International Marketing: The Product and the Brand PDF

International Marketing @ University of Tübingen Marketing decisions: The product and the brand Prof. Dr. Kristina Klein Agenda Introduction to international 1 marketing 2 Market selection and market entry 3 The role of culture Marketing decisions: Th...

International Marketing @ University of Tübingen Marketing decisions: The product and the brand Prof. Dr. Kristina Klein Agenda Introduction to international 1 marketing 2 Market selection and market entry 3 The role of culture Marketing decisions: The 4 product and the brand Marketing decisions: International 5 pricing Marketing decisions: International 6 distribution Marketing decisions: International 7 communication and advertising Agenda 4.1 Segmentation and Targeting 4.2 Standardization vs. Adaptation 4.3 Brand Naming Strategies Other Branding Elements (color, 4.4 logo) 4.5 (Cultural) Positioning Strategies 4.6 The Country-of-Origin Effect Multi-segment marketing: Building brands across markets Separate universal truths from culture specific context What binds your markets together with regard to your brand? Find a universal product or emotional truth to link your product or brand across markets. E.g., mother’s dilemma between convenience and providing a healthy nutritious meal Quantifying the culture specific context Look at the underlying cultural values and lifestyle of the target audiences. Analyze databases: make it possible to look at differences in target audiences across markets and assess what this means for the culturally specific component of communication including the tone of voice Building target audiences across markets More often than not, despite two markets being quite different from each other on aggregate, they may share similar smaller minority target audiences. https://www.researchworld.com/three-key-steps-to-building-brands-across-markets/ 4 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Targeting segments on an international level: targeting criteria Segment size and growth Is the market segment currently large enough to present a company with the opportunity to make a profit? If the answer is ‘no,’ does it have significant growth potential to make it attractive in terms of a company’s long-term strategy? Competition Is there currently strong competition in the market segment? Is the competition vulnerable in terms of price or quality? Feasibility & Compatibility Will adaptation be required? If so, is this economically justifiable in terms of expected sales? Will import restrictions, high tariffs, or a strong home country currency drive up the price of the product in the target market currency and effectively dampen demand? 5 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Agenda 4.1 Segmentation and Targeting Standardization vs. 4.2 Adaptation 4.3 Brand Naming Strategies Other Branding Elements (color, 4.4 logo) 4.5 (Cultural) Positioning Strategies 4.6 The Country-of-Origin Effect Different countries - different products (adaptation with regard to product) Special ingredients and smells Some cultures prefer shower Griesson – De Beukelaer in different countries: soap soaps, other shower gels offers in France more tastes from Marseille in French Persil of “Prinzenrolle” than in washing powder Germany (white-chocolate, etc.) Different cultures have… Different countries offer…  Different wants and needs  Different products  Different tastes  Different product line extensions  Different demands, etc.  Different packaged products, etc. In many countries people wash Different religions prefer Different countries have their clothes with cold washing different food, e.g., Jewish different sockets, important powder (other formulation) people eat kosher food when producing electronical goods 7 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Developing products for different markets Key for success: technical development and testing are done locally Procter & Gamble: Establishment of 25 R&D Centers worldwide (one in Bejing, for instance) Example development of Gillette razor for Indian men: First P&G successfully tried out the razor on Indian men studying on the MIT, but the launch in India flopped. Why: MIT students had access to running water, unlike much of the Indian market. Key learning: Local product testing  Launch in 2010 Gillette Guard, a razor that is easier to rinse. Adaptation of existing products It is not always an issue of inventing a totally new product. Often it is a matter of finding the right match of existing products. Example body cleanser for China: Many Chinese don‘t have an own bathroom and don‘t undress completely by taking a shower, because of privacy issues. Solution: Body cleanser with foam, formulated to clean without much water. Technology came from an existing hair-color product. 