MAR002-6 Brand Mgt.

& Research

Global Branding Strategy

Lecture 12
 What is marketing?
• Marketing Involves:
– Focusing on the needs and wants of
customers
– Identifying the best method of satisfying
those needs and wants
– Orienting the company towards the process
of providing that satisfaction
– Meeting organisational objectives
What is international marketing?

• Different Levels of International

Marketing
– Export marketing
– International marketing
– Global marketing
 Environmental influences on
international marketing
Socio/Cultural Political
Language Legal Operational
Religion Local domestic laws restrictions
Aesthetics International law Discriminatory
Values and Home domestic law restrictions
attributes Physical actions
Social
organisation
Material culture Technological
Satellite
Environmental Communications
Influences on ISDN
Economic
International Internet
Developed economies
WWW
Emerging economies Marketing
The Electronic
Less developed
Superhighway
economies
Currency movements
 Social/cultural influences
• Coca-Cola:
– 2 Litre bottles too big for Spanish fridges
– Pronunciation in China – Kooke Koula
• ‘A thirsty mouthful of candle wax’
• Johnson’s Floor Wax:
– Made Japanese floors slippery
• The Japanese do not wear shoes indoors
• McDonald’s:
– The white face of ‘Ronald McDonald’
• A white face is seen as a death mask in Japan
 Social influences
• "Future consumer markets will be concentrated in
the fast growing emerging markets where small
and large enterprises will find profitable
opportunities to meet health ,education and
nutrition needs" UN people & tomorrows markets

– 80% world population currently live in developing

countries
– By 2025, 85% population will live in emerging markets
– 2 out of every 5 people currently live in China and India
– In the next 50 years, the African population will treble
 Regional breakdown of global
population (bn)
0 2.5

0 0.5 1.0 1.5 2.0 2.5

Other Asia

Africa

India

China

Latin America

Europe

North America
1995

Source: United Nations (1996)

2050
 World’s mega cities
• By 2010, 50% of people will live in urban
areas
• By 2015, the top 5 largest cities will be:
• Tokyo-Japan 26.4 million
• Bombay- India 26.1 million
• Lagos- Nigeria 23.2 million
• Dhala-Bangladesh 21.1 million
• San Paulo-Brazil 20.4 million

Source: United Nations

 Environmental influences on
international marketing
Legal
Local domestic laws
International law
Home domestic law

Environmental
Economic Influences on
Developed economies International
Emerging economies Marketing
Less developed
economies
Currency movements
 The legal environment
• 3 dimensions in the legal environment:

– local domestic law:

• different in every country

– international law:
• issues include piracy, treaties, patents etc

– domestic laws in the home country:

• export controls, plus duty to abide by national laws in all
activities
 The economic environment
Gross National Income per capita (US$)

• Luxembourg 48 560 • Brazil 7 070

• USA 34 280 • Thailand 6 230
• Denmark 28 490 • Turkey 5 830
• Netherlands 27 390 • Philippines 4 240
• Germany 25 420 • China 4 070
• United Kingdom 24 340 • Indonesia 2 890
• Singapore 21 630 • India 2 820
• Greece 17 520 • Zimbabwe 2 220
• Hungary 11 990 • Vietnam 2 070
• South Africa 10 910 • Bangladesh 1 620
• Poland 9 370 • Nigeria 790
• Chile 8 840 • Tanzania 520
• Uruguay 8 250 • Sierra Leone 460
 Working time required to buy a
Big Mac
0 20 40 60 80 100 120
Minutes 1997
Caracas
Moscow
Manila
Shanghai
Mexico City
Bogota
Warsaw
Bangkok
Sao Paolo
Johannesburg
Singapore
Paris
Kuala Lumpur
London
Frankfurt
New York
Source: Economist: Jan 1998
Tokyo
 Economic environment
• Developed triad Economies
– account for 80% of world trade
• Emerging Economies
– huge and growing consumer demand
– government directed economic reforms
– ‘dual economy’
• Less Developed Countries (LDCs)
– low GDP, limited manufacturing base
– infrastructure weaknesses
– heavy reliance on one product/one trading partner
Environmental influences on
international marketing
Political
Operational restrictions
Discriminatory restrictions
Physical actions

Technological
Satellite
Communications
Environmental ISDN
Influences on Internet
International WWW
Marketing The Electronic
Superhighway
 Political environment
• ‘A risk due to a • Government actions
which may constitute
sudden or gradual potential risk for the
change in a local firm:
political environment – Operational restrictions
eg. exchange controls or
that is employment policies
disadvantageous or – Discriminatory
restrictions eg. special
counter productive taxes and tariffs
to foreign firms and – Physical actions eg
markets’ nationalisation, riots and
war
Technological considerations

• Increased ease and speed of

communication
• High rate of technological change
• Global access to the World Wide Web
– Projected 765 million users by end 2005
• Importance of English language for web
users
 Global communications...
• Globally e-business;
– US $200bill (nearly all B2B)
– By 2005 estimated to reach US $10
trillion

