Comparative International Marketing - Common Elements of Highly Recognized Brands - Assignment Example

? Comparative International Marketing Overview International marketing can be recognized as the marketing activity that is conducted by the companiesin overseas markets. It can further be referred as company-level marketing criteria in the global market. It comprises the market determination along with other parameters such as targeting, marketing mix, entry-mode choice and tactical decisions so that the firms can vie in the global markets. Question One Common Elements of Highly Recognized Brands Branding can be defined as the utilization of the name, term, symbol along with design and an amalgamation of all these so that it becomes easier to recognize a product. Brand elements are acknowledged as those tools that tend to recognize and distinguish a brand. It is a well known fact that the famous and well known brands make use of multiple brand elements. For instance, Nike makes use of the ‘swoosh’ logo, ‘Just do it’ slogan and the legendary ‘Nike’ name based upon ‘winged goddess of victory’ (Wrenn, Kotler, & Shawchuck, 2009). Therefore, in this regards, it can be stated that the most recognized global brands tend to possess the various brand elements such as name, logo, and slogan as well as brand story. The six main parameters for choosing the brand elements are that they need to be meaningful, likable, memorable, adaptable, transferable and protectable (Wrenn, Kotler, & Shawchuck, 2009). Reasons for Preferring Global Brands In particular, the brands that operate across international borders and are widely recognized all over the world are generally categorized as global brands. Researches on global brands such as Adidas, Zara, and Nokia among others have established their benefits in comparison to other brands. It is often assumed that the global brands tend to provoke greater favorable affect. They are perceived to be of considerably superior quality and thus enjoy greater recognition as well as trust. They have also been found to be evoking luring global myths and tend to have greater advantages in comparison to the local brands. Global brands demonstrate positive impact on brand esteem. Global brands are generally preferred by the customers because of their wide accessibility. These brands are well known, standardized, more multi-ethnic, and highly authoritative and are also observed to be depicting more social responsibility in comparison to other brands (Dimofte, Johansson, & Bagozzi, 2010). Role of Global Branding To Firms One of the significant advantages to the firms from global branding has been economies of scale. The companies are likely to benefit from huge economies of scale that can be generated in all parts of the business methods. Large economies of scale can be created with a comprehensive focus on Research & Development (R&D) efforts in a few of the international locations, the rationalization of the production methods and the standardization of the marketing program. The second most significant benefit to the firms from the global brands is the generation of the unique global image. This helps in the reduction of the costs in the communication area. The other benefit of the global brands to the firms is that there will be increase in the sales of the companies since the travelers will view their preferred brands being available at other markets as well. The trade channels are likely to accept a global brand that has been advertised in their market (Girboveanu, n.d.). It can be stated that the global brands tend to be beneficial for the firms as they are largely driven by a single focused strategy in their globalised operation. Benefits of Standardization For Certain Brands Even though there is high demand for the local products owing to the economic growth taking place as well as anti-globalization sentiments, it has been observed that the global brands and products are generally standardized. A few of the international products that have been standardized are Gillette razor blades along with other brands such as Sony and Benetton. The significant pros of standardization are that it leads to cost reduction and improved quality of the product. Product standardization also leads to improved customer preferences. Global products are generally standardized products possessing common brand names but with certain unique characteristics in all the countries. It is difficult to practice 100 percent standardization. It is significant to localize a few of the features as well such as packaging and pricing among others. Brand standardization works well with certain products because of culture and market of targeted country. It needs to be remembered that the standardized brand may not be feasible when there are significant disparities across the markets (Desjardins, 2006). Analysis and Critique of the Interbrand Methodology Interbrand methodology signifies the value of the brand by estimating its projected earnings by viewing the percentage of the overall revenues arising from the brand value. The rankings of the brand actually come from a referenced report that is published by BusinessWeek magazine in collaboration with Interbrand. Interbrand is a branding consultancy that has created its own methodology in order to identify the value of the brand (Salinas, 2011). One of the criticisms of the Interbrand methodology is that it sets rigid parameters while identifying which brands can easily make the lists. The other critique related to the model is that the method has assumed similar factors and weighting processes for all the industrial sectors, product categories and regions. Nonetheless, the weight of each factor and the amount of key factors required for identifying brand strength may alter by sector, region, and product and industry life cycle. The other criticism related to Interbrand methodology is that it treats different brands in the same way. For instance, Gillette is treated as a single brand company although there are numerous sub-brands and extensions. Interbrand treats Marbolo which is a single brand by similar protocols as applied in Gillette. Interbrand is found to be adopting business-oriented views of a brand instead of customer oriented views. For example, PUMA has diversified its product ranges with its new perfumes. Campbell has targeted health conscious female customers and has been collaborated with wide range of customers. Hence, it is viewed that most of the global products focus upon customers more instead of business (Salinas, 2011). Establishing Global Brands In order to create global brands, it is quite essential to establish and to create a brand identity. Branding generally involves the people’s perception regarding the particular business and products of the company. Prior to creating a strong foundation, it would be vital to identify the core attributes of the brand, personality and positioning of the brand by evaluating its market category, competitors and the attitudes and beliefs of their own employees. Furthermore, the political environment, cultural differences, social and environmental pressure, regional restrictions and the tastes and the preferences of the customers also need to be taken into consideration. It is significant to develop a brand reputation in the international market. Moreover, the companies need to focus upon the advertising and word-of-mouth communication. The companies further need to make an attempt towards naming the products, designing the logos and thus ensuring that their brands are standardized all through the business (Roellig, 2001). Strategies of Global Brands It can be stated that the companies that are performing well in the global markets are found to be embracing technology as well as social media. A few of the brands make use of the social media in order to reach beyond young people to consumers belonging to all the ages (Marketing Week, 2012). Question Two 2a. Difference of New Global Challenger Firms with Multinationals from the West That Have Been Around For a Long Time There are a few new global challengers belonging to the rapidly developing nations that have a significant role to play in the global markets in the present times. These challengers are found to be internationalizing their businesses and thus vying with the present multinational companies for the market share, resources and talents at home and countries abroad. The difference between the new global challengers and the multinationals from the west such as Sony, Shell, Unilever, Siemens, and Nestle among others can be studied from the three distinctive characteristics. One of the features is the accelerated internationalization which is a distinctive characteristic. The other characteristics are they have been capable of attaining such rapid internationalization not because of the technological innovation but because of the organizational innovations that are adapted properly to the context of the emergent economy. The other characteristic is that they have been capable of executing these approaches by means of strategic innovations that permit them to manipulate their latecomer and peripheral position to advantages. The main difference among the multinational firms from the west and the new global challengers is that the multinational firms have certain kinds of proprietary benefits that differentiate them from purely domestic firms that assist them to overcome the liability of foreignness. The multinational firms exist since few economic conditions and proprietary benefits make it advisable as well as possible for them to gainfully take on manufacturing of the goods and the services in foreign locations. On the other hand, the horizontal investments of the new Multinational Enterprises (MNEs) are essentially driven by the possession of the intangible assets. In terms of speed of acceleration, it can be observed that the new global challengers tend operate at a rapid pace while the traditional MNCs are found to be internationalizing gradually. The competitive advantage of the new MNCs is weak and hence the upgradation of the resources is needed while that of the traditional MNCs is quite strong. The new MNCs are used to unstable political environment whereas the traditional MNCs are used to stable political environment. The new MNCs are found to be taking dual paths by simultaneous entry into the developing as well as developed countries. Conversely, the traditional MNCs are found to be taking simple path and thus entering from less to more distant countries. The organizational adaptability in case of new MNCs is quite high owing to their meager international presence while, on the other hand, the organizational adaptability of the traditional MNEs is quite low because of their ingrained structure and culture (Guillen & Garcia-Canal, 2009). 