8 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Product vs. brands: The product-brand matrix Product Local Global 1. Local Product/Local Brand 2. Global Product/Local Brand Example: Dulce de Leche from La Example: Local Chinese beer brand Local Salamandra (South American “Tsingtao“ is sold in 62 countries product and Argentine Brand) Brand 3. Local Product/Global Brand 4. Global Product/Global Brand Example: Milka offers Alfajores Example: Coca-Cola (flagship brand) Global (regional specialty) in South America 9 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Brands can be standardized differently - examples Brand name and brand logo Standardized Partially standardized Differentiated Marlboro Magnum by Langnese in Germany Vim in Germany and Glorix in the (Cigarettes, Philipp and Magnum by Streets in Netherlands Standardized Morris) Australia, each of them with a (toilet cleaner, Unilever) heart as an uniform brand label (ice cream, Unilever) Conte nt design Domestos as an Nescafé Unser Bester in Germany Ariel in Germany and Tide in the US Positioning of the antibacterial toilet and Nescafé Silka in the US (detergent, Procter & Gamble) positio Differentiated cleaner in Great Britain (Instant coffee, Nestlé) ning and as an all-purpose cleaner in Germany (Cleaner, Unilever) Sattler, H./Völckner (2007), Markenpolitik, p. 145 10 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Adaptation of brand name: Brands might have different names in different countries GERMANY Meister Proper Mr. Clean (USA) KFC Poulet Frit Kentucky (in parts of Canada) Deichmann Dosenbach (Switzerland) Burger King Hungry Jack’s (Australia) Mars Milky Way (USA) Milky Way 3 Musketeers (USA) Iglo Bird’s Eye (USA) T.K. Maxx T.J. Maxx (USA) Axe Lynx (UK, Ireland, Australia, New Zealand) 11 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Local brands can offer strategic advantages Greater flexibility of local brands – better response to specific consumer needs (e.g., specific pricing) Faster entering into new markets by acquisition of successful local brands Risk management with a balanced brand portfolio Local brands benefit from higher brand awareness and a strong brand image (better value and trust perceptions) Examples Unilever ice cream: standardization of logo, product, but keeping the well-known local brand names Coca Cola: multi-domestic approach Procter & Gamble: Dawn (vs. Fairy Ultra) in Germany L’Oréal: Maybelline used to have local complements (Gemey-Mabelline in France; Maybelline Jade in Germany), now Maybelline New York Schuiling, I./Kapferer, J.-N. (2004), Real Differences Between Local and International Brands: Strategic Implications for International Marketers, Journal of International Marketing, 12(4), pp. 98 ff 12 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Agenda 4.1 Segmentation and Targeting 4.2 Standardization vs. Adaptation 4.3 Brand Naming Strategies Other Branding Elements (color, 4.4 logo) 4.5 (Cultural) Positioning Strategies 4.6 The Country-of-Origin Effect Desirable characteristics of brand names The brand name is the foundation of a brand‘s image and should… be simple be easily pronounceable be easily memorable be understandable possess positive connotations be relevant for the product (category) be able to offer a distinctive image be extraordinary be different be extendable be protectable Francis, J. P./Lam, J./Walls, J. Y. (2002), Executive Insights: The Impact of Linguistic Differences on International Brand Name Standardization: A Comparison of English and Chinese Brand Names of Fortune-500 Companies, Journal Of International Marketing, 10(1), pp. 98-116. 14 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de International brand names – a challenge Brand names in different languages have different meanings Translations can be correct, but still not appropriate Natives should be asked for advice - back translation Examples: Colgate sent Cue over to the French market. “Mitsubishi Pajero” is called “Mitsubishi Gazprom named a new Joint Venture in Nigeria The problem occurred that “Cue” was also Montero” in Spain, because “pajero” means “Niggaz“ (combination of Gazprom and the name of one of France‘s most notorious “tosser” or “mother fucker” in Spanish. Nigeria), but “Niggaz“ has the same meaning porno magazines. It is a slang term in like “Nigger“. African people felt offended by French for “butt“, prompting Colgate to yank this name. the brand, which is no longer made today. Best Practice Example: IKEA in Thailand hired a team of linguists to scrutinize and then carefully transliterate its product names into the Thai alphabet. Changing a single letter sound was enough to prevent misunderstandings and to avert a cultural crisis, e.g., “Redalen” bed frame may conjure images of getting to third base, while the “Jättebra” plant pot sounds suspiciously like a slang word for sex. http://www.guardian.co.uk/world/2009/jun/30/russia-nigeria-gas-name-blunder, http://www.welt.de/wirtschaft/article4051387/Die-Liste-der- peinlichsten-Markennamen.html, http://newsfeed.time.com/2012/06/06/why-ikea-products-sound-naughtier-in-thai/#ixzz1yEW3I2L8 15 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de