This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.
Branding has taken on a greater significance in the past decade as companies begin to see their brands as assets - as valuable and as tangible as their factories and patents. So brands have become more than marketing slogans and icons today: they are now closely monitored by the CEO and CFO, and assessed by industry analysts and pundits. Global brands benefit if consumers see them as part of their local communities with local accountability. Consumers respond very positively to outreach initiatives into the local community. They are more likely to favor companies with such programmes than they are to reject companies who transgress on higher threshold issues. However, these activities need to be relevant though and, if possible, reinforce the basic brand positioning.
Globalization has been the battle cry of the last decennium of the 20th century. This phenomenon is not new or unique to this period. The process has only been given an added impetus by the political, technological and economic developments that have been unique to the last ten years of the century. The demise of communism, the liberalization of trade is only few of the driving forces of this latest round of intensified globalization. The effect that this globalization has had on brands has been spectacular. New brands are seemingly born global, or at the very least experience a quick rollout from home or lead countries into other markets. Many traditionally local brands are sold, fazed-out or face transition to a new regional or global brand name and subsequent harmonization. Brand portfolios, which have been built-up through decennia of acquisitions, are rationalized in order to focus attention and resources on a limited number of strategic brands. Long established brands have enhanced their dominant positions across the globe, threatening less marketing-savvy local brands, but also encountering stern opposition from local brands that find ways to fight back. Some of the global brands manage to become local institutions by filling a local role in the societies where they operate, while others dominate their category as global monoliths.
Debates have also flared over the supposed supremacy of global brands and the inadequacy of (multi-) local brands. This paper argues that this viewpoint is incorrect and that the each individual global or international brand has specific opportunities and limitations when it comes to standardization or localization. Only a thorough understanding of a variety of factors that influence brands in their global and local contexts helps determine the best course for them. Brand strategy is aimed at influencing people's perception of a brand in such a way that they are persuaded to act in a certain manner, e.g. buy and use the products and services offered by the brand, purchase these at higher price points, donate to a cause. A global brand needs to provide relevant meaning and experience to people across multiple societies. To do so, the brand strategy needs to be devised.
McDonald's, Microsoft, Nike, Starbucks, Coca-Cola, Sony. There is hardly a corner of the earth where their names are not known. They are global brands, yet few people would have any difficulty identifying their countries of origin. There are several corporations with a global presence, but we have yet to see the emergence of the global corporation.
Branding is a way to differentiate your company, product or service from competitors, and to provide it with a personality that is both unique and appealing to potential customers. It is a multifaceted, multilayered process and discipline. Its beneficial for smaller companies to have well-focused and consistent attention tobranding, and to creating favorable, memorable positioning of their product/service in the minds of prospects and customers is the most effective way to compete, to rise above the static and become a factor in the competitive arena in which they've chosen to participate.
As we cross into the next century, the issues facing brand and identity managers will become increasingly complex. Globalization, industry consolidation and market fragmentation are only a few of the challenges to be addressed. But no matter what new obstacles arise, and no matter which new audiences must be reached, success is impossible without an effective identity management strategy, a strong brand management organization and a workable plan for implementing ideas.
The last two decades we have seen an ongoing globalization of markets, industries and competition. A still increasing number of firms pursue international market expansion in order to satisfy global customers and to capture economies of scale in, for example, production and advertising. First of all, this leads to an increase in a firm's country portfolio. Moreover, nowadays products are not longer developed for the domestic market only. After the product is launched in the domestic market, sooner or later products will often be introduced in foreign markets. Consequently, product launch decisions are not longer constrained to one particular market, but involve multiple markets. Consumers perceive there to be three main types of global brand - Master brands, Prestige brands and Global brands, with two additional groupings of importance.
IMPORTANCE OF GLOBAL BRANDS
In today's world consumers don't just want products and brands but demand global brands.
Branding has taken on a greater significance in the past decade as companies begin to see their brands as assets - as valuable and as tangible as their factories and patents. So brands have become more than marketing slogans and icons today: they are now closely monitored by the CEO and CFO, and assessed by industry analysts and pundits. Yet many business-to-business marketers and service providers do not practice, or even appreciate, the value of branding in their businesses. The truth is every business, even a commodity supplier, is building a brand through their actions and their presence even if that brand is not being intentionally created and nurtured. They acquire a “position” in the minds of customers and prospects, a position or identity based on exposure and experience with the provider in the context of a competitive marketplace.
Global brands benefit if consumers see them as part of their local communities with local accountability. Consumers respond very positively to outreach initiatives into the local community. They are more likely to favor companies with such programmes than they are to reject companies who transgress on higher threshold issues. However, these activities need to be relevant though and, if possible, reinforce the basic brand positioning. Both Nike and McDonald's are examples of Master brands with good local outreach programs (e.g. McDonald's, while controversial in Turkey, was praised for its local response to then 2000 earthquake).
FUTURE OF GLOBAL BRANDS
While marketers of global brands clearly face major challenges on the three core issues- localization, politicization and the reaction against homogenization - the future of these brands appears to be a healthy one.
They will need to react creatively to the challenges of wave three branding and some global brands will no doubt fail to make the transition. But in a fluid, time-stressed world consumers will respond powerfully to marketers who strike the right balance between global reach and local feel, between individualized identity and membership of a global tribe.
Brand builders everywhere think they want global brands. But global brand leadership, not global brands, should be the priority. As more and more companies come to view the entire world as their market, brand builders look with envy upon those that appear to have created global brands - brands whose positioning, advertising strategy, personality, look, and feel are in most respects the same from one country to another. It's easy to understand why. Even though most global brands are not absolutely identical from one country to another; Visa changes its logo in some countries; Heineken means something different in the Netherlands than it does abroad - companies whose brands have become more global reap some clear benefits.
