MANAGING
BRANDS
GLOBALLY
UNIT 3
We organize this section on global branding to answer the following
three questions:
1.Why should a brand focus on global
markets? What are the advantages and
disadvantages of expanding internationally?
2. What is the definition of a global brand?
What are some factors which contribute to
global brand equity?
3. What are some pros and cons of
standardizing versus customizing brand
offerings? How should a brand effectively
customize various aspects of marketing mix?
Why Should a Brand Focus on
Global Markets?
A number of well-known global brands such as Apple, Google,
Coca-Cola, Microsoft, and Toyota have derived their sales and
profits from international markets. This has encouraged many
firms to market their brands internationally, for the following
reasons:
Perception of slow growth and increased competition in
domestic markets
• Belief in enhanced overseas growth and profit opportunities
• Desire to reduce costs from economies of scale
• Need to diversify risk
• Recognition of global mobility of customers
WHAT IS GLOBAL BRANDING ?
Global branding unifies and strengthens brand identity by aligning
messaging, visual identity, and marketing across international markets.
It builds a cohesive presence that resonates with diverse audiences.
It is critical to adapt to local markets.
Global brand strategy should elements like cultural nuances and
regional consumer behaviors and preferences.
This understanding also helps your teams comply with legal and
regulatory requirements in different countries, including trademark
laws, advertising regulations, and industry-specific rules.
With a strong global brand strategy, you'll be better positioned to
maintain consistency and authenticity, drive impactful localization
tactics, and accommodate trends and demands.
Benefits of a Unified
Global Brand Image
A harmonized brand presents a consistent and
cohesive identity across all touchpoints and
markets.
This
includes using the same logo, color scheme,
typography, messaging, and tone of voice in all
marketing materials.
A robust image builds trust and recognition,
drives customer loyalty, and enhances
competitiveness.
Awareness: Effective global branding introduces you to
new customers. For instance, if you launch a product line in
multiple countries simultaneously with a coordinated
marketing campaign, you can expand your reach to a
broader audience and attract new customers by raising
awareness in diverse markets.
• Recognition: A cohesive global image helps enforce your
identity so people can quickly pinpoint your brand
regardless of where they see it. Maintaining the same style,
quality, and experience in all your marketing materials
ensures that customers recognize your brand immediately.
• Competitive advantage: A well-executed global branding
strategy helps you stand out. For example, by leveraging
your international experience and resources, you can offer a
more comprehensive product range or better customer
support than regional competitors.
Advantages of Global Marketing
Economies of Scale in Production and Distribution. From a
supply-side or cost perspective, the primary advantages of a
global marketing program are the manufacturing efficiencies and
lower costs that derive from higher volumes in production and
distribution. The more that strong experience curve effects exist—
driving down the cost of making and marketing a product with
increases in production.
Lower Marketing Costs. Another set of cost advantages arises
from uniformity in packaging, advertising, promotion, and other
marketing communication activities. The more uniform, the
greater the potential savings. Branding experts maintain that
using one name can save a business tens of millions of dollars a
year in marketing costs.
Power and Scope. A global brand profile can communicate
credibility. Consumers may believe that selling in many diverse
markets is an indication that a manufacturer has gained much
expertise and acceptance, meaning the product is high quality and
Consistency in Brand Image. Maintaining a common marketing
platform all over the world helps maintain consistency of the brand
and company image; this is particularly important where customers
move often, or media exposure transmits images across national
boundaries. Services often desire to convey a uniform image due to
consumer movements. For example, American Express communicates
the prestige and utility of its card worldwide.
Ability to Leverage Good Ideas Quickly and Efficiently. Not
having to develop strictly local versions speeds a brand’s market entry.
Marketers can leverage good ideas across markets as long as the right
knowledge transfer systems are put into place. MasterCard’s corporate
marketing group helps facilitate information and best practices across
the organization.
Uniformity of Marketing Practices. Finally, a standardized global
marketing program may simplify coordination and provide greater
control of communications in different countries. By keeping the core
of the marketing program constant, marketers can pay greater
attention to making refinements across markets and over time to
improve its effectiveness.
Disadvantages of Global Marketing
The most compelling disadvantage of standardized global marketing programs is that they
often ignore fundamental differences of various kinds across countries and cultures.
