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2007 9


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2007 9

  1. 1. GLOBAL OR NATIONAL BRANDS? Reader PhD Sorina GÎRBOVEANU University of Craiova Abstract: Today, branding is such a strong force that hardly anything goes unbranded. Branding in global markets poses several challenges to the marketers. A key decision is the choice between global and nationals brands. This article gives the answers to the questions: what is, what is need for, what are the advantages, costs and risks of global and national brands? All go to the following conclusion: use global brands where possible and national brands where necessary. Keywords: global branding, strategic branding Introduction Increasingly, corporate and brand In essence, a brand identifies the image is being recognized as a majorseller or maker. It can be a name, influence on sales. In the commercialtrademark, logo, or other symbol. Under world, where it is becoming increasinglytrademark law, the seller is granted easy from a technical point of view toexclusive rights to the use of the brand duplicate a competitor’s offering, thename in perpetuity. Thus brands differ creation of a favourable or differentfrom other assets such as patents and image may give the company acopyrights. A brand is essentially a competitive advantage.seller’s promise to consistently deliver a The concept of brand managementspecific set of features, benefits, and was created in the 1930s by Procterservices to the buyers. The best brands and Gamble, the giant Cincinnati soapconvey a warranty of quality. But a and toiletries company. It came aboutbrand is even a more complex symbol. as a result of the failure to launch A brand can convey up to six successfully a new soap at that time,levels of meanings. Attributes: a brand Camay. P&G’s original market strengthfirst brings to mind certain attributes. had been founded on a soap brandBenefits: customers are not buying called Ivory and it was felt that the salesattributes, they are buying benefits. failure of the company was due to “tooAttributes need to be translated into much Ivory thinking”.functional and/or emotional benefits. A strong brand reassures theValues: the brand also says something customer; it gives confidence in terms ofabout the producer’s values. Culture: the quality and satisfaction that can bethe brand may represent a certain anticipated from buying it. From all ofculture. Personality: the brand can also this comes the possibility of long-termproject a certain personality. User: the profits. Many brands are householdbrand suggests the kind of consumer names today, but the concept of brandwho buys or uses the product. management has moved beyond theMarketers must decide at which level(s) household goods deeply anchor the brand’s identity. People with brand-managementPromoting the brand solely on one or experience in fast moving consumermore of its benefits can be risky. The goods companies are now in demandmost enduring meanings of a brand are by financial institutions, serviceits values, culture and personality. They organizations, retailers and newdefine the brand’s essence [4]. technology-based companies. Their
  2. 2. marketing skills are being applied to seven “pillar” brands: Concorde, First“own label” brands. For example, the Class, Club World, Club Europe, WorldMidland Bank has introduced new Traveller, Euro-Traveller and Superbrands of accounts, with names such as Shuttle, each run by a brand managerVector and Orchard, which have been and a group brand manager. Customerstrongly promoted. The Halifax Building service and profitability have bothSociety is moving along similar lines improved under the new system.with its “Contents Xtra” insurancescheme. Global Brands Without a doubt, the concept of A global brand is defined as thebranding can fit in very well with the worldwide use of a name, term, sign,idea of the corporate image [3]. Take symbol (visual and/or auditory), design,British Airways, for example. Once they or combination thereof intended towere organized on the basis of a identify goods or services of one sellernumber of “marketing centers”, which and to differentiate them from those ofwere essentially geographical areas competitors. Much like the experiencesuch as North America, Europe and with global products, there is no singleAustralia. With such an organization, it answer to the question of whether or notwas very difficult to get a focus on to establish global brands. Table 1 listscustomer service and to track down the the estimated worth (equity) of the 20real needs of customers. There is now top global “umbrella” or “master brand”, whichis British Airways itself. Under this are Table 1 Top 20 Global Brands Brand Description1. Coca-Cola Little innovation beyond its flagship brand and poor management(United has caught up with Coke as consumers’ thirst for Cola hasStates) diminished.2. Microsoft It’s logo pops up on 400 million computer screens worldwide. But(United virus plagues and rival Linux took some luster off Gates &Co.States)3. IBM A leader in defining e-business, with services making up more(United than half of Big Blue’s sales.States)4. GE With acquisitions in areas from bioscience to bomb detection, it’s(United easier to buy GE’s new theme of “imagination at work”.States)5. Intel No longer just inside PCs, Intel is using its muscle to set the(United agenda for everything from wireless standards to the digital home.States)6. Disney Long the gold seal in family entertainment, but newcomers like(United Nickelodeon and Pixar are siphoning off some of its brand equity.States)7. Big Mac has pulled out of a two-year slump but still has to battleMcDonald’s its reputation for supersizing the world’s kids.(UnitedStates)8. Nokia Tough times for the mobile-phone giant as its market share has(Finland) slipped and younger buyers turn to rivals such as Samsung. 83
