International Marketing

Question 1

Global Brands: How do we define global?

Answer 1

• 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

Question 2

Global Brand

Answer 2

○ 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.

Question 3

MINT

Answer 3

(Mexico, Indonesia, Nigeria, Turkey)

Question 4

Transnationals

Answer 4

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

Question 5

Multi-domestic

Answer 5

different strategies for different countries

• local control
• bottom up strategies
• local responsiveness
• adapted strategies

BUT can be complex, inefficient and create duplication

Question 6

Arguments for standardisation (Levitt, Ohmae)

Answer 6

• Technological Advances
  
  • Homogenisation of tastes- same tastes
  • Economies of scale and scope
  • Global competition

Question 7

Quelch’s Global Brand Definition (HBR): Producer Perspective

Answer 7

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.”

5. 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.

Question 8

Cateora and Graham (2007)

Answer 8

• 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.

Question 9

Loss of Intended Meaning

Answer 9

• 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)

Question 10

Creating Global Brands

Answer 10

• 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

Question 11

Consumer Perceptions

Answer 11

• 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.

Question 12

Steenkamp, Batra and Alden (2003)

Answer 12

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.”

Question 13

Aaker and Joachimstaler HBR 1999

Answer 13

• 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

Question 14

Cultural Myths (Holt, Quelch, Taylor 2004)

Answer 14

• “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.

Question 15

What is a Country-of-Origin Effect?

Answer 15

• 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,”

Question 16

Which Elements of the Mix are more likely to be standardised?

Answer 16

Positioning-  High
Product
Brand
Packaging
Advertising
Pricing
Promotion (drops here)
PR
Distribution - LOW

Question 17

GIobal Pricing Strategies

Answer 17

• 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

Question 18

International Pricing

Answer 18

• 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

Question 19

Grey Markets

Answer 19

• 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

Question 20

Pricing Strategies for Global Brands

Answer 20

1. 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
2. Define the base-line market
3. 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

Question 21

5 M’s

Answer 21

• Mix
  
  • Message
  • Miscommunication
  • Media
  • Money

Question 22

Will your Advertising Idea Travel?

Answer 22

1. Product facts and functions
   
   2. Universal symbols, myths and metaphors
   3. Basic human emotions
   4. News, fashion and celebrities
   5. Cultural Values, Lifestyle and Humour

Question 23

Legal Restrictions and how firms avoid these

Answer 23

• 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

Question 24

The Uppsala Incremental Model

Answer 24

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

Question 25

Licensing agreements

Answer 25

○ “We are a global business that operates on a local scale, in every community where we do business.
○ We are able to create global reach with local focus because of the strength of the Coca- Cola system, which comprises our Company and our nearly 250 bottling partners worldwide.”

Question 26

Franchise Agreements

Answer 26

• McDonald’s has been a franchising company since 1955 and has relied on its franchisees to play a major role in the system’s success. McDonald’s remains committed to franchising as a predominant way of doing business.

Today, the McDonald’s franchise is the leading global food service retailer with more than 35,000 restaurants located in more than 100 countries. There are nearly 13,000 McDonald’s franchises within the United States, over 6,000 company-owned McDonald’s locations, and over 17,000 franchises outside the U.S.