Features and Strategies of Successful Global Brands - Essay Example

Global brands inserts his/her s Department’s Introduction Global brands operate in the contemporary world of volatile market dynamics as well as external changes in markets. Although globalization has allowed such brands to expand their customer base and increase brand equity, it has brought with it strategic challenges such as the decision to offer standardized products versus the decision to adapt to local dynamics. Successful global brands, however, have managed to counter this challenge by finding what works for them. However, even standardized global brands such as Coca Cola have opted for some variations in terms of the flavors and products offered. Ultimately, the challenge of motivating local staff while maintaining centralized orders remains existent for such brands. The paper comprehensively explores the features of global brands along with the strategies adopted by successful global brands. 2. Features and strategies of successful global brands Various lists of top global brands have been accomplished. Companies such as Coca Cola, Sony, Microsoft, Google and IBM have since long been ranked as the top global firms. Managers are, therefore, confronted with the question of what features distinguish successful global brands from the rest? According to one study, various factors have been identified. Firstly, almost all successful global brands have dominant sales positions in their home market (Quelch, 1999). Even though these companies may be popular internationally, it is the home market sales that form their backbone. Secondly, global brands, by definition, are recognized in almost every part of the world and have at least some sales in these areas (Quelch, 1999). In other words, global brands achieve a “geographical balance” as far as their sales are concerned. Third, the products or services provided by these brands are almost similar across the globe and cater to similar customer needs (Quelch, 1999). Even though variations in the products may exist in countries, they still would be serving the same need. For instance, Mc Donald’s offers greater beef products in the U.S than in India; however, it still serves the need for hunger in both countries. Next, global brands must have consistency as far as their brand image and positioning is concerned. In other words, they must be perceived in a similar way by customers and must not have conflicting images in customers’ minds. For instance, Disney connotes identical family values across the globe (Quelch, 1999). Furthermore, most successful global brands have the same brand name as their corporate name. Although exceptions exist, this strategy allows such firms to gain greater awareness and stronger and consistent brand identity across the globe. However, global corporate giants such as Unilever and P&G could practically not use a single brand name owing to the myriad of brands under their umbrella. Next, most global brands are known for making something or being associated with a single product category. For instance, Microsoft is best known for its Windows software, Coca Cola has been associated with the Coke beverage and Phillip Morris has been associated with cigarettes. Even, companies such as Samsung that have diversified their product offerings may stand holistically for product categories such as electronics. Finally, the country of origin effect plays a crucial role in making brands global (Pharr, 2005). Brands such as Mc Donald’s or Marlboro, for instance, reflect the American lifestyle and customer values of Americans. These values in turn drive greater brand loyalty towards the brand. This is exactly where global brands become recognized by virtue of their association with customers of a particular (home) country. For instance, Japanese electronics, French perfumes and German cars all enjoy country of origin effect (Quelch, 1999). Consistency in brand image of global brands is quintessential to deliver a coherent marketing message across the globe. For instance, Coca Cola may use different advertising and marketing communications in different parts of the globe but will stick to a single brand logo and/or slogan to ensure that the marketing communications are consistent. In other words, global brands must stand for something or have a distinct meaning attached to them. This has been defined as a three-step process for most global brands. In the first stage, most global brands will develop the quality of the brand which often means emphasizing the product’s heritage (Quelch, 1999). Next, marketers emphasize the target market for the product and how the product can be used (Quelch, 1999). Finally, the last stage involves developing a set of values that form the unique identity of the brand such that the consumer is able to develop a bond with the product (Quelch, 1999). The aim of most marketers here is to induce repeat purchase of the brand. This points to the area of developing a strong brand loyalty towards global brands. Successful global brands have been able to build such loyalty which means that customers may discount occasional disappointment with the brand and continue to remain loyal to it owing to the strong emotional bond that the customer has with that brand. It is interesting to note, however, that the meaning of the brand may differ from market to market. Furthermore, global brands must often develop a truly global