Managing Brands Across Boundaries and Segments

Chapter 14

Why go Global?

• Slow growth and competition domestically

• Profit opportunities overseas

• Diversify risk

• Emerging economies

• Consumer mobility

Global Marketing Disadvantages

• Consumer difference for usage, needs, wants• Consumer response to marketing mix

elements (poor retailing)• Competitive environment varies (local brands)• Restrictions from legal environment (product

endorsements, comparative ads)• Cultural differences (hi/lo context countries)• Advertising regulations (native production)

Strategy Terms

• Brands & Advertising

can be globalized or localized

• Products & Servicescan be standardized or customized

Global Brands Suggested:

• For worldwide firms like IBM

• When the brand is the creator like Tommy

• To enable product adaptation for tourists and over the Internet

• To ease the process of brand extension

• To gain credibility

Conditions Favoring Global Brands

1. Social and cultural changes - new values, new role models, new demographics

2. Technology brings standardization3. Cultural stereotypes help brand proliferation

(BMW=made by German craftsmen)4. Single production centers deliver a unified

product

Global Identity Management: Lego

• Universal concept of play from Denmark

• Product has 378 different sets with 1720 elements

• Centralized production in 5 factories

• Only localized elements are sales brochures in 25 languages

• Universal toy with global image

Product Adaptation

STANDARDIZE• Brand name• Product positioning• Warranties• Packaging• Advertising theme

CUSTOMIZE• Distribution• Personal selling• Pricing• Media selection

When is Product Standardization Best?

• In markets with similar economies

• If segments are customers, not countries

• When lifestyles are similar

• For industrial and hi-tech products

• With centralized authority

Globalization & Standardization Criteria

Industry/Product Category Factors

Company competitive factors

Global/standardized

Local/customized

Cultural Factors

Attitudes toward foreign images

Company and Competitive factors

• Airlines standardize image management and customize tactical decisions like pricing

• Mary Kay cosmetics uses a global image and product standardization

• Coke customizes the product and localizes advertising but retains a global brand image

Industry and Product Category Factors

• Product category differences - light use of deodorant in Germany so customization is necessary

• Automotive industry differences - India imports few options for purchase; imports are customized for Indian consumer use

Attitudes Toward Foreign Images

• Cognitive component - knowledge consumers have about the country of brand origin

• Affective component - emotional feelings and attitudes about country of brand origin

Cultural Factors

Physical artifacts. diamonds mean Africa, coffee means Columbia

Language. spoken and written; tone, inflection, character, etc.

Values. social norms: collectivism vs. individualism; time orientation

Customs. Gerber baby food jar label

Styles and Themes in Global Identity Management

1. Brand naming (GM car Nova means “No go” in Mexico)

2. Color (Hundai uses Korean colors)3. Shape (Building orientation [chi] and design

[feng shui])4. Styles (ornamental for Thai brand)5. Themes (Western independence &

individualism; Eastern harmony & affiliation)

Matrix of Strategies

Standardized productLocalized communicationKLM, Mercedes, FiatLevis jeans

Customized ProductLocalized communicationNestle chocolate, Nescafe

Unilever brands: Vif, Viss, Jif

Worldwide standardized product and global communicationMontblanc pens, American Express, Cartier jewelry

Customized productGlobal communicationDouwe Egberts coffee

Esprit, Esso

Qualities of Multi-Cultural Advertisements

• Recognize the culture of the category

• Reflect the culture of the brand• Respect the culture of the

consumer

Factors for Selecting a Car

JAPAN•Self expression• Driving sensation• Comfort• Quality• Sporty handling• Personal

USA•Self expression• Comfort• Driving Sensation• Personal• Innovation• Sporty handling

EUROPE•Self expression• Quality• Comfort• Value• Driving sensation• Innovation

BMW Advertising Message by Location

• Japanese are told to “Feel the sensation of speed and performance.”

• Americans are told to “Sit back and relax in leather cushioned seats.”

• Europeans are told about “Expert engineering and extended warranties.”

Cultural Differences: Talking to women about intimate moments

• France - woman bathing for her husband portrays seductive power

• Japan - man would never enter a woman’s bathroom• Italy - macho man with admiring wife• Austria - Paris background is seductive• Greece - sexy woman with few clothes

Standardize or Customize?

• No one product for every country

• Expensive to produce variety

• Global branding, local usage

• “Think global, act local” optimizes brand and product adaptation

Breathe Right Strips Video Case

• How did the company localize the brand?• How did they globalize the product?• What was the best source of product promotion for

the brand?• What advertising strategy was used and how was it

implemented?