Challenges of Taking a Brand Global

In a globalized economy where the purchasing power for a consumer has been increased over the last few decades. An in-depth study of GLOBAL BRANDING. when a company decides to expand its brand to beyond their borders, what are challenges which come under their way

We are well aware of many brands became an utter failure when the same products have been introduced to a new market without making any changes to its characteristics, just because they are selling successfully in another country.

Here is a study about the importance of Market Intelligence and how Geographical and Cultural Differences affects the whole game

In the business world today, it has become extremely important for the organizations to come up with innovative ideas to make their brand enhanced and renowned in the market. It is due to the fact that the market has become competitive more than ever. Over the years, different organizations belonging to the different industries have appointed numerous techniques to strategically attract the target audiences towards their products. Whatever technique that has been used so far was associated with risk factors (Anandan 2009). Researchers and investigators have claimed that a newer range of products being marketed often doesn’t get the desired success rate. It has been noted that extreme competition for longer shelf life has led companies to install newer products. Among various techniques, brand extension is one of the popular techniques being used in the current business world. Brand extension strategy is widely used because it lowers the risk associated with the launch of newer products (Kapferer 1997). Many case studies have been published to understand the success of a brand extension strategy. It has also been noted that after the recessions took place, the global economy has considered many strategies to put an extension to its product growth. Managers have closely looked into the matters of the company that can be boost with development through various techniques. The brand extension strategy has got the same attention as other strategies.

The concept of brand extension evolved with great uncertain results at the beginning. Previously, a great deal of debate was noted in terms of the applicability of the brand extension strategy for a successful product launch. Some of the companies have considered brand extension strategy as their basic technique to develop and grow with the help of newer products (Gia 2009). The ongoing debate regarding brand extension strategy has yielded claims by companies stating that it’s a technique that helps the consumer in a way that they feel secured when they buy the product. Launching a product with the help of usage of a brand name, which is already successful, helps the company to reach out to the consumers easily with a lowered risk of being unsuccessful.

Researchers have often debated about the brand success transference to the extension i.e. launch of newer products. On the other hand, many investigators claim that the brand extension technique cannot flourish successful results as consumers start expecting higher quality. Such a fact has been elaborated by researchers at many events (Gelder 2005). Investigators have claimed that consumers expect the quality of newly launched products to be higher and equal to the successful product. Such a perspective of consumers can be a challenge for companies. That is why most companies consider strategies other than brand extension strategies.

It has also been observed that very few reports and literature have been published to address the competitive context to brand extension strategy. Some of the investigators claim that launching newer products can be associated with a lot of risks and brand extension strategy seemingly has both the positive and negative ends. The debate regarding brand extension strategy has also touched the issues of expenses to launch newer products. It has been claimed that expenses to launch a new product with the usage of brand extension strategy is relatively lesser than any other type of strategy.

Researchers claimed that brand extension strategy often go beyond the values and goals of the brand. It means that companies launching newer products might diverge from their ethical values or goals (Balmer and Greyser 2003). Companies often go against their criteria to successfully market their newer range of products.

The evolution of the concept of brand extension strategy also raised uncertain ideals regarding consumerism. The debate regarding brand extension strategy also pointed out the factor of losing their returning consumers in the run of launching newer products. In case the expectations of the costumers are ruined they might not use the brand anymore (Oh and Pizam 2008). On the other hand, it has been claimed by the supporters of brand extension strategy that brand extension strategy has gained much-renowned entrance in global business because many companies have extended their product range and successfully launched with the use of their brand fame.

The researches regarding brand extension strategy have noted a few major examples of brand extension strategy usage. For instance, the brand caterpillar introduced clothing, handbags though their first products were heavy machinery (Schmitt and Rogers 2008). The launch of clothing and handbags as newer products appeared to be a success for the brand.

Despite such examples, many people claim that the brand extension strategy does not work in any better manner because it associated a certain degree of risk with respect to brand launch. Such a claim has been proposed by masses because they consider the example of Cadillac Cimarron. It was the biggest failure that took place because of the usage of the brand extension strategy (Olmsted London). Alongside the example of failure, many notable examples can be concluded such as that of Pepsi and diet coke which has resulted in the successful launch of new products. The parent brand can make use of brand extension strategy and further associate active advertising techniques to help the products to reach to the fragmented and mass audiences.

Following all the claims made by supporters and people against brand extension strategy, it can be said that the success rate of the brand extension strategy greatly depends upon the consumer behavior of selecting and expecting from the product quality. In other words, it could be said that it is dependent upon the customers, how they perceive the brand, and how they conduct an evaluation of the product (Guinn, Allen and Semenik 2008). In this manner, managerial executives have played a great role because they have different sets and models to estimate the expectations of the consumers with the product. By gaining information regarding consumer behavior, executives can easily customize their campaigns and strategies. Researchers have also stressed the need of understanding the factors favorable and unfavorable for the brand extension strategy. There could be a lot of parameters that are more likely to affect the results of the brand extension strategy (Monye 2008). Some parameters might not need higher importance so that they can be addressed but ignoring such parameters can result in the failure of brand launch to consumers.

The uncertainty regarding the success and failure of a brand extension strategy has persuaded researchers and companies to evaluate the imperative working criteria of a brand extension strategy. There are higher debated claims regarding brand extension strategy but very less literature published in gaining understanding regarding any one position. Thus it is significant and required that companies investigate and conduct surveys to understand anyone's position associated with brand extension strategy. Such a task can be done with the help of considering companies that have become successful in launching newer products with the help of a brand extension strategy (Begemann 2008). Similarly, those companies can also be considered that are opposite in this regard. There is a need for research to evaluate the reasons that might cause the success or failure of a brand extension strategy to transfer companies' leverage on their newer products. Moreover, the situation questioning the success and failure of the brand extension strategy calls for the address to factors that have a greater impact on it (Lauwaert 2009). Previous researches can be taken as a background for the researches that are required to be conducted as they hold a great many examples that have successfully managed to attract business giants to use the strategy of brand extension to achieve fast-paced growth and success rate.