionalization. To

do this, a research project was developed to undertake an exploratory analysis of the advertising

trade-press literature over a 10-year period (1997–2007) to map how three major MNCs—Coca-

Cola, McDonald’s, and Colgate-Palmolive—engage with marketing from the global, to the

local, and the regional.1 These particular corporations were selected because of their high

profile in industry reportage on MNCs in the advertising trade press. The primary trade-press

publications examined in this study include, but are not limited to, Advertising Age (US) and

Media (Hong Kong). These two publications constitute a leading international and a regional

forum, respectively, for the reporting of key developments and emerging trends in the area of

global advertising. The focus on a decade of trade source publications permits an examination

of how global advertising strategies of multinational corporations were being discussed within

and represented by the advertising industry itself. Tracking these discussions over a 10-year

period provided continuity of data collection, a diachronic as opposed to a synchronic perspec-

tive. What is more, at the same time as this study has been able to draw upon these sources for the

privileged data about the industry to which they have access, it has also taken the opportunity to

observe how the industry interprets this information, and how it talks about itself more generally.

From this exploratory analysis, two key developments emerge. The first is that the three

MNCs under examination have developed particular and quite distinct responses to the issue

of standardization, localization, and regionalization. Even so, despite individual variations in

each corporation’s response to global marketing, in broad terms all three corporations do not

‘make a one-time choice between the poles of absolute standardisation or adaptation’

(Vrontis et al., 2009, p. 492). Rather, the dominant global marketing approach is one of ‘gloca-

lization’—that is, finding the right balance between the bottom line of standardization while

meeting the demands of localization and cultural adaptation. The second key development

and key argument of this paper is that, while the reemergence of ‘regionalization’ in analyses

of global marketing and corporate strategy is becoming more prevalent, the term as presently

understood requires significant conceptual revision. The present research suggests rather more

complex understandings of regionalization are at play in global marketing than is generally

acknowledged to be the case. Thus, in the final part of this paper, we propose and develop

the concept of ‘strategic regionalism’ as a valuable umbrella term for capturing some of the

nuances of regionalization as it pertains to and is practiced within global marketing communi-

cations and corporate strategy.

Before examining the case studies at hand, it is useful to review in more detail ideas around

the development of global marketing standardization, localization, and regionalization.

2 R. Wilken & J. Sinclair

Global Standardization, Localization, and Regionalization: A Review

Advocacy of advertising standardization has arisen at various points since the idea was first

mooted in the 1920s (see Chandra et al., 2002, pp. 69–70), notably the 1960s (see Buzzell,

1968; Elinder, 1961, 1965; Fatt, 1967), and, most recently, the early 1980s, when it reemerged

to become a major preoccupation in international marketing communications following the pub-

lication of Harvard business theorist Theodore Levitt’s influential 1983 article, ‘The globaliza-

tion of markets’. Levitt proclaimed a ‘new commercial reality’ based on the ‘emergence of

global markets for standardized consumer products on a previously unimagined scale’. Gone,

he argued, were ‘accustomed differences in national or regional preference’ (Levitt, 1983,

p. 92), or ‘ancient differences in national tastes or modes of doing business’ (p. 93). In their

place, he argued, is a ‘commonality of preference’ that ‘leads inescapably to the standardization

of products, manufacturing, and the institutions of trade and commerce’ (p. 93; see also, Rau &

Preble, 1987). The globalization of markets concept is attractive for MNCs insofar as it promises

greater global returns through the adoption of standardized marketing communications efforts

(Tai, 1997, pp. 56–57).

However, the reality of global marketing has proved somewhat more complex than the ‘glo-

balization of markets’ argument suggests (see Hite & Fraser, 1988; Mueller, 1991; Quelch &

Hoff, 1986; Sandler & Shani, 1992; Wills & Ryans, 1977). While standardization has continued

to be attractive to global marketers, they have had to develop adaptive or ‘localizing’ strategies

to cope with market-by-market variations (Herbig, 1998).

The legacy of all this has been a kind of continuum evolving in marketing theory and practice

between standardization and localization (for discussion, see Agrawal, 1995; Fastoso & White-

lock, 2007; Melewar & Vemmervik, 2004; and, Vrontis et al., 2009). However, by the beginning

of the 1990s, some middle ground was being sought in the concept of ‘glocalization’, ‘one of the

main marketing buzzwords’ of the time (Robertson, 1997, p. 28). This had its origins in the strat-

egies of Japanese marketers in Asia, notably Sony, which pursued ‘global localization’ rather

than ‘global standardization’ (Iwabuchi, 2002). Just as Roland Robertson took up this unlikely

concept in the social theory of globalization to show the fallacious dichotomization of ‘hom-

ogenization’ and ‘heterogenization’, arguing instead that the tendencies denoted by these

terms are ‘mutually implicative’ (1997, p. 27), glocalization was embraced in marketing as

the practical wisdom of creating the right balance between minding the bottom line of standard-

ization while meeting the demands of localization—more than just a point on a continuum.

