Process of International Branding - Literature review Example

Branding Process Ideally, the branding process begins from the top management (Kotler, Michi & Pfoertsch 2006, p. 159). Therefore, for a particular brand to be effective, the top management should ensure that there is adequate implementation of the set strategies. In brand building it is important to have both an ‘inside perspective’ and an ‘outside perspective’. According to Keller, Best practices within the branding industry generally includes four phases (2014, p. 14). These Phases are identifying and establishing brand positioning and values, planning and implementing brand marketing product, Measure and Interpret Brand Performance, and Grow and Sustain Brand Equity. These phases are discussed in details below. Phase 1: identifying and establishing brand positioning and values. This is the first phase of the strategic branding process. According to Kotler et al., brand positioning is about finding the right spot in the customers’ minds in order to create the desired association (2006, p. 172). This phase is usually divided into five key concepts that are an essential part for establishing a good brand. Firstly, there is the creation of mental maps by the management. These mental maps will help the management team to work within the set limits during the branding process. Secondly is the setting of a competitive frame of reference which will be used as a point of focus throughout the establishment of the brand values. The next concept is the identification of the points of parity and the points of difference that exist. Points of parity “are attributes that consumers strongly associate with a brand” (Kotler, Shalowitz & Stevens 2008, p. 236). This concept can be used in the marketing of a brand for competitive advantage through the product. The fourth concept is setting of core brand values that will enable the customers to associate themselves with the new brand. Finally, a brand mantra is formulated. Brand mantra is the successive step of brand positioning which helps the brand to present a consistent image by reinforcing its meaning. Phase 2: planning and implementing brand marketing product. The management team then develops a market plan and oversees its implementation. Armstrong et al., points out that a brilliant plan “counts for little if the company fails to implement it properly” (2014, p. 61).Therefore, the key concept in this phase is the careful examination of the brand elements which will guide the management to have a concise plan on the general outlook of the product. This phase also includes the ideation and the creative exploration of secondary alternatives that will help to convey your brand clearly and compellingly. After a clear scrutiny of the product, it is implemented. This phase usually consist of creating a brand identity style guide that will help in the management and protection of the brand. Phase 3: Measure and Interpret Brand Performance. This phase deals with the critical analysis of the market performance of the implemented brand. A brand value chain analysis should thus be set first. According to Temporal, measuring the brand progress will enable management to track brands differently and make better decisions about the future (2010, para 1). This analysis will help to determine the cost benefit analysis of the implemented brand thereby helping the management to make a financial decision on the viability of the brand. Besides, brand audits, brand tracking and brand equity management systems can be implemented in order to determine the overall progress and performance of the brand. Phase 4: Grow and Sustain Brand Equity This is the final phase in the brand management process. It is important to have a tracking system for brand equity for continuous progress evaluation (Kapferer 2008, p. 15). This phase entails the formulation of a brand product matrix that will examine the impact that the brand has to the consumers, noting any deficiencies that could exist. Brand portfolios and hierarchies are also formulated to suit the needs of different customers. Besides, brand expansion strategies are put in place to ensure a continuous growth and sustainability of the brand. Finally, there is a constant brand reinforcement and revitalization that will help in the continual growth and sustenance of the branded product. 2.7.2 International branding Steenkamp et al., described international brand as one “that consumers can find under the same name in multiple countries” (qtd. in Whitelock & Fastoso 2014 p. 264). A good example of this brand is Coca Cola. According to Clarke and Chen (2007), international branding is recognized by managers as the propeller for improved, more sustainable results and as a source of inspiration (qtd. in Eleedan 2014, para. 2), which creates both high acknowledgement and relationships in the universal market. Indeed, it is widely accepted that brands are created to provide instant recognition and help to achieve benefits of competitive advantage. Monye (2000) points out that international branding has become a point of focus in product management strategy since companies with high brand equity have more influence in bargaining power in the marketplace (qtd. in Eleedan 2014, para. 2). A good branding strategy is therefore understood to be a focal point within the overall marketing strategy of a firm. There are multiple definitions of international branding depending on the nature of perception of the brand at hand. In fact, the researcher’s background will tend to generate a basis for different kind of brand definitions. Branding can thus be defined in four distinct ways