Managers who stampede blindly toward creating a global brand without considering whether such a move fits well with their company or their markets risk falling over a cliff. There are several reasons for that.
First, economies of scale may prove elusive. It is sometimes cheaper and more effective for companies to create ads locally than to import ads and then adapt them for each market. Moreover, cultural differences may make it hard to pull off a global campaign: even the best agency may have trouble executing it well in all countries. Finally, the potential cost savings from "media spillover" - in which, for example, people in France view German television ads -- have been exaggerated. Language barriers and cultural differences have made realizing such benefits difficult for most companies.
Second, forming a successful global brand team can prove difficult. Developing a superior brand strategy for one country is challenging enough; creating one that can be applied worldwide can be daunting.
Neither by the templates of globalization, nor by the principle of one-world-one-market can transnationals triumph in India. To win over the country's 1 billion customers, transnationals must understand just how global and how Indian they must be. The long-accepted law of globalization-One World, One Strategy-doesn't hold once India's borders are crossed.
Perhaps that's why, across industries and markets, the Indianization of the transnational is becoming evident. On every point of the value-chain, global corporations are deviating from their international methodologies and improvising their strategies for local markets. The Ford Motor Co. announced that its next car, the Ikon, has been designed exclusively for India. LG Electronics is using purely Indian brandnames, such as Sampoorna, for its TV sets. Coca-Cola has redesigned its distribution-crates as well as trucks for safe delivery through India's poor roads.
Electrolux is working on a made-for-India fridge designed to serve just 3 basic purposes: chill drinking water, keep cooked food fresh, and withstand long power-cuts. Instead of importing its products, as it used to, luggage giant Samsonite is setting up a manufacturing base in India to service not just the country, but all of Asia. Mercedes-Benz has started using ads exclusively for India, appealing to Indian aspirations.
Omega has picked Shah Rukh Khan to replace Cindy Crawford as its celebrity endorser for India. Breaking with its practice around the world, McDonald's has Indianised not just its products, but also its sub-brands, symbolized by the McAloo. Enron, despite its global focus on oil and gas, has stayed in India for over 5 years with a power-project since that is where the opportunity is.
What all of them have realized is that only by making the Made-For-India choice at every stage of the value-chain, instead of simply replicating their international strategies can transnationals crack India's one-of-a-kind markets. The survival and success for any foreign company in India essentially depends on localization. If they do not change or adapt to the local conditions, they are doomed.''
The temptation to argue that what has worked in other countries must work in India too is strong-particularly when customers around the world are being exposed to the same things and is beginning to resemble one another. But in India since the cultures, the language, the consumption patterns, the spending power, and the very nature of the customer is so different from her counterpart in the West, it was equally alluring to forget one's global pedigree and simply behave like a new company with no baggage of processes or systems.
The major research objectives of this study are:
§ To find out how have the global companies entered India
§ To find out the marketing strategies adopted by these global companies in India
§ To find out the extent to which these companies have Indianised
§ To find out the effect of indianization on the sales and profit of these global companies.
Branding is a way to differentiate your company, product or service from competitors, and to provide it with a personality that is both unique and appealing to potential customers. It is a multifaceted, multilayered process and discipline.
A GLOBAL BRAND is one that has the same name, design, and creative strategy everywhere in the world and is marketed in most of the major regional market blocks.
A Global Brand gives a company a uniform worldwide image that enhances efficiency and cost savings when introducing other products associated with the brand name, but not all companies believe in a single Global approach is the best. In addition to companies like Kodak, Coca - Cola, Caterpillar and Levi's that use the same brands worldwide. Building a global brand is inherent in using a standardized product. It success depends on a growing convergence of consumers tastes and preferences and coordination of global advertising and promotion. Also important is the development of communication media with multinational reach, such as the simultaneous transmission around the world of the summer Olympics. Brand strategy is aimed at influencing people perception of a brand in such a way that they are persuaded to act in a certain manner, e.g. buy and use the products and services offered by the brand, purchase these at higher price points, donate to a cause. In addition, most brand strategies aim to persuade people to buy, use, and donate again by offering them some form of gratifying experience. As branding is typically an activity that is undertaken in a competitive environment, the aim is also to persuade people to prefer the brand to competition.
A global brand needs to provide relevant meaning and experience to people across multiple societies. To do so, the brand strategy needs to be devised that takes account of the brand.s own capabilities and competencies, the strategies of competing brands, and the outlook of consumers (including business decision makers) which has been largely formed by experiences in their respective societies.
There are four broad brand strategy areas that can be employed.
(1) Brand Domain.
Brand domain specialists are experts in one or more of the brand domain aspects (products/services, media, distribution, solutions). A brand domain specialist tries to pre-empt or even dictate particular domain developments. This requires an intimate knowledge, not only of the technologies shaping the brand domain, but also of pertinent consumer behaviour and needs. The lifeblood of a brand domain specialist is innovation and creative use of its resources. A brand domain specialist is like a cheetah in the Serengeti preying on impala and gazelle. The cheetah is a specialist hunter with superior speed to chase, and the claws and teeth to kill these animals. The cheetah is also very familiar with the habits of its prey. It finds ways of approaching, singling out and capturing its prey. The cheetah is one of the most accomplished of hunters within the wild cat species; it catches up to 70% of prey that it hunts.
(2) Brand Reputation.
Brand reputation specialists use or develop specific traits of their brands to support their authenticity, credibility or reliability over and above competitors. A brand reputation specialist needs to have some kind of history, legacy or mythology. It also needs to be able to narrate these in a convincing manner, and be able to live up to the resulting reputation. A brand reputation specialist has to have a very good understanding of which stories will convince consumers that the brand is in some way superior. A brand reputation specialist is like a horse. It can be pure-bred, have a certain nobility and bearing, and exhibit qualities that can be traced back to these (e.g. grace, speed, temperament, looks). Like a horse, the brand reputation specialist can also thrive on association with celebrities.