Indeed, one advocate argues that standardization is a mere abstraction, and all cross-cultural

marketing requires some degree of glocalization: it is ‘the working arm of standardization’

(Herbig, 1998, p. 48).

In addition to this advocacy of the apparent inevitability of glocalization, more recently a

further strand of academic marketing debate has gained prominence, in which the geographic

region has reemerged as a key concept, and ‘regionalization’ thus becomes seen as a process

which mediates between the extreme poles of localization and globalization in marketing com-

munications (for detailed discussion, see Fastoso & Whitelock, 2008). Some critics go so far as

to assert that globalization is ‘a myth’ (Johnson, 1991; Rugman, 2003, p. 409) and that truly

effective multinationals ‘now design strategies on a regional basis’, while ‘unsuccessful ones

pursue global strategies’ (Rugman, 2001, p. 584).

In the following section we draw on an examination of a decade of trade literature (1997–

2007) to investigate the approaches and attitudes of three MNCs to this triumvirate of standard-

ization, localization, and regionalization. It should be noted that all of these corporations are in

Global Marketing Communications and Strategic Regionalism 3

product areas in which we should expect to find their brands adapted in accordance with market

variations. Broadly, they are all in what the trade press calls ‘FMCG’—fast-moving consumer

goods. This is a very wide category, ranging from fast food to packaged food, drink, and personal

care products, all of which are likely to be more sensitive to market-by-market variation than,

say, domestic electronic goods. Thus, the selection of these cases recognizes that product

type is a factor in market adaptation. They are all heavy advertisers: Coca-Cola appears in

sixth place, McDonald’s in fourteenth, and Colgate-Palmolive in thirty-sixth place in Advertis-

ing Age’s list of the world’s largest 100 advertisers for 2009 (Advertising Age, 2009).

Three Corporate Case Studies: Coca-Cola, McDonald’s, Colgate-Palmolive

(1) Coca-Cola: Think Local, Act Local?

Because they both are ‘globally standardized products sold everywhere and welcomed by every-

one’, Theodore Levitt sees Coca-Cola and Pepsi-Cola as the examples par excellence of his ‘glo-

balization of markets’ thesis (1983, p. 93). Both corporations have long been united in their

‘need for a uniform identity throughout the world’ (Agrawal, 1995, p. 41). Certainly, the globa-

lization of markets and an almost universal worldwide familiarity with a brand like Coke has

paid dividends for the company when it has come to ‘localizing’ its core products for particular

national markets. For example, in April 2000, one Malaysian-based Coca-Cola executive

quipped that, to localize Coke’s ‘Enjoy’-themed advertising, was simply a matter of ‘wrapping

a sarong around a global idea’ (quoted in Madden, 2000).

However, this remark belies the many complexities and difficulties faced by Coca-Cola’s global

operations at this time—not the least of these being the slow but steadily declining sales of carbo-

nated cola beverages worldwide, waning global brand appeal (Advertising Age, 2006), and an

increasingly difficult struggle to keep pace with its global arch-rival PepsiCo, especially in Asia.

Accordingly, Coca-Cola began moving away from global, standardized ad campaigns to ‘more

locally relevant executions’, meaning different advertisements for different markets (MacArthur,

2000a). This shift was the beginning of what would appear to be a dramatic marketing sea

change towards localization within the company between the late 1990s and 2005 (Yoon, 2001).

Rather than Levitt’s globalization of markets approach—which might be thought of according

to the dictum, ‘think global, act global’—Coke executives instead adopted a ‘think local, act

local’ strategy (James, 2001; Madden et al., 2000; McIntyre, 2001). Whereas ‘local’ in such a

context usually means national, or even sub-national markets, in Coca-Cola’s case, it

becomes evident that world-regional or other transnational zones can also be seen as ‘local’.

Led by Douglas Daft, the Australian-born worldwide CEO at the time, Coke’s new creed

became, ‘there is no such thing as a global consumer: each market is different’ (James,

2001).2 This conviction was the result of a growing understanding of cultural, geographic,

and economic complexities both across and within markets. It was also the result of market

research which found (among other things) that, even in countries that seem similar, such as

Australia and New Zealand, there can be customers with ‘diametrically opposed attitudes’

(2001).3 The belief was that Coca-Cola required greater marketing flexibility to compete suc-

cessfully in emerging markets in order to permit greater ‘responsiveness and adaptation to

culture, infrastructure and competition’ (Melewar & Vemmervik, 2004, p. 868), and adopt a

different emphasis in each country if and where required (James, 2001).

