Global Branding Strategy

Chapter Overview Brand definition Global, Regional, and Local Brands Brand Equity The pros and cons of global branding Global Branding Strategies 2 Defining brands BRANDS are symbols associated with a product or service that identifies legally the maker of the product. Brands are then legally protected The right needs to be registered in each country where the brand is sold for the protection to hold. As a competitive advantage, a strong brand can be a sustainable advantage – but needs forceful enforcement against piracy and imitators Definition of Brand (???? ) ????? ?? ???? ???? ???? (Yahoo! ) ????????????? ,?? ?????? ,????????? ????? ,?????????? ??? 4 77,839(U$M) Many types of brands Product brands – Tide Corporate brands – Boeing Master brand – Intel, Microsoft Umbrella brands – Pepsico Endorsement brands – Polo by Ralph Lauren Dual branding – Cingular, AT&T Brand extensions – Virgin 5 Global Brands GLOBAL BRANDS ARE BRANDS ASSOCIATED WITH GLOBAL PRODUCTS WHICH ARE WELL KNOWN IN ALL MAJOR MARKETS OF THE WORLD. Ex’s: SONY, MERCEDES-BENZ, MICROSOFT, COCA-COLA. Regional and Local Brands REGIONAL BRANDS ARE BRANDS WHICH ARE UNIFORM ACROSS A REGION (Honda’s Acura/Legend). LOCAL BRANDS ARE BRANDS FOUND IN ONLY ONE OR TWO MARKETS (Ex’s: Fortnum & Mason in the U. K. , A&W Rootbeer in the U. S. ,) THE TYPICAL MULTINATIONAL FIRM HAS A “PORTFOLIO” OF BRANDS, SOME OF WHICH ARE GLOBAL, SOME ARE REGIONAL, AND SOME LOCAL ONLY. 7 Customer Brand Equity Customer Brand Equity is the value of the positive associations that consumers have with a product’s brand name.

These associations often involve emotional attachments, affinity, positive brand image, and brand identity. They also involve cognitive factors such as familiarity, knowledge and perceived quality, as well as social factors including peer group acceptance. When these associations turn negative (as in antiglobalization sentiments against global brands) the brand equity can go down very quickly. 8 Financial Brand Equity “Hard side” Financial BRAND EQUITY is the monetary value???? f a brand in terms of net revenues the brand is expected to generate over time, across all country markets. How to calculate: Check “Interbrand’s Hard Equity Formula” (e. g. the cost of brand sales, marketing costs, overhead costs…. ) Financial brand equity is sometimes called “hard equity” – while customer brand equity is “soft” equity. For “hard equity” global reach of the brand matters more (????? ?????? ), since the value is computed as a sum across markets and segments. For “soft equity”, affinity to the individual consumer (??????? ?) matters more. FINANCIAL BRAND EQUITY THE WORLD’S MOST VALUABLE BRANDS 1 2 3 4 5 6 7 8 9 10 Brand Name 2006 Brand Value ($ billions) Coca-cola 67. 0 Microsoft 56. 9 IBM 56. 2 GE 48. 9 Intel 32. 3 Nokia 30. 1 27. 9 Toyota Disney 27. 8 McDonald’s 27. 5 Mercedes 21. 8 Source: Interbrand. com 2007 10 Global Branding Strategies (1) Global Brands A truly global brand is one that has a consistent identity with consumers across the world. Economic of Scales: The development costs for products launched under the global brand name can be spread over large volumes (???? ).