according to the approach chosen. These approaches include, the attribute based approach, the legal brand definition approach, effect based approach and finally, the perceived versus real performance approach. Attribute Based Approach This approach states that a brand’s characteristics is derived from its physical appearance. Precisely, this approach proposes that branding is simply labelling of products that will make it distinct from other products and services and give a clear depiction of their origin or manufacturing company (Swan & Zou 2012, p. 34). Therefore, a branded good is characterized by attributes such as increased sales area, intense promotions and wider acknowledgement of products. However, it is worth noting that branding not only refers to goods, but services as well. Legal International Branding Approach This approach implies that brands are protected trademarks. A company’s bran is usually copyrighted and thus the goods and services of one company are differentiated from those of its competitors. These trademarks therefore need numerical and graphical data to support the chosen branding design (Swan & Zou 2012, p. 36). For instance, a company could decide to use eye catching bright colors to package its product. Bright colors will attract more customers as compared to dull colors. Effect Based Approach This approach puts an emphasis on the customer’s perception of the brands’ impact on consumers’ from a personal point of view. This approach tend to explain that the Brands are usually fixed. The different perceptions of a product or service in the minds of consumers creates an ideal identification and differentiation of the product thereby greatly influencing the consumer choices. The Perceived Versus Real Product Performance Approach Finally, this approach proposes that consumers are not only influenced by the attributes that the brand possess, but through the experiences and feelings generated by brands (Swan & Zou 2012, p. 42). The consumers therefore look at these brands subjectively thereby associating certain products with the brand scheme, which generate positive recognition associated to the product. 2.7.3 Use of international branding International branding has been widely used by large corporation in multiple ways. This paper will discuss on the different ways that international branding has been used by firms in order to increase their competitiveness. Uses of international branding Economies of scale (production and distribution). A company that uses international branding techniques enjoys a relatively high economies of scale as compared to a country which only trades within a country. This is because international branding enables a firm to produce in bulk thereby consequently leading to a decrease in production and transportation costs. This will ultimately lead to an increased profitability on the firm. Lower marketing costs. International branding also helps a firm to lower the marketing costs since the brand is recognized universally. For instance, Coca Cola Company has enjoyed low marketing costs over the past years. This can be attributable to the fact that its international branding strategy was well profound and implemented differently throughout the continents. It therefore implies that many people are conversant with the brand, and the company will therefore, spend less money on marketing. Laying the groundwork for future extensions worldwide. International branding has also been used as a basis of laying the groundwork for future extensions worldwide. When a firm diversifies its product to a different country, it opens up the door to partnerships with other foreign countries. Entering into partnerships will lat the foundation for future extension of the firms products worldwide. Maintaining consistent brand imagery. International branding also enables a firm to maintain a consistent brand imagery. For instance, Coca Cola Company has for decades maintained a positive brand imagery in that its production of other beverages have received high recognition among consumers. The consumers of these products have therefore build trust in the company due to its consistent brand imagery. Quicker identification and integration of innovations (discovered worldwide). International branding enables a firm to identify and integrate quickly into the innovations and technology that is ever dynamic. A firm that uses international branding techniques will therefore eliminate the use of obsolete technology. Indeed, quick identification and integration of innovations can help the firm to cut on labor costs thereby increasing profitability. Pre-empting international competitors from entering domestic markets (or) locking you out of other geographic markets. Many governments have passed tough laws that obstruct international competitors from entering into domestic markets (Allen 2009, p. 110). International branding is one way through which a firm can indirectly unlock its operations beyond geographic boarders. A firm can create subsidiaries in the international markets while still maintaining the parent company in the home country. This will help it diversify its products and generally, it will increase its productivity. Increasing international media reach. International branding has also played a major role in increasing the international media reach especially with the explosion of the internet. Firms can therefore obtain the information on when and where to diversify their products to. For instance, the investors will tend to look for areas with a high economic growth rate and consequently consider the risks of investing in that area. Increases in international business