Global brands

Question 1

What measures does Business and Management theory suggest for defining global brands?

Answer 1

1) the number of countries
2) the geographic spread of the countries
3) the amount of investment that transfers across borders

Question 2

What is Kenichi Ohmae’s ‘Borderless World’ stating about how the world is changing?

Answer 2

The world is becoming increasingly defined by tradeflows around the world, where in financial and economic terms the world is becoming borderless and globally interlinked

Question 3

What statistics does Ohmae use to support their theory of the ‘Borderless World’?

Answer 3

In 1990, 80% of the world’s trade occurred between the triad economies -> Europe, North America and Japan
Since then, the BRIC economies have outstripped the growth and moved ahead of the triad
There has also been large increases in investment in the Middle East, China and India

Question 4

What is the solution developed by Bartlett and Ghoshal to help define global brands?

Answer 4

The Transnational solution -> there is a scale from multi-domestic to transnational where levels of centralisation differ along this scale

Question 5

What does the transnational solution dictate about global brands?

Answer 5

That they will have one marketing strategy that works across all markets

Question 6

What does the transnational solution dictate about multi-domestic’s marketing strategies?

Answer 6

That they will have a different marketing strategy for different markets

Question 7

According to Bartlett and Ghoshal, what are the characteristics of how a transnational is run?

Answer 7

They have top-down strategies -> head office decides actions
They have centralised R&D and control
Consistent communication and strategies across different markets
They are cost effective -> economies of scale and scope

Question 8

What is the drawback of being a transnational?

Answer 8

They can be inflexible -> can miss opportunities and threats because they are so large, which makes it hard to access and control the business in all places at all times -> different markets may have different demands and regulation

Question 9

According to Bartlett and Ghoshal, what are the characteristics of how a multi-domestic is run?

Answer 9

Bottom-up strategies -> localised control and responsiveness rather than centralised
They will use adaptive strategies -> strategies will change based on domestic demand and the localised responses to previous strategies

Question 10

What is the drawback of running a multi-domestic?

Answer 10

They can be complex and inefficient -> can lead to duplication of work and technology

Question 11

What do Levitt and Ohmae argue are reasons for standardisation?

Answer 11

1) Technology advances
2) Homogenisation of tastes
3) Economies of scale and scope

Question 12

What reason does Hout et al and Bartlett and Ghoshal give for standardisation?

Answer 12

It will create global competition -> once there is global competition it will drive others to do the same so that they can compete with them in the market

Question 13

What 2 perspectives can global brands be split into?

Answer 13

Consumer and Producer

Question 14

According to Quelch, what 5 characteristics do global brands have from the producer perspective?

Answer 14

1) the company must have the same positioning worldwide
2) the firm focuses on a single product category
3) the company name is the brand name
4) access to the global village -> consuming the product = membership into a global club
5) the firm will have social responsibility -> consumers will expect the firm to lead on CSR

Question 15

What is the potential issue with having one name/brand across all countries?

Answer 15

It can have misunderstandings or may lose its meaning in other languages

Question 16

How can global brands overcome the issue of people misunderstanding their brand name?

Answer 16

Develop a transparent name e.g. a combination of random letters (IBM) or use an image to represent the brand

Question 17

What do Steenkamp, Alden and Batra believe makes a brand global?

Answer 17

A brand is global when it is perceived in a consumer’s mind to be that way

Question 18

What do Aaker and Joachimstaler believe about global brands?

Answer 18

They believe that there is a lure to global brands, where their look, feel, positioning and personality is the same across different countries.

Question 19

What do Aaker and Joachimstaler believe that the success of global brands will lead to others doing?

Answer 19

They believe that brands seeing high profile success of other global brands will encourage them to try to match and emulate that

Question 20

What is Holt, Quelch and Taylor’s belief about global brands?

