brands – the more global the better

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Brands The More Global the Better?

Hans H. Bauer, Stefanie Exler, Lucina Bronk, University of Mannheim

Abstract

This study highlights the question which distinct associations consumers hold about global

brands in comparison to local brands. For this purpose thirty in-depth interviews were con-

ducted. By including Germany and Poland in the study we were able to compare the role of

global brands in two countries from different historical, political and economical backgrounds

and with different positions in the globalizing world. The results suggest that global brands

generate powerful associations in a positive as well as in a negative sense depending on cul-

tural and individual variables as well as product category.

Introduction

Globalization has had a huge impact on the branding strategies of international companies.

Since the early 1990s many multinational companies, such as Unilever, have moved from a

multidomestic to a global marketing approach including global branding strategies (Schuiling

and Kapferer 2004). Cost-cutting due to economies of scale and benefiting from a strong

worldwide image have been suggested as the most important reasons in favour for a global

brand strategy (Schuiling and Lambin 2003). Moreover, the alleged convergence of consump-

tion patterns across borders (Levitt 1983) challenge the concept of brands adapted to local

needs and conditions. However, from a consumer perspective, reactions to the prevalence of

global brands seem to be quite heterogenous. On the one hand, consumers seem to value and

admire global brands as illustrated by their sometimes even iconic status. On the other hand,

global brands are often criticized for threatening local differences and for imposing an objec-

tionable consumer culture on societies (Holt 2002). This criticism culminates in the antibrand-

ing movement represented by renowned spokespersons like Naomi Klein or George Ritzer.

This paper aims to examine how consumers perceive and evaluate global brands. We define

global brands as brands that consumers can find under the same name in multiple countries

with generally similar and centrally coordinated marketing strategies (Steenkamp, Batra and

Alden 2003, p. 53). Specifically, we examine the following question: When and why do con-

sumers prefer global over local brands and vice versa? Since this questions addresses a quite

new and broad area of research a literature review and theoretical framework is presented

first. In addition, a qualitative study was carried out to achieve a better understanding of the

questions of interest. Finally, we develop some proposition for future research.

Literature Review and Theoretical Framework

What Do Consumers Relate to Global Brands?

So far, consumer research has focused on positive effects of a global brand image, i.e. of the

perceived brand globalness. Research indicates that consumers value global brands especially

for their assumed high quality and prestigious image (e.g., Nguyen, Barrett and Miller 2005;

Steenkamp, Batra and Alden 2003). An internationally well-established brand name can act as

a "halo" construct that effects quality beliefs (Han 1989). If a brand is perceived as globally

available, consumers are likely to attribute a superior quality to the brand, since such quality

is thought of as a prerequisite for international acceptance. Furthermore, prestige and status

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benefits have been shown to constitute one of the primary motivations of consumers to choose

global brands. Especially in Non-Western countries, international brands are more expensive

and scarcer than local brands and, therefore, have an exclusive appeal (Batra et al. 2000;

Steenkamp, Batra and Alden 2003). In addition, the consumption of internationally recog-

nized brands demonstrates a cosmopolitan and modern lifestyle an association highly desir-

able for some consumer segments (Alden, Steenkamp and Batra 1999).

So far, the disadvantages of global brands from a consumer perspective have not attracted as

much interest in the marketing community. One exception is provided by Schuiling and

Kapferer (2004) who give evidence that local brands are perceived as better value, more

trustworthy, down to earth and reliable than their global rivals. Deeper insights about the

"dark sides" of global brands are offered by interpretive researchers. A widespread concern

about global brands at least in some consumer segments is the advancement of a global

homogenization of cultures and the promotion of a global consumer culture (Belk 1995;

Thompson and Arsel 2005). As a consequence, consumers sometimes challenge the authentic-

ity of global brands. Consumers may view brands that are highly standardized and calculated

as inauthentic in contrast to local alternatives, which are understood as distinctive expressionsof local cultures (Thompson, Rindfleisch and Arsel 2006). Furthermore, the lack of authentic-

ity is stressed by polished and expensive marketing techniques that global brand companies

typically use because commercialization is negatively related to perceived authenticity (Holt

2004). Similarly, since global brands are often pushed into markets with enormous marketing

budgets, while being produced at ever lower cost in low-income countries, they could also be

thought of as aggressive or even reckless.

Which Additional Factors Influence the Perception and Evaluation of Global Brands?

As already mentioned, beliefs about and reactions to global brands seem to be quite heteroge-

neous indicating the relevance of additional explaining factors in that context. Relevant vari-ables can be identified on a product/brand, individual and cultural/country level. Apart from a

few constructs, e.g. consumer ethnocentrism (CET), most of these variables have not been

empirically researched in the given context so far.