positioning which brings with it the question of whether or not the product should be positioned in a similar manner everywhere. Even if uniformity amongst the position of various countries is achieved, the intended meaning may differ from the actual meaning. For instance, the rugged positioning of Levi’s jeans is targeted at the American masses; however, the same brand is viewed as stylish in other parts of the world (Johansson, 2010). The product’s usage may also differ from country to country making it quintessential for global brands to incorporate the unique usage in their marketing communications if they are to be successful. For instance, apples in most parts of the world denote health; whereas, in Japan the same are used for gift giving which puts emphasis on the way they are packaged, their color and price (Johansson, 2010). Most importantly, brands may have a different perceived value in countries at different stages of development. For instance, a particular brand of car may represent a higher status in developing countries compared to developed countries where it may be regarded as a less valuable purchase. Perhaps, the most challenging task for any global brand is to compete against local competition in foreign markets and to create a unique space for itself in that market. Typically, brands that enjoy a mass market appeal in their home country tend to target specific customer segments in such foreign markets. Sometimes brands may have to fight off preconceived “negative” notions surrounding their origin in order to make them truly global. This is best illustrated by the case of Volkswagen. Volkswagen developed a revolutionary ad campaign in order to market its model- Beetle to the U.S customers. The company adopted an aggressive strategy owing to the World War II which had recently taken place. In this context, the Beetle model, which had been manufactured in and associated with German, could have easily spelled a disaster in the U.S. In such times, a campaign titled “think small” was introduced to counter the negative image that the Volvo brand had in U.S and to set it apart from rivals who, at that time, were selling larger cars for baby boomers and families. The ad used phrases such as “think-small” and “ugly is only skin deep” as self-deprecating terms, thereby conforming to the famous law of candor (Mills, 2000). This strategy was used wisely by the company which quickly turned negative sentiments towards the brand into positive sentiments resulting in the remarkable success of the Beetle car in a foreign market. On the contrary, some global brands prefer to expand their market coverage by adopting a mass marketing strategy in global countries. Successful brands such as the Japanese Honda adopted the same approach in its market in U.S. Furthermore, where competition is intense in the foreign markets, global brands adopt consistent marketing strategies across similar groups of countries. On the other hand, where there is great potential for market growth, global brands do not adopt consistent strategies in such markets. For instance, Samsung and Nokia’s marketing strategy is different depending on different levels of growth of each market. a. Global Positioning Furthermore, the process of global positioning is further complicated with the varying stages of product lifecycle at which global brands in different countries are. Brand morphing is a strategy that allows global brands to adopt different meanings to different customers in order to be line with the varying cultural requirements of foreign markets (Akaka & Alden, 2010). For instance, Canon marketed its first automatic reflex camera with single lens as a mainstream product in Japan (Johansson, 2010). However, the same was positioned as a specialty product for professionals in other parts of the world. Similarly, while Honda’s Accord has been marketed as a mass market vehicle in U.S, it is considered a luxurious car in Australia (Kates & Goh, 2003). Furthermore, Kraft Cheese altered its advertising message across different markets to suit cultural needs (Kates & Goh, 2003). Standardized positioning of successful brands That is not to say that a standardized positioning strategy will not work for global brands as it certainly will and does. This is particularly true of well recognized brands that adopt standardized appeal in most markets. Successful brands under this category include Mc Donald’s and Coca Cola. Furthermore, even though a standardized global strategy may deter brands from targeting specific segments precisely, it may be a favorable strategy owing to various reasons. Firstly, the standardized product may allow brands to cater to preferences not served before in the market. For instance, Honda offered a unique blend of economical fuel usage and sportiness when it entered the American market. Secondly, standardizing the marketing strategy may allow global brands to achieve cost efficiency which, in turn, helps lower down prices and gain a large market share. This strategy was applied by Samsung before it went on to become one of the largest global brands. Furthermore, the quest for economies of scale has driven some successful global brands towards setting up their manufacturing plants in the home country. This has been adopted, for instance, by Toyota whose plant in Kentucky manufacturers its model “Camry” for the entire world. Similarly Apple’s Macintosh is produced in Taiwan