(3) Brand Affinity.
Brand affinity specialists bond with consumers based on one or more of a range of affinity aspects. A brand affinity specialist needs to outperform competition in terms of building relationships with consumers. This means that a brand affinity specialist needs to have a distinct appeal to consumers, be able to communicate with them affectively, and provide an experience that reinforces the bonding process. A brand affinity specialist is like a pet dog. A dog is generally considered to be man.s best friend, due to its affection, its obedience, its loyalty, the status and the protection it provides to its owners. Different kinds of dogs will command a different form of affection.
(4) Brand Recognition.
Brand recognition specialists distinguish themselves from competition by raising their profiles among consumers. The brand recognition specialist either convinces consumers that it is somehow different from competition, as is the case for niche brands, or rises above the melee by becoming more wellknown among consumers than competition. The latter is particularly important in categories where brands have few distinguishing features in the minds of consumers. In some cases, a brand recognition specialist needs to be able to outspend competition to gain unbeatable levels of awareness. In other cases, a brand recognition specialist needs to convince a loyal following of consumers that it is unique. A recognition specialist is like a peacock. Most of us will know little about birds, but we can recognise a peacock from a large distance. We may not know its precise qualities, but if we were to choose between birds we are more likely to plump for a peacock than for a more ordinary specimen, because of its beauty and presence.
To continue the analogy, animals that are transplanted from their original habits, face particular difficulties. Their specialist skills, particular traits or specific qualities may no longer be to their advantage and they may need to develop new ones. The cheetah may fare fine in other parts of the world where there are grassy plains with sufficient game. However, if the cheetah moves from the plains to the jungle it will need to develop an appetite for different prey (e.g. monkey), change the way it hunts (e.g. climb trees) and compete with new predators (e.g. snakes). Although horses are widely considered noble animals, the way they are viewed does differ between societies. In some, the horse is mainly considered as a mode of transport and competes with cars and trucks. In another, the horse is mainly seen as an opportunity for gambling and there it competes with casinos and dog races. Yet in others, the horse is hardly used and seen as symbolising independence and pioneering spirit. Each of these roles requires different traits from the same animal.
Similarly, a dog is not considered a loveable or desirable animal in all societies. The relationship with a dog can be functional in some societies (e.g. sleigh dogs), affective in others (e.g. pet dogs), and ambitious (e.g. fighting dogs) in yet other societies. Thus, a dog may need to build a totally different kind of relationship depending on its new owner's background. A peacock may be highly recognisable all over the world, but it symbolizes something different depending on local culture. In Bengal, the peacock symbolizes prosperity, while in Bali it represents the power of knowledge, and in China it symbolises beauty and dignity.
As in the animal kingdom, there is also a place for generalists who mix and match strategies to their advantage. For instance, in some markets Heineken mainly leverages its reputation (e.g. country-of origin), while in others it applies its formidable media planning expertise to innovative use of various forms of (integrated) media; a specific form of domain specialisation. Brands also use complementary strategies. In the case of Nokia, it has been developing its brand affinity through Club Nokia and the Nokia Game.
The following section deals with factors that influence brands. strategies when operating in societies other than their original habitats.
THE BRAND ENVIRONMENT
A brand operates in a space that is defined by its own company or organisation, its competitors, and the societies where it operates. There are both internal and external factors that influence how a brand is finally perceived and experienced by consumers.
Factors that are internal to a brands company or organisation can be categorised as being strategy-related, performance-related and stemming from the brands past.
The strategy-related factors are those that derive from the business strategy and the marketing strategy. There is a strategy hierarchy, whereby business strategy takes the lead, guiding brand strategy. Brand strategy in its turn guides marketing strategy.
The business strategy is aimed at achieving particular consumer behaviour. Only if consumers actually purchase, use (more often), pay a higher price or donate (more) will objectives of a business strategy be met. These objectives may include a larger market share, increased returns, higher margins and increased shareholder value. Brands are designed to persuade consumers to exhibit the behaviour that will make these objectives come true for the organisation. Thus the influence of business strategy upon brand strategy is direct and compelling.
The marketing strategy aims to translate the brand strategy into actual products or services, with a specific price, to be sold at specific outlets, to be promoted through specific communications activities and channels, and to be supported by specific service. The influence of the marketing strategy is thus indirect in that the correct translation of the brand into the marketingmix determines whether consumers get the correct impression of the brand.
The performance-related factors are dependent upon the marketing implementation, i.e. the actual production and delivery of the products and services, their accompanying messages to consumers, and the actual product or service experience. The implementation eventually determines whether consumers experience what the brand strategy set out to provide. The marketing implementation may make or break a brand at the moment that is of most importance to consumers: e.g. when they actually experience the brand through advertising, promotions, purchase, usage, and after-sales service.
The factors that stem from the brands past are the brands internal legacy and its internal conventions. The brand.s internal legacy is about who have developed it, who have managed it over the years, and what the role of the brand has become for the organisation. This influences how management, staff, partners, distributors and shareholders view the brand and its future potential. It may prove difficult to change such perceptions once a brand has been slotted into a specific position. The internal conventions of an organisation are such issues as how things are typically done, support systems, what the culture is like, who has the power to decide, who has the power to frustrate decisions, the structure of the organisation, its policies, and its (other) activities.
For a global brand, such influencing factors exist at central as well as at local levels. More often than not, there are tensions between central and local as specific factors work in opposite directions, and people within the organisation have different agendas for the brand.
