Marketing Essays - Global Branding Advertising

Global Branding Advertising

Branding

“Entire process involved in creating a unique name and image for a product (good or service) in the consumers’ mind, through advertising campaigns with a consistent theme. Branding aims to establish a significant and differentiated presence in the market that attracts and retains loyal customers.”

(www.businessdictionary.com)

In the early days of marketing, brands were used as a marker of ownership. Over the years however, through the application of sophisticated marketing techniques, branding has become much more than just a label. In modern day terms brands are arguably as important as the product itself, and in some cases more important! You could say that we live in a brand culture, where the label is the determining factor for the consumer. It’s no wonder then that organisations are allocating huge budgets on brand development. Mainly brands are aimed at encouraging consumer loyalty.

With the advent of huge organizations spreading trade all across the world and the effects of the internet and global media, global branding has become a very important aspect of marketing. By looking at examples from the real world we can identify and evaluate the key reasons for a company to market under a global brand name.

Global Branding

With the internationalisation of markets and the rise in competition on a global scale, organisations are continuously expanding the geographic scope of their operations. At the same time, with the spread of global and regional media, the development of international retailing, and the movement of people, goods, and organizations across national borders, markets are becoming more integrated. As a result, firms need to pay greater attention to coordinating and integrating their marketing strategy across markets. An important element of a firm’s international marketing strategy is its branding policy. Strong brands help to establish the firm’s identity in the market place, and develop a solid customer franchise. Clifton, Rita.; Simmons, John, (2003) relates that company brands marketed in different parts of the world would often have completely different visual appearances in each of those markets. Then, in the early 1980s, the marketing trend became one-brand/one-look and local differences were wiped out, this was the first step towards truly global brands. These days, some firms think that global consistency and standardization is the key. However there is also the view of “think global, but act local” which is prevalent in some organisations (http://dinarstandard.com/).

Most organizations would recognize the key elements of a brand being the product itself, pricing strategy, distribution, packaging, advertising campaigns and associated promotions, brand name and anything else that contributes to its overall look and presentation. Murphy, John M (1991) says “it is the particular, differentiated product of one supplier”.

The International Marketing Mix

As described above, it is important when creating a global brand that in the process there is careful consideration of key elements; these elements are grouped into the international marketing mix.

International Product Strategies

On the international scene you could argue that the organisation has a choice to make, adjust the product or sell standardised merchandise? Fundamental marketing concepts tell us that an organisation will make more sales if they aim to meet the requirements of the target market. In international markets, you have to reflect upon the cultural backgrounds, buying behaviour, levels of personal disposable income etc in order to deliver a customized marketing mix strategy to suit that specific market.

However, the argument for standardisation proposes that if you go through the hassle of adjusting the product to suit local markets the major noticeable outcome is the increase in the overall cost of producing the product and diminishes the brand on the global scale. In today’s global world, where consumers travel more, watch satellite television, communicate and shop internationally over the internet, the world now is becoming a lot smaller. Because of this there is argument that there is no need to adapt products to local markets. Arvidsson, Adam (2006) gives examples of brands such as Coca-Cola, MTV, Nike, and Levis that are all successful global brands where they have a standardised approach to their marketing mix; all these products are targeted at similar groups globally.

However, with certain product lines certain situations may arise where a company must adapt their product and marketing mix strategy to meet local needs and wants that are set strongly in the local way of life and cannot be changed. Schroeder, Jonathan E.; Salzer-Morling, Miriam (2006), give the example of McDonalds which is a global player and their burgers are adapted to local needs in India where the cow is a sacred animal their burgers are served with chicken or fish and in Mexico burgers come with chilli sauce. There is also the example of Coca-cola, where in some parts of the world the taste is noticeably sweeter than in others. Though there is the argument that standardisation is better for companies because of the major savings in the cost of launching global brands, there are many organisations that will have to ‘think global, but act local’ if they want to be successful and firmly establish their brand in these foreign markets (Schroeder, Jonathan E.; Salzer-Morling, Miriam, 2006).

International Promotion Strategy

As with international product strategy an organisation can either adapt or standardise their promotional strategy. Advertising campaigns in foreign countries might have to be modified for obvious reasons such as language barriers or for less obvious reasons such as the standard campaign used in the national market may contain messages that might be offensive to overseas residents. For example, the use of certain colours might be something that needs to be attention paid to it like in (Schroeder, Jonathan E.; Salzer-Morling, Miriam, 2006) explains how in India red is the colour worn by the bride in weddings, white is the colour for mourning in Japan, you don’t want to mix these colours to symbolise opposite things. Arvidsson, Adam (2006) argues that the current level of the advances in media development also has to be considered. Questions have to be asked such as, is commercial television well established in the proposed country? What is the level of television penetration? How much control does the government have over advertising on TV and radio? Is print media more popular then TV? Many organisations go for a strategy of adapting advertising messages to local markets to best meet consumer demand.

