• Save
Brand Breakout
Upcoming SlideShare
Loading in...5
×

Like this? Share it with your network

Share

Brand Breakout

  • 1,652 views
Uploaded on

Nirmalya Kumar, Professor of Marketing, presents key findings from his book: "Brand Breakout: How Emerging Market Brands Will Go Global". The book was launched on 20 June at London Business School.......

Nirmalya Kumar, Professor of Marketing, presents key findings from his book: "Brand Breakout: How Emerging Market Brands Will Go Global". The book was launched on 20 June at London Business School. Find out more: http://www.london.edu/newsandevents/news/2013/06/Eight_ways_emerging_market_brands_can_crack_international_markets_1668.html

More in: Business
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
No Downloads

Views

Total Views
1,652
On Slideshare
1,647
From Embeds
5
Number of Embeds
1

Actions

Shares
Downloads
0
Comments
0
Likes
3

Embeds 5

https://twitter.com 5

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. Copyright © Nirmalya Kumar
  • 2. Copyright © Nirmalya Kumar “China must have a group of world-level enterprises which have global competitiveness and world-famous brands. These enterprises must have their own brands, must have own operative networks, must have their own independent and complete supply chain.” (Chinese CEO) The need to go international • Intense competitive rivalry in home market • Quest for technology • Opportunities offered by global market • Economies of scale • Avoidance of trade protectionism • Improvement of company capabilities • Urgency to build “world-famous brands”
  • 3. Copyright © Nirmalya Kumar Why should emerging market companies develop global brands?  Financial benefits  Escalating labor costs (China)  Global ambition  Keep company fate in own hands: Brand power = market power  Improve management capabilities  Broader economic benefits (COO spill-over)  National pride
  • 4. Copyright © Nirmalya Kumar Hurdles to the development of global brands by emerging market companies  Financial benefits  Escalating labor costs (China)  Global ambition  Keep company fate in own hands: Brand power = market power  Improve management capabilities  Broader economic benefits (COO spill-over)  National pride  COO image
  • 5. Copyright © Nirmalya Kumar “One of the biggest challenges many emerging market companies face as they globalize is the perception that emerging market brands are inferior.” (The Economist 2011) Country image of China and Japan among U.S. consumers • Workmanship • Quality • Tech. advanced • Reliable • Value for money • Overall attitude • Active preference • Barriers to ever buying COO 0 3-3 China Japan
  • 6. Copyright © Nirmalya Kumar Hurdles to the development of global brands by emerging market companies  Financial benefits  Escalating labor costs (China)  Global ambition  Keep company fate in own hands: Brand power = market power  Improve management capabilities  Broader economic benefits (COO spill-over)  National pride  COO image  Production focus – scale v. value  Marketing competencies  IP protection  Centralized hierarchy v. bottom-up innovation  Patience?
  • 7. Copyright © Nirmalya Kumar 1. The Asian Tortoise Route Migrating to higher quality and brand premium • This is the “mother of all routes,” pioneered by Japanese companies (Toyota, Honda, Sony, Panasonic). It was subsequently copied by Korean companies such as Kia, Samsung, Hyundai, and LG. • Enter the Western countries with a decent product, sold for a very low price to a niche market. In an upward spiral of interlocking steps, the emerging market brand increases quality, while pricing the new version a little higher to attack the next lowest segment, and so on, until dominant market presence is achieved, across the entire price/quality range. • Examples: Pearl River Piano, Haier, Hisense Build to Cost Build to Volume Build to Quality Build to Brand
  • 8. Copyright © Nirmalya Kumar 2. The Business to Consumer Route Leveraging B2B strengths in B2C markets Capabilities Capital • Investments • Financial strength • Profit margins • Marketing & branding • Consumer insight • Distribution & service • Innovation & design • Global management Products go global People go global Assets go global Brands go global Global B2B player Contract manufacturer • Examples: Huawei, ZTE, ASD, Galanz, Mahindra & Mahindra
  • 9. Copyright © Nirmalya Kumar 3. The Diaspora Route Following emigrants into the world • Enter Western markets using the home market Diaspora as a beachhead. • In a world of unprecedented cross-border flows of people, there are millions of people living in other countries. Only a minority of these people will be fully assimilated into the new (host) culture. Many migrants will retain some old brand preferences and consumption patterns. • Examples: HSBC (China), Pran (Bangladesh), Bimbo (Mexico), Jollibee Foods (Philippines), ICICI, Reliance, Dabur (India), Islamic Bank of Malaysia
  • 10. Copyright © Nirmalya Kumar 4. The Brand Acquisition Route Buying global brands from Western MNCs • This pathway entails the acquisition of a Western brand, possibly followed by the subsequent migration of the acquired brand into the emerging market brand. • As emerging market companies are latecomers in the global stage, they often cannot employ the incremental internationalization strategy used by Western and Newly Industrialized Economies. Instead, they rapidly expand internationally via a series of aggressive, high-risk acquisitions of critical assets from mature Western multinationals. • Acquisitions are used primarily to secure brands and channel access as well as pre-empt similar moves by competitors. • Examples: Lenovo, Tata Motors, Geely, Bright Foods
  • 11. Copyright © Nirmalya Kumar Some recent acquisitions by emerging market companies
  • 12. Copyright © Nirmalya Kumar 5. The positive campaign route Select a brand name that disguises the COO or even invokes a favorable CO Focus on favorable “nuggets” Invest heavily in marketing Offer extra guarantees Emphasize aesthetics
  • 13. Copyright © Nirmalya Kumar 6. The Cultural Resources Route Positioning on positive cultural myths • In some categories, a specific country may have unique positive associations amongst Western consumers (e.g., silk from China, yoga from India, untamed nature from Brazil). If the emerging market brand can be positioned on these specific attributes, its country of origin can be turned into an advantage. • Examples: Shanghai Tang (China), Jim Thompson (Thailand), Mandarin Oriental Hotels, Taj Hotels and Resorts, Havaianas (Brazil)
  • 14. Copyright © Nirmalya Kumar 7. Branding Natural Resources Route Defined Geographical Region •Tight •Marked as unique •Myth to emphasize quality Product/process Specification •Transparent •Raise entry barriers •Elaborate (expensive) to imply quality Authentication •Independent authentication body •Regular audits •Seals of approval International Branding •Protected Geographical Indication •Awareness of brand and region •Communicate the difference Key success factors: Undifferentiated Value adding Global natural resource process brand
  • 15. Copyright © Nirmalya Kumar 8. Build National Champions Route • These are companies championed by the state and therefore have received substantial help from the state, either directly (e.g., subsidies) or indirectly (e.g., preferential treatment). They use the resources and protection of the state to win domestically and then subsequently expand into international markets. • Sometimes after an initial gestation period, these firms are left to the “forces of the market” or privatized though they are still closely aligned to the interests of the state. • Reasons to develop national champions include national prestige and security, economic development, desire to develop R&D and technology, and generate employment. • Examples: Embraer, Emirates Airlines, Comac, Proton