External influences upon a brand strategy come mainly from three quarters: competition, consumers and media. These external influences will vary between the markets and societies where a brand operates. Therefore, these influences need to be determined locally. When a brand is introduced into a foreign society, it will encounter particular brand strategies that are being practiced by competitive brands. Unless competitors are very complacent, head-on confrontations with them are generally not the best way of winning the hearts and minds of consumers. It is, therefore, important to determine competitors. Brand strategies and to find ways of flanking established competition by choosing an alternative strategy. Rules that govern the way in which products or services are designed, advertised, distributed, serviced, priced, experienced, etc. Challenging such conventions may provide a brand with a competitive advantage. It is imperative that such a challenge has value to consumers and that they are willing to go along with the challenge. This is only the case if the particular convention is no longer rock solid. Such opportunities emerge when competition is complacent and underestimates the effects of the challenge.
An example is the advent of on-line share trading, which became possible due to the combined development of the Internet and the popularisation of shareholding. Established stockbrokers failed to respond dequately to the challenge to their conventional mode of operations and thus lost a lot of their business to Charles Swab cum suis.
Cultural conventions determine how people in a society interact, what they believe, how they make decisions and what meanings they attach to certain representations. Cultures are not static, but develop through intergenerational and interpersonal learning and experience. A cultural convention can be challenged if it is already loosing its value to consumers and is ready to be replaced by something new. Therefore, one needs to be on the lookout for such cultural shifts. Once identified, it becomes a matter of deciding whether the challenge will be of perceived value to consumers and will provide competitive advantage.
Needs conventions determine the forms in which consumers. needs are manifested. Human needs are not universal and neither is the importance placed upon each need. However, the major differences lie in the manner in which a need is articulated or the form of a solution that is provided to a need. For example, although there is a general need for nutrition, there are considerable differences between societies with regard to which foodstuffs are acceptable for specific meals. Not to mention foods that are totally unacceptable to specific societies, as witnessed by the controversy over the consumption of dog meat during the upcoming world cup soccer finals in Korea. The media can seriously affect a brand strategy in a positive or a negative manner. In some developing countries foreign brands are promoted by the media as examples of modernity, while in others these same brands may be portrayed as the vanguards of a foreign domination. Particularly, bad news about brands can spread like wild fire across boarders, as Coke found out in Belgium, where the outsides of some bottles were contaminated with a fungicide, causing a health scare.
IMPACT ON BRAND STRATEGIES
The factors discussed above each have their own specific impact on the four general brand strategies and their strategy sub-types. Due to the limitations of its format, this paper focuses on factors that influence the four general strategies only. We also limit the discussion to one global branding issues that has attracted a lot of attention among practitioners in recent years, namely brand harmonisation or standardisation. This is not say that the factors discussed above do not also have a profound effect on other global branding issues such as global brand extensions, rationalising a global brand portfolio, global brand architecture and co-branding global brands.
Domain specialists generally require economies of scale to be able to sustain their investments in constant innovation. Brand proposition standardisation or harmonisation is part of this drive towards economies of scale. Domain specialists tend to centralise brand management, which leaves little room for local adaptation. Domain specialists, therefore, need to either establish new conventions themselves (through a successful challenge) or not enter the market at all. Information and communications technology (ICT) companies have had the advantage of establishing conventions without having to challenge existing category conventions. They have had the opportunity to shape their category. This is why many ICT companies have been able to establish highly standardised global brands. Among the world.s ten most valuable brands in 2001 (compiled by Interbrand) are four such ICT domain specialists, namely Microsoft, IBM, Intel and Nokia. Shaping a category does involve having indepth knowledge not only of technology, but also of consumers. Iridium, the mobile satellite phone operator, did not have this knowledge and failed miserably when it introduced a service that few felt a need for. Most people already had excellent alternatives to the expensive and unwieldy system.
Domain specialists are particularly susceptible to category conventions, as these largely govern the brand domain aspects. Renault, which introduced a fair number of innovative car designs during the past decade (e.g. Twingo, Scenic, Espace), has little or no position outside Europe. While the brand has successfully challenged automotive design conventions in Europe, it fails to persuade consumers across the Atlantic. Other European car brands, many less innovative than Renault, have been successful in the USA.
Domain specialists can also be prone to cultural conventions, especially beliefs and customs directly related to the products or services involved. For instance, there is a traditional belief in Chinese culture about the efficacy of certain herbs. Proctor & Gamble tapped into such beliefs by adding Showu root extract to its popular Rejoice shampoo, claiming it makes black hair shinier. This adaptation provided Rejoice with a competitive response to local competition such as the Olive brand, which had earlier staked its claim of providing lustre to black hair.
Domain specialists. brand building activities consist mainly of introducing global brand extensions to reinforce the perception of the brand.s innovativeness. Without constant and consistent extensions, the brands would quickly lose their relevance to consumers.
Reputation specialists are a diverse bunch, some of whom rely heavily upon their pedigrees while others leverage their connections to celebrities, and yet others build on a promise that they have demonstrably been able to keep. Reputation specialists are often good at tweaking their brands to ensure relevance to consumers in specific societies. This means that brand and marketing management need to be largely localised, with a largely a guiding task for global management. It also means that competencies such as consumer understanding and narration need to be available locally.
Reputation specialists are particularly susceptible to cultural and needs conventions. Brands that leverage their country-of-origin make use of beliefs (sometimes stereotypes) about those countries. However, the significance and essence of such beliefs can vary widely across societies. The same applies to values. Virgin.s reputation as a challenger to established brands connects well with the general British distrust of major companies. Whether the same will work for Virgin in the Far East is doubtful, as consumers there tend to trust major companies and their brands more than contenders.
