International Marketing Flashcards
Global Brands: How do we define global?
• Business and Management theory suggests a number of measures
- and definitions…
○ The number of countries
○ The geographic spread of those countries
○ The amount of investment which transfers across borders
Global Brand
○ Recognition of the brand from around the world
○ Influential, big companies
○ products or services that are recognized pretty much worldwide. Companies that useglobal brandinguse the same, or at least a very similar, marketing strategy to promote thebrandeverywhere thebrandis offered, regardless of the country or region.
MINT
(Mexico, Indonesia, Nigeria, Turkey)
Transnationals
have strategies that work across countries
○ Standardised organisation of brands and marketing
- centralised control, r&d
- top-down strategies
- clear and consistent communication
- cost- effective - economies of scale and scope
BUT can be inflexible; miss Opportunities and Threats
Multi-domestic
different strategies for different countries
- local control
- bottom up strategies
- local responsiveness
- adapted strategies
BUT can be complex, inefficient and create duplication
Arguments for standardisation (Levitt, Ohmae)
- Technological Advances
- Homogenisation of tastes- same tastes
- Economies of scale and scope
- Global competition
Quelch’s Global Brand Definition (HBR): Producer Perspective
There are five characteristics that all top global brands have in common:
1) The same positioning worldwide.
- This provides a combination of functional product quality and innovation with emotional appeal. Think Coca-Cola and Disney.
2) A focus on a single product category.
- Think Nokia and Intel.
3) The company name is the brand name.
- All marketing dollars are concentrated on that one brand. Think GE and IBM.
4) Access to the global village.
- Consuming the brand equals membership in a global club. Think IBM’s “solutions for a small planet.”
- Social responsibility.
- Consumers expect global brands to lead on corporate social responsibility, leveraging their technology to solve the world’s problems.
- Think Nestle and clean water.
Cateora and Graham (2007)
- A global brand is “the worldwide use of name, term, sign, symbol (visual and/or auditory), design or combination therefore intended to identify goods or services of one seller and to differentiate them from those of competitors” (p. 360).
- A global brand is a product or service with uniform characteristics (name, sign, and symbol) sold in multiple countries.
Loss of Intended Meaning
- Examples even within the Roman alphabet include; French steel producer Creusot-Loire in the USA, Twix in German etc.
- Using a name which has symbolic meaning which is lost eg: Tide Washing Powder (about the sea)
Creating Global Brands
• Transparent names eg: Sony, IBM often with transparent imagery
○ Sony- had a complicated Japanese name
○ Sonic, son? Invented name to be used globally
• Transliteration – transferring the meaning into a different language
eg: Comfort, Snuggles, Kuschelweich, Coccolino, Cajoline - fabric softner
○ Same imagery but different names in different places
• Transculture or deliberate association with a particular country or culture
○ Smirnoff
Consumer Perceptions
- Steenkamp, Batra, and Alden (2003) state, “The issue here is whether a brand benefits from consumer perceptions that it is ‘global”’
- Dimofte, Johansson, and Ronkainen (2008): “In order to get a true sense of what a global brand might stand for in the consumer’s mind, we avoided defining what a global brand is and thus imposing our own interpretation onto respondents’ opinions.
Steenkamp, Batra and Alden (2003)
A global brand for them is any brand that consumers perceive to be global:
“A brand benefits from consumer perceptions that it is ‘global’. . . only if consumers believe the brand is marketed in multiple countries and is generally recognized as global in these countries.”
Aaker and Joachimstaler HBR 1999
• The “lure of global brands”
• “Brands whose look, feel, positioning, personality are much the same
from one country to another”
• High profile examples of success tempt other companies to attempt to create global brands
• Variation in brand perception, positioning depending on customer preference and who else is in market
Cultural Myths (Holt, Quelch, Taylor 2004)
- “Global brands make you feel part of something bigger and give you a sense of belonging
- “Local brands show what we are; global brands show what we want to be.”
- Cultural myths are no longer created only by lifestyle and luxury brands; myths are now spun by virtually all global brands, in industries as diverse as information technology and oil.
What is a Country-of-Origin Effect?
- Associate a good or product with a country e.g. smirnoff
e.g.Chanel
○ “We have a French ethos and I think a French design sensitivity, and, I think, the chic that comes along with being a French brand is very, very important to Chanel. At the same time, the way we run our business is quite international and global.” Being a global brand requires a “balancing act,”
Which Elements of the Mix are more likely to be standardised?
Positioning- High Product Brand Packaging Advertising Pricing Promotion (drops here) PR Distribution - LOW
GIobal Pricing Strategies
• Market Oriented Pricing
○ Want to standardise pricing, MOP has lead to variation in pricing in different countries
- Globally Adapted Pricing Strategies?
○ There is a greater price sensitivity e.g airplane tickets, cars (right hand and left-hand drive)
• Pressures for Harmonisation
○ Internet
○ Global Retail
○ Global Customers
• Grey Markets
○ Buy good legitimately in another country as it is cheaper and transfer the good to another country
○ E.g buy a car in Germany and transfer across borders due to difference in price
International Pricing
• Limiting Factors ○ Parallel Markets ○ Exchange Rates ○ Price Controls ○ Competition • Range of Managerial Discretion: PRICING STRATEGY ○ Competition ○ Anti-Dumping Laws (cannot undercut company) ○ Exchange Rates ○ Inflation ○ Costs of Operation
Grey Markets
• Bucklin defines grey market goods as: “genuinely branded merchandise distinguished only by their sale through channels unauthorized by the trademark owner.”
• Grey Markets can happen through:
○ Parallel Importation
• Aparallel importis a non-counterfeit product imported from another country without the permission of the intellectual property owner
○ Re-Importation
• theimportationof goods into a country which had previously been exported from that country
Pricing Strategies for Global Brands
- Converge to a price corridor 2. The corridor must be:-
a. broad enough to match local competition and long term exchange rate movements
b. narrow enough to deter long term diverting, given the cost of transportation - Define the base-line market
- Develop a process to measure the extent of and need for convergence
- Countries/Markets/Channels BELOW the corridor threaten the entire pricing strategy
- Countries/Markets/Channels ABOVE the corridor threaten only themselves
5 M’s
- Mix
- Message
- Miscommunication
- Media
- Money
Will your Advertising Idea Travel?
- Product facts and functions
- Universal symbols, myths and metaphors
- Basic human emotions
- News, fashion and celebrities
- Cultural Values, Lifestyle and Humour
Legal Restrictions and how firms avoid these
• The Case of the Marlboro Cowboy
○ Legal restriction on use of the Marlboro cowboy in many markets because this glorifies cigarette smoking.
• BUT
○ Emotions and Visual Imagery
• Distinction between basic and social emotions (Huang 1998).
• Social emotions may be culturally-specific (compare with
Trompenaars) as they are learned during a socialisation process
• Use of highly visual imagery for global advertising (Bulmer and Buchanan-Oliver 2006)
Michailichenko (2009) effectiveness depends on consumer familiarity
The Uppsala Incremental Model
From Export -> Knowledge-based agreements -> foreign direct investment
(increasing commitment, investment and risk)
Export
- agents
- own salesforce
- distributors
Knowledge-based agreements
- Licensing
- Franchising
- Turnkey projects
Foreign direct investment
- Minority Stake
- Joint Venture/ Strategic Alliance
- 100% owned subsidiary
