This presentation is based Article review.

1. Base article: “How Global Brands Compete”
By: Douglas B. Holt, John A. Quelch and Earl L. Taylor
Purbanchal University
M.Phil – II Semester
Cohort 2018
Presentation by Arjun Rai
email: chhiwatpang@gmail.com
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2. Background of the study
• Debate between standardization and
customization have been ongoing ever since the
marketing departed through different stages of
philosophical foundations.
• Both Standardization and customizations have
their relative strengths and dark sides.
Standardization ensures higher efficiency but
obscures individual differences. Similarly,
customization address individual differences but
overlooks efficiency aspect of marketing.
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3. • In the backdrop of this complexity, Theodre
Livitt the professor or Harvard Business School
published an article “Globalization of market”.
• Prof. Livitt suggested global companies to
exploit the economic simplicity and grow.
• Although Livitt, did not explicitly advocated for
standardization, many managers and global
companies interpreted his proposition as
standardization of global branding.
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4. • In 2004 Douglas B. Holt, John A. Quelch and
Earl L. Taylor evaluated the current worldview
of global brands and what customers believed
about local brands and global brands.
• They conducted an extensive study in two stages
• Stage 1 a qualitative research by including
respondents from 41 countries
• Stage – 2 a survey, in which 1800 respondents were
included from 12 countries to measure the relative
importance of those branding dimensions when
consumers buy the productsA.R

5. Dimensions of global branding
• A detailed analysis revealed four factors which
are;
1. American Value
2. Quality signals
3. Global myths
4. Social responsibilities
• These, four factors were the key dimensions, the
prospects considered while buying a
transnational companies’ offerings.
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6. Did American value mattered in brand
selection ?
• The study revealed that, a brand revealing
American Value did not matter to the customers.
• Thus, transnational companies’ brands whether
revealed or not the American values did not play
significant role amongst the respondents located
in different part of world.
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7. Quality signal
• The researchers analyzed the respondent’s opinion of
customers about quality signals of global brands and,
found the following;
1. Russian respondents said that, the more people
bought a brand, the better the quality would be.
2. Spanish respondents believed that global brands offer
better quality and guarantee.
3. Similarly, Thai respondents argued that, even if the
price of global brands are expensive, but it is
reasonable when you think of quality.
4. Indian respondents believed that global brands
always upgrade, better and innovative.A.R