Answer 20

That they make you feel a sense of belonging and sense that you are part of something bigger -> localised brands show what you are, global brands show what you want to be

Question 21

What do Holt, Quelch and Taylor believe the consumption of global brands can lead to the creation of?

Answer 21

Cultural myths -> global brands now help the creation of cultural myths in society

Question 22

What is the country-of-origin effect?

Answer 22

Certain countries are associated with being good at producing certain products e.g. Germany and manufacturing -> creates a halo effect for that product

Question 23

Can the country-of-origin effect also be negative?

Answer 23

Yes, certain countries may also be attributed with poor performance in a certain industry which will reduce your demand in that industry

Question 24

What elements of the Marketing mix are more likely to be standardised across markets?

Answer 24

Packaging, pricing, and product

Question 25

What elements of the Marketing Mix are less likely to be standardised across markets and why?

Answer 25

Sales promotion, PR and distribution -> these are more strategic elements

Question 26

What has been invented that has led to more standardisation of distribution?

Answer 26

The internet

Question 27

What factors will impact the level of adaptation of the marketing mix?

Answer 27

1) how far from the site of production the product is sold -> if the product is sold locally, it will need to be adapted less
2) what type of product it is -> industrial products require less adaptation that consumer products

Question 28

How does using market-oriented pricing strategies lead to a lot of price differentiation?

Answer 28

Different markets will be paying/willing to pay different prices, meaning that the prices for certain goods can differ a lot across different markets

Question 29

How may firms adapt their pricing strategies globally?

Answer 29

How much is the country willing to pay?
What level of taxation is put on the good?
Who are the competitors?
How wealthy is the country?

Question 30

What factors may create pressure to harmonise prices across markets?

Answer 30

The internet, global retailers and global competitors

Question 31

What are grey/parallel markets?

Answer 31

You can buy a good legitimately in one country for cheaper and then pay someone to transfer it across borders for you e.g. you buy a righthand drive car in Germany for cheaper and then have it transferred to the UK

Question 32

What is Parallel Importation or Re-importation?

Answer 32

When you buy a good that has been exported for cheaper in that country and then re-import it and sell it for more in your country for a profit

Question 33

What are limiting factors on high prices in international markets?

Answer 33

Parallel markets, exchange rates, price controls and competition

Question 34

What are limiting factors on low prices in international markets?

Answer 34

Competition, anti-dumping laws, costs and inflation and exchange rates

Question 35

What are global prices converging towards?

Answer 35

A pricing corridor

Question 36

What is a pricing corridor?

Answer 36

A limitation on the variation in prices that the brand can charge worldwide

Question 37

What characteristics must the pricing corridor have?

Answer 37

1) it must be broad enough to match local competition and long-term exchange rate movements
2) it must be narrow enough to deter long-term diverting, given the the cost of transportation

Question 38

How will a global brand determine the size and level of the pricing corridor?

Answer 38

They will pick a base-line market from which the corridor will be set -> a process will also be developed to measure the need for and extent of convergence

Question 39

What threat do countries BELOW the pricing corridor pose?

Answer 39

They will see the emergence of grey markets or the other countries may demand lower prices

Question 40

What threat do countries ABOVE the pricing corridor pose?

Answer 40

They only pose a threat to themselves

Question 41

What 5 M’s do global brands need to focus on/consider?

Answer 41

1) Mix -> what elements can be standardised and which can’t
2) Message -> will your promotion message travel? -> use of emotion and visual imagery can travel well across borders
3) Miscommunication
4) Media
5) Money -> the level of spending required to promote and operate worldwide will be very high -> this means risks are high as the stakes are high

Question 42

What are the most important/easiest factors to convey across boundaries and what factors are less important/easy to convey?

Answer 42

Easy/important to convey -> product facts and functions, universal symbols and myths and basic human emotions

Hard/less important to convey -> fashion and news, cultural values and lifestyles and humour

Question 43

For the Uppsala Incremental model:

Answer 43

Check notes