Although long known for its highly centralized global marketing approach in the past, Coca-

Cola took a new departure in restructuring its marketing communications operations and

4 R. Wilken & J. Sinclair

designating 13 countries as ‘creative hubs’, which were to make a pool of ads that could be selected

from and adapted to each of the 200 countries where Coke sells its products (McIntyre, 2001). One

of the first of the ads to be created via this system was produced in Australia and then ‘exported’ to

nine other countries worldwide (2001). At the same time as it was reorganizing its marketing

resources in this way, Coke was also busy developing a range of new product lines for various

markets. In most cases, these were in step with its ‘think local, act local’ strategy and the com-

pany’s desire to tailor its products to suit local market tastes where necessary, with ‘local’

being understood at both national and regional levels (James, 2001). So, for example, in 2005,

Coke tested a ginger-flavored version of Sprite in China (Madden, 2005a). Two years earlier,

Coke had launched Nativa in Argentina, a soft drink flavored with the country’s traditional

yerba mate herbal tea, which was developed ‘as part of its strategy to broaden its portfolio with

products made of indigenous ingredients’ (Advertising Age, 2003a). A more ‘strategic regional’

example was a pan-Asian and European ‘roll-out’, between 2001 and 2003, of a non-carbonated

juice-based drink called Qoo (pronounced ‘coo’). Described as a ‘regional brand with inter-

national potential’, Qoo was first launched in Japan in 1999 before entering South Korea, Singa-

pore, China, Thailand, Taiwan, and then Germany (Advertising Age, 2002; Osborne, 2001).

The adoption of the ‘think local, act local’ strategy in part implies the recognition that ‘Coke’s

local people know their market better than the bigwigs in Atlanta’ (McIntyre, 2001), but it would

be a mistake to think that this new approach represents a total embrace of localization. Rather,

the Coke approach more accurately constitutes an amalgamation of global, regional, and local

strategies, with the emphasis on the sharing of ideas across markets and across brands.

Notably, this coordinated approach does not map onto regional boundaries as they are conven-

tionally understood. Thus, while the company divides itself geographically into three areas—the

Americas, Asia Pacific, and Eurasia—brands are not necessarily aligned for targeting within

these geographical zones. As one Coke executive explained, ‘The reality is we know Argenti-

nean and French people do [things] a lot more similarly than Argentineans and Brazilians.

That’s just a fact in the way they react to the brand and the sort of messages that are right for

them’ (quoted in McIntyre, 2001).

Zandpour and Harich (1996) refer to this approach as ‘country clustering’—the grouping of

markets which exhibit a similar preference for emotional and rational advertising appeals.

Country clustering can be seen as a type of standardization and is based on the idea that advertisers

‘should view standardization not as the transferability of an entire campaign across countries, but

as a strategy that makes unified themes, images and even brand names, possible’ across countries,

even if issues of campaign execution ‘still need to be decided at the local subsidiary level’ (Sriram

& Gopalakrishna, 1991, p. 146). The notion of using standardized marketing campaigns to appeal

to defined segments in different countries in different regions is consistent with the rhetoric of

global standardization advocates such as the advertising agency Saatchi & Saatchi in the

1980s, who saw ‘consumer similarities in demography and habits rather than geographic proxi-

mity’ as the decisive factor (cited in Mattelart, 1991, p. 53). Yet the notion of ‘country clustering’

also can be considered a regional strategy of sorts, albeit one that cuts across traditional geo-

graphical regions, in that it works cross-culturally to identify, group, and target market segments

with virtual cultural affinities, and compatible behavior and tastes.

Once again, the distinction between strategy and tactics is crucial. In light of this, Coca-Cola’s

declaration that it is thinking and acting locally is a misnomer in any world-regional sense. The

slogan ‘think local, act local’ might suggest that the company is operating at the extreme local-

ization end of the advertising spectrum, but, as the Argentina–France example illustrates, this

clearly is not the case. Rather, our evidence indicates firstly, that Coca-Cola is working with

Global Marketing Communications and Strategic Regionalism 5

cross-cultural, virtual ‘regions’ of consumer compatibility, and secondly, that its advertising is

not locally produced, but only locally adapted from a global pool.

In the years immediately following its adoption, critics—especially from within America’s

trade journal, Advertising Age—have increasingly argued that Coca-Cola’s overall marketing

strategy has lost its global branding direction (see James, 2001; MacArthur, 2005a; Yoon,

2001). By 2005 Coca-Cola appeared to concur and began reinvesting in and consolidating its

standardized processes and global marketing efforts. For instance, it was reported that Coke

was instigating a ‘planning group at a corporate, global level’ (MacArthur, 2005b), as well as

continuing its commitment to ‘search for the big advertising idea’ by calling on various roster

agencies to ‘create ideas that could become a global integrated campaign’ (Advertising Age,

2005). The indication, then, is of a consolidation of a mix of global, local, and regional adver-

tising approaches and marketing strategies. This can be seen in the company’s launch in 2006 of

its coffee-flavored cola, Coca-Cola Blak, across several countries (commencing in France) with

supporting advertising ‘developed locally and regionally’ (Wentz & Mussey, 2006).

In summary, Coca-Cola’s corporate strategy over the past 10 years has acknowledged and

attempted to respond to various cultural differences and intra- and inter-market complexities.

Also noteworthy is its partial adoption of regional strategies as part of its global marketing com-

munications mix via ‘country clustering’ and regional product launches.