2b. Some of the New Global Challengers Seek Organic Growth While Others Internationalize Through Acquisitions. What Are the Advantages and Disadvantages Associated With Each Strategy The main advantages of acquisition are that companies are capable of widening their capability base and thus move into more specialized product lines. One of the significant benefits obtained from organic growth is investor’s confidence. Most of the investors are cautious of those companies that expand by means of mergers and acquisitions. The main reason behind this phenomenon is that it recommends that the company is not capable to grow on its own by means of simple business expansion. Organic growth is endorsed by promotion from within along with incremental escalation in staff. Such personal growth permits a comparatively simple transition for new employees. The companies are capable of expanding smoothly in case of organic growth. The main disadvantage of organic growth is that it takes longer time for the organic growth businesses to grow and furthermore the business will be bearing the overall risk themselves (The University of Nottingham, 2008). A few of the companies tend to expand through acquisition. An acquisition takes place when one firm obtains another firm. The main benefits of acquisition are economies of scale, greater market share in case of horizontal integration and availability of opportunity of distribution of risks in case the product is different along with minimization of competition. The main drawbacks of the acquisition is that it leads to diseconomies of scale if the business is huge and thus lead to conflicts of culture among the different types of businesses (The University of Nottingham, 2008). 2c. Strategies Used By New Global Challengers It is worth mentioning that the new global challengers make use of numerous strategies in order to remain competitive in the market. A few of the policies are making Rapidly Developing Economies (RDE) brands available globally, ensuring monetization of the RDE based natural resources, attaining the natural resources, presuming global type of leadership, converting the RDE engineering into global innovation and starting new business models in various markets. The other strategies utilized by them are diversification of the product range and expansion at numerous geographical areas. These strategies will enable them to attain sustained growth as they will be capable of becoming more productive in comparison to their competitors, and there will be rise in the revenues as well as market share too (Hill & Rothaermel, 2003). 2d. Strategies for Incumbent Firms There are numerous strategies that the incumbent firms are supposed to employ in order to remain competitive in the market. Advertising is one of the strategies, which needs to be employed by the incumbent firms in order to deter the new entrants. It is often noted that the firms are not observed to view others in similar way as they perceive themselves. Owing to imperfect information, companies generally influence others strategically. For instance, incumbent firms view their own R&D as keeping the cost too low. However, their rivals will not be capable of viewing this expenses, but will manifest the fact that the incumbent is low cost and this is likely to prevent the new firms from entering into the market. Furthermore, it can be stated that the incumbent firms will be capable of defending their territory by offering the customers with the best services. In relation to this context, it can be observed that British Airways among other airline companies are found to be offering the customers with the loyalty program so that they can attract significant number of customers. They are also required to make use of the product differentiation strategies and capture significant portion of the customers (Hill & Rothaermel, 2003). Question Three Challenges Faced In the Meeting The meeting in the provided scenario is likely to take place between Turkish, Belgian and Japanese people. Owing to the fact that each people have their own culture and hence the communication and the negotiation taking place in the meeting is likely to instigate certain challenges. In order to identify the challenges that the meeting is likely to confront, it is important to have a comparative study of various countries in terms of Hofstede cultural dimensions. The native country in this context is the United States (Krannert School of Management, 2012). Power Distance Index: It has been noted that Japan scores 54 in terms of power distance index and hence it is a mildly hierarchical society. Japanese are quite conscious regarding their hierarchical position. Belgium scores 65 and Turkey scores 66 in this index. In this dimension, the scores of the United States is quite low i.e. 40. In attending the meeting as an USA manager, the person might have greater power with himself on making any decision about the new products in comparison to the managers of other countries such as Japan, Belgium and Turkey. Japanese colleague will have greater power or authority to make decisions in comparison to the managers of Belgium and Turkey. This is