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Brand Awareness: A global brand has much more visibility than a local brand. The fact of being global adds to the image of a brand 11 Global Branding Strategies (2) Global brands are also able to leverage the country association for the product The value of a global brand (brand equity) usually varies a great deal from country to country (three key value dimensions: quality signal: Global brands cannote better quality and offer higher heritage global myth: Gives customer a sense of belonging, of being part of something bigger Social responsibility: e. . Nike, Shell, Timberland, Kiehl’s 12 Global Branding Strategies (3) Inter-country gaps in brand equity may be due to any following factors History: much more familiarity for earlier comer Competitive climate: The battlefield varies from country to country Marketing support Cultural receptivity to brands Product category penetration: due to different life style 13 Global Branding Strategies (4) Local Branding (????? ????????????????? ????? ): ????? Examples: Coca Cola Global Branding: Coke, Sprite, Diet Coke, Fanta Local Branding: owns numerous local and regional brands across the globe; India: Thums Up, Japan: Georgia (ready-to-drink coffee) Some Reasons for Local Branding Cultural Barrier : Pocari Sweat in Japan, Sisi in Holland Patriotism and Buy-Local attitudes: Some case in Beer industry in Emerging Country Local Brand from Acquisition : Local brand equity, e. g. Danone in France adapt this strategy in China for Wahaha (bottled water) 14 Global Branding Strategies (5) Global or Local Brands?

Nestle, Unilever have a portfolio of local, regional or global brands Branding Approaches Solo branding : Each brand stands on its own with a product or brand manager running it (e. g. Unilever, P&G) hallmark branding : The firms tag on one brand (e. g. Bank, Acer, Benq, Asus) family branding : Hierarchy of brands (e. g. Wii, Toyota) Combined branding : ????????????????? (e. g. Sony Ericsson) A firm’s global brand is shaped by three types of factors: Firm-based drivers Product-market drivers Market dynamics 15 Global Branding Strategies (6)

A firm’s global brand is shaped by three types of factors: Firm-based drivers Centralized firms: Global Bands, Decentralized: mash of local & global brand Expansion strategy: Ahold in Holland, (25 names worldwide, e. g. ICA in Sweden) Product diversity: Unilever (more products) & Nokia (mobile related products) Product-market drivers nature and scope of the target market: Cultural embeddedness : high, local brand competitive market structure: Key players local, regional, or global Market dynamics: Economic integration & Customer mobility 16 Nestle Branding Tree 17 Brand Name Changeover Strategies

Fade-in/fade-out: the new brand is tied with an existing local band, and after a while, the old is dropped e. g. Euro Disney and then new brand as Disneyland Paris Co-branding : ?? /AT&T, Whirlpool/Philips, HP/Compaq Transparent forewarning :?????? (e. g. Mars in Pan Europe Market, Replace Rider to Twix) Summary axing : ?????? 18 Brand Name Changeover Strategies Consumer research prior to change the brand name Length for the transition period: IBM/Lenova,IBM in the first 18 month, Co-branding (18-40 months), Lenovo (40-60 months) To avoid negative spillovers on the global brand name: e. Whirlpool buy Raybo (half of life expectancy of Whirlpool) in China Monitor the marketplace’s response 19 Global Branding StrategiesPrivate Label Branding Private Label Branding (“Store Brands”) ???? : very popular in several European countries but not in Japan or some Asia countries, Switzerland (45%), German (30%), UK (28%) Factors explaining success of private labels: 1. Improved quality of private-label products 2. Development of premium private label brands 3. Shift in balance of power between retailers and manufacturers ???????????? e. g. Carrefour & Tesco) 4. Expansion into new product categories (????????? ?? ) 5. Internationalization of retail chains: Wall-Mart, Carrefour, Tesco, Ahold 6. Economic downturns 20 ?????????? OEM ???????? ???????? ???????????? ????????? : ??????? ?? ????????????? ??????????? ???????? 21 Global Branding Strategies Umbrella (Corporate) Branding: Umbrella branding facilitates brand-building efforts over a range of products, e. g. Microsoft, Intel, Nokia, Siemens Umbrella branding makes it easier to add or drop new products.

Umbrella branding makes it easier to add or drop new products (More Efficient). 22 Global Branding StrategiesBrand Name Protection Protecting Brand Names Brands are vital assets to brand owners, e. g. Coca-Cola trademark is estimated to be over $70 billion, 64% of its market value. In the area of brand protection, the oldest treaty is the Paris Convention for the Protection of Intellectual Property. The difference in opinion held by industrialized and developing countries on intellectual property 23

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