(2) McDonald’s: Thinking Global, Consciously Acting Local

Like Coca-Cola, McDonald’s traditionally had maintained a centralized approach to global mar-

keting, in which the agency office closest to headquarters would take the lead in creating its

global campaigns (Cardona, 2004). However, with its ‘I’m Lovin’ It’ campaign, launched in

2003, McDonald’s ‘ditched traditional brand-positioning marketing’ in favor of an alternative

approach referred to variously as creating ‘brand journalism’ or a ‘brand chronicle’—that is

to say, taking a narrative approach that ‘seeks to tell as many different stories in as many differ-

ent ways as it takes to reach McDonald’s 47 million consumers in 119 countries’ (Cardona,

2004). Declaring that ‘the days of mass marketing are over’, McDonald’s Global Chief Market-

ing Officer Larry Light caused a stir in advertising circles as McDonald’s brand journalism

approach and the ‘I’m Lovin’ It’ campaign sought to reinvent ‘a brand that had lost its way’

(quoted in Cardona, 2004).

The origins of the slogan behind this campaign can shed light on McDonald’s overall global

marketing strategy and its position on the standardization–localization debate. In a strategy not

dissimilar to the ‘country cluster’ approach adopted by Coca-Cola, McDonald’s called on its

agencies around the world to produce creative ideas which it could then review for selection.

In the case of ‘I’m Lovin’ It’, the slogan emerged from a lesser known European agency,

DDB’s Heye & Partner, Hunterhaching, Germany. Once selected, however, the transformation

from idea into a fully fledged campaign was done centrally, with creative work handled on a

global basis, but where local agencies were given the opportunity to adapt the campaign with

executions to suit each national market. An example cited by Light as to how this works in prac-

tice is through the creation of a global ‘template’ for television commercials which have ‘green-

screen segments’ for local agencies to ‘insert local touches’ (Cardona, 2004).

The overall process that is described here—a single global campaign designed for local adap-

tation—is indicative of McDonald’s philosophy of ‘think global, act local’, in accordance with

the globalization cliché of the 1990s. This approach informs all facets of the company’s global

business operations, as well as its worldwide marketing communications strategy. All of

6 R. Wilken & J. Sinclair

McDonald’s operations are in some way structured around global–local tensions. Obviously,

certain facets of its global operations are more readily ‘standardized’ than others, such as

food supply and processing, point of purchase, signage and design, and so on (Vignali, 2001;

Watson, 1997). Other business practices require more substantial adaptation to meet local con-

ditions, such as pricing structures and menu options, processes that are well documented in the

literature (Desker Shaw, 2006; Fowler & Settodeh, 2004; Sinclair & Wilken, 2009, pp. 152–

153; Vignali, 2001; Watson, 1997; White, 2006). As Watson (1997, p. 37) notes, this process

of localization through cultural adaptation ‘correlates closely with the maturation of a generation

of local people who grew up eating at the Golden Arches’. Such is the level of acceptance by

such consumers that McDonald’s is often ‘no longer perceived as a foreign enterprise’ (1997,

p. 37), and adds support to former McDonald’s president James Cantalupo’s vision for McDo-

nald’s to ‘become as much a part of local culture as possible’ and where the company is seen not

as ‘multinational’ but ‘multilocal’ (cited in Watson, 1997, p. 12).

As already explained, the ‘glocal’ or adaptive approach is particularly evident in McDonald’s

global marketing communications strategies—especially the various localized versions of the

company’s ‘I’m Lovin’ It’ television commercials (Liu, 2003; Madden, 2003). However, a stan-

dardized approach remains in evidence in terms of its agency relationships and media buying,

that is, the planning and purchase of media time and space. For example, notwithstanding the

decentralized creative input in developing the ‘I’m Lovin’ It’ campaign discussed earlier, in

2006 McDonald’s confirmed its global alignment of its creative work with its two ‘agencies

of record’: Leo Burnett and DDB (Media, 2006a), with the aim that both would produce creative

work suitable for local adaptation. As for media buying, McDonald’s centralized its media

buying at a global level by handing it to the Omnicom-owned OMD in 2003–2004 in order

to ‘squeeze higher efficiency and fuel greater innovation and creativity’ (Advertising Age,

2003b; Media, 2004). Four years earlier, McDonald’s had developed an ‘electronic infrastruc-

ture’ in order to allow co-ops and local agencies to make ‘locally relevant creative’ by

drawing on a digital library of over 15,000 McDonald’s commercials dating back to 1967

(MacArthur, 2000b). For McDonald’s, the system had the advantage of allowing for local adap-

tation while not compromising on ‘corporate-driven quality controls’ by keeping food footage

consistent worldwide, and reducing advertising production costs (2000b). In each of these

cases, McDonald’s embraces a more overtly ‘standardized’ marketing communications strategy.

Nevertheless, there are several indications from the literature over the past decade that McDo-

nald’s is becoming increasingly interested in adapting standardized marketing messages at a

regional rather than national or more local level. For instance, in 1998, McDonald’s ran its

first pan-European campaign to coincide with the France ’98 World Cup football finals (Adver-

tising Age International, 1998). More recently, in 2005, the company announced its ‘first pan-

Asia initiative’: the ‘Prosperity Program’ (Desker Shaw, 2005; Madden, 2005b). This was a

program based on its ‘Prosperity Burger’, and employed the promise of good luck as an

‘insight that cuts across borders of nine very diverse markets’ (Madden, 2005b), and was fol-

lowed in 2006 by further pan-Asian marketing programs (Hargrave-Silk, 2006). Here are two

significant examples of McDonald’s recognizing ‘the existence of homogenous customer seg-

ments’ that cut across national borders on a regional level (Melewar & Vemmervik, 2004,

p. 871) and marketing to these.