  3. 3. Table 1 (continued from the previous page) Brand Description9. Toyota With rock-solid quality and the edge in hybrid cars, the Japanese(Japan) auto maker is on track to overtake Ford in worldwide sales.10. Marlboro The no. 1 name in cigarettes has cut prices and upped marketing(United to beat back the challenges of higher taxes and fewer smokers.States)11. Mercedes With wobbly profits and quality problems, the luxury car brand is(Germany) struggling to retain premium status.12. Hewlett- Covering everything from digital cameras to service, the IT giantPackard wants to dominate the middle ground between Dell and IBM.(US)13. Citibank New CEO Charles Prince has spurred on global expansion and(United boosted the consumer credit division.States)14. American A recent federal court ruling that allows banks to issue AmexExpress cards should give the brand another boost.(UnitedStates)15. Gilette Despite the tougher competition from Schick, the King of Blades(United still reigns new products like the battery-powered M3Power.States)16. Cisco This networking behemoth used slick TV ads and key acquisitions(United like Linksys to extend its reach.States)17. BMW This Bavarian auto maker is powering higher sales with raft of (Germany) new models from the sleek 6 Series sports coupe to the X3 baby SUV.18. Honda Overtaken by Nissan at home and falling further behind rival(Japan) Toyota in the U.S. market.19. Ford Ford is trying to make quality “Job One” again after am(United embarrassing run of glitches, but leery consumers haven’t yetStates) regained trust.20. Sony It was late to the LCD TV boom, and the PS2 video game console(Japan) is slipping. Worse, rival Samsung is in Sony’s face.Source: Cateora, Ph., Graham, J., Bruning, E., International Marketing, McGraw-HillRyerson, Toronto, 2006, pg. 323 Figure 1 dramatizes the extent of (BMW). In fact, U.S. dominance is muchU.S. company domination of global deeper that the rankings reflect.branding. No other country remotely A successful brand is the mostapproaches the brand values held by valuable resource a company has [1].American companies. U.S. companies The brand name encompasses theaccount for fourteen of the top twenty years of advertising, good will, qualityglobal brands (70 percent) across both evaluation, product experience, andconsumer goods and industrial sectors. other beneficial attributes the marketOthers countries within the top twenty associates with the product. Brandrankings are Finland (Nokia) in image is at the very core of businesstelecommunications, Japan (Toyota, identity and strategy. CustomersHonda, and Sony) and Germany everywhere respond to images, myths, and metaphors that help them define84
  4. 4. their personal and national identities between countries. Another advantagewithin a global context of world culture is that sales may increase becauseand product benefits. Global brand play travellers will see their favourite brandsan important role in that process. The advertised and distributed in othervalue of Kodak, Sony, Coca-Cola, markets. Third, trade channels are moreMcDonald’s, Toyota, and Marlboro is ready to accept a global brand that hasindisputable. One estimate of the value been advertised in their market. Finally,of Coca-Cola, the world’s most valuable a worldwide recognized brand name isbrand, places it over $70 billion and a power itself, especially when thegrowing. In fact, one authority country-of-origin associations are highlyspeculates that brands are so valuable respected. Japanese companies havethat companies will soon include a developed a global reputation for high“statement of value” addendum to their technology and quality and their namesbalance sheets to include intangibles on products give buyers instantsuch as the value of their brands. confidence that they are getting goodNaturally, companies with such strong value.brands strive to use those brands But there are also costs and risksglobally. In fact, it appears that even to global branding. A single brand nameperceived “globalness” leads to may not be as appealing as locallyincreases in sales. The Internet and chosen names. If the company replacesother technologies are accelerating the a well-regarded local name with a globalpace of the globalization of brands. name, the changeover cost can beEven for products that must be adapted substantial. The company will have toto local market conditions, a global inform millions of people that its brandbrand can be successfully used with still exists but under another name.careful consideration. Heinz produces a Even the company’s local managersmultitude of products that are sold may resist the name change orderedunder the Heinz brand all over the from headquarters. Theworld. Many are also adapted to local overcentralization of brand planning andtastes. In the United Kingdom, for programming may dissipate localexample, Heinz Beans Pizza (available creativity that might have producedwith cheese or sausage) was a runaway even better ideas for marketing thehit, selling over 2.5 million pizzas in the product.first six months after its introduction. In Even when a company hasthe British market, Heinz’s brand of promoted its global brand namebaked beans is one of the more popular worldwide, it is difficult to standardize