Reputation specialists often make use of people.s senses of insecurity and their needs for belonging. A toothpaste brand that is endorsed by dentists may meet security needs in one society, while the relevant security need in another country is whiteness. A particular celebrity endorsement may work wonders in one country, but the same person may not mean a thing in another country. For instance, Nike used American football and baseball star Bo Jackson for advertising in the USA, but substituted him for local sports celebrities in other countries. Reputation specialists often have a limited scope for challenging category conventions. However, they also have less of a need for doing so. Volkswagen, which builds on a reputation for the excellent quality and resale value of its cars, does not feel the need for constant innovation. Unlike Renault, Volkswagen.s sales do not dry up when it doesn.t introduce innovative designs every few years. Reputation specialists. main brand building activities are narration to and education of consumers about their brand, as well as an experience that is consistent with the brands. reputations.
Affinity specialists are able to pluck the heartstrings of consumers. They way they do so differs markedly between brands, but the common result is unrivalled brand loyalty. Some affinity specialists are able to standardise their brands across societies by using themes that are common across various societies. For instance, Mercedes is a brand that many (successful) people around the world wish to be associated with. However, most affinity specialists need local brand management in order to be able to build a worthwhile rapport with consumers. Affinity specialists need to get close to consumers to be able to connect with them. This closeness requires affinity specialists to understand exactly which conventions can and cannot be challenged. This also means that the brands organisation must encourage local brand management initiatives.
Affinity specialists are particularly susceptible to cultural and needs conventions. For instance, a financial services brand that connects to it customers by employing empathy utilises a society's prevailing values and esteem needs. In a collectivist society, the brand.s empathy is likely to be expressed through showing deference to customers. In an individualist society, the empathy is likely to be expressed through personal recognition and advice pertaining to the customers specific financial situations. Affinity specialists also make use of people.s sense of belonging. Many youth brands seek ways of appealing to consumers in such a manner that they wish to be associated with the brand. This entails constant cool hunting and staying closely in tune with teens and young adults. Tommy Hilfiger was the epitome of teen cool, but when the brand got stuck in the same rut for a season it instantly became obsolete.
Affinity specialists have the greatest scope for challenging category, needs and cultural conventions. Due to their general closeness to consumers, affinity specialists are in-tune with their consumers and can sense when conventions are shifting. The Body Shop challenged packaging conventions by using simple plastic refill bottles, thereby reinforcing the social conscience of the brand, which resonated with likeminded consumers. Maximizer bra challenged values of female modesty in East Asia by promoting a push-up bra using slender dark haired western models. The brand tapped into (professional) Asian women.s sense of developing selfconsciousness. The main brand building activity of affinity specialists is relationship building. It differs considerably between the types of affinity brands how this is achieved, whether that is through events (e.g. Harley Davidson), through service experience (e.g. Starbucks), a loyalty programme (e.g. Shell), an Internet information site (e.g. Pampers), through demonstrating an understanding of target consumers (e.g. MTV), extolling principles relevant to target consumers (e.g. Greenpeace), or by demonstrating coolness and hipness at relevant occasions (e.g. Burton). The particular connection with consumer needs to be constantly reaffirmed by the brand through behaviour, advertising, publicity, direct communications, brand extensions, etc. Brand extensions generally aim at reinforcing that bond by offering products or services that bring consumers into closer or more frequent contact with the brand (e.g. Harley Davidson aftershave).
Recognition specialists succeed by using two aspects, namely consumers. Inability to discriminate between a multitude of brands in a category and their inability to know more than a few brands in a category.
In some categories it is difficult for consumers to understand the differences between brands. Subsequently consumers will opt for those brands that they know, the ones they hear of often. These will usually be the big players in a market. For instance, most people are not able to fathom the differences in the propositions offered by various banks. What they are aware of are the well-known banks. This awareness breeds confidence and leads most people to choose one of these. A more extreme case is the mass wine category, which is teeming with unfamiliar brands. By raising its profile, the Ernest & Julio Gallo brand provides a safe-haven for consumers. It is a brand that they can trust to provide a consistent quality at an agreeable price.
In some categories, consumers actively know only one or two brands. Apparently, there is an inability or a reluctance to know more brands. This may be due to the fact that competition is weak at raising its profile or the category is a low-interest one. Such brands become the points of reference in their category. For instance, people will generally be actively aware of only one or two toilet paper brands. These brands will usually have very distinct propositions, e.g. one is soft and the other is decorative. Distributors own brands will usually occupy the value positions. The recognition specialists keep their advertising expenditure at high levels to preserve this situation.
These high levels of advertising expenditure necessitate recognition specialists to find economies of scale in this area. Developing regional or global campaigns is a logical consequence.
Recognition specialists, therefore, tend to centralise brand management, which leaves little room for local initiatives. Recognition specialists often have a limited scope of adapting to local conventions. However, recognition specialists are susceptible to category conventions and needs conventions. For example, Citibank presents its credit cards as .dependable. in the USA and as having .distinction. in Hong Kong. Citibank thus adapts to the prevailing conventions of representation in both markets.
Obviously, the main brand building activity of recognition specialists is (mass) advertising. A high general awareness among consumers forms a formidable barrier to competition. A recognition specialist, therefore, requires advertising skills as one of its core competencies.
In today's highly competitive and globalized environment the creation and maintenance of brands is becoming increasingly important (Seetharaman et al., 2001; Wulf et al., 2005). There exists a severe alteration of brand portfolios in favor of global brands by several multinational corporations (Steenkamp et al., 2002). One such example is the telecom giant, Vodafone replacing local brand names in many countries by the global Vodafone name (Business Week 2001). One of the major reasons that is causing shift from local to global brand adoption is globalization (Steenkamp et al., 2002). Apart from yielding economies of scale, globalization pragmatically increases consumers around the world to develop similar preferences and speeds up a brand's time to market globally instead of local modifications (Yip 1995; Hassan and Katsanis 1994). The shift towards global brands is also attributed to the consumer's preference for brands with global image over local competitors even when quality and value are not objectively superior (Steenkamp et al., 2002; Kapferer 1997; Shocker, Srivastava and Ruekert 1994).