On a product level, especially the product category should have a strong influence on the fa-

vorability of the type of the international branding strategy. Johansson and Ronkainen (2004)

suggest that global brands are more successful in high profile and high-involvement catego-

ries with pronounced symbolic functions. An important distinction has also been made be-

tween culture-free and culture-bound products (Wind and Douglas 1972). Thus, for example,

food would be regarded as strongly culture-bound products and therefore as difficult to stan-

dardize, while high-tech products would be regarded as essentially culture-free products andconsequently as easy to standardize (Baalbaki and Malhotra 1993). Another important brand

related variable is the country-of-origin or country image. Global brands from countries with

a bad publicity are likely to have acceptance problems and vice versa.

With regard to individual variables, consumers of global brands have been characterized as

younger, more educated, wealthier and more urban than the average consumer (Quelch 1999).

Apart from demographics some studies have dealt with the influence of consumer ethnocen-

trism (CET) on the preference for global versus local brands (e.g., Aysegul 2006; Steenkamp,

Batra and Alden 2003). According to Shimp and Sharma (1987, p. 280) CET is defined as

"the beliefs held by consumers about the appropriateness, indeed the morality, of choosing

foreign-made products". Steenkamp, Batra and Alden (2003) showed that low-CET consum-ers from the U.S. and Korea showed a higher tendency to buy global brands compared to

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high-CET consumers. Similar effects should be caused by related constructs, e.g. consumer

animosity (Klein, Ettenson and Morris 1998), nationalism and patriotism (Druckman 1994).

Consumer cosmopolitanism should also influence the acceptance of global brands. In a recent

definition, a cosmopolitan consumer is defined as "an open-minded individual whose con-

sumption orientation transcends any particular culture, locality or community and who appre-ciates diversity including trying products and services from a variety of countries (Riefler

and Diamatopoulos 2006). Cosmopolitan motives are expressed through the search for "au-

thentically distinctive social and aesthetic experiences" (Thompson, Rindfleisch and Arsel

2006, p. 56). Since global brands stand in contrast to authentic local brands, cosmopolitan

consumers should therefore avoid global offerings. In addition, since global brands can be

viewed as symbols of a globalized and materialistic world, general attitudes towards global-

ization and consumption as well as materialism may be important in the given context (Wit-

kowski 2005). More generally, global brands can be associated with either the benefits or the

drawbacks of globalization depending on globalization attitudes. Similarly, global brands,

such as Nike, seem to be especially vulnerable to a change in people's attitudes toward con-

sumption and materialism, because they represent a favourite target of the growing antimate-rialistic, anticonsumption and anticorporate movement (Holt 2002).

On a country/cultural level, there is some convincing evidence that the state of the economic

development of a country is crucial for a global brand's attraction. As stated before, global

brands are valued for their assumed superior quality, status-enhancing properties and moder-

nity. This especially seems to hold true for developing or transitional economies, where local

alternatives can sometimes be of inferior quality and global brands are still relatively scarce

and expensive (Ger et al. 1993). Furthermore, the political background determines the rela-

tionship between consumers and brands. In the last decades, the world has witnessed the col-

lapse of communist regimes, such as China or Poland. Since the reforms, the worlds Western

brands poured into the national markets. Whether consumers from post-socialist countriesonly view global brands as beneficial for their societies still has to be examined.

Empirical Study and Research Findings

Methodology

We could identify a variety of potential associations with global brands from a consumer per-

spective and additional influencing factors. Thus, we decided to conduct a qualitative study in

order to gain a better understanding of the topic. In-depth interviews were conducted in Ger-

many and Poland to account for country-specific differences. While Germany is a highly in-dustrialized Western nation, Poland is a post-socialist country whose economy is still in tran-

sition. As a consequence, global or foreign brands are still a relatively new phenomenon in

Poland. The comparison between Germany and Poland enables us to investigate differences in

the perception and evaluation of global brands due to country-specific and cultural variables.

The interviews were conducted between November 2005 and March 2006 in urban but not

metropolitan areas. Fifteen participants in each country were interviewed. They were be-

tween 18 and 72 years old and from a wide range of occupational backgrounds. The inter-

views were semi-structured to ensure that all relevant topics identified in the literature review

could be covered.

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Results

Regarding general associations with global brands, we found substantial differences between

our German and Polish participants. For the Polish consumers associations with quality and

globalization were prominent. The Polish seem to make a connection between their growing

wealth, globalization and global brands that enable them to be part of a global culture. Asso-ciations with a modern and prestigious lifestyle and status, however, were only made if asked

about the typical user of global brands. Typical consumers of global brands were character-

ized as young, open-minded, cosmopolitan and modern, but also as snobbish. Other critical

comments related to the expensiveness of global brands. More general concerns were the

threat to the local economy and culture and the dominance of Western symbols and values.

