The Top 3 Challenges Regional Marketing Models Create for Global Businesses

June 27, 2024

By [email protected] (Kipp Bodnar)

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Starbucks recently shifted from a global to a regional marketing structure. Kieran and I believe this is the worst thing you can do to your marketing strategy, resulting in significant, long-term business consequences.

Starbucks’ new CEO, Brady Brewer, recently announced a shift from a global marketing approach to a regional, decentralized model. As part of the change, Brewer is eliminating the role of a global CMO and will instead have regionally divided marketing teams with regional CMOs.

While this may seem like a strategic move to tailor marketing efforts to local nuances — Brewer was previously Starbucks’ CMO, after all — we believe this is the single biggest mistake a marketing leader can make.

As discussed in the latest Marketing Against the Grain Podcast, we dive into the biggest challenges that regional marketing models create for global businesses.

We also touch on the lessons learned by companies like Uber and HubSpot, which have tried this structural change, and steps to build your own global marketing strategy.

Regional Marketing Model Challenges

1. Inefficiency and Misaligned Competition

One of the core challenges of a regional marketing model is that it generates significant inefficiency and counterproductive competition.

For example, when teams operate independently, they often (unknowingly) duplicate efforts, creating similar campaigns from scratch instead of optimizing and scaling successful strategies globally. This not only wastes valuable resources but also leads to inconsistent execution.

Additionally, having multiple CMOs can incentivize teams to compete over the same resources, goals, and budgets. Each CMO wants to make their region seem ‘special’ and ‘different,’ resulting in what Kieran describes as “kingdom making.”

This phenomenon shifts the team’s focus from collaboration and unified strategy to internal rivalry, ultimately diminishing the overall impact of marketing initiatives and reducing efficiency across the organization.

2. Inconsistent Brand Messaging

A second challenge with regional marketing approaches is that it becomes increasingly difficult to maintain a consistent global brand experience.

Why? Because regional CMOs will all try to put their personal spin on it.

While regional teams might be better equipped to understand local nuances, the lack of a centralized strategy leads to conflicting and often confusing brand messaging across different markets.

Overall, we believe that a good idea is a good idea everywhere. What we mean by this is that the world is much more the same than you think — and is becoming increasingly so.

“In nearly all of my experience,” says Kieran, “more than 80% of a marketing strategy can be copied across most regions with a couple of exceptions. Plus, technology will continue to make the world smaller and smaller, highlighting the need for a unified approach.”

3. Fragmented Knowledge & Expertise

A third challenge that regional marketing models create is the fragmentation of technical knowledge and expertise.

Today’s marketing requires a deep and thorough understanding of algorithms, storytelling techniques, and emerging technology like artificial intelligence (AI).

By decentralizing marketing teams, however, businesses dilute this information-sharing across regions and create rigid knowledge silos that impede learning and …read more

Source:: HubSpot Blog