Global brands

There is a famous scene in Tarantino's movie, Pulp Fiction, where John Travolta and Samuel L. Jackson discuss the different names for a Big Mac around the world. Whether Le Big Mac or Royale with Cheese, there was never any dispute that the overall brand was McDonalds. This brand, along with Marlboro, Nike and Coca-

Cola, belongs to a small but distinguished group of truly global super-brands. This kind of recognition is the dream of many less well known brands who have to find their way around the problems of global design. Problems, as we saw in Chapter 3, arise with names causing an embarrassing faux-pas, colours, symbols or the logistical challenge of harmonizing a myriad of names and designs under a new brand identity.

Few brands can reach the level of standardization normally associated with McDonalds, Marlboro, Nike and Coca-Cola, whose positioning, advertising strategy, personality, look and. feel are in most respects the same from country to country. Therefore it is not unusual to find a strategy based on regional flexibility. The key is to establish core brand values and come up with a design solution appropriate to disparate regional markets. Even strong brands like McDonalds have to change sometimes - for example, in Sweden the packaging was altered to use woodcut illustrations and an overall softer design, to appeal to the Swede's perceived interest in food value and the natural world.

The dominance of globalization was reflected more in the textbooks of the 1980s and early 1990s, whereas by the late 1990s there was more often an appreciation of the environmental maxim 'think global, act local'. Marketers are attracted to globalization through demand motives such as internationally shared tastes, preferences and the expectation that products everywhere should be sold at the same price. However, any attempt to devise a 'world consumer' would seem only to result in the lowest common denominators being used, and would be a useful as any 'average'. Even within Europe the pan-European consumer can be difficult to identify as, for example, in the washing machine market where there are contrasts between consumers who prefer a top or front loading machine. However, companies like Gillette have attempted to capitalize on pan-European brands (see Box 7.1).

In the 1980s Gillette discovered that price competition from truly disposable ra/ois, ' e.g. Bic was eroding their profit margins and brand loyalty. To compete on price would : be futile in the long term. Instead the company focused on its concept of a shoving j system where only the blades were replaced but the shaver was durable.

The intention was to create n product which would serve US, Canadian and European customers, thus covering the North Atlantic marketplace, thus Sensor ; was launched in 1989. The name was selected for its ease of pronunciation in many languages as well as .for its technological imagery. As part of its intention to build « \orth Atlantic and then a global brand, the company used the Gillette name a-, a super-brand to capitalize on the company's dominant'«; m the jndustrv. !

The gamble paid off and Gillette Senior succeeded. On the back or this success the company has brought greater consistency to its other products across diverse markets. Thus names and graphics, have been given greater unity and fragmontjHion reduced. Fins strategy has successfully boosted sales, and increased customer loyalty in what | was becoming on undifferentiated, purely price-driven business. j uidnplM ¡mm A(kt'rm<ith l$3l) ' !

Table 7.1 Mandatory and cultural reasons for adaptation

Mandatory

Cultural

Legal reasons

Consumer tastes - beer can be preferred bitter, foamy, bubbly, sugary and have different strengths

Disposable income

Labour costs

Physical differences

Language

Illiteracy

Taxes and tariffs Technical requirements Nationalism

Climate

Culture acts as a natural entry barrier to pure globalization, and there is probably a greater recognition of this now amongst marketers than there was in the 1980s. If consumers share global values, then a globalization approach becomes easier and the economies associated with standardization will come into play. However, global strategies can also be pursued with the input of good local market research, and by making use of cultural 'insiders' to advise the company. Acquisition of local companies can also accelerate organizational learning in the local market and thus assist the globalization process. Compromises can be forced on a company either because of cultural differences or as a result of mandatory regulations (Table 7.1).

