Chapter 7: Creating a Global Brand PDF

CHAPTER 7: CREATING A GLOBAL BRAND 7.1 ELEMENTS AND BENEFITS OF BRANDING WHAT IS BRAND? Brands are interesting, powerful concoctions of the marketplace that create tremendous value for organizations and for individuals. Because brands serve several functions, we can define the term “brand” in...

CHAPTER 7: CREATING A GLOBAL BRAND 7.1 ELEMENTS AND BENEFITS OF BRANDING WHAT IS BRAND? Brands are interesting, powerful concoctions of the marketplace that create tremendous value for organizations and for individuals. Because brands serve several functions, we can define the term “brand” in the  A brand is an identifier A brand is a promise A brand is an asset A brand is a set of perceptions A brand is “mind share“ BRANDING the act of creating or building a brand–may take place at multiple levels: company brands, individual product brands, or branded product lines. BRANDS CREATE MARKET PERCEPTION A successful brand is much more than just a name or logo. As suggested in one of the definitions above, a brand is the sum of perceptions about a company or product in the minds of consumers. BRANDS CREATE AN EXPERIENCE Effective branding encompasses everything that shapes the perception of a company or product in the minds of customers.  BRAND CREATE VALUE Brands create value for consumers and organizations in a variety of ways.  Value of Branding for the Consumer Brands help simplify consumer choices. Brands help create trust, so that a person knows what to expect from a branded company, product, or service. Value of Branding for Product and Service Providers For companies and other organizations that produce goods, branding helps create loyalty Value of Branding for the Retailer Retailers such as Target, Safeway, and Walmart create brands of their own to create a loyal base of customers. Branding enables these retailers to differentiate themselves from one another and build customer loyalty around the unique experiences they provide. 7.2 FORMULATING A GLOBAL BRAND SUMMARY Defining Brand Structure Importance of different branding levels: corporate, product division, and product brand. - Understanding interrelation and overlap among branding levels. - Establishing geographic scope aligned with organized structure. KEY PRINCIPLES OF BRAND ARCHITECTURE PARSIMONY - Incorporate all existing brands, both internal and acquisitions. - Aim for consolidation to reduce brand numbers and enhance individual brand roles. - Harmonize similar products under the same brand name across different countries. CONSISTENCY - Balance brand name differentiation of product lines against establishing a common identity. - Create a strong, distinctive brand images for each product line while leveraging a common brand name for synergy. CONNECTIVITY - Assess the value of corporate brand endorsement for connecting products and building customer reassurance. - Ensure corporate endorsements do not dilute brand image or spread negative associations across the portfolio. Implementation Considerations: - Weigh benefits of corporate endorsements against potential risks. (e.g.,brand damage) - Integrate distict identities across national boundaries while maintaining a cohesive brand image. 7.3 GLOBAL BRANDING Global Brand it is widely recognized and trusted internationally (e.g., Coca-cola, IBM, Microsoft). Advantages of Global Branding: - Economies of scale in production and packaging. - Lower marketing cost and increased in leveraging power. Disadvantages of Global Branding: - Differences in consumer needs, legal frameworks, and competition across countries. - Necessity for local adjustments in marketing strategies. Branding Strategies: Single Global Brand - Companies like Coca-cola use one brand (Coke) globally but may have local brands (e.g., Dasani). Multi-Brand Strategy – Companies like use local brands while promoting a corporate brand globally. Example of Multi-Brand Strategy: Acer: Operates under four brands, tailored to various markets (e.g.,Gateway in the US, Packard Bell in Europe) Global Brand Web Strategy: Successful companies adapt websites for local cultures and languages while maintaining a consistent corporate identity. Challenges in Emerging Markets: Pricing Strategies must consider income levels; low-cost entry can complicate brand positioning later. Centralized vs Decentralized Marketing Decisions: Centralized - Headquarters controls decisions for speed and consistency. Decentralized - Regions make their own decisions, benefiting from local knowledge but possibly lacking consistency. 