Global brands may be preferred by consumers as they convey high quality, expertise, authority and credibility (Batra et al., 2000). Moreover, global brands enjoy high prestige and status in the minds of many consumers (Batra et al., 2000, Steenkamp et al., 2002). Although there is a wide assertion of the abovementioned notion regarding the global brand perception, the belief that adoption of global brands creates superiority of global brands over local brands among consumers can be challenged. Research indicates that that consumers have no intrinsic preference for global brands and many consumers often prefer brands with local connections (de Mooij 1998, p. 39; Zambuni 1993). More over, there is an evidence of consumer ethnocentrism concept which focuses on the consumer's preference to products or brands of local origin (Shimp and Sharma 1987).
There exists a glaring gap in the existing literature in identifying whether consumers adopt global brands over the local brands as to date only very few studies have focused on this aspect. There is a need to investigate the antecedents that cause the consumer's adoption of global or local brands. Therefore in the current study an attempt has been made to posit brand equity and attitudinal dimensions as antecedents that cause the adoption of global or local brands. In consumer marketing, often a strategic approach is essential for the effective management of brands as they are critical to the success of global and local brands through differentiation between competitive offerings (Wood 2000; Wulf et al., 2005). In order to attain the abovementioned strategic approach, the concept of brand equity is an essential requisite. The concept of brand equity has attracted the attention of market researchers over the last decade, still to date researchers stress the importance of the various dimensions of brand equity (Broniarczyk and Gershoff 2003; Wulf et al., 2005).
Though there are many definitions and forms of brand equity, the construct collectively consists of four dimensions such as brand loyalty, brand awareness, perceived quality of brand and brand associations (Aaker 1991; Aaker and Keller 1993). Attitude usually determines an individual's intention to adopt either a global or a local brand. Attitude is defined as an individual's positive or negative feelings in other words evaluative affect about performing a target behavior (Fishbein and Ajzen 1975). Extant literature suggests the pivotal role of five perceived attributes such as relative advantage, compatibility, complexity, trialability and result demonstrability in influencing an individual's attitudinal beliefs (Taylor and Todd 1995b; Tan and Teo 2000).
India is the second most populated country in the world with an estimated population of 1.08 billion (Population Clock 2005). Until the 1980's, due to restricted trade practices, consumer's choice of different products and brands was very limited. In the 1990's with increased globalization and the opening of bilateral trade agreements with other countries, India's market was enhanced with a huge number of products and brands available for sale. These changes paved the way for a number of global brands and brand extensions to enter Indian markets. As a result, the consumer's choice of different categories of products and brands increased. India as a developing country is very distinct from other countries as consumer's in India demonstrates unique purchasing behavior due to the prevailing cultural differences (Batra et al., 2000). There is a profound influence of Western consumerism on the young generation of India and it is important to understand the purchasing intention as well as the perceptions that Indian consumers hold with respect to global and local brands.
RESEARCH OBJECTIVES AND METHODOLOGY
The following are the research objectives of my study-
· To Study and Understand As To What Are Global Brands
· To Study the Consumer's Perception about the Global Brands
· To Identify What Different Types of Entry Strategies Have To Be Considered By Global Brands While Entering a Market
· To Understand & Highlight How Global Brands Should Be Positioned In Different Geographic Markets
· To Identify What Are the Different Global Branding Strategies
· To Understand How Locally Responsive Global Brands Should Be
· To Highlight the Cultural Factors Affecting the Global Brand
The research that I have undertaken is an Exploratory Research, i.e. there is an insight into the literature available, and what is happening to seek new insight and to access phenomena in a new light. It is a useful approach to clarify what one understands of a problem. There are three principal ways of conducting an exploratory research, which I have mentioned in my dissertation. They are as follows: -
· A search of the literature
· Talking to experts in the subject
· Conducting focus groups interviews
An exploratory research has its own advantages. It is flexible and adaptable to change. As and when I was collecting the data, I could change it according to the situations and where it was most appropriate. The flexibility inherent in an exploratory research does not mean absence of direction to the enquiry. What it means is that the focus is initially broad and becomes progressively narrower as the research progresses.
In my research, I have given importance to Research Ethics. These were ethical concerns, which emerged as I planned my research. Seeking access to organizations and to individuals, collect, analyze and report the data. In the context of a research ethics refers to the appropriateness of your behavior in relations to the rights of those who become the subject of your work, or are offered by it. Wells defines ethics in terms of a code of behavior appropriate to academics and the conduct of research. Certain points that in kept in considerations were as follows: -
No pressure was applied on the intended participants to grant access to any kind of information. It was their own will to give as much information as they wanted.
When the participant agreed to give me the information, he /she had the right to withdraw as participant in anything that will intrude on their privacy.
While I collected the data, I made sure that I collected the data fully and accurately. The importance of this relates to the validity and the reliability of the work that I have presented.
Confidentiality and anonymity have also been shown to be important in my research work. Once promises about confidentiality and anonymity have been given, it's very important to make sure that they are maintained.
The data collected and analyzed is not misrepresented.
