Managing Brands Over Geographic Boundaries and Market Segments

Rationale for Going International

Perception of no growth and increased competition in domestic markets Belief in enhanced oversees growth and profit opportunities Desire to reduce costs from economies of scale Need to diversify risk Recognition of global mobility of customers

Rationale for Going International

Optimal strategy for a global brand should consist of one product formulation, one package design, one price schedule, one distribution plan

the extent to which advantages accrue depends on extent to which the above can be achieved

Rarely possible, and a trade off between standardization and customization has to be considered

Advantages of Global Marketing

Economies of scale of production and distribution (supply side cost perspective) Lower marketing costs Power and scope credibility from expertise and acceptance across a wide variety of countries Consistency of brand image important when there is customer mobility Ability to leverage good ideas quickly and efficiently Uniformity of marketing practices

Disadvantages of Global Marketing

Differences in consumers

Needs, wants, usage patterns of products Consumer response to marketing mix elements

Varying product lifecycle - brand and product development in a different competitive environment Legal environment Marketing institutions intermediaries, media, Administrative procedures and autonomy of local offices

Standardization Versus Customization

Standardization and Customization Think global act local strategy that optimizes brand effectiveness in various markets

Positioning consistent. But may not be the same brand name and marketing program Packing may have the same overall look but tailored to local requirement

Standardization Versus Customization

Standardization and Customization Think global act local

Hire local staff to tailor marketing to the region,

Delivers locally oriented strategy, faster decision making

Centralized marketing strategies that preserve local customs

Increasing ability for coordination made possible by advances in information systems and telecommunication Decreasing concentration of production activities - made possible by flexible manufacturing technology

Establishing Brand Equity Over Market Segments

To build brand equity, it is necessary to create different marketing programs to address different market segments:

1. Identify differences in consumer behavior

How they purchase and use products What they know and feel about brands Choice of brand elements Nature of supporting marketing program Leverage of secondary associations

2. Adjust branding program

Global Brand Strategy

Global CBBE
1.

2.

3.

4.

Create brand salience establish breadth and depth of brand awareness Create brand image strong, favorable and unique associations Elicit brand responses positive and accessible judgments and feelings Cultivate resonance - intense active brand relationships

Global Brand Strategy

Global CBBE consider the differences in various markets

1.

2.

Creating brand salience note that different order of product introduction impacts consumer perceptions as to what the brand represents products offered, benefits supplied and needs satisfied mobile phones where there is limited land-line penetration Creating brand image product functionality is often largely fixed across markets but imagery associations may be local

History and heritage may vary across markets Brand personality may not have the same impact either

Global Brand Strategy

Global CBBE - consider the differences in various markets

3. Eliciting brand responses ensure proper balance and type of emotional responses and brand feelings Blending inner (enduring and private) and outer emotions (immediate experiential), is difficult with cultural differences 4. Cultivating resonance digital marketing aids the process, but grass-root efforts are needed to develop intense active loyalty

Global Brand Strategy

Global brand positioning 3 questions
1.

How valid is the mental map in the new market? How appropriate is the positioning?

What is the level of awareness? How valuable are the associations - core values

POPs, POD?
2.

What changes need to be made to Positioning?

Do any new associations need to be created / old ones modified or dropped?

3.

By what means should this new mental map be created?

Same marketing / adapted or new marketing activities are needed?

Global Brand Strategy

Global brand positioning because brand is in an early stage of development abroad, define the hierarchy of brand associations by countries depending on the similarities and differences across markets Key points of parity Then the PODs Decide how brand associations are to be created taking into account different tastes, perceptions, and environments

Building Global CBBE - Tactical Guidelines Ten Commandments of Global Branding

1. 2. 3. 4. 5. 6. 7.

8.
9. 10.

Understand similarities and differences in the global branding landscape Dont take short-cuts in brand-building Establish marketing infrastructure Embrace integrated marketing communications Cultivate brand partnerships Balance standardization and customization Balance global and local control Define operable guidelines Implement a global brand equity measurement system Establish effective lines of communication

Bands Going Global

by

Jean Noel Kapferer

Barriers to Globalization Strategy

1.

Market differences

Structural market differences Consumer category behavior patterns Price variance positioning and market positioning Other barriers

2.

Organizational blockages
Corporate culture Decentralized firms Relationship between HO and country branches

Pathways to Globalization
Three pathways
1.

Progressively duplicate original strategy across countries Orangina - a country a year progressively
Starting with markets with similar cultures

2.

Simultaneously launch brand in several countries

Particularly appropriate for cosmetics, technology, luxury brands, etc.

3.

Unify with local brands - inherited / acquired

Substitute original name with own name Vodafone and Hutch Or Retain old brand to benefit from equity associated with the original name Thums Up and Coke

Organization for a Global Brand

Three different approaches Decentralized approach - beginner brands let each subsidiary decide its own strategy and produce its own advertising

Centralized approach - Lead-country approach Decentralized structure but with strong coordination evolves over time, as centralized organizations lose touch with the different markets

Globalization and Communications

Communication approaches vary Produce advertising campaigns worldwide - allow local subsidiaries to produce their own e.g. Acer, Benetton Execution of the campaign adapted, but theme is centralized around the brand kernel

Strong focus on common graphics / character Pepsi, Johnson and Johnson

Pool of advertising from which subsidiaries choose - Coca-Cola (in the past)

Global Brand Management

by David Aaker

Global Brand Management

by David Aaker
Four approaches to GBM Top Management

Brand Champion usually the CEO Business Management Team top level Global Brand Manager / Stewart middle level Global Brand Team middle level, used in conjunction with GBM

Authority GBM / GBT versus Country Team

Formalized Authority categorizes actions, activities as

Imperatives - logo specifications, advertising theme Adaptable advertising adapted to local culture although theme is fixed Discretionary brand communication channels How the logo is presented Look and feel of the product or service design Advertising strategy, agencies and themes

Sign-off authority on any departure from imperatives

Brand strategies GBM / GBT, Country Manager may sign-off