This paper uses the Unilever Butter Beater case to evaluate whether multinational companies should regionalize or globalize their product development strategies. It argues that adapting products to local tastes and preferences — while intuitive — is financially burdensome and risks diluting brand identity. Drawing on scholars including Mooij, Reibstein, and Featherstone, the paper contends that a standardized global brand, consistent in name, positioning, and identity across markets, is more sustainable and cost-effective. Coca-Cola and Pepsi are cited as models of successful global standardization, and the paper recommends that Unilever transform its Krona product into a similarly strong globalized brand.
A central strategic question facing multinational corporations is whether to regionalize or globalize product development. Would global products and brands truly lower the costs of local market entry? And what financial leverage can be gained from developing such products? These questions sit at the heart of the Unilever Butter Beater case.
Diversity in local tastes and preferences has led many multinationals to develop products that cater to individual markets. However, the Unilever Butter Beater case suggests this is not entirely a sound strategy. The differences between markets can be so substantial that development and advertising costs alone can consume a local subsidiary's first-year profits. It may therefore be far more effective to develop a product as a strong global brand and allow consumers to accept or reject it on those terms.
For a brand to be truly globalized and succeed across markets, it must shed visible cultural associations. This principle is evident in such powerful brands as Levi's jeans, Sony's Walkman, Pepsi, and Coca-Cola. These brands do not evoke precise cultural or ethnic associations, which is why they perform well in every market they enter. Strong Japanese brands, for instance, are not marketed "on the back of a Japanese way of life" (Featherstone, 1995, p. 9).
Cultural neutrality gives each country the freedom to decide whether to adopt a product after being educated about its benefits and advantages. A global brand is broadly defined as one in which all elements — packaging, design, brand name, and advertising — are standardized without local adaptation. In practice, very few brands achieve 100% standardization across every element. Nevertheless, by keeping the most important elements consistent across markets, a strong global brand can emerge even if minor adjustments, such as in advertising or packaging, are occasionally necessary (Mooij, 2009, p. 29).
In the Butter Beater case, Unilever may need time to educate consumers about the benefits of a product that serves as an alternative to both margarine and butter. That educational investment, however, is considerably less costly than a product development process designed to please consumers in each new market individually.
Adapting to local preferences and tastes is a risky choice. Even after a product has supposedly been tailored to local expectations, consumers may still reject it — for any number of reasons. The financial cost to the company can be enormous, and a product that fails in adapted form may struggle to attract consumers later when presented in its original form. It is therefore important to develop a strong regional or global brand that is introduced consistently across markets. Consumer response will vary, but a standardized approach allows the company to focus on multinational brand development without bearing the ongoing cost of local adaptation.
For a globalized brand to be genuinely accepted across markets, it must maintain consistency everywhere. As Reibstein (2005, p. 176) states, "for a global brand to be a true global brand, it must also be consistent, not just in name, but in position and what it offers." Interbrand (2007) echoes this view, noting that "the best brands achieve a high degree of consistency in visual, verbal, auditory, and tactile identity across geographies."
By making numerous changes to meet local tastes and preferences, a company risks diluting its brand to the point where it loses its identity. This dilution is counterproductive: consumers no longer perceive the product as a strong brand. Furthermore, creating multiple variations of the same brand places a significant financial burden on the company.
A globalized or regionalized brand is therefore strongly recommended. It tends to maintain a strong identity and brand image, and it makes the product development and management process more cost-effective. Coca-Cola and Pepsi serve as prime examples of highly globalized brands. Their product variations are not designed to cater to local tastes or preferences; rather, they are line extensions that originate in the United States and are subsequently introduced to global markets. Unilever's Butter Beater should adopt a similar strategy and transform Krona into a strong globalized brand.
"Multiple local variations dilute brand identity and profits"
"Standardization enables economies of scale and lower prices"
Mooij, M. K. de. (2009). Global marketing and advertising: Understanding cultural paradoxes. SAGE.
Reibstein, D. (2005). House of brands vs. branded house. Global Agenda, 3(January), 175–177.
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