likely to create a problem in the meeting (Krannert School of Management, 2012). Individualism: In relation to Hofstede’s cultural dimension, Japan scores 46 in this dimension. However, there are instances, when Japanese have demonstrated the features of the collectivist society. Turkey scores 37 and is also a collectivist society. However, Belgium and the USA are largely individualist societies with Belgium scoring 75 and the USA scoring 91. The problem in the meeting can arise due to the difference of personality among the USA manager and the Belgium manager with the Japanese as well as Turkish managers because of their culture of individualism since they may think of individual efforts or benefits instead of collective gains (Krannert School of Management, 2012). Masculinity/ Femininity: In the dimension of masculinity/femininity, Japan scores 95 and is found to be a masculine society in the world. The United States score 62 on this dimension and thus is considered to be a masculine society as well. Belgium is found to be scoring 54 and Turkey is observed to register a score of 46. Japan is likely to be inclined towards attaining visible outcomes and registering monetary benefits while the other nations are likely to place greater emphasis upon relationships instead of money and is likely to focus upon the preservation of the environment (Krannert School of Management, 2012). Uncertainty Avoidance: Japan is found to be scoring 92 in terms of uncertainty avoidance. One of the main reasons behind such a high score in this dimension is owing to the fact that the country is considerably threatened by natural disasters, which has made them to prepare and adapt themselves significantly against any uncertain circumstances. The USA is found to be scoring 46 in this dimension and Belgium is estimated to score 95 while Turkey is observed to score 85. The manager of USA will not prefer taking risks or dealing with any uncertain plans and will not attempt to come to an agreement until and unless he is certain of the outcome (Krannert School of Management, 2012). Long-Term Orientation: Japan scores 80 in terms of long-term orientation dimension. The USA scores 29 in this particular dimension and is characterized to be a short-term oriented society. Belgium on the other hand scores 38. Consequently, the problem in the meeting is likely to persist in terms of decision making on the length of agreement that they is going to be made regarding the new aftershave product (Krannert School of Management, 2012). Criticism of Hofstede’s Study Geert Hofstede’s developed model has been condemned on certain grounds. The survey is not an adequate tool for identifying and evaluating cultural differences. Hofstede, in this regards has stated that survey is generally one particular method but not the only method that has been used in the study. Hofstede’s study presupposes the fact that the domestic population can be stated to be a homogenous entity. However, it can be viewed that the nations possess ethnic units. The outcome might have a probability of unpredictability. Contextually, Hofstede does not place considerable importance upon the community. Nations cannot be characterized to be the proper units of analysis because cultures are not restrained by borders. Conversely, Hofstede has stated that national identities are the only way to demonstrate cultural differences (Jones, 2007). Question Four Difference of Entry Strategy of a Born-Global Firm from That of a Mature Multinational Company In comparison to the conventional firms, the born-global firms have numerous different features that differentiate them from that of others. The born-global firms view the world as a single market and the companies tend to initiate exporting greater than one product in two years of establishment. They tend to depend largely upon the international sales. The conventional firms have the common perception that it is significant for the company to attain certain experience in the home country prior to instigating exporting activities to the country possessing similar culture and thus sharing same border. Coca-Cola, a leading multinational company was found to be making use of the similar strategy. The born global companies are found to be quite innovative in comparison to the traditional companies. Niche markets can be better served by the born-global companies. It can be stated that the born-global companies are mainly dependent upon outsourcing and thus they are able to minimize fixed costs. The reason behind this phenomenon is that they do not have sufficient funds as traditional firms. New technologies are often explored by the born-global companies that assist these companies to generate high quality products (BCG, 2009). Question Five Best Ways of Segmenting Export Markets With the increase in globalization efforts of the business houses, global market segmentation has progressed as a noteworthy matter in developing, positioning as well as selling of the products in the global markets. Global market segmentation can be recognized as the method of identifying particular segments, entity customer groups across various countries and probable customers with similar attributes demonstrating identical buying behavior (Kumar & Nagpal, 2001). It can be stated that most of the companies make use of the following