However, a global brand may not be an appropriate solution for every country. Aaker and Joachimsthaler (1999) suggest three difficulties with this concept. First, economies of scale may not be achieved. Cultural differences make the development, for example, of a global advertising campaign more difficult, and even a large agency may have trouble executing it well in all countries. Cost savings from 'media spillover' where people in France view German television advertisements are, they argue, exaggerated due to language and cultural differences. Second, putting a global brand team together and developing a superior brand strategy for one country is difficult enough without trying to devise one for a world-wide launch. Teams would have to assimilate too much information, be extremely creative and anticipate all the difficulties of a global execution. Finally, global brands cannot be imposed. Sometimes brands mean different things in different markets, for example, Honda means quality and reliability in the US and Europe but in Japan the quality of cars is taken as given and Honda represents speed, youth and energy. The name itself can be a crucial part of success in branding and a company in the US specializes in developing brand names (see Box 7.2).

i 111■ ■ -■ i .1 uMi'ivnv i\i'-i'il m ' ,iliiiinii.i. I ^ vv'iu li ■.[>(•( i.ill/ rs iiuo'iin-., up v. -Ill l-Mini ,, Mill"- I .1 pioil:. Itn-.. <nip.nn • li'Min r.f.nn'i:' , Wli "hi will1 i' h-i<\<- ' lie l\ is iii i'i ilnp . i ii hi I .iN.i> li.<\ l* L<t i'il i .lil.'ii Ka/i»r, l'u>(. h p im Inti'll.'i I li.nl i" t\ ini\ i-s ..!

C. in ii>. 1 up s> <ll< . lluml'i" .»I iipii.ins i. ,i.i! ,,11 Msk l>i\(di'li"' lu.m.'i'i ol i I- ti.i'i inn-1 In-.; .¿jm .in un.luiLiiiiIng oi ilie pioilinl, tin- di'mo<,-.i| ,-ii.s ui in.■ i ■ i .linn i mil .in idi' i .it " Ii.iI lie ii.hiu' iliiu.kl i'wki' I liUM l-.Miii Uh.Is .'i-'.lu iiii'ii'li In > |>|I.I' II' > , li'l l'l.lti'- lill I (M <-<11.111 ^ 'li'W dllN.lll'i! 11-. i'll' lki' I II, v. I'll' I 1,11 (-.

' ;.n i>l ,li. l'if.',g--"'t itiiiMii'iiin.ls lln 'ivip'in li.i-. In-i :i i ivohid null ■ <i-. nhi'u i'I- -11.ui .i in iv h| 'toe knou n '.:nipl\ «j-. .1 M.K'iiIii'.Ii i-ui l.ibk' I .'M<ii'i ¡"m iili-u u-

fcisilf^^^^pi^®IlllililplllllS

Aaker and Joachimsthaler go on to argue that rather than developing global brands, firms should concentrate on creating strong brands in all markets through global brand, leadership. This they define as using organizational structures, processes and cultures to .allocate brand-building resources globally, to create global synergies, and to develop a global brand strategy that co-ordinates and leverages country brand strategies.' In a study of 35 companies across Europe, the US and Japan, they found that four common ideas about effective brand leadership emerged from the interviews. These were:

■ Stimulate the sharing of insights and best practices across countries

■ Support a common global brand-planning process

■ Assign, managerial responsibility for brands in order to create cross-country synergies and to reduce local bias

■ Execute brilliant brand-building strategies

However, global, brands have not had it all their own way. Studies of the sources of our favourite brands have linked Nike sneakers to abusive sweatshops of Vietnam, Barbie's outfits to child workers in Sumatra and Shell's oil to the polluted and impoverished villages in the Niger Delta. These stories seem to be providing a focus for protest by activists against the 'brand bullies' as discussed by Naomi Klein (2000) in her book 'No Logo'. This will be discussed further in Chapter 10.

Controlling global brands can be a problem for companies. Pepsi spent £200 million (pounds sterling) on introducing its new blue cans all over the world in 1996 at the start of a 3 year programme. However, the company experienced problems because gray marketeers were selling the old style cans more cheaply in the markets where the new design had already been introduced. This resulted in brand dilution and customer confusion. The gray traffickers are attracted by currency fluctuations and differences in. taxes. Thus the goods flow from continental Europe into the UK, from Switzerland into France, from France to Belgium and from Norway into Sweden (The European, 1998). See Box 7.3 for further details.