8. Global myths
• Consumers perceive the global brands as symbol of
cultural ideals.
• They use global brands to create and imagined global
identity that they share with like minded people.
• Therefore, transnational companies compete not only to
offer the highest value products, but also to deliver
cultural myth with global appeal.
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9. Respondents’ cultural myth
• Global brands make them feel like citizens of
the world and sense of identity – Argentinean.
• A Newzealander stated that global brand make
him/her feel like part of something bigger and
sense of belonginess
• Costa Rican respondent stated that local brands
show what we are; global brand shows what we
want to be.
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10. Global myth in post WW -II
• The global myth was very eminent specially
after post WW II, many companies like Jack
Daniel’s, Mc Donald’s, Disney, Levi Strauss
stry to spun global myth, but today global myth
have less to do with American way of life.
• Now, no longer are myths created by lifestyle
and luxury brands; myths are now spun by
virtually all global brands.
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11. Global brands and social responsibility
• People perceive that global companies wield
extraordinary influence both positive and negative
on social well being.
• They expect the firms to address social problems
liked to what they sell and how they conduct
business.
• Respondents were concerned whether, the
transnational company was American, but it did not
matter in brand selection, i.e a company’s American
root did not affect the consumers brand selection.
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12. American root and respondents’ response
• French panelists – opined that, American brands
are “imperialists”
• German – “Americans want to impose their own
way on everybody”
• However, the root of the transnational company
did not affect global brand selection. But they
were concerned about the social responsibilities
of global companies
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13. Some of the blunders of TNCs
1. Nestle Infant formula sell in Africa -1980
2. Union Carbide Bhogal Gas Tragedy -1984
3. Exxon Valdez Spill - 1989
4. Shell’s plan to sink its Brent Spar Oil Rig in
Nigeria
5. British Petrolium Crude Oil spillage in Mexican
Gulf - 2009
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14. • Study revealed that people have become
concerned that global brands have special duty
to social well being.
• Anti American sentiment was at rise because of
Iraq War.
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15. • Some of the responses
• African – I hate the country, but I like their
products.
• Philipino respondent said that he used to
participate in Anti American rallies when he
was student, but had not thought obout
American Closthes and shoes.
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16. Global Consumer Segments
• The researchers did not find much variations
across countries, but when the researchers
looked for differences within them, they found
that each countries’ consumers had variety of
views about global brands.
• Based on the homogeneity and heterogeneity of
the respondents, the researchers found four (4)
major segments
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17. Major Segments
1. Global citizens – 55%
2. Dreamers – 23%
3. Doubters or Antiglobal 13 %
4. Global Agnostics 8%
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18. Global Citizens
• 55% of respondents used the global success of a
brand as a clue to the quality and innovation.
• Global citizens were concerned about the global
companies’ responsibilities towards consumers’
well being, the environment and, workers right.
• UK and USA had few global citizens compared
to Brazil, China and Indonesia.
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19. Global Dreamers
• The second largest segment consisted of
consumers who are less discerning about, but
ardent in their admiration of transnational
companies.
• They see global brands as quality products.
• They are not nearly as concerned with those
companies social responsibilities as are the
global citizens.
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20. Antiglobals
• This segment is skeptical that transnational
companies deliver higher quality products.
• They dislike brands that preach American
Values and don’t trust global companies to
behave responsibly.
• They are reluctant to do business with
transnational companies.
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21. Global Agnostics -8%
• This segment of consumers don’t base purchase
decision on brand’s global attributes. Instead
they evaluate a global brand by the same criteria
they use to evaluate local brands.
• USA and South African have high global
Agnostics and Japan, Indonesia, China and
Turkey low on Global Agnostics.
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22. New opportunities, New responsibilities
• Global brands usually compete with another global
brands.
• In most countries, Toyota competes with Volkswagen,
Ford
• So what should global companies do to succeed ?
1. Think globalness
2. Manage the company’s dark sides
3. Build credible myth
4. Treat anti global as customers
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23. Think globalness
• Smart companies manage their brands as global
symbols because that’s what consumers perceive them
to be.
• However, people all over the world are either
astonished or disturbed by giant transnational
companies with their new products.
• Firms must participate in polarized conversation about
global brands and influences.
• One of the challenges is instability of global culture,
which is shaped by mass media, rhizome like
discussion that spreads over the internet – companies
must invest to monitor these perception constantly
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24. Manage the dark side
• Even the most successful global companies have dark
sides, that they must manage.
• In early 1990s the consumers of IBM believed that the
company was quality focused, they also believed that
IBM was “arrogant” and “bureaucratic”. To manage
this dark side, IBM launched an advertisement titled
“Solution for small planet”. By the late 1990s, this ad
helped shape the consumer’s perception from
“arrogant” to “kinder and gentle”
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25. Build Credible myths
• Global companies must create credible myths. Myths in
the sense an imbedding message to use the product,
which elevates their self esteem or touches their inner
self. This technique was successfully used by Microsoft
thorough its advertisement “where do you want to go
today?”
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26. Treat Antiglobal as customers
• Most transnational companies are unsure how to treat
the people who dislike them.
• The research revealed that 1/10 of customers would not
buy global brands, if given a choice. That is massive
number which accounts more than the size of
Germany’s and UK’s market - large potential market.
• Global companies must earn trust of this segment by
focusing on them as disgruntled customers.
• FOR THIS ;
• The firms must make investment social activities that
convince even the skeptical prospects.
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