for global supply. On the contrary, global brands face the dilemma of adhering to local responsiveness. Even though standardization allows global brands to lower costs, customers may not buy the same. Even companies such as Coca Cola have developed products for specific markets such as its Georgia brand that is sold in Japan but has failed to capture other markets. Furthermore, successful global brands often have developed a strong brand equity that allows them to extend the original product portfolio. This brand equity is then leveraged to new markets or categories of products. For example, Virgin, originally a record company, extended its brand portfolio into airlines, cola, mobile etc. b. Global brands and CSR As part of the strategy of global brands to enhance their presence in developing countries, the concept of building trust has surfaced. In various cases it has been observed that global brands seek to serve needs that are locally valued ( in addition to their core business operations) in such countries in order to mask any oppositions these brands may have faced or are facing (Alden et al., 2006). For instance, Coca Cola’s clean water initiative in India revolves around benefitting the local community while strengthening the brand image. This is one of the ways in which successful brands enhance their brand equity. Furthermore, global brands often associate themselves with consumers through “credible myths” that help create a bond between themselves and the consumers. For instance, one of Microsoft’s advertisements was centered on the tagline asking where customers would want to visit today (Atilgan et al., 2009). In other words, it was pointing towards the customers’ need for self-empowerment. Another major feature of global brands is their attempt to engage in corporate social responsibility. These activities are often used to mask local problems from bearing a negative impact upon organizational reputation (Torres et al., 2012). c. Standardization vs. Adaptation On the other hand, failure of global brands has been common owing to poor or incorrect strategies. One of the most common mistakes is to engage in excess standardization of the product which means that majority of the elements of the marketing mix and communication are standardized. The question of standardization versus adaptation is quite common here with some brands preferring to standardize strategic elements and adapt with respect to less strategic ones. This is in line with research which claims that adaptation is easier with respect to strategic aspects of the brand as compared to less strategic ones. For instance, the strategic brand positioning of Coca Cola is the same in all regions across the world which is to provide happiness through the drink. This perception of the Coke brand is consistent across the globe, whereas, the less strategic aspects such as its sales promotion and distribution may vary across countries. It is quintessential for global brands to adapt to local customer tastes at touch points where the company has direct interaction with the customers. Next, strategy for global brands must incorporate the differences in market development. Global brands may possess different sales, market share and position in different markets. In most cases, these brands enjoy a considerable market share in their home country whereas they are less developed in emerging markets. Paradoxically, neglecting the brand in one’s home market can result in disappointing customer response in the home country. This is best explained with the case of Tesco which, owing to its undivided attention to the new Chinese market, suffered loss in profits and position in its home country-U.K. However, the policy of looking at each market differently may conflict with “regional” marketing strategies of global brands. Finally, global brands must not grant excess control to the headquarters which can result in a myopic vision with the headquarters basing its decision on the domestic market dynamics and missing out on important differences in consumers. Furthermore, mere compliance with the orders of headquarters can lead to little innovation and learning as well as loss of motivation for local managers (Craig & Douglas, 2000). 3. Conclusion To conclude, global brands may adopt various strategies to adapt to the changing marketplace. One of these, as discussed earlier, is brand morphing which reflects the need to adapt to various cultures. The task of managing diversified product portfolios in multiple markets is never easy as has been highlighted earlier. However, successful global brands can and do make it beyond the hurdles through their unified strong global positioning and the creation of a “perception” of single identity of the brand across the globe. This leads to the creation of a strong brand meaning whereby such global brands “stand for something”. In other words, the brand name is often easily associated with the product category. Finally, strategies such as pursing CSR have been used by various such brands not only to enhance their goodwill but to mask any local issues. References Akaka, M. & Alden, D., 2010. Global brand positioning and perceptions. International Journal of Advertising, 29(1), pp.37-56. Alden, D.L., Steenkamp, J.E.M. & Batra, R., 2006. Consumer attitudes towards marketplace globalization: Structure, antecedents and consequences. 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