Our participants from Germany also mentioned associations with globalization most often,

but in a more negative sense. For them, global brands are symbols of the economic globaliza-

tion and, thus, for mass production, mass culture, homogenization and the proliferation of

Western values. Some German respondents clearly expressed the concern that global brands

would finally push authentic local alternatives out of existence. The German respondents also

stated that global brands stand for high quality and a good availability all over the world, forexample when travelling. Yet, our German respondents held fewer positive beliefs about

global brands than the Polish.

We also asked about the typical characteristics of local brands. These brands, especially in

Germany, are also associated with a superior quality. However, "local" quality is understood

more in terms of knowledge of local tastes and traditions. Generally, our respondents reacted

more emotional when asked about local brands. One German participant mentioned that local

brands gave him a "cosy feeling; local brands feel like home". For our respondents it was

more difficult to name negative attributes of local brands. Yet, Polish and German partici-

pants criticized the sometimes limited availability, innovativeness and modernity of local

brands. Again, the question about the typical user of predominantly local brands revealed in-teresting findings. Germans were especially negative about such a person. Attributes such as

boring, old-fashioned, not open-minded and rural were mentioned most often. In contrast,

some participants characterized such consumers as down-to-earth, attached to his or her home

country or region and supportive of the local culture and economy.

We further wanted to examine if consumers have a generalized preference for global brands.

When we asked our participants if they generally prefer either global or local brands, the ma-

jority had a preference for global brands or no general preference. Yet, when confronted with

the scenario of a choice situation between a local and a global brand of the same quality and

price, most of our participants would choose the local brand for ideological reasons, i.e. to

support the local economy. These results clearly indicate that globalness does not represent abrand benefit per se but that it implies other brand characteristics such as quality and moder-

nity a finding consistent to previous studies (e.g., Steenkamp, Alden and Batra 2003). In

addition, this result implies some relevance of consumer ethnocentrism. Furthermore, in both

scenarios about half of our participants could not make a decision between local and global

brands because their preference was determined by the product category. Beauty products,

electronics and automobiles were the product categories most often related to global brands.

Our consumers, however, clearly prefer local brands for food products, especially for fresh

food such as dairy and meat products, vegetables and fruits.

Our data did not allow findings about the influence of (consumer) cosmopolitanism. All of

our respondents seemed to be quite open to foreign brands and cultures indicating a wide-spread banal cosmopolitanism, since routine exposure to global cultural difference through

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the television creates the possibility of people becoming cosmopolitans in their own living

rooms" (Vertovec/Cohen 2002, p. 7). Moreover, we could not find an Anti-American bias in

buying decisions. Although some of our respondents were notably critical towards the U.S.,

they still bought U.S. brands. Most of our participants felt that they had no other choice and

that there were often no alternatives to American brands. One respondent admitted that "I buy

what I like, even if it violates my ideals".

Summary and Research Propositions

We found clear indications that global brands can elicit some strong associations. On the one

hand, these associations were related to quality perceptions and a modern and prestigious life-

style, which was particularly stressed by Polish consumers. On the other hand, negative re-

marks were made about the development towards mass production, consumption and culture.

The participants from Poland also criticized the high prices of global brands. Yet, while the

benefits of global brands were predominantly brand- or product-intrinsic qualities such as

quality and image, drawbacks were most often related to normative concerns. That is, ourrespondents did not reject global brands because those are not suited to their special needs but

because they fear damaging influences on their societies. Generally, we found that the Polish

participants were more positive about global brands than the Germans. Because of its political

and economic background global or Western brands have some extra-advantages in Poland.

Furthermore, there is evidence that general attitudes towards consumption and globalization

have an impact on how people perceive and evaluate global brands. In fact, our German sam-

ple was more sceptical about globalization and the consumption culture than our Polish re-

spondents. There were also signs of consumer ethnocentrism among our participants.

Based on theory and on our qualitative study the following propositions can be developed.

These propositions should be tested in the future with larger samples in multiple countries thatare in different stages of the market development:

P1: Global brands are associated with a higher quality than local brands.

P2: Global brands are associated with a higher status than local brands.

P3: Global brands are perceived as more modern than local brands.

P4: Global brands are perceived as less authentic than local brands.

Recent research also showed that political and ideological considerations influence consump-

tion decisions (e.g., Crockett and Wallendorf 2004). In the given context, general attitudes

and normative beliefs related to globalization and the consumption culture seem to represent

an especially interesting topic for future research. For example, Thompson and Arsel (2005)

claim that consumers who wish to take a stand on globalization debates via consumption

choices may gravitate toward David-like brands that can be interpreted as fighting a heroic

battle against the corporate Goliaths of global capitalism" (p. 639). Concepts such as material-

ism, market alienation, ethnocentrism or cosmopolitanism should be, thus, examined more

thoroughly in future studies.

Furthermore, the decision criterion mentioned most often by our respondents regarding the

choice between global and local brands was the product category. Although there are assump-

tions about which product categories are suited for global standardization, a sound theoretical

framework and convincing empirical support is still missing.

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brands – the more global the better

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