We have seen that McDonald’s strives to keep certain elements of its operations constant,

while it adjusts other elements when and where required in response to market specificities.

In this way, McDonald’s provides an exemplary case in support of the argument that ‘a corpor-

ation can standardize the market strategy (target segment and positioning) but this does not

Global Marketing Communications and Strategic Regionalism 7

imply that the tactics (implementation) must be standardized’ (Melewar & Vemmervik, 2004,

p. 866). This has not changed over the past 10 years, but what has changed is the company’s

apparent interest in doing this on a regional basis.

(3) Colgate-Palmolive: Regionalization and Reverse Localization

Colgate-Palmolive, a significant global player in the personal and household products market,

operates in 218 countries with three-quarters of its sales generated outside of the US (Byrnes,

2002). The company has built a reputation as a ‘powerhouse’ in the emerging markets of

Latin America (and, to a somewhat lesser extent, China, where it holds 35% of the toothpaste

market), but is considered a ‘perennial also ran’ in its home market of the US, where it regularly

trades place with Unilever for second and third spot behind the world’s biggest advertiser and

industry leader, Procter & Gamble (Neff, 1998, 2002).

Colgate-Palmolive’s non-US dominance has led to it pursuing a process of ‘reverse localiz-

ation’, in the sense that products and advertising strategies that have been developed and

proven successful in specific national markets outside of the US are subsequently ‘localized’

or ‘adapted’ in order that Colgate-Palmolive may leverage and win greater market share

inside the US. So, for example, in 1998 Colgate-Palmolive drew on a successful global campaign

for its toothpaste brand Total when launching it in the US (Neff, 1998). This process of reverse

localization is also employed in order to reach US Hispanic consumers. For instance, two of

Colgate-Palmolive’s ‘biggest hits’ in the US Hispanic market are two brands brought in from

Latin America, Suavitel and Fabuloso. Colgate-Palmolive’s aim, in the first instance, is to use

these brands to try and capture a sizeable proportion of the US Hispanic market and, from

there, to generate ‘crossover potential’ in the general market (Wentz, 2005).

Key to the success of this strategy of adapting and developing brands and campaigns across

diverse overseas markets has been the remarkable stability of the company’s global agency

relationships. In a Levitt-esque move, Colgate-Palmolive was one of the first multinationals

in 1995 to appoint, and consolidate most accounts in, the one global ad agency: the WPP-

owned Young & Rubicam (Neff, 2000b). This single-agency relationship has endured through-

out the 10-year survey period. With respect to media buying, in 2006 Colgate-Palmolive shifted

its media business in China from Universal McCann to Mediaedge:cia (aka MEC), a move

designed to achieve even greater global consolidation, with MEC and Young & Rubicam

both falling under the umbrella of WPP Group (Media, 2006b).

At the same time that Colgate-Palmolive first made the move to a single global agency back in

1995, it also implemented a communications strategy aimed at ‘drawing on local market ideas to

drive their world marketing campaigns’ (Wentz, 1996). Just as Coca-Cola restructured its mar-

keting communications operations around 13 ‘creative hubs’, Colgate-Palmolive established

‘centers of excellence’ in different countries in order to ‘cull innovations to be used over

wider areas’ (Wentz, 1996). Almost a decade later, the same general strategy has been reinvigo-

rated through the use of the German-developed business management SAP software, which

enabled Colgate-Palmolive to take test results from advertising campaigns in Mexico and

apply them around the world in ‘an effort to get more volume lift from the same level of

trade-promotion spending’ (Neff, 2005). The desire to achieve such gains can be interpreted

as evidence of its desire to achieve greater marketing standardization, and a response to the

financial pressures the corporation experienced two years prior.

In respect to the latter, in late 2003–early 2004, Colgate-Palmolive’s financial position

became acute. Faced with ‘dropping profits, higher costs and fierce competition’, Colgate-

8 R. Wilken & J. Sinclair

Palmolive (under the leadership of long-serving CEO Reuben Mark) embarked on a four-year

‘belt-tightening’ campaign and a reassessment and re-jigging of many facets of its operations

(Brandweek, 2004). For example, with respect to its global manufacturing operations, it was

reported in 2004 that Colgate-Palmolive would close one-third of its 78 factories worldwide,

leading to the elimination of around 4,000 jobs (Brandweek, 2004).