7.4 GLOBAL BRAND STRUCTURES Multinational companies typically operate with one of three brand structures: (a) a corporate-dominant, (b) a product-dominant, or (c) a hybrid structure. A corporate-dominant brand structure is most common among firms with relatively limited product or market diversity, such as Shell, Toyota, or Nike. Product-dominant structures, in contrast, are often used by (mostly industrial) companies, such as Akzo Nobel, that have multiple national or local brands or by firms such as Procter & Gamble (P&G) that have expanded internationally by leveraging their “power” brands. The most commonly used structure is a hybrid structure (think of Toyota Corolla cars or Cadbury Dairy Milk chocolate) consisting of a mix of global (corporate), regional, and national product-level brands or different structures for different product divisions. In many companies, “global” branding evolves as the company enters new countries or expands product offerings within an existing country. Typically, expansion decisions are made incrementally, and often on a country-by-country, product-division, or product-line basis, without considering their implications on the overall balance or coherence of the global brand portfolio. To make such decisions, companies must formulate a coherent set of principles to guide the effective use of brands in the global marketplace. These principles must define the company’s “brand architecture,” that is, provide a guide for deciding which brands should be emphasized at what levels in the organization, how brands are used and extended across product lines and countries, and the extent of brand coordination across national boundaries. 7.5 DETERMINANTS OF GLOBAL BRAND STRUCTURE A company's global brand structure is influenced by a number of factors, including: Firm-based characteristics A company's organizational structure and international expansion strategy can affect its brand structure. For example, a company's acquisition strategy or organic growth can impact how its brand structure evolves. Product-market characteristics The relative strength of local and global competitors in a given product market can influence a company's brand structure. Underlying market dynamics The similarity of markets in different regions can impact the pressure on an industry to globalize. For example, the demand for soft drinks is similar across countries, which has led to a more uniform brand for companies like Coca-Cola and PepsiCo. Brand identity A company's brand identity should be strong and coherent, with a clear vision, mission, and values. Brand image A brand's image is important for its reputation and credibility, and can influence consumer purchasing decisions. Consistency A consistent brand identity is key to establishing a global brand. This can include using the same colors, logo, or style. Local adaptation While it's important to maintain global consistency, it's also important to adapt to local markets. Market research can help inform localized adaptations, such as products, packaging, and promotions. 7.6 MANAGING KEY STRATEGIC BRANDS Managing key strategic brands involves a multifaceted approach that integrates marketing, brand development, and consumer engagement to create a sustainable competitive advantage. It requires a deep understanding of the brand's identity, target audience, and market dynamics. BENEFITS OF CORPORATE BRANDING:  A strong corporate branding strategy can add significant value in terms of helping the entire corporation and the management team with implementing its long-term vision, creating unique positions in the marketplace for the company and its brands, and signalling a commitment to a broader set of stakeholder issues.  Corporate branding not only enhances a company’s visibility and reputation but also contributes to long- term success and resilience in a dynamic business environment. By cultivating a strong corporate brand, organizations can build lasting relationships with their stakeholders and achieve their strategic objectives. CORPORATE BRAND AS THE “FACE OF THE COMPANY” A strong corporate brand acts as the face of the company, portraying what it wants to do and what it wants to be known for in the marketplace. In other words, the corporate brand is the umbrella for the corporation’s activities and encapsulates its vision, values, personality, positioning, and image, among many other dimensions. Think of HSBC. It employs the same slogan “The world’s local bank”—around the world. This creative platform enables the corporation to portray itself as a bridge between cultures. COST SAVINGS A corporate branding strategy is often more cost-efficient than a multi-brand architecture. Specifically, corporate branding produces efficiencies in terms of marketing and advertising spending as the corporate brand replaces budgets for individual product marketing efforts. Even a combined corporate and product branding strategy can often enable management to reduce costs and exploit synergies from a new and more focused brand architecture. THANKYOU!