English vs. Chinese brand names Investigation of the degree and nature of brand standardization/localization of the Fortune-500 (the largest 500 US corporations) consumer goods multinational companies in Hong Kong and the People’s Republic of China → comparison of linguistic features The majority of the brand names were adapted to the local markets (only 10 % used an English brand name) Majority of companies try to leverage their brand names in the Chinese markets Transliteration (linking the brand name to the original English brand name by sound) as most often employed translation technique  however, low similarity ratings between Chinese and English brand names Very few companies (23 %) created a new brand name with little or no relationship to the original brand name More Chinese than English brand names were associated with product benefits Consideration of Chinese cultural traits (“well being”, “treasure” used as words in the localized brand names) No unfortunate brand names Francis, J. P./Lam, J./Walls, J. Y. (2002), Executive Insights: The Impact of Linguistic Differences on International Brand Name Standardization: A Comparison of English and Chinese Brand Names of Fortune-500 Companies, Journal Of International Marketing, 10(1), pp. 98-116. 16 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de The power of sound (of brand names) http://www.autocarbase.com/2013/01/hummer.html; https://findvectorlogo.com/desperados-vector-logo-svg/; https://www.pfeiffer- augenoptik.de/liebeskind-berlin/ 17 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de The power of sound (of brand names) choosing a brand name to create associations for the product through the sound --> foreign branding e.g. Desperados sounds like it comes from a spanish speaking country, but it is originally from France http://www.autocarbase.com/2013/01/hummer.html; https://findvectorlogo.com/desperados-vector-logo-svg/; https://www.pfeiffer- augenoptik.de/liebeskind-berlin/ 18 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Some brand name linguistic characteristics Characteristics Definitions/Examples Alliteration Consonant repetition (Coca-Cola) Assonance Vowel repetition Consonant repetition with intervening vowel changes Consonance (Weight Watchers) Onomatopoeia Use of syllable phonetics to resemble the object itself (Zisch) Initial plosives /b/, /c-hard/, /d/, /g-hard/, /k/, /p/, /q/, /t/ (Bic) 19 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de A short definition of sound symbolism Sound of a brand name can communicate information about the product, e.g., its size, speed, strength, weight etc. That is, brand name sounds can convey product-related information either in the presence or absence of supporting marketing communication Specific forms of sound symbolism are not language specific => valuable for naming internationally sold products (Athaide/Klink 2012; Shrum et al 2012) 20 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Back and front vowels convey different meanings Front/back distinction: location of the highest point of the tongue during pronunciation Front vowels: highest position is in the front of the mouth Back vowels: highest position is in the back of the mouth Size symbolism through the use of vowels Front vowels communicate smaller size Back vowels communicate larger size Yorkston/Menon (2001): Attributes (e.g., leg room, trunk space) of a fictitious automobile brand were rated as larger when the brand used the phonetic /ä/ sound (e.g., Bromley) than when it used the phonetic /i/ sound (e.g., Brimley) Other meanings also exist with front/back vowels Light-dark, soft-hard, thin-thick, weak-strong, light- heavy, fast-slow, cold-warm 21 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Sound symbolism effects in international brand names? Investigation of international sound-preference effects across languages Study objects: a two-seater convertible and a SUV Languages: English, French, German, Spanish Original result: brand name for convertible (SUV) that contains front vowels (back vowels) compared to back vowels (front vowels) is preferred Generally, independent of product category, language can influence the preference for both vowel (English) and consonant (German, English) sound. Accordingly, the results suggest that sound–preference effects may not generalize across all vowels and consonants, and languages. Sound–perception effects with evidence for an international sound–attribute fit: Consumers associate brand names that contain front vowels (fricatives) compared to back vowels (plosives) with smaller size, faster speed, and lighter weight across English, French, German, and Spanish. → Marketers may convey messages on these product attributes via sound symbolism in international brand names. Kühnl, C., A. Mantau (2013), Same sound, same preference? Investigating sound symbolism effects in international brand names?, International Journal of Research in Marketing, 30 (4), 417-420. 