International Pricing Strategies

When talking about international pricing, it’s not unusual from the outset to think its going to be tricky. On top of having to consider the conventional pricing factors such as fixed and variable costs, competition, company objectives, proposed positioning strategies, target group and willingness to pay, the organisation will also have to make decisions on the costs of transport, any tariffs or import duties that may be levied on the product(s) when they are sold on in global markets. Also what currency do you expect to be paid in? Will it be home or international currency? Exchange rates and their constant fluctuation will most likely impact the profitability of the product and influence pricing decisions.

Other factors to consider include local incomes, what are income and PDI levels. What is the general economic situation of the country and how will this influence pricing?

Then there is also the situation with how the internet is providing increased price transparency for consumers. Products can be bought online from any overseas organisations at the local prices in local currency formats. An example of this is DVD’s that can be purchased from websites like www.dvdsoon.com which deliver internationally.

International Distribution Strategies

In the UK, looking at a normal distribution channel, you can have distribution going from manufacturer, wholesaler, and retailer to consumer or direct from a manufacturer to a retailer. In an overseas market there may well be more intermediaries involved. For example in Japan there are approximately five different types of wholesaler a product goes through before the product reaches the final consumer. In your international market, is it dominated by major retailers or is the retail sector made up of small independent retailers? Is internet distribution common for your product?

Reasons for Standardisation of Global Brands

The first and arguably most major advantage gained from creating a global brand is the ability to extend your market relatively straightforwardly and inexpensively. Once you have an international brand in place it can potentially be shipped into new markets without too much expenditure. A lot of exporters take the route of setting up production facilities abroad and forming international brands, so an international brand in this scenario is developed from small-scale to large-scale exports as an indicator of potential for that market. An example of this is major Japanese automobile manufacturers like Toyota and Mitsubishi. These organizations started with small-scale imports to places such as the UK and established a good base with which they expanded to large-scale imports and now have production plants all over the UK producing and selling their branded motors in the UK in massive quantities.

In Murphy, John M (1991), he argues that another key reason for marketing a brand globally is the advantage of inexpensive transfer of experience. He claims that by focusing on the product itself i.e. the key unique selling points, distribution, promotion etc, you can transfer this knowledge quickly and easily in international markets to achieve success without having to completely reinvent the brand and thus incur the high costs related to brand creation again and again. In essence it is a form of reaping benefits economies of scale, the knowledge and experience obtained in one market can be forwarded and exploited in others. The tire industry is a good example of this type of exploitation of knowledge transfer to international markets. For example, a tire manufacturer producing a range of branded tires can take the expertise and knowledge gained in say Germany and apply it pretty much the same way in the UK i.e. in Germany the top tire manufacturers all sponsor race teams in the popular race series’ such as the DTM and in the same way the same manufacturers sponsor teams in the BTC as promotional aspects of branding strategies.

Another important reason is the spread of international advertising. The introduction of satellite TV allowed for images to be beamed to millions of viewers all around the world. Popular broadcasts such as F1 motorsport and live boxing events are watched internationally and are opportunities for companies to promote their brand globally. The internet has expanded this phenomenon even further. Examples of truly global brands are evident everywhere on the internet e.g. Google, eBay, MSN etc. Brands that were already globally recognized have also taken their brand image further with these technologies and reach even more consumers now than ever before, Arvidsson, Adam (2006) contains examples such as Coca-Cola, who have probably the most recognizable brand in the world, have spent uncanny amounts on getting their adverts onto the most popular webpage’s.

Companies also started considering international branding when tourism started to boom in the 1960’s and it is now a main reason for having an international brand. For example, British holidaymakers choose destinations in the Mediterranean in large numbers, therefore it would be a sensible policy to provide the brands preferred in Britain available to them when on holiday. This is a policy taken up by many popular brands in Britain especially the case with wines and spirits; brands such as Heineken and Carlsberg have used this to their advantage and have transferred their brand loyalties from one market to another.

Reasons for Localisation and Differentiation of Global Brands

When saying “global brand” one may assume we mean a standardized product sold over different continents, this is true in some cases but its meaning can vary for different brands as some take steps to differentiate in order to accommodate local customs and/or regulations.