Another technique that I have used in my research is Semi-Structured Interviews and questionnaire survey among the target group. An interview is a purposeful discussion between two or more people that helps to gather valid and reliable data that are relevant to the research objectives and questions respectively. Semi-Structured interviews are non-standardized interviews. In this, the researcher will have a list of themes and questions to be covered although these may vary from interview to interview. This means that the researcher can omit some questions in particular interviews, given the specific organizational context, which is encountered in relation to the research topic. Additional questions may be required to explore the research question and objectives given the nature of events within particular organizations. The nature of questions and ensuing discussion mean that data will be recorded by note taking, or perhaps by tape recording. In my research I have taken notes of the participants I interviewed. The use of Open-Ended Questions was made while interviewing the participants. The use of open-ended questions allows the participants to define and describe a situation or an event. An open-ended question is designed to encourage the interviewee to provide an extensive and developmental answer and may be used to reveal attitudes or obtain facts; they encourage the interviewee to reply as they wish.
Data Collection Methods
In the proposed research there is different data collection methods used. There is an extensive use of Secondary Data. When considering how to answer the research questions or to meet the objectives, few researchers consider the possibility of re-analyzing data that have already been collected for some other purposes. Such data are called secondary data. Secondary data include both raw data and published summaries. In my research where the emphasis was on the Consumer's perception about the global brands and the Importance and the Emergence of Global Brands which requires national and international comparisons, secondary data provided me the main source to answer my research questions and address my research objectives.
We have seen many global companies from different segments of the industry entering India and moving on a path of success after going through a lot of turmoil and adjusting with the actual tastes and preferences of the people of the country.
There are a lot of things that are to be kept in mind when a global company enters India like:
§ Entry strategy
§ Target audience
§ Brand positioning ( brand communication and value proposition)
§ Promotional strategies
§ Pricing strategies
§ Ad campaigns
§ Sales volume
§ Newer products
§ Indian tastes and preferences
§ Distribution strategies etc.
With all these things the most important question that arises is that whether or not an international company should pursue a policy of global branding - whether it should seek globally consistent brand names, identities and positions - encapsulates perfectly the core dilemma of international marketing. On the one hand, brands work because of their consistency and omnipresence, offering customers a short cut in the purchase decision by a promise of reliability and familiarity. Standardization is therefore at the heart of branding, and consistency in execution a keystone of effective brand management. It is also true, of course, that it is more efficient for companies to manage a single brand worldwide than a portfolio of different brands, both in terms of economies in marketing expenditure, and also in terms of managerial control and accountability. These two factors suggest that brands should seek wide presence and a uniform identity on a global scale.
In managing brands internationally, a contingency framework can be enhanced by disaggregating an offer into the brand and product offerings. The approach is based on the concept of a “Branded Product”, i.e. we clearly differentiate between the functional contributions of a product and the more emotional persuasive elements of a brand. This differentiation is a key in understanding of the global branding issue.
Products come to life in the manufacturer's lab - they are faceless aggregates of mechanics, chemicals, and basically all conceivable tangibles in order to perform in a certain way that is more or less required or appreciated by their users. Their characteristics can be altered deliberately by their producer.
Brands come to life in the consumers' minds - they are meaningful aggregates of associations, meaning, perceptions and all other intangibles. Brands have a “face” that helps them to be recognized by a person who then immediately associates certain characteristics with this person-like entity. Brands as intangibles are thus owned jointly by the producer and the user.
Now we simply combine these two elements to define the “Branded Product” - thus clearly emphasizing that the brand part is only one component and should not be mistaken to also comprise the product part. “Coca Cola” is a good example - originally exported widely in its original American formulation, it has now evolved to the point where its ingredient mix is adjusted by region to cater to differences in taste in areas such as sweetness, while the (largely American) brand attributes have remained unaltered for the most part. As a “Branded Product” approach, it can be managed following this ‘Regional Adaptation' strategy.
So we can say that a “Branded Product” is viewed as an array of so-called “persuasive elements” which in total make up the value proposition to the consumer. A persuasive element is simply any element that contributes to the total value perception from the consumer's point of view. In the whole range between tangible and intangible assets we can conceive quite a lot of persuasive elements.
With the help of this diagram we can see that the real, tangible, functional and specific parts of the product is something what the companies give to the consumers according to their tastes and preferences but as we move towards the higher side i.e. the virtual, intangible, emotional and unspecific part of the brand is what the company creates in the minds of the consumers. The more we move to the virtual top of the hierarchy the more we must be aware that these parts are not in the package or on the shelf, but resides in the mind of the consumer who actively changes or maintains her/ his idea about the total value concept of a Branded Product. The producer may choose to exchange, add or remove parts of the lower end of the hierarchy without even asking the consumer, changing parts of the jointly owned modules aginst the consumers' consent represents a cruel violation of the common character of the Branded Offer. The producer and the consumer should have the same mental representations regarding particularly the virtual top elements of hierarchy of persuasive elements.
Corporations should therefore spend huge amounts of money on image studies or e.g. associative maps in order to really understand how their communication efforts influence consumers' mental models about the Branded Offer.
We know that:
1. A brand is not the same brand everywhere (in consumers' minds).
2. A product is not the same product everywhere.
3. A consumer is not the same consumer everywhere.
From my point of view the matrix can be seen as the starting point for a number of different strategies how to address the Global Branding issue in international markets.
Localization Strategy (Different Brands, Different Products)
This is a common situation for corporations with broad local portfolios characterized by a high level of complexity due to low standadization of the product and the brand part; each brand part has its own name, advertising etc., each product part has it own formula, fragrance, color etc.
Globalization Strategy (Same Brand, Same Product)
The exact opposite to the “Localization” strategy; the same product is marketed everywhere under the same brand; high to complete standardization of brand and product elements.
Regional Adaptation Strategy (Same Brand, Different Products)
This strategy is characterized by a limited number of global brands; however, the features of the product part may vary according to local/ regional specifics - e.g. the sugar content in soft drinks.