22 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Sound symbolism effects in international brand names? The results exam question: graph with percentages and ask TABLE 1 Our study whether the sound symbolism is confirmed or not Sound manipulation Vowels --> sound symbolism Sound x product effect F(1, 448) = 10.67;p=.001 Sound x product x language-effect F(3, 448) = 1.33;p=.26 Car type n % of front % of back vowel words vowel words preferred preferred All languages combined 456 Convertible 227 57.5a 42.5b SUV 229 46.1a 53.9b English 74 Convertible 43 60.5a 39.5b SUV 31 61.3a 38.7b French 95 Convertible 49 57.1a 42.9a SUV 46 46.7a 53.3a German 213 smaller car, less loud Convertible 99 57.3a 42.7b SUV 114 43.6a 56.4b Spanish 74 Convertible 36 54.9a 45.1a SUV 38 40.1a 59.9b Notes: Comparing across columns, means with different superscript differ at p good fit Multi-attribute metric combines information on brand and country images into a country-specific multi-attribute measure offers insights into the reasons behind consumers’ high (versus low) fit assessments Klein, Kristina, Franziska Völckner, Hérnan A.Bruno, Henrik Sattler and Pascal Bruno (2019). Brand Positioning Based on Brand Image– Country Image Fit. Marketing Science, 38(3), 516-538. 34 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de The database: Y&R‘s Brand Asset Valuator (BAV) Consumers’ perceptions of a multitude of brands in several countries Consumer panels composed based on quotas for traits like age, gender, and region Each data-collection wave covers several hundred brands Individual respondents evaluate a subset of brands, every brand is evaluated by several respondents In addition, respondents evaluate several countries, potentially including their home country Respondents assess brands and countries on 48 image attributes, e.g., “authentic,” “reliable,” or “fun” BAV data for more than 1,100 food and beverage brands in three countries (Germany, France, United Kingdom) Klein, Kristina, Franziska Völckner, Hérnan A.Bruno, Henrik Sattler and Pascal Bruno (2019). Brand Positioning Based on Brand Image– Country Image Fit. Marketing Science, 38(3), 516-538. 35 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de The “Carlsberg case” Panel A. Germany charming Panel C. France down to earth down to earth fun intelligent obliging Im ag e ite m s progressive prestigious restrained Image items progressive simple sensuous social social socially responsible socially responsible tough upper class unapproachable −0.1 0.0 0.1 0.2 upper class Weighted item values −0.1 0.0 0.1 0.2 Weighted item values Panel B. United Kingdom carefree down to earth glamorous helpful Im ag e ite m s kind rugged sensuous socially responsible straightforward unapproachable −0.1 0.0 0.1 0.2 Weighted item values Klein, Kristina, Franziska Völckner, Hérnan A.Bruno, Henrik Sattler and Pascal Bruno (2019). Brand Positioning Based on Brand Image– Country Image Fit. Marketing Science, 38(3), 516-538. 36 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Managerial implications BICI fit offers insights also use when you want to position your product near a local country … how to capitalize on LCC in brand-building activities → idea of BICI fit metric can be applied to own data … for the identification of concrete image attributes for positioning new and existing brands → e.g., in Germany “obliging,” “down to earth,” and “socially responsible” contribute most to BICI fit, whereas attributes like “fun” or “sensuous” have a negative weight and thus do not associate a brand with LCC … into segmenting markets and identifying consumers who are strongly influenced by BICI fit → stronger effect of BICI fit for female, older, and less innovative consumers with a high need for structure (Germany) … on category-specific characteristics that have to be considered Klein, Kristina, Franziska Völckner, Hérnan A.Bruno, Henrik Sattler and Pascal Bruno (2019). Brand Positioning Based on Brand Image– Country Image Fit. Marketing Science, 38(3), 516-538. 37 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Agenda 4.1 Segmentation and Targeting 4.2 Standardization vs. Adaptation 4.3 Brand Naming Strategies Other Branding Elements (color, 4.4 logo) 4.5 (Cultural) Positioning Strategies 4.6 The Country-of-Origin Effect Nation Brands Index (NBI) – Germany in top position Index assesses the current reputation of a country in 6 different categories: Exports, government, culture, people, tourism, immigration and investments if you are leading, you should take advantage of that (2024 Japan overtook Germany) “Germany” (as a brand) finds itself in the leading position until 2023 (then only 2nd to Japan) Constant strength over several categories (particularly German labor market and German products are perceived very positively on an international level) Nations as personality – Germany is associated the most with the attribute “tough” (39 %) 2019 https://www.marktforschung.de/aktuelles/marktforschung/markenimage-deutschland-wieder-an-der-spitze/ 