and tourism are also enabled. International branding has not only enabled the growth of international businesses but also increased the number of tourists travelling all over the world. For instance, Fiji Water Company has attracted many tourists in Fiji and America due to the protection of its ideal brand (bottled water). This bottled water has been uniquely branded and drinking it alleviates one to a celebrity state due to its ideal marketing strategy that uses prominent figures such as popular musicians to advertise it. Strategies of international branding To discuss and have a vivid explanation of international branding, we will employ the use of internationalization theory. This theory highly focusses on intermediate product markets. Through industrialization, larger and multiple multinational enterprises arise. The Internalization Theory This theory is basically an extension of the Market imperfection theory. When a company decides to invest in a foreign market or subsidiary rather than licensing, it is able to send the firm’s knowledge across boarders and still maintain it within the company. A multinational enterprise (MNE) seeks expansion by direct investment when it has competitive advantages over other firms and the firm specific advantage needs to be protected by its organizational structure, this implies that an MNE internalizes its foreign market activity to increase its overall profitability. This theory relies on a gradual and progressive process of internationalization during which the gathering of the organizational knowledge occurs. Internationalization theory is therefore an essential theory that can be useful for firms which purpose to diverse its services globally. International branding strategy. International branding strategy is composed of a number of important strategic plans and actions. According to Seagull, this strategy is divided into a process containing four sequential strategies (Huang & Hsieh 2010, p. 616). This strategic process comprises of creating a transcultural brand name, identifying a universal brand theme, developing global brand essence, developing global brand essence and finally, conveying brand essence through products. This strategies are described below. a) Creating a transcultural brand name. The first and most important step towards international branding is the crafting of a new brand name and logo. The management should endeavor to formulate a new brand name and logo that should be appealing and meaningful to customers internationally. Usually, the logo is composed of three main components. The first component is a name representing the parent company. For instance Seagull used the name ‘soaring seagull to represent the parent company, the Seagull Group. In the international context, the seagull bird is frequently connected with brevity and freedom and the positive linkage enables international consumers to perceive the ambition of the brand which is ‘flying into the worldwide market.’ The second component is creation of the name. For instance, Seagull named his new product ‘Franz’ (Huang & Hsieh 2010, p. 616). Franz is a noble name that has been used frequently by leaders and patricians in various European countries. The use of this name therefore would associate the brand with royalty. It also will associate the product with high taste and alleviate its general perception internationally. Thirdly, a unique design or logo is also necessary in promoting the brand internationally. For instance, Seagull combined different cultural aspects in Franz’s logo, thereby building a worldwide transnational appeal. b) Identifying a universal brand theme. In addition to creating a brand name and logo, identification of a universal brand theme is important in the branding of a product. For instance, Seagull established a brand theme for Franz by keenly combining cultural practices of both the eastern and western nations (Huang & Hsieh 2010, p. 616). By doing this, the corporation will learn the expectations of the different cultures and people thereby enabling them to differentiate the product to suit the targeted consumers. This will also decrease the chances of any potential cultural misinterpretation of the product being branded. Identification of a universal brand theme also help the product to attain a universal recognition thereby building trust among its consumers. An example of a company with a good brand theme is Coca Cola. c) Developing a global essence. The next step in strategic international branding is the development of a global brand essence. In order for a brand to appeal to customers from different cultures and regions, it has to be able to transcend centuries. The management must keenly examine the prominent behavior across its potential consumers so as to clearly come up with an ideal product that will suit the market that the firm want to diversify to. For instance, Seagull “accumulated information from employees and the organization database” (Huang & Hsieh 2010, p. 616) and used it to determine the prominent preferences across different cultures and religions. This helped Franz to develop a global essence. The firm should therefore look at local market with a close examination in a bid to differentiate the product to suit the different cultural practices and religious beliefs. For instance, one cannot receive a gift that has a shape of a frog since in their culture, a frog simply means ‘get out and leave.’ Product differentiation is therefore a core phase in the development of a brand. d) Conveying brand essence through products. This is the final stage in strategic planning process. A unique brand essence can only increase the desirability of a brand if the target consumers can receive a positive message and can afford to buy the product’s brand. It is therefore important that management convey a positive message on the product being branded. Besides, it should also examine the economic conditions of the target market to determine the price. Internationalization strategies. Internationalization refers to the channel in which an organization can gain access into a new market. This paper will focus on the various internationalization strategies that a firm can use to diversify its products and services. Licensing Licensing is whereby an organization charges a fee or royalty as a result of using its technology, brand or expertise (Friesner 2014). Licensing therefore involves giving a foreign organization the right to create a product in a foreign country at some fee. Although the licensing firm will therefore be able to cut a lot of costs, its overall profits will be limited to the fees collected from the local organization. Franchising According to Friesner, Franchising implicates that the franchiser provides branding, ideas, expertise, and other aspects needed for a firm to operate internationally, to the franchisee (2014). Management of these firms is usually controlled by the franchiser. Companies such as Domino’s Pizza, Coffee Republic and McDonald’s Restaurants have adopted this method of internationalization. Turnkey Contracts Turnkey contracts are key strategies that are used to construct large plants. Friesner points out that turnkey contracts often includes the training and development of main workers wherever skills are sparse (2014). A turnkey contract therefore, the client is usually left out of the construction process since the contractor is the one with the duty of handling all decisions and problems related to construction. International Agents and International Distributors A company can use agents and distributors as a strategy of entering an international market. Organizations contract agents to market their products on their behalf in foreign countries (Friesner 2014). Therefore, agents do not have the real ownership of products but they are entitled to a commission on the goods that they have sold. Distributors are also similar to agents (Friesner 2014). However, the main difference between them is that distributors have the ownership rights of the goods. Therefore they possess the absolute right to market the products and sell them at their set price in a bid of making profit. Strategic Alliances (SA) Strategic alliances are also ways that a firm can enter into a foreign market. According to Friesner, Strategic alliances is a term used to describe an entire sequences of different connections between corporations that market their goods internationally (2014). At times, these connections are between competitors. For instance, a shared manufacturing deal such as Toyota Ayago which is also marketed as a Citroen and a Peugeot. In strategic alliances, companies remain autonomous and separate. Joint Ventures (JV) A joint venture (JV) refers to a business treaty whereby organizations reach an agreement to develop, new entity and assets for a finite period time by cumulatively contributing equity. They usually take over control of the enterprise and subsequently share profits, expenses and assets. Friesner argues that “Joint Ventures tend are equity-based” (2014). For instance, a new corporation can be formed up with the merging parties owning a share of the new company. Companies form up joint ventures for a couple of reasons which may include access to technology, gaining entry into a foreign market, access to distribution channels among others. Exporting Exporting can either be direct or indirect. Direct exporting is whereby an organization essentially makes a guarantee to market internationally on its own behalf. This therefore gives it a greater control of its products and operations in the international market. On the other hand, indirect exporting is whereby an organization uses intermediaries to export its brands (Friesner 2014). However, although this method usually requires less marketing investment, the exporting company has little or no control over its products in the international market. Works Cited Allen, K. R 2009, Launching new ventures: an entrepreneurial approach, Boston, Houghton Mifflin. Armstrong, G., Adam, S., Denize, S. M., & Kotler, P 2014, Principles of marketing, Harlow, England : Pearson. Eleedan 2014, International Branding, Marketing and Business Solutions Company, retrieved 4 November 2014, . Huang, H Y, Hsieh, H M 2010, An international branding strategy based on a case study of a Taiwanese firm, International branding strategy, vol. 29, no. 6, pp. 616. Kapferer, J. N 2008, The new strategic brand management: creating and sustaining brand equity long term, London, Kogan Page. Keller, L K 2014, Strategic management: building, measuring, and managing brand equity, 4th edn, Pearson, Edinburgh Gate. Kotler, P., Pfoertsch, W., & Michi, I 2006, B2B brand management. Berlin, Springer. Kotler, P., Shalowitz, J., & Stevens, R. J 2008, Strategic marketing for health care organizations: building a customer-driven health system. San Francisco, Jossey-Bass, Swan, K. S., & Zou, S 2012, Interdisciplinary approaches to product design, innovation, & branding in international marketing. Bingley, U.K., Emerald. Temporal, P 2010, Advanced brand management managing brands in a changing world, Singapore, John Wiley & Sons (Asia). Whitelock, J, Fastoso, F 2014, Understanding international branding: defining the domain and reviewing the literature, vol. 24, no.3, pp. 264. Read More