Differences in Consumer Needs, Wants, and Usage Patterns for Products. Differences in
cultural values, economic development, and other factors across nationalities lead customers to
behave very differently. One consequence of the differences is that strategies that work in one
country may not work in another.
Differences in Consumer Response to Branding Elements. Linguistic differences across
countries can twist or change the meaning of a brand name. Sound systems that differ across
dialects can make a word problematic in one country but not another. Cultural context is key.
Customers may actually respond well to a name with potentially problematic associations. The
questions are how widespread the association is, how immediate it is, and how problematic It
actually would be.
Differences in Consumer Responses to Marketing Mix Elements. Consumers in different
parts of the world feel differently about marketing activity.27 U.S. consumers tend to be fairly
cynical toward advertising, whereas Japanese view it much more positively. Differences also
exist in advertising style: Japanese ads tend to be softer and more abstract in tone, whereas U.S.
ads are often richer in product information. There are also major differences in how consumers
use social media.
Differences in Brand and Product Development and the Competitive Environment;
Products may be at various stages of their life cycle in different countries. For
example, consider the detergent category and how P&G modified its strategy for its
detergent brand Tide. When entering the India market, P&G had to grapple with the
fact that only 10 percent of India’s consumers have access to a washing machine.
Most consumers wash their clothes with detergent bars and water.
This example highlights the importance of understanding the stage of development of
a given product category prior to launching a global brand. Moreover, the perceptions
and positions of particular brands may also differ considerably across countries, based
on local market conditions.
Differences in the Legal Environment: One of the challenges in developing a global
advertising campaign is the maze of constantly changing legal restrictions from
country to country. Canada banned prescription drug advertising on television. Poland
required commercial lyrics to be sung in Polish. Sweden prohibited advertising to
children, and Brazil recently instituted similar laws. Malaysia did not allow lawyers or
law firms to advertise. Advertising restricts the use of children in commercials in
Austria, comparative ads in Singapore, and product placement on public television
channels in Germany.
Differences in Marketing Institutions. Channels of
distribution, retail practices, media availability, and media costs
all may vary significantly from country to country, making
implementation of the same marketing strategy difficult.
Foreign companies struggled for years to break into Japan’s
rigid distribution system that locks out many foreign goods. The
prevalence of online shopping, smartphones, supermarkets,
and so on may also vary considerably, especially in developing
countries.
Differences in Administrative Procedures. In practice, it
may be difficult to achieve the control necessary to implement
a standardized global marketing program. Local offices may
resist having their autonomy threatened. Local managers may
suffer from the “not invented here” syndrome and raise
objections—rightly or wrongly—that the global marketing
program misses some key dimension of the local market. Local
managers who feel their autonomy reduced may lose
motivation and feel doomed to failure.
CUSTOMIZATION
V/S
STANDARDIZATION
One of the key decisions a global brand needs to make is what and how
much to standardize and what and how much to customize, in the
geographies that it is present in.
Product offering and brand messaging
The two most important aspects to consider in this context are: Product
offering and brand messaging.
As depicted in the graphic below, there are four approaches that global
brands can follow, and these are dependent on the interplay between the
category and culture in the markets they serve.
Total Standardization - same product, same
message
Generally, this approach is followed by brands in the
luxury, technology, and automobile categories. They
standardize all the elements of their product and
messaging across the globe. Consumers aspire to these
brands because of their global stature.
Apple markets the same products in terms of design and
features (although it outsources the manufacturing to
local markets). Its brand communication is also the
same with respect to the message, tone, and style.
The luxury car brands like Mercedes Benz, Audi, and
BMW also standardize their products and messaging
across markets.
Product customization - different product, same
message
McDonalds is a classic example. In India (and across
markets), they have customized their menu to suit the
local palette. The McAloo Tikki Burger is a derivative of
the Aloo Tikki. They also don’t use beef and pork. In
terms of the brand messaging though, McDonalds uses
their global theme ‘I’m lovin’ it.’ with a local twist.
Most global food brands adapt their tastes and flavors
within their global formats- Tandoori Chicken/Paneer
Pizza from Dominoes or Masala Chai from Starbucks.
Message customization - same product, different
message
Here, brands don’t change the product, but adapt their
messaging- the brand proposition and/or the creative
expression.