steps in order to put into practice global marketing segmentations. At the onset, it is significant to discover the reason of segmentation. This can be done by means of initiating new or existing products. Then, it is significant to choose the criteria for segmentation. The companies need to decide if they are supposed to make use of tradition segmentation criteria or will make use of the merging segmentation criteria. Subsequently, it is vital for the companies to re-examine the fit of the segment after execution of the intended program. Finally, it would be crucial to update segment membership. It needs to be remembered that the global market segmentation membership must be re-examined continuously. The method of allocating membership to countries into a segment can be done by means of traditional process (Kumar & Nagpal, 2001). McDonald’s is found to be selling its products globally. It sells burgers aimed according to the taste and the preferences of the local market. For instance, burgers are prepared from lamb in India instead of beef because of numerous cultural issues. In Mexico, the company adds chili sauce in huge quantity. The market potential/profitability/attractiveness along with demand/behavioral characteristics of buyers, political/legal consideration as well as risk, economic/legal constraints in the market are considered to be crucial categories for export market segmentation (Erem & Menguc, 2008). Small and Medium-Sized Enterprises (SMEs) Marketing To Various Segments Segmenting the market for export depending upon the firm level behaviors is considered to imitate the company’s stage of exporting. There are at least three segments that are presumed to agree to three stages of export development. They are generally treated as different target markets by a few of the export support service providers. The first segment is known as pre-exporters which are firms with quite a few experiences in their domestic market and which do not possess any experience in the export activity. The second segment is those firms that have been well established in their domestic markets and thus are creating regular foreign customers. The third segment comprises of those firms that are regular as well as active exporters. They tend to be larger and more established firms. The endorse policies that are aimed at such companies need the firms to be above specific sales level. It can hence be stated that that the SMEs can easily market to various segments successfully (Fischer & Reuber, 2012). References BCG. (2009). From crisis to opportunity. Retrieved from http://www.bcg.com.cn/export/sites/default/en/files/publications/reports_pdf/From_Crisis_to_Opportunity_Sept_2009_English.pdf Dimofte, C. V., Johansson, J. K., & Bagozzi, R. P. (2010). Global brands in the United States: How consumer ethnicity mediates the global brand effect Journal of International Marketing, 18(3) pp. 81-106. Desjardins. (2006). Exporting your brand image. Retrieved from http://www.desjardins.com/en/entreprises/projets/commerce-international/chroniques/cci060516.pdf Erem, T., & Menguc, B. (2008). Export market segmentation practices of Turkish firms. Journal of Euromarketing, 6(3) pp. 103-135. Fischer, E., & Reuber, A. R. (2012). Targeting export support to SMEs: Owners international experience as a segmentation basis. Journal of Small Business Economics Forthcoming. Girboveanu, S. (n.d.). Global or national brands. Retrieved from http://www.mnmk.ro/documents/2007/2007-9.pdf Guillen, M. F., & Garcia-Canal, E. (2009). The American model of the multinational firm and the “new” multinationals from emerging economies. Academy Of Management. Hill, C. W. L., & Rothaermel, F. T., 2003. The performance of the incumbent firms in the face of radical technological innovation. Academy of Management Review, 28(2) pp. 257-274. Jones, M. L. (2007). Hofstede - Culturally questionable? Retrieved from http://ro.uow.edu.au/cgi/viewcontent.cgi?article=1389&context=commpapers Kumar, V., & Nagpal, A. (2001). Segmenting global markets: look before you leap. Marketing Research, 13(1) pp.1-8. Krannert School of Management. (2012). Hofstede scores. Retrieved from http://www.krannert.purdue.edu/faculty/akcurat/teaching/mgmt690/hofstede%20scores.htm Marketing Week. (2012). Home trends the top 100 most valuable global brands. Retrieved from http://www.marketingweek.co.uk/trends/the-top-100-most-valuable-global-brands/4001824.article Nag, B. (2010). Basics of international marketing mode of entry, product, positioning, pricing, and promotion. Retrieved from http://www.unescap.org/tid/artnet/mtg/competitivenesss_s7.pdf Roellig, L. (2001). Designing global brands: Critical lessons. Design Management Journal. 13(4), pp. 39-45. Salinas, G. (2011). The international brand valuation manual: a complete overview and analysis of brand valuation techniques, methodologies and applications. United States: John Wiley & Sons. The University of Nottingham. (2008). An evaluation of organic growth, and mergers and acquisitions as strategic growth options in the Nigerian banking sector. Retrieved from http://edissertations.nottingham.ac.uk/1780/1/08MAlixaj14.pdf Wrenn, B., Kotler, P. & Shawchuck, N. (2009). Building strong congregations: attracting, serving, and developing your membership. 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