A leading example of this is the European brand of Diet Coke. In many of the Europe based markets, the word “diet” would make many consumers view the product as feminine, which would lead to obvious deductions from male purchases, so the brand name in Europe is instead called Coca-Cola Light. The packaging and labels are near identical to Diet Coke, so in spite of the name change the product retains its global familiarity and is clearly recognisable, this is reassuring to U.S. consumers travelling abroad to European destinations (www.themanagementor.com). In Schroeder, Jonathan E.; Salzer-Morling, Miriam (2006) there is also the example of Johnson & Johnson’s global prescription brand of anti-dandruff shampoo. This shampoo is only called Nizoral in the markets where the name is obtainable as in some markets it is unavailable due to copyrights and various other reasons. As such, the characteristics that were chosen for its over-the-counter introduction had very strong graphical icons for it to create and maintain some type of easy visual recognition across a variety of markets and even brand name variations.

Some organisations take tremendous steps to ensure using the same brand name in all markets. Clifton, Rita.; Simmons, John, (2003) give the example of Pillsbury who wanted to market Progresso, a strong and growing U.S. brand of Italian-style food products, as a global brand. After conducting some market research the company found out that in some South American markets the brand name could be linked with things other than food products, even as far afield as financial services. So the company took the step of creating a made-up word, Frescarini (meaning “fresh dough/pasta”) and this was established as the global brand. Knowing and understanding such cultural nuances is vital and can help to avoid problematic situations in the future. Like in cases such as the case of Japanese car manufacturer Mitsubishi, who desired to globalise one of its brand models the Pajero. In the process they found that in certain Latin American countries, the term Pajero is slang for compulsive sexual behaviour! So obviously they couldn’t market the brand name Pajero in these places, instead Mitsubishi is now marketing the Pajero under the name “Montero” in most parts of the world.

In some cases it is only a really minor change within the successful strategy is all that is required. For example, the brand of Benecol created a packaging architecture that incorporated a mountain scene to communicate that the key ingredient is a natural plant. This was then overlapped with photography of food. The picture of the food on the packaging was left changeable. This way it allowed for different shots to be applied in that slot to accommodate any local needs. For example, in the U.S. the package for the spread features an English muffin, as opposed to Europe, where rolls would be used. The approach used in this process is to first identify the brand proposition, which may or may not coincide with the product characteristics, and then develop a meaningful visual representation of this proposition. The next step is to determine which elements are key to the imagery, which ones are most likely to provide global recognition and which ones need to be tailored to local conditions. Even though this example is not of a change in brand name but of a change in imagery across the different markets, it still shows how there is sometimes a need to alter the brand slightly across markets in order to accommodate local needs.

Conclusion

As the popularity of global brands increases, it’s evident that marketers are looking to consolidate brands and direct resources towards brands that can prove successful on a global basis. Once the organisation takes the decision on what brands it will be elevating to this status, a lot of resources and effort will be required to obtain the degree of consistency needed for a global brand. Normally, the means of achieving that consistency is through large amounts of marketing dollars. After narrowing down the brands with real global potential, these marketing dollars can then be used more efficiently achieving broadbased brand recognition and conveying a cohesive message worldwide.

The cohesive message may need to suffer sometimes however in order to achieve differentiation from competitors. Like in the examples given before, it might just happen that an aspect of the brand used in one market, be it colour, name, anything, is not viable for use in another market for reasons such as being too similar to a major competitor, offensive meanings in the other market. In this case, the organisation must evaluate the situation to determine what needs to be altered and how it can be altered so that the package can still perform in the local marketplace while maintaining its brand familiarity globally. In some situations however, a compromise might have to be reached so that the brand can perform in that marketplace, even if its uniformity suffers a bit.

Bibliography

Books

• Murphy, John M (1991), Brand Strategy, Fitzwilliam Publishing Limited
• Arvidsson, Adam (2006), Brands: Meaning and Value in Media Culture, Routledge Publishing
• Schroeder, Jonathan E.; Salzer-Morling, Miriam (2006), Brand Culture, Taylor Francis Publishing Ltd
• Clifton, Rita.; Simmons, John, (2003), Brands & Branding, London Profile Books Ltd

Websites

• http://www.businessdictionary.com/definition/branding.html (03/04/2008)
• http://dinarstandard.com/marketing/InternationalBranding061507.htm (15/04/2008)
• http://www.themanagementor.com/kuniverse/kmailers_universe/mktg_kmailers/Coke’s.htm (17/04/2008)