With respect to its brand portfolio, Colgate-Palmolive underwent a significant product purge,

shedding a number of famous US laundry detergent brands, including Ajax, Fab, and Pepsodent,

in order to focus its corporate energies on higher profit margins and its area of greatest strength—

the oral care category (Neff, 2003). To further strengthen its US position in this category, and

exploiting a growing embrace of forms of ‘ethical consumption’, in 2006 Colgate-Palmolive

bought a controlling share of Tom’s of Maine, a family-run company based in Kennebunk,

Maine, that makes ‘natural’ toothpaste and other oral and personal hygiene products (Brand-

week, 2006).

Colgate-Palmolive subsequently went on the marketing offensive in support of its oral care

lines, with a reported 50% increase in US media spending in the third quarter of 2004 (Neff,

2004b). This last move represents a big turnaround from its previous (and rather notorious) strat-

egy of ‘trimming year-end ad spending’ in order to ‘hit earnings numbers’ (Neff, 2004a). Else-

where, the same approach was repeated. For instance, in 2004 Colgate-Palmolive also increased

adspend in China on its ‘flagship’ Colgate brand by 152% to become the ‘second MNC after

P&G to enter the league of China’s 10 biggest-spending brands’ (Savage, 2005).

In addition to the above developments, Colgate-Palmolive also strengthened its commitment

to regional advertising strategy in a variety of forms. For example, in the late 1990s, Colgate-

Palmolive adopted the practice of simultaneous product launches across geographical regions,

so that competitors (such as Procter & Gamble) were not able to catch up as easily as they pre-

viously had been with staged launches (Gatsoulis, 1999). In 2003, Colgate-Palmolive launched a

pan-European search marketing campaign on Google to boost brand awareness and sales of its

toothpaste Colgate, by directing web search traffic to Colgate-Palmolive associated websites

once search terms such as ‘teeth whitening’ were entered (Marketing, 2003). Furthermore, via

the use of ‘centers of excellence’ and its more recent use of SAP software, Colgate-Palmolive

(like Coca-Cola) has embraced the ‘country clustering’ approach by working with cross-cultural

‘regions’ of consumer compatibility.

In summary, on one level, the global marketing strategies of Colgate-Palmolive, like those of

the other two corporations examined, is an amalgamation of global, regional, and local strat-

egies, with an emphasis on the sharing of ideas across markets and across brands. On another

level, what makes Colgate-Palmolive rather unique is the fact that it has traditionally concen-

trated its efforts in specific national markets distinct from but connected to their ‘home’

market as part of the larger geographic region of the Americas. Not only has this led them to

adopt a strategy of ‘reverse localization’ (‘adapting’ campaigns developed in Mexico and

South America for the US market), but it has enabled them to operate and advertise within

(and across) a broader geolinguistic region comprised of Spanish-speaking consumers in

North, Central, and South America. More recently, Colgate-Palmolive is attempting to draw

from the same de facto ‘home market’ of Latin America to develop advertising strategies

with global appeal. In key respects, then, Colgate-Palmolive could be viewed to be moving in

the opposite direction of a corporation like McDonald’s in the sense that Colgate-Palmolive

is drawing from ‘local’ market specificities in order to develop more ‘standardized’ marketing

efforts within and across geographic and geolinguistic regions, with the view to the creation of

product lines and advertising campaigns at even greater globally standardized scales.

Global Marketing Communications and Strategic Regionalism 9

Conclusion: Glocalization and Strategic Regionalism

On the basis of the cases examined here, Theodore Levitt’s prophecy of the globalization of

markets and universal standardization has not in fact been fulfilled, but, by the same token—

as closer scrutiny of Coca-Cola’s ‘think local, act local’ campaign reveals—neither does local-

ization exist on a universal scale. Rather, the dominant global marketing approach is the prac-

tical wisdom of ‘glocalization’—an amalgam of global strategy and local adaptation. This is

likely to remain the dominant model at least for the foreseeable future (Sinclair, 2001). As

the case studies demonstrate, the specific approach that each corporation takes within this

model can shift depending on which aspect of its overall operations is involved. Thus, corporate

organization, product-market strategy, and advertising can and often are globally aligned or

locally adapted to differing degrees depending on the company, the particular point in time,

and other circumstances.

On the question of the degree to which glocalization is being practiced on a regional basis, the

approach of the global corporations under discussion here suggests a trend to what we are calling

‘strategic regionalism’, where organizational structure, ad creation, and marketing strategies

have, over the past decade, been realigned to varying degrees and in different ways around

the concept of the global region (see also Banerjee, 1994, pp. 110–111).

Evidence of increased efforts towards regionalization of corporate operations and marketing

strategies was noted already in the 1990s in relation to Asian marketing, at the very time that

companies such as Coca-Cola and Colgate-Palmolive first mooted their respective changes of

marketing direction. Studies at the time reported that ‘multinationals have been advised to

follow a regional approach’ (Tai, 1997, p. 60), ‘by thinking globally, acting locally and mana-

ging regionally’ (Banerjee, 1994, p. 110; see also, Dibb et al., 1994). While some observers pre-

dicted an intensification in regionalization and a corresponding decline in the importance of

adopting a global advertising approach (Tai, 1997, pp. 59–60), other critics have since asserted

that the ‘hope for regional “consumer clustering” remains more hype than reality’ (Kanso &

Nelson, 2002, p. 86), and even claim that there is some evidence of an increase in advertising

standardization by multinational corporations (Sirisagul, 2000). Neither assessment reflects

fully the range of approaches that emerge from the case studies discussed here.