Product Standardization Strategy (Same Product, Different Brands)
The “Product Standardization” strategy removes complexity from the product part by international harmonization wherever possible. The standardized (global) product part is then marketed under different (local) brand names, maintaining the established bond of the brand to the consumer.
The four strategic directions can be dealt with in a flexible way. In the chart we have used arrows to indicate several migration paths depending on the actual status of a corporate portfolio of branded products.
Once we have understood the basic guidelines of managing the brand internationally we focus on the Marketing Entry Strategy
While most attention has been paid to market entry mode questions, such as the choice between a joint venture or a subsidiary, it is notable that most multinationals made the same assumption about their marketing entry strategy—namely, that they would replicate the competitive strategy that had served them well in developed markets, transferring their developed market brands and strategies to emerging economies without adaptation. The result in most cases has been an unprofitable niche position, in which MNCs compete with each other for the business of the small elite who value their brands and can afford their prices. This type of positioning is the wrong one for multinationals since it is evidenced by their subsequent struggles, many aspects of which flow directly from this marketing approach. The surprisingly rapid growth of local brands, many of which imitate their global competitors, for example, is an achievable goal when it is part of an integrated market-driven approach. The fierce competition among multinationals is also indicative of “me-too” niche marketing strategies driven by replication rather than local market responsiveness, and it is evidence of a flawed execution of the original market entry strategy of market penetration.
To turn around their business in these markets, multinationals must in effect enter the markets by thinking their marketing strategy at two levels.
First, they must embrace a mass-marketing mindset.
While most global companies have lost the mass-marketing competence that made them huge corporations in the first place this approach is suitable both for current conditions in emerging markets and for the market penetration objectives behind their market entries. This mindset, which includes the need for aggressive attention to price competitiveness, should be reintroduced as the medium-term goal of the global companies in emerging markets.
Secondly, market expansion strategies
These companies must develop dynamic strategies for reaching those mass markets; in effect, market expansion strategies that will take them out of the elite niche.
Reasons to adopt a mass market approach
First, it is demanded by the typical emerging market structure. Second, anything else is inconsistent with the rationale behind the entry of multinationals into these markets, which was market penetration that was justified by the high potential of large and/or economically undeveloped populations. The principal reason why these billions of people are described as potential consumers rather than categorized into market segments is that they lack the financial resources to purchase the multinationals' products. The affordability gap will only be bridged when companies reach down to them by offering products at affordable prices.
Develop localized products
In practice, however, most multinationals did not develop localized products as part of their entry strategy, instead preferring to transplant offerings from their traditional developed markets. Even disregarding the question of whether the product met local needs, this is a niche strategy because of the price position that such products inevitably occupy. Keen to maintain a degree of global price consistency and unable to lower the price much because of the threat of parallel importing, these transplanted products end up being priced at points at which only 3-5 percent of the population can afford them. It is this niche strategy that has given local competitors the space to develop their own competence and brands far more quickly than multinationals had anticipated. It also fitted well with the niche distribution strategy adopted by most multinationals, which tend to rely on larger channels with which they are somewhat familiar and which cannot realistically achieve high distribution coverage of the traditional, complex, socially embedded channels characteristic of emerging markets.
In short, multinationals were pursuing marketing strategies that were fundamentally inconsistent with their declared objective of entering emerging markets to realize the mass-market potentials of their huge populations. Another argument articulated by some multinationals is that emerging market consumers are rapidly becoming more like their affluent market counterparts, and that it is therefore sensible to offer globally standardized products and wait for the consumer to evolve towards a preference for these. This convergence argument may or may not be true, but it is certain that the rate of change is slow; specifically, in most emerging markets, the mass market will remain poor well beyond the current planning horizons of most multinationals. Even as they grow more affluent, it is far from certain that Chinese and Indian consumers' preferences will converge with those of Europeans or Americans. It is as likely that they may retain idiosyncratic local consumption patterns that are driven by cultural norms. A better strategy for any serious emerging market player is to understand and cater to local consumers' current needs and evolve with them as they grow more affluent.
Two principal routes of localization:
Use of global sources of advantage: It involves the MNC adapting its marketing mix to make that global asset more suited to local emerging market conditions. For example, an MNC might transfer an established global brand into an emerging market but change its packaging size, price points, or even its product formulation to enhance its attraction to the emerging market retailer and consumer. (Kellogg's approach in India is an example of this degree of localization.) It is important to note that this strategy does leverage the MNC's global assets (i.e., it is not based upon marketing derived ground-up from analysis of the local market). However, it is more than simply exporting a global brand via a local distributor—the necessary adaptation requires investment. Importantly, this strategy also brings the MNC into competition with local players.
Develop new market-specific resources: It is a more direct but more costly and probably a slower approach than adaptation. This strategy is starting to be seen in the form of a number of MNCs acquiring local brands that are added to their portfolio alongside global counterparts. In Japan, for example, Coca-Cola carries a number of locally-oriented brands, such as Georgia iced coffee, that enable it simultaneously to meet local taste segments and to derive greater economies of scope from its sales and distribution investments in the country.
Given India's foreign investment laws, the global companies have the option of coming in through equal or majority joint ventures, or through fully-owned subsidiaries. A local partner often acts as a guide for them through the maze that is the Indian market, but such an alliance has also proved to be a brake because of a mismatch in objectives and, frequently, the inability of the Indian partner to invest as much as these global companies.
It picked the joint-venture option out of its global rulebook-discovered vis-à-vis its alliance with Mahindra & Mahindra. Admits John Fink, 45, Ikon Launch Manager, Ford India: ''For the Asian region, Ford had a policy of roping in a local partner.''
On the flip side, solo entries have forced transnationals to spend so much time in understanding and mastering local dynamics that the