itsproducts. The British consumer eats an brand associations in all countries.average of 16 cans annually, for a sales Heineken beer, for example, is viewedtotal of $1.5 billion a year. The company as a high-quality beer in Canada, as arealizes that the consumers in other grocery beer in the United Kingdom,countries are unlikely to rush to stores and as a cheap beer in Belgium. Cheezfor beans pizzas, but the idea could Whiz, a Kraft General Foods Cheeselead to the creation of products more spread, is viewed as a tasty snacksuited to other cultures and markets. spread in Canada and as a coffee What are the advantages [4] of a flavourer in Puerto brand name? One main Ideally a global brand gives aadvantage is economy of scale in company a uniform worldwide imagepreparing standard packaging, labels, that enhance efficiency and costpromotions, and advertising. Advertising savings when introducing othereconomies result from using products associated with the brandstandardized ads and the fact that name, but not all companies believe amedia coverage increasingly overlaps single global approach is the best. 85
  5. 5. Indeed, we know that the same brand umbrella, Mars returned the candies todoes not necessarily hold the same their original names. The pet foodmeanings in different countries. In division adopted Whiskas and Sheba foraddition to companies such as Kodak, cat foods and Pedigree for dog food asKellogg, Coca-Cola, Caterpillar, and the global name replacing KalKan. ToLevi’s that use the same brands support this global division that accountworldwide, other multinationals such as for over $4 billion annually, Mars alsoNestlé, Mars, Procter&Gamble, and developed a website for the pet foodGillette have some brands that are brands. The site functions as a “globalpromoted worldwide and other that are infrastructure” that can be customizedcountry specific. Among companies that locally by any Pedigree Petfoods branchhave faced the question of whether or worldwide. For instance, Pedigreenot to make all their brands global, not offices can localize languages andall have followed the same path. For information on subjects as veterinariansexample, despite BMW’s worldwide and cat-owner gatherings.successes, only recently did thecompany create its first global brands National Brandsposition. A different strategy is followed by Companies with successful the Nestlé Company, which has a stablecountry-specific brand names must of global and country-specific nationalbalance the benefits of a global brand brands in its product line. The Nestléagainst the risk of losing the benefits of name itself is promoted globally, but itsan established brand. And some brand global brand expansion strategy is two-names simply do not translate. The cost pronged. In some markets it acquiresof reestablishing the same level of well-established national brands when itbrand preference and market share for can and builds on their strengths – therethe global brand that the local brand are 7,000 local brands in its family ofmust be offset against the long-term brands. In other markets where therecost savings and benefits of having only are no strong brands to be local, peopleone name worldwide. In those markets to be regional, and technology to bewhere the global brand is unknown, global. It does, however, own some ofmany companies are buying local the world’s largest global brands; Nestlébrands of products that consumers want is but one.and revamping, repacking, and finally Unilever is another company thatrelaunched them with a new image. follows a similar strategy of a mix ofUnilever purchased a local brand of national and global brands. In Poland,washing powder, Biopan, that had a 9 Unilever introduced its Omo brandpercent share of the market in Hungary; detergent (sold in many otherafter relaunching, market share rose to countries), but it also purchased a localabout 25 percent. brand, Pollena 2000. Despite a strong When Mars, a U.S. company that introduction of two competing brands,includes candy and pet food among its Omo by Unilever and Ariel byproduct lines, adopted a global strategy, Procter&Gamble, a refurbished Pollenait brought all its products under a global 2000 had the largest market share abrand even those with strong local year later. Unilever’s explanation wasbrand names. In Britain, the largest that East European consumers arecandy market in Europe, M&Ms were leery of new brands; they want brandssold as Treets and Snickers candy was that are affordable and in keeping withsold under the name Marathon to avoid their own tastes and values. Pollenaassociation with knickers, the British 2000 is successful not just because it isword for women’s underpants. To bring cheaper but because it chimes withthe two candy products under the global local values.86