In marketing communications terms, regionalism is desirable, particularly if a corporation

wishes to build up a pan-European or pan-Asian brand image. For regionalization theorists

such as Alan Rugman (2001, 2003), there is a more fundamental reason behind regional strategy:

most MNCs operate mainly within geographic regions, and usually the region closest to their

home market (which is certainly the case with Colgate-Palmolive). Indeed, the fact is that

most ‘global’ companies have the great bulk of their sales within their own domicile of what

Ohmae called the ‘triad’ of North America, the European Union, and Asia—at the beginning

of this decade, of the whole Fortune 500, only Coca-Cola had more than 20% of its sales in

Asia, while the seemingly ubiquitous McDonald’s had less than 14% (Rugman & Verbeke,

2004, pp. 8–9). However, since the most rapid rates of growth are now in Asia and Latin

America, corporations are looking for ways to capitalize upon their economies of scale but at

the same time avoid the cross-cultural global marketing disasters that occurred in foreign

markets in the 1980s (Polak & Cuttita, 2006).

It is in this context that Vignali (2001) distinguishes between the ‘globalisation of markets’

and what he calls ‘internationalisation’. The former ‘embodies the view that the world is a

single market’ (p. 98). The latter ‘involves customising marketing strategies for different

regions in the world according to cultural, regional and national differences to serve specific

10 R. Wilken & J. Sinclair

markets’ (p. 98). Fastoso and Whitelock (2008) characterize this as a shift from strategic

decisions made on a ‘geocentric’ basis (where the world forms one market and strategies are

developed globally), to those made on a ‘regiocentric’ basis (where markets are formed accord-

ing to geographical regions and strategies are standardized accordingly). While this distinction is

useful, the picture that emerges from the present study of Coca-Cola, McDonald’s, and Colgate-

Palmolive is more complex than the tailoring of marketing strategies to different geographical

regions.

We propose the concept of strategic regionalism as a productive (if provisional) term for cap-

turing something of the complexity associated with the reemergence of the regional in global

marketing strategy. The provocation we wish to make in coining this term is that ‘regional’ is

a decidedly more complex concept than is commonly acknowledged—especially with respect

to how it is employed in relation to global marketing. How we conceive of the ‘regional’ in

global marketing terms needs to be expanded to move beyond reference to geographical

region alone—which in itself involves many different scales (Jessop, 2002)—in order to incor-

porate additional layers of sociocultural phenomena. These include, among other things, geocul-

tural and geolinguistic similarities and other forms of cross-border identities (Perkmann & Sum,

2002); the movement of peoples and the formation of diasporic communities; and the sharing of

cultural affinities, especially as they form outside of and across the borders of nation states.

Josu Amezaga Albizu (2007, p. 240) refers to such phenomena as the formation of ‘geocul-

tural’ compatibilities. This is an extension of the notion of geolinguistic regions, which refers to

the idea that a region can be ‘defined not necessarily by its geographical contours but more in a

virtual sense, by commonalities of language and culture’ (Sinclair, 2004, p. 77; Sinclair & Cun-

ningham, 2000, p. 2; Amezaga, 2007). A good example of this is the case of Spanish-speaking

migrants of diverse origin who inhabit the United States, ‘who are integrated in particular ways

with the larger geolinguistic media [and broader consumer] markets of Latin America’ (Sinclair,

2004, p. 77). As we have seen, in marketing terms this form of strategic regionalism has been

pursued with great success by Colgate-Palmolive (Neff, 2000a; Wentz, 2005). Another striking

example is the geolinguistic region formed by the nations of Greater China and its worldwide

diaspora.

Thus, in positing the idea of ‘strategic regionalism’, our aim is to extend our understanding of

commercial cultural globalization in two respects. The first is the need to apprehend the com-

plexities and nuances that are associated with the concept of the regional, which are the variable

result of the overlaying of several determinant factors—cultural (meaning mainly religious and

linguistic), urban–rural, generational, socioeconomic, as well as regulatory. There is also the

corollary that we attend to this complexity in relation to the critical analysis of global marketing.

The second is to acknowledge the very particular but often quite diverse, though always stra-

tegic, ways that global marketers negotiate and engage with the category of the regional.

Just as the dilemma of global cultural homogenization/heterogenization has been resolved in social theory with the concept of hybridity, so does the standardization/localization antinomy in marketing practice find its practical synthesis in glocalization. However, in both cases, our theor-

etical understanding of globalization processes is enhanced by positing the regional as a mediat-

ing factor between the poles of the global and the local. That is to say, the concept of the regional

opens up a space between the global–local dichotomy, especially since ‘local’ is usually under-

stood to be the national. The regional can be seen as a metaphorical intermediate level, or more

in the language of networks and flows, as actual or virtual spaces where global communication

traffic has been switched to lower systems in which more intensive action takes place. The notion

of diaspora, or better, that of transnationalism, is indeed implicit in this reformulation of the

Global Marketing Communications and Strategic Regionalism 11

regional in the sense that the movement of peoples across borders means that marketers no

longer confront the nation as a self-contained entity, but rather, are encouraged to think of

their target markets as existing in more fluid, cross-border situations. This, therefore, makes

‘regional’ marketing more ‘strategic’.