• HOWEVER.....
– 50% of world has never used a telephone
– Only 7% have access to a pc
– Only 4% have direct internet access
Diversity of stakeholder interest
The challenges of the international
marketing environment #1
• Culture
– Often diverse and multicultural
• Markets
– Widespread and sometimes fragmented
• Data
– Difficult to obtain and sometimes expensive
• Politics
– Regimes vary in stability, political risk becomes an
important variable
The challenges of the international
marketing environment #2
• Governments
– Can be a strong influence in regulating
importers and foreign business ventures
• Economies
– Varying levels of development
• Finance
– Many differing finance systems and
regulatory bodies
 The challenge of international
marketing environment #3
• Stakeholders
– Commercial, home country and host country
• Business
– Diverse rules, culturally influenced
• Control
– Difficult to control and co-ordinate across
markets
International marketing strategies
Success and Failure

• Failure arises from:

– inability to find right market niche
– unwilling to adapt products
– products not perceived as sufficiently unique
– vacillating commitment
– assigning the wrong people
– picking the wrong partners
– inability to manage local stakeholders
– mutual distrust/lack of respect between HQ &
management
– inability to leverage ideas to all countries
 Regional Market Segments
• Regionalization is an important recent trend
that, perhaps on the surface, seems to run
counter to globalization.
• Reasons for regional marketing
– Need for more focused targeting
– The shift from national advertising to sales
promotions
• Drawbacks
– Production headaches
– Marketing efficiency may suffer and costs may rise

Keller 2007
 Other Demographic and Cultural
Segments

• For example, the importance for

marketers to consider age segments and
how younger consumers can be brought
into the consumer franchise
• As another example, the 2000 census
revealed that Asians and Hispanics
accounted for 79 million of 281 million
people in the United States and an
estimated $1 trillion in annual purchasing
power.
Keller 2007
Rationale for Going International
• Perception of slow growth and increased
competition in domestic markets
• Belief in enhanced overseas growth and
profit opportunities
• Desire to reduce costs from economies of
scale
• Need to diversify risk
• Recognition of global mobility of
customers
Keller 2007
 Advantages of
Global Marketing Programs
• Economies of scale in production and
distribution
• Lower marketing costs
• Power and scope
• Consistency in brand image
• Ability to leverage good ideas quickly and
efficiently
• Uniformity of marketing practices
Keller 2007
 Disadvantages of
Global Marketing Programs
• Differences in consumer needs, wants,
and usage patterns for products
• Differences in brand and product
development and the competitive
environment
• Differences in the legal environment
• Differences in marketing institutions
• Differences in administrative procedures

Keller 2007
 Standardization vs. Customization

• According to Levitt, because the world is

shrinking—due to leaps in technology,
communication, and so forth—well-
managed companies should shift their
emphasis from customizing items to
offering globally standardized products
that are advanced, functional, reliable,
and low priced for all.
 Standardization vs. Customization

• Blending global objectives with local or

regional concerns
• “Think global. Act local.”
• A global brand has a clear consistent
equity across geographies: same
positioning, same benefits plus local
tailoring if needed
 Global Brand Strategy

To build brand equity, it is often necessary to create

different marketing programs to address different
market
segments.
• Identify differences in consumer behavior
– How they purchase and use products
– What they know and feel about brands
• Adjust branding program
– Choice of brand elements
– Nature of supporting marketing program
– Leverage of secondary associations
 Building a Global Brand

• How valid is the mental map in the new

market?
– What is the level of awareness?
– How valuable are the associations?
• What changes need to be made to the
mental map?
• By what means should this new mental
map be created?
Keller 2007
Global Customer-Based Brand Equity

• To build customer-based brand equity,

marketers must:
1. Establish breadth and depth of brand awareness
2. Create points-of-parity and points-of-difference
3. Elicit positive, accessible brand responses
4. Forge intense, active brand relationships
• Achieving these four steps, in turn, requires
establishing six core brand building blocks.

Keller 2007
 Core Brand Building Blocks

• Creating brand salience

• Developing brand performance
• Crafting brand image
• Eliciting brand responses. Example:
positive brand judgments
• Creating brand feelings
• Cultivating resonance

Keller 2007
 Questions for Global Branding
Positioning
• How valid is the mental map in the new market? How
appropriate is the positioning? What is the existing
level of awareness? How valuable are the core brand
associations, points-of-parity, and points-of-
difference?
• What changes should we make to the positioning? Do
we need to create any new associations? Should we
not re-create any existing associations? Should we
modify any existing associations?
• How should we create this new mental map? Can we
still use the same marketing activities? What changes
should we make? What new marketing activities are
necessary?

Keller 2007
Building Global Customer-Based Brand
Equity

• In designing and implementing a

marketing program to create a strong
global brand, marketers want to realize
the advantages of a global marketing
program while suffering as few of its
disadvantages as possible

Keller 2007