  6. 6. Neither Canada nor Australia is The trend today is toward arepresented in the top 100 global "borderless world." In Europe, custombrands, as their branding strategy is duties, border delays, and otherpredominately national. They do not impediments to inter-European tradehave well-developed consumer goods are rapidly diminishing. Companies areand services sectors, as in the U.S., eager to launch new brands asand most of their companies cater to Eurobrands. P&G launched itslocal consumer markets. Of the top ten detergent Ariel as a Eurobrand. Marsbrands in Australia, only two are in has replaced its Treets and Bonitasconsumer products (Woolworth’s, in brands names with M&Ms worldwidefood, and Billabong, in casual clothing). and changed its third largest UnitedFive of the remaining eight brands are Kingdom brand - Marathon – to thefrom firms in the financial services Snikers name that it uses in the Unitedsector. Commonwealth Bank, Westpac, States. Unilever is now seeking toANZ, National Australia Bank, and St. market its various detergent brands –George’s Bank. The other three brands All, Omo, Persil, Presto, Skip, and Via –are Testra, in telecommunications, under fewer labels.Australian Post, government services, Clearly some brand names haveand Ansell, health care supply. gained worldwide acceptance. Such Large and small companies must companies as Kodak, McDonalds, IBM,also consider rises in nationalistic pride Sony, and Coca-Cola would not think ofthat occur in some countries and their using different brand names as theyimpact on brands. In India, for example, enter additional countries.Unilever considers it critical that itsbrands, such as Surf detergent and Lux Conclusionsand Lifebuoy soaps, are viewed as Branding is a major issue inIndian Brands. Just as it’s the case with product strategy. Branding is expensiveproducts, the answer to the question of and time-consuming, and can make orwhen to go global with a brand is, “It broke a product. The most valuabledepends - the market dictates”. brands have a brand equity that is In the past, most companies considered an important companyestablished new brand names that asset. The best brand name suggestmade sense in their country [4]. When something about the product’s benefits;they later attempted to introduce their suggest products qualities; are easy tobrand into foreign markets, some pronounce, recognize, and remember;companies discovered that the existing are distinctive; and do not carrybrand name was not appropriate. The negative meanings or connotations inname was difficult to pronounce, other countries or languages.offensive, funny, meaningless, or To growing globalization ofalready co-opted by someone else. The markets that gives rise tocompany would be forced to develop a standardization must be balanced withnew brand name for the same product the continuing need to assess allwhen it was introduced in other markets for those differences that mightcountries. P&G had to create a different require adaptation for successfulbrand name for its Pert Plus shampoo acceptance. The premise that globalwhen it introduced it in Japan (called communications and other worldwideRejoy) and the United Kingdom (called socializing forces have fosteredVidal Sassoon). Using different brand homogenization of tastes, needs, andnames for the same product comes at a values in a significant sector of thehigh cost, however. The company has population across all cultures is difficultto prepare different labels, packaging, to deny. However, more than oneand advertising. authority notes that in spite of the forces 87
  7. 7. of homogenization, consumers also see advertising, good will, quality evaluation,the world of global symbols, company product experience, and other beneficialimages, and product choice through the attributes the market associates with thelens of their own local culture and its product. Brand image is at the very corestage of development and market of business identity and strategy.sophistication. Each brand must be A global brand is the worldwideviewed in light of how it is perceived by use of a name, term, sign, symboleach culture with which it comes in (visual and/or auditory), design, orcontact. What is acceptable and combination thereof intended to identifycomfortable within one group may be goods or services of one seller and toradically new and resisted within others, differentiate them from those ofdepending on the experiences and competitors. Even when a company hasperceptions of each group. promoted its global brand name A brand is essentially a seller’s worldwide, it is difficult to standardize itspromise to consistently deliver a specific brand associations in all countries.set of features, benefits, and services to Sometimes, companies are forcedthe buyers. The best brands convey a to develop a new brand name for thewarranty of quality. But a brand is even same product when it is introduced ina more complex symbol. A strong brand other countries, a strategy of mixingreassures the customer; it gives national and global brands. Companiesconfidence in terms of the quality and with successful country-specific brandsatisfaction that can be anticipated from names must balance the benefits of abuying it. The concept of branding can global brand against the risk of losingfit in very well with the idea of the the benefits of an established brand.corporate image. Increasingly, The major inference to draw fromcorporate and brand image is being all of this is that wise companies willrecognized as a major influence on globalize those elements that make orsales. save substantial sums of money and A successful brand is the most localize those that competitivevaluable resource a company has. The positioning and success require.brand name encompasses the years ofREFERENCES[1] Cateora, Ph., Graham, J., Bruning, E., International Marketing, McGraw-HillRyerson, Toronto, 2006.[2] Cheverton, P., Understanding Brands, Kogan, London, 2006.[3] Christopher, M., McDonald, M., Marketing – an Introduction, Pan Books,London, 1991.[4] Kotler, Ph., Turner, R., Marketing Management – Analysis, Planning,Implementation and Control, Prentice Hall, Ontario, 1998.[5] Lendrevie, L., Lévy, J., Lindon, D., Mercator – théorie et pratique du marketing,Dunod, Paris, 2006.[6] Westphalen, M-H., Comunicator – le guide de la communication d’entreprise,Dunod, Paris, 2004.88