Take the case of Coca Cola. The product is the same all
over the world based on its patented formula. The
brand message is localized from time to time. For
example, when it wanted to increase penetration in the
Indian market with a 10 Rupee price point, it was driven
by the ‘Thanda Matlab Coca Cola’ campaign featuring
Aamir Khan. The global brand campaign ‘Open
Happiness’ was adapted to local cultural contexts, like
bringing together Indian and Pakistani people.
Total customization - different product, different
message
Some global brands change both the product and
communication for local markets.
Maggi instant noodles that sell around the world are as Indian
as it gets. The Indian consumer does not even consider Maggi
as a global brand. Its taste and flavors are tailored for India
and so is its brand messaging. The masala flavor outsells
every other flavor and campaigns like ‘Me and Meri Maggi’
make it one of the most loved brands among Indians.
In India, Cadbury’s Dairy Milk chocolate is having a sweeter
taste, compared to its western counterparts, catering to the
sweet tooth of Indians and ‘Kuch Meetha Ho Jaye’ is an India
specific campaign. Dairy Milk’s strategy is to substitute
‘mithai’ with chocolate, across occasions.
GLOBAL CUSTOMER-BASED BRAND EQUITY
In designing and implementing a global brand marketing program,
marketers want to realize the advantages while suffering as few of
the disadvantages as possible.
Understand Similarities and Differences in the Global
Branding Landscape
The first—and most fundamental—guideline is to recognize that
international markets can vary in terms of brand development,
consumer behavior, marketing infrastructure, competitive activity,
legal restrictions, and so on. Virtually every top global brand and
company adjusts its marketing program in some way across some
markets but holds the parameters fixed in other markets.
The best examples of global brands often retain a thematic
consistency and alter specific elements of the marketing mix in
accordance with consumer behavior and the competitive situation
in each country
Do Not Take Shortcuts in Brand Building
In particular, we must create brand awareness and a
positive brand image in each country in which a brand is
sold. The means may differ from country to country, or
the actual sources of brand equity themselves may vary.
Nevertheless, it is critically important to have sufficient
levels of brand awareness and strong, favorable, and
unique brand associations to provide sources of brand
equity in each country.
Building a brand in new markets must be done from the
bottom up. Strategically, that means concentrating on
building awareness first, before the brand image.
Tactically, or operationally, it means determining how to
best create sources of brand equity in new markets.
Establish Marketing Infrastructure
A critical success factor for many global brands is their
manufacturing, distribution, and logistical advantages. These
brands have created the appropriate marketing infrastructure,
from scratch if necessary, and adapted to capitalize on the
existing marketing infrastructure in other countries.
Companies go to great lengths to ensure consistency in
product quality across markets.
Embrace Integrated Marketing Communications
Many top global firms have introduced extensive integrated
marketing communications programs. Overseas markets do
not have the same advertising opportunities as the
expansive, well-developed U.S. media market. As a result,
U.S.-based marketers have had to embrace other forms of
communication in those markets—such as sponsorship,
promotions, public relations, merchandising activity, and so
on—to a much greater extent
Cultivate Brand Partnerships
Most global brands have marketing partners of some form in their
international markets, ranging from joint venture partners, licensees or
franchisees, and distributors, to advertising agencies and other
marketing support people. Barwise and Robertson identify three
alternative ways to enter a new global market:
1. By exporting existing brands of the firm into the new market
(introducing a “geographic extension”)
2. By acquiring existing brands already sold in the new market but not
owned by the firm
3. By creating some form of brand alliance with another firm (joint
ventures, partnerships, or licensing agreements)
The choice of entry strategy depends in part on how the resources and
objectives of the firm match up with each strategy’s costs and
benefits. Procter & Gamble would enter new markets in categories in
which it excels (diapers, detergents, and sanitary pads), building its
infrastructure and then bringing in other categories such as personal
care or health care.
Balance Standardization and Customization
As we discussed earlier, one implication of similarities and differences
across international
markets is that marketers need to blend local and global elements in
their marketing programs.
The challenge, of course, is to get the right balance—to know which
elements to customize
or adapt and which to standardize. Some of the factors often
suggested in favor of a more
standardized global marketing program include the following:
• Common customer needs
• Global customers and channels
• Favorable trade policies and common regulations
• Compatible technical standards
• Transferable marketing skills
