The value of local brands
Posted on June 19, 2012
For some time now people have been arguing that the more businesses become internationalised, the greater mutuals looking like irrelevant anachronisms.
News last week that the staple British brands of Sarsons Vinegar and Hayward pickles have been sold to a Japanese company got me thinking about the notion that as the world becomes more globally connected, the value of local brands is diminishing.
It's easy to see why Apple, Amazon, Facebook and others have produced internationally valued brands, with the internet knowing no barriers; and we can see some evidence of that in financial services. Banks and big insurers have become increasingly internationalised; the UK's largest insurer, Prudential, achieves most of its sales outside the UK and has recently begun to explore relocating, in a coordinated call with HSBC.
But just as those firms are exploiting the advantages of working across international boundaries, recent events in Europe remind us just how difficult it can be to co-ordinate, with differences in markets, customs and cultures as well as economic factors. Indeed, when the gender directive is fully implemented later this year, UK consumers will be puzzled as to how rules can be designed to disadvantage them.
So just as there are lots of advantages in building big, global companies, so there are inherent and abiding opportunities for small, local mutuals. For a start, their conservative business approach means they're not heavily exposed to failing economices in Europe, or bad debts in North America.
Instead, mutuals have been described as a 'haven of stability' in an increasingly turbulent world. With no shareholders to satisfy they can afford to develop their business with longer-term horizons or lower profit expectations. They work within clearly defined communities and embrace the local culture in a way that conglomerates simply cannot. From a customer's viewpoint, that means not having to rely on a call centre in Asia, or to put up with a brand name or advertising that is clearly designed with other countries in mind.
In an era where mis-trust in financial services is rife, having a local brand and identity is once again a clear advantage. It's one we should be expecting the mutuals to adopt with ever greater enthusiasm. After all, if we (with apologies to Welsh and Scottish readers) can get jingoistic about tonight's football, then we should all get exciting about the best of British mutuals!
Last week I chaired a conference on 'The future of life and long-term savings'. At the start of the day I asked the audience whether they saw a positive future for the sector- there was a distinct lack of enthusiasm. We heard presentations from a wide range of providers, distributors and consultants, and the strongest message was that the sector had a great deal of work still to do to enable consumers to trust them, and that putting customers first was key to that. Products that meet a real need, communication that is clear and meets modern expectations for social networking, and service that is efficient and which does what the customer needs, are essential ingredients of that.
Now, however cliched that might sound, the effect on the audience was marked, and when I repeated my opening question at the end of the day, I was encouraged to see the sentiment had become distinctly more optimistic. Let's hope that positivity is taken back into the office, and translated into a real commitment to serving customers more fairly.
To understand more about the benefits of mutuals, go towww.OwnedByYou.org.
Wish to receive regular updates? Comments?
Fill in our contact form: contact us