In terms of its relationship to the ‘glocal’, the strategic regionalism concept extends the

concept of glocalization in that it identifies instances in which marketing practice is modified

in accordance with cross-national cultural differences/similarities rather than those of national cultures, which is what, we would suggest, is usually assumed.

To reiterate one final, key point, as this study has shown there are several different forms of

strategic regionalism which are being mobilized and these differentiations require recognition

and further, careful attention. For instance, and as outlined above, these range from the

concentration of corporate operations within certain geographical regions (Colgate-Palmolive),

to marketing efforts tailored to geographical regions (McDonald’s), geolinguistic regions

(Colgate-Palmolive), and supranational ‘geocultural regions’ based on ‘clustering’ of cultural

and other compatibilities (Coca-Cola, Colgate-Palmolive).

While the economic logic of globalization might impel multinational marketers to seek the

economies of scale and other theoretical advantages of standardization, experience with the rea-

lities of linguistic and other cultural differences have obliged them to go some distance towards

the localization of their marketing campaigns. This study suggests that strategic regionalism in

its various forms represents a kind of practical compromise, a means of ensuring that campaigns

are not ‘glocalized’ any more than is strictly necessary. This new kind of pragmatism keeps as

much of the benefits of standardization as can be retained, while making minimal concessions to

the realities of cultural and other differences, and exploiting constructed similarities, in both

‘virtual’ (e.g. geolinguistic) and ‘actual’ world regions (‘Asia’, ‘Latin America’, etc.). In this

sense, strategic regionalism points up the degree to which the global–local dialectic is in prac-

tice mediated not only by the national, but also, and increasingly, by the regional, in all of its

complexity.

Acknowledgements

This paper is an output from a program of research under Australian Research Council Discov-

ery—Project, DP0556419, ‘Globalisation and the media in Australia’, funded 2005–2009. The

authors gratefully acknowledge the ARC’s financial support.

Notes

1 This paper is part of a larger study which examined the strategies of six global marketers with respect to

standardization, localization, and regionalization: Coca-Cola, Colgate-Palmolive, McDonald’s, Nestlé, Procter &

Gamble, and Toyota.

2 The origins of this strategy are said to stem from Daft’s time as country manager for Coke Japan in the mid 1980s. It

is reported that during this time, Daft ‘broke with tradition and expanded the company’s product-line beyond its

carbonated core brands to cater to fickle Japanese tastes’, introducing new products such as a canned coffee

called Georgia (still Coca-Cola’s most successful line in Japan), Royal Milk Tea, as well as various juices and

‘health tonics’ (Yoon, 2001). Upon elevation to CEO, Daft drew on this experience to redirect Coca-Cola’s

global marketing efforts. Daft firmly believed that a similar path to that taken in Japan was the way forward for

the company in all world markets if it was to regain a strong brand identity, as well as wrest market share and

brand supremacy from Pepsi.

12 R. Wilken & J. Sinclair

3 A more general example is found in the cultural and linguistic difficulties the company faced when rolling out its ill-

fated global ‘Life tastes good’ campaign because the tagline did not translate well in many foreign languages; the

campaign was ditched after the events of September 11 (Chura & Linnett, 2001).

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Rowan Wilken is Lecturer in Media & Communications at Swinburne University of Technol-

ogy, Melbourne, Australia. His teaching is in the areas of new media technologies, and the glo-

balization of the media and communication industries. His ongoing research is concerned with

the interconnections between teletechnologies (technologies of distance, such as computers and

mobile phones), and social and spatial theory, as well as locative media in its broadest under-

standing and including the implications of locative and mobile media on advertising. He is

author of Teletechnologies, Place & Community (Routledge, forthcoming), and co-editor

(with Gerard Goggin) of Mobile Technologies & Place (Routledge, forthcoming).

John Sinclair is Honorary Professorial Fellow in the Australian Centre at the University of Mel-

bourne. His record of internationally published research covers various aspects of the globaliza-

tion of the media and communication industries, particularly advertising and television, and has

a regional focus on Latin America and Asia. His ongoing research concerns the globalization of

the media in Australia, with particular reference to the advertising industry, taken in its broadest

political, economic, and cultural aspects. He is author of Images Incorporated: Advertising as

Industry and Ideology, and Latin American Television: A Global View. He is a co-editor of

and contributor to New Patterns in Global Television: Peripheral Vision; Floating Lives: The

Media of Asian Diasporas; and Contemporary World Television. He has held several visiting

professorships, notably at the University of California, San Diego, the University of Texas at

Austin, and the Universidad Autónoma de Barcelona, where he was UNESCO Professor of

Communication.

Global Marketing Communications and Strategic Regionalism 15

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