Gray markets occur When branded items are distributed through (mauthovi^ed channel? Hi -ii (In - flov takes n'.ii-e Jfn^ national bound.ii-u- i\1-,eie piu,- illlloieuliak can v .¡okaM/Oil upon liuis f',i,i\ marketer- will piutlia-e r.ooib wilier ¡10111 :n ,n! n-i 1 'o,l Ji ,:lci or iliri\ th lioin I lie manut.u tuivr. .ind I lien 10 -.ell ¡If ,'iinlin 1 m ■■ '.if'n" 1'ii^ed 'eaikel al puilll lei hnii.ilh lhe\ aie 11. >1 mii'.i.He'un', >ni\ ia't but ¡hey may bt in i>nv.ch nl license .i.juvmcnis or ;;owi iirnent irade iee.nl :iioii':

Some consumer groups argtiv that such trade promotes competition, hut the manufacturer tends to view it as an impairment on the trademark owner's ability to got a full fot 11111 ii. Iieif i-ueslmoiK 01 piotei 1 Ihe hi.'nd im.ii;i.

In 1998 after some high-profile examples of gray market activity, the El.: imposed a ban on it resulting in an increase in legal actions taken against retailers and importers liaudling uii.iii.li.'i /ed gniius l:oph- L'k based mmt' mark.'l • -\eie 11 'i,g tin- :,i.i\ market sources lo obtain fashionable brands of clothing. However, the Advocate General of the European Court of Justicc ruled in January 1998 that'trademark owners ..■nid 1 *. 1 "■ enilie -ciliij: .»1 Iheir bi.uuled i;oods ii ti-,e go.uU h<ul been imported, ■ ■ rh. in I ;lf ir .uitiioii/.i'.ion. I ¡0111 i.unsiile the I I. lonum l lilti;.;iT < 'o ;> .:!so onleied into legal proceedings against Tesco Stares Ltd., claiming that they found counterfeit items amongst Tesco's tommy Hilfiger goods.

I11.11 ml In 1 1 .i- e helonj ine 1 mope,111 Com I. "silhouette, .1 ni.n-.ii'.n luiei o' la:.liionahle

Ic frames, sold a shipment of an outdated model to a trading company in

! Bulgaria with the stipulation that the frames could be sold only there or in the states . Ilie ■ .1 iniT N>\ let I niu. i lowi 1ei. Maill.;uei. .1 itM.iili'i' ul louei- pin '¡I sjwl.i. Ii-. (w hich Silhouette had refused to supply in Austria), subsequently acquired the frames, >rted them and' offered them for sale in its shops. Silhouette, fearing damage to it:, upmarket brand, sued. 10 slop the sale,

.¡11.h I'\ M\ el-, anil l a illilii (l'19'^l 1 i'V. e.iled th.it ;-',i".i\ in.li kei ,u ii\ ii\ oiCi:i- ill almost every manufacturing industry, and not just in k.ss developed or volatile ii.ri.-t. 11ie\ .;ib 1 .e lh.it 1:1 iiulei-in 101nb.1t market .11 H> ma" i::ers nri'I.

| s Co-ordinate distribution channels horizontally ; ® Keep apprised of changing regulations

| • i..> 1 1'iilio" 10 diileii nii.ileil pnuhieis ai rnss ni.itki-ls

I # RcUrk't the autonomy to set prices i * Slav in touch with-distributors

: .,.•.•lifted i\viii Kobimvu, 1998; Muer? mid Ciiffith, 1999: mid Vii\tcoiiohnA;. 199HI

Was this article helpful?

0 0
Financial End Game

Financial End Game

How to profit from the global crisis and make big bucks big time! The current global financial crisis has its roots embedded in the collapse of the subprime markets in the United States. As at October 2007 there was an estimated loss on the subprime market of approximately 250 billion. If you want to come out on top, you have come to the right place.

Get My Free Ebook


Post a comment