39 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de The country-of-origin effect Country-of-origin perceptions are mental associations/beliefs triggered by a country Often used as a cue when evaluating a product The more favorable a country‘s image, the more prominently the “Made in…“ label should be displayed Country-of-origin effect varies with the type of product (high vs. low involvement products):  Example: Consumers want to know where a car was made, but not the lubricating oil. Sometimes country-of-origin perception can encompass an entire country‘s products + Positive COO Neutral COO Negative COO - Support of association with country of origin Link brand name to another country Keegan, W.J./Green, M.C., 2011, pp. 344-345; Kotler, P./Keller, K.L., 2009, p. 660 40 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Cultural variation of country-of-origin effects Experimental setting Investigation of the effect of country of origin on product evaluations in two countries – does the place of manufacturing influence product evaluations? Mountain bike either made in Japan or in the USA Target product either superior or inferior to the competition Results Respondents in Japan evaluated the product that originated in the home country (versus foreign country) more favorably regardless of product superiority Respondents in the United States evaluated the product that originated in the home country more favorably only when the product was superior to competition Explained by Vertical Individualism (VI)-Collectivism:  Individualist cultures  persons desire to perform better; VI: people are competitive and attempt to achieve individual goals at the expense of group goals  Collectivist cultures  people are willing to sacrifice for the collective goal. VC: people are anticipated to sacrifice their personal preferences and evaluate the home product favorably to enhance the group interest Gürhan-Canli, Z./Maheswaran, D. (2000), Cultural Variations in Country of Origin Effects, Journal of Marketing Research, 37(3), pp. 309-317. 41 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Foreign Branding implicitly uses country-of-origin effects “Spelling or pronouncing a brand name in a foreign language” (Leclerc et al. 1994, p. 263) to implicitly suggest a specific country of origin (COO) in hope that this will build or enhance certain product qualities Examples: Where do these brands come from? Galanz sounds German, is from China sounds German, is from the USA Landwind sounds German, is from China sounds French, is from France --> to create associations with the other countries 42 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de What happens if consumers recognize the incongruence? Foreign Branding and “made in” Empirical study Foreign branding and “made in” are both signals 2 (Foreign Branding: of a product‘s origin Croixbergière/Kreuzberger) x 2 (product type: Companies are increasingly obliged to indicate the hedonic/utilitarian) x 3 (made in: congruent vs. country-of-origin (made in) on the product packaging incongruent developed country vs. incongruent emerging country) between What happens if consumers recognize the subjects design incongruence between “made in” and the country-of- origin implied via the foreign brand name? Online access panel (NZ consumers) Major results If consumers recognize the incongruence, purchase likelihood is influenced negatively. This effect is especially pronounced for hedonic product categories (compared to utilitarian ones) and manufacturers from emerging countries Melnyk, V./Klein, K./Völckner, F. (2012), The double-edged sword of foreign brand names for companies from emerging countries, Journal of Marketing, 76(6), pp. 21-37 43 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Ad copy techniques can reduce the negative effect Information processing Empirical study Utilitarian products: strong cognitive elaboration; Focus on incongruent case product attributes and not superficial cues (e.g., country- 2 (product type: hedonic/utilitarian) x 2 (ad copy of-origin cues) are in the focus technique: statement vs. rhetorical question) between Hedonic products: evaluation of the holistic picture; subjects design usage of subjective heuristics and stereotypes, e.g. Control group (“best case”): congruence between country-of-origin cues foreign brand name and “made in”-information Rhetorical questions induce product-attribute processing Online access panel (NZ) of ad Major results Rhetorical questions reduce the negative effect of incongruence in hedonic product categories Purchase intention does not differ significantly from the control group in this case Melnyk, V./Klein, K./Völckner, F. (2012), The double-edged sword of foreign brand names for companies from emerging countries, Journal of Marketing, 76(6), pp. 21-37 44 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Universität Bremen Prof. Dr. Kristina Klein Max-von-Laue-Straße 1 Gebäude WiWi 2 F3210 [email protected] 0421 218-66970