Global Brands and Positioning Strategies

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Questions and Answers

What is one potential downside for luxury brands when dealing with parallel importing?

Dilution of exclusivity in the brand image (correct)

Increased exclusivity of the brand

Expansion of market reach

Higher production costs for the brand

Which of the following best describes the impact of distribution channel strategies on brand image?

High-end brands benefit from broad distribution channels

The alignment of distribution channels influences brand perception (correct)

Mass brands should focus on exclusivity in their distribution

All brands should utilize the same distribution strategy

What is a critical factor to consider when selecting local distributors?

Experience in digital marketing

Excellent negotiation skills

Willingness to invest in the market (correct)

Their existing customer base

Why would a mass brand like Coca-Cola use multiple distribution channels?

To increase consumer exposure and sales opportunities Signup and view all the answers

Why is it not prudent to give local distributors too much autonomy?

Fashion companies need to control marketing strategies Signup and view all the answers

What strategy should a premium brand adopt regarding distribution channels to effectively reach its target market?

Focus on high-end department stores and standalone locations Signup and view all the answers

What approach should fashion companies take towards local distributors?

Consider them long-term partners Signup and view all the answers

What advantage do distributors with good customer contacts provide?

Immediate return and revenues Signup and view all the answers

How can high prices in emerging markets lead to issues for companies?

Consumers may be compelled to choose gray market products Signup and view all the answers

Which statement accurately reflects the role of online shopping in global distribution?

It simplifies access to international consumers. Signup and view all the answers

What effect did Zara's high pricing strategy in Korea have on its sales?

Zara had to lower prices after social media backlash Signup and view all the answers

Which of the following represents an advantage of using local distributors?

They often have a deep understanding of local market needs Signup and view all the answers

What is one primary benefit of selling via a fashion brand's own website?

Direct control over delivery processes Signup and view all the answers

What is a recommended strategy for contracts with local distributors?

Include strong incentives for long-term goals Signup and view all the answers

How does the unauthorized nature of parallel importing affect consumer choices?

It allows consumers access to authentic products at lower prices Signup and view all the answers

What challenge might occur if distributors work with competing brands?

Focus on brand loyalty could wane Signup and view all the answers

What is a significant advantage of working with local distributors for fashion brands?

They possess local market knowledge. Signup and view all the answers

Why is channel localization particularly important when entering international markets?

Dominant channels may differ significantly from domestic ones. Signup and view all the answers

What outcome may occur as a disadvantage of losing control over brand strategy when working with local distributors?

Potential harm to the brand image due to mismanagement. Signup and view all the answers

How can international fashion brands effectively select their local distributors?

Choose distributors who approach them at industry events. Signup and view all the answers

What issue may arise from the existence of different social media platforms in various countries?

Legal restrictions can limit communication options. Signup and view all the answers

What factor can complicate distribution channel decisions for international expansion?

Presence of unique local regulations and consumer preferences. Signup and view all the answers

What is a potential risk for a fashion brand when they allow local distributors to take ownership of their merchandise?

The distributor may replicate and sell similar designs independently. Signup and view all the answers

Which statement is true regarding the relationship between store location and brand image?

Flagship stores on major fashion streets indicate a reputable brand. Signup and view all the answers

Study Notes

Global Brands and Their Value Positioning

Four types of global brands are discussed: value brands, fun brands, mass brands, and premium brands.
Value brands offer acceptable quality at low prices (e.g., Uniqlo, Ikea).
Fun brands focus on lifestyle, enjoyment, and stimulation, targeting young people (e.g., Zara, H&M).
Mass brands offer high quality with above average pricing, targeting the middle class (e.g., L'Oreal, Levis).
Premium brands provide top-notch quality and emotional benefits at a higher price point for engaged customers (e.g., Lululemon, Athletica).

STP Strategy

STP stands for segmentation, targeting, and positioning.
This strategy enables companies to target different market segments and position their products as similar even if they target different segments.
The STP strategy considers positioning a brand as either similar or different for similar or different target markets.

Consumer Culture Positioning

Global positioning: Brands are positioned as symbols of global culture (e.g., Nike emphasizes athleticism globally rather than its American origin).
Foreign positioning: Brands associate themselves with a specific foreign culture (e.g., Ikea emphasizes its Swedish origins through design and products).
Local positioning: Brands reflect and highlight the local culture and consumer identity (e.g., L'Occitane uses local French language and ingredients).

Global Market Fit

Four approaches to address cultural differences are discussed:
Culture: Companies can adapt products to suit specific cultural markets.
Season: Products and inventory need to adapt to the host country's season.
Religion: Brands should be aware of and respect the religious contexts of different countries.
Economic development: Consider the local economic development level and adapt products or services as needed.

Cost Escalation in Exporting

Tariffs: Taxes placed on goods crossing borders (both imported and exported goods).
Duties: Indirect taxes on imported goods (consumers often pay them).
VAT (Value Added Tax): Taxes at various production points that add to the final cost of goods (common in the EU but not the US).

Pricing Approaches for Global Markets

Cost-plus pricing: Adds all costs associated with international trade - transportation, tariffs, and fees/documentation, to calculate the final price.
Flexible cost-plus pricing: Prices are adjusted to reflect competition and market conditions, in order to stay competitive.
Penetration pricing: Products are priced lower to gain market share quickly.

Market Factors Affecting Pricing

Customer demand: Prices need to align with customer expectations and product values to create sufficient demand. For instance, overpricing may cause lack of interest.
Competition: Competition level and brand strategy impact pricing decisions (e.g. prices may differ depending on whether a company is trying to gain market share faster or if the focus is on maintaining reputation).
Product life cycle: The stage of a product's life cycle impacts the pricing strategy.
Economic conditions: Local economic conditions may affect consumer behaviour and willingness to purchase.
Market Intermediaries Costs associated with various intermediaries that handle distribution and logistics affect pricing.

Distribution Strategies that Convey Brand Image

Number of channels: Number of channels aligned to branding is a key factor. Mass brands need extensive channel presence to succeed, while premium brands may use selective or exclusive channels.
Intermediary type: Matching channel distribution to target market is essential.
Store location: Selecting strategic locations affects brand perception.
Channel localization: Companies must adapt their distribution channels to meet local market needs and understand local preferences.

Local Distributors

Prioritize selection based on market development capabilities rather than existing customer contacts.
Focus on distributors with an investment willingness in the brand.
Maintaining control over the brand's marketing strategy is crucial, though not requiring full autonomy.

Advertising Standardization Barriers

Cultural differences: Advertising might not translate well to different cultures without adjustments.
Legal constraints: Regulations in different countries may limit advertising content and style.
Linguistic barriers: Translations must be appropriate.
Media limitations: Adapting to platforms within each region.

Advertising Adaptations

Local languages: Translations create global image, especially for cosmetics, that are used with the product.
Models: Use local models for commercials.
Verbal message: Adaptation to cultural context within countries.
Media: Adapt to local media/social media platforms.

Harmful or Misleading Ads: Ensuring ads aren't considered unhealthy, undesirable or misleading within a given country.

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Description

This quiz explores the various types of global brands, including value, fun, mass, and premium brands, along with their market positioning strategies. You will also learn about the STP (segmentation, targeting, and positioning) strategy and how consumer culture influences brand positioning. Test your knowledge of these key marketing concepts!