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Companies struggle with innovation because they put all their chips on one innovation paradigm-what Holt calls better mousetraps. This is innovation as conceived by engineers and economists-a race to create the killer value proposition. It wins on functionality, convenience, reliability, price, or user experience. Fortunately, building better mousetraps is not the only way to innovate. In consumer markets, innovation often proceeds according to a logic Holt calls cultural innovation. Better-mousetraps innovation is organized by quantitative ambitions: Outdo your competitors on existing notions of value. Cultural innovation operates according to qualitative ambitions: Change the understanding of what is considered valuable. Holt's research and consulting reveal the strategic principles that allow companies to pursue cultural innovation. In this article he explores those principles using the stories of how the Ford Explorer reinvented the family car and how Blue Buffalo reinvented the ideology of dog food.

Social media was supposed to usher in a golden age of branding. But things didn't turn out that way. Marketers originally thought that Facebook, YouTube, and Twitter would let them bypass mainstream media and connect directly with customers. Hoping to attract huge audiences to their brands, they spent billions producing their own creative content. But consumers never showed up. In fact, social media seems to have made brands less significant. What happened? The issue is, social media has transformed how culture works, in a way that weakens certain branding techniques. It has united once-isolated communities into influential "crowdcultures." Crowdcultures are very prolific cultural innovators. Their members produce their own content--so well that companies simply can't compete. Consider that people making videos in their living rooms top the charts on YouTube, which few companies have managed to crack. While they diminish the impact of branded content, crowdcultures grease the wheels for an alternative approach, "cultural branding." In it, a brand sets itself apart by promoting a new ideology that springs from the crowd. Chipotle did this successfully when it made two short films critiquing industrial food, tapping into a movement that began in the organic-farming subculture and blew up into a mainstream concern on social media. Other good examples come from personal care. Axe revived its brand by becoming an over-the-top cheerleader for the "lad" crowd that arose as a response to politically correct gender politics. Dove championed the other side of the divide, with campaigns that spoke to crowdculture concerns about unhealthy beauty standards for women. Brands succeed when they break through in culture, and crowdcultures are a great vehicle for doing that. But firms can't identify the critical opportunities by relying on traditional segmentation and trend reports.

It's time to rethink global branding. More than two decades ago, Harvard Business School professor Theodore Levitt argued that corporations should grow by selling standardized products all over the world. But consumers in most countries had trouble relating to generic products, so executives instead strove for global scale on backstage activities such as production while customizing product features and selling techniques to local tastes. Such "global" strategies now rule marketing. Global branding has lost more luster recently because transnational companies have been under siege, with brands like Coca-Cola and Nike becoming lightning rods for antiglobalization protests. The instinctive reaction of most transnational companies has been to try to fly below the radar. But global brands can't escape notice. In a research project involving 3,300 consumers in 41 countries, the authors found that most people choose one global brand over another because of differences in the brands' global qualities. Rather than ignore the global characteristics of their brands, it's critical for firms to manage those characteristics, because future growth for most companies will likely come from foreign markets. Consumers base preferences on three dimensions of global brands--quality (signaled by a company's global stature); the cultural myths that brands author; and firms' efforts to address social problems. The authors also found that it didn't matter to consumers whether the brands they bought were American--a remarkable finding considering that the study was conducted when anti-American sentiment in many nations was on the rise.

Some brands become icons. Think of Nike, Apple, Harley-Davidson. But they are not built according to the principles of conventional marketing, says Harvard Business School marketing professor Douglas Holt. Iconic brands beat the competition not just by delivering innovative benefits, services, or technologies, but by forging a deep connection with the culture. A brand becomes an icon when it offers a compelling myth. In America, the most potent myths are depictions of rebels. Mountain Dew has long offered a rebel myth in ads showing exciting, vital men who are far from the ideological model of success. Loyal customers drink the beverage to consume the myth. But Mountain Dew's greatest achievement is that it has retained its iconic power by creating fresh rebel myths to suit the tensions of each era. Holt says marketers can learn from Mountain Dew and other iconic brands if they are willing to move beyond conventional brand management. They must learn to target national contradictions instead of just consumer segments, create myths that make sense of confusing societal changes, and speak with a rebel's voice.

Develops a cultural framework for thinking about what a brand is and how firms shape their brands through their marketing activities. Four dimensions of the brand are described: economic, social, psychological, and symbolic.

Highlights the key role of selecting creative in brand communications, the challenges of building a brand in a turbulent cultural environment, the challenges of extending an advertising campaign, and the interpretation of ads as a crucial senior management skill. Includes color exhibits.

Spreadsheet supplement for case 502-040.