What is a global brand?
A global brand is defined as one that is available in most countries in the world and shares the same strategic principles, positioning, and marketing in every market throughout the world although the marketing mix can vary (Mooij, 2009). Global brands have a substantial market share in all countries. They dominate markets and have comparable brand loyalty or brand franchise. Global brands also carry the same brand name or logo (Mooij, 2009). In relation to availability a global brand that fits this definition is McDonald’s which in 2008 offered its services via more than 30,000 distribution points in more than 100 countries, serving 52 million customers each day. Mooij (2009) indicated that “to dominate, a global brand must have a substantial market share and be a leadership brand in all important markets in the world” (p. 29).
Brand consultants have come up with lists of the most powerful brands worldwide, and Coca-Cola has occasionally been number one. In 2007 Coca-Cola topped the inter-brand list of global brands with the highest brand value, and it had been at the top of that list for a long time (Mooij, 2009). Studies indicate that the classic examples of global brands are rarely full globally standardized. This implies that if a global brand is defined as one in which all elements are standardized that identical brand name, package, and advertising worldwide, then there are hardly any global brands and even Coca-Cola is not fully standardized (Mooij, 2009).
For most global brands, the product mix will vary to meet local consumer needs and competitive requirements. Mooij (2009) indicated that “both Coca-Cola and Pepsi-Cola increased the sweetness of their drinks in Middle East where consumers prefer a sweeter drink” (p. 29). Another example is that McDonald’s has standard specification for its technology client service, hygiene, and operational systems, but much else is localized such as its products and most of its communications. In addition it has been noted that through the logo and color combinations, McDonald’s is recognized worldwide (Mooij, 2009).
A global brand is inherently easier to manage. Aaker & Joachimsthaler (2000) noted that the fundamental challenge of brand management is to develop a clear, well articulated brand identity, then find ways to make that brand identify and drive all brand building activities. In their research, Aaker & Joachimsthaler (2000) determined that “this challenge is less formidable with a global brand; visa’s worldwide acceptance position is much easier to manage than dozens of country specific strategies” (p. 307). The key to a global brand is finding a position that will work in the international markets. Aaker & Joachimsthaler (2000) says that Sprite for example has the same position worldwide-honest, no hype, and refreshing taste. In this context we articulate that based on the observation that kids everywhere are fed up with hype and empty promises, Sprite advertising uses the tagline “Image is nothing. Thirst is everything. Obey your thirst.” This massage to trust one’s own instincts resonates around the world.
According to Geissel (2010), global brands are associated with high quality. For many consumers high quality is the main reason to choose a global over a local brand. Geissel (2010) indicated that consumers seem to notice a correlation between the volume of a product sold and its quality. In this aspect the quality aspect is also supported by the argument of faster product innovations (Geisel, 2010). He also indicated that global brands are seen as being dynamic and constantly renewing but local brands are seen as rather traditional. From a consumer’s perspective, they use global brands to create a global identity for themselves. Geissel (2010) says that they employ global brands as symbols for their cultural belonging sharing them with likeminded people. Many consumers feel that local brands show what we are while global brands show what we want to be. Geissel (2010) continue to say that in a converging global economy a company’s country of origin seems to comparatively unimportant rather than its global stature already indicates quality. On the other hand national identities still have to be considered because consumers interlink certain expertise to countries for example Belgium for chocolate, Switzerland for watches Italy for fashion and Germany for cars (Geissel, 2010).
From the manufacturer’s perspective, global brands deliver a set of benefits. Geissel (2010) commented that “besides economies of the scale in production, logistics and communications, global brands are associated with high quality and global identity” (p. 12). Benyon & Dunkerley (2000) in their studies noted that the majority of brands with global availability are of United States. In the year 1992, few European Union companies used domination strategies. In the same year of 46 major EU based food companies, half were present in only one or two countries, 24 percent in two or 3 countries, 17 percent in three or four countries and only 9 per cent in five or more countries. Benyon & Dunkerley (2000) say that one of the reasons given for the lag in developing global brands in Europe is the lack of opportunities in branding compared with the US.
Benyon & Dunkerley (2000) further argued that global brands usually have a country of origin (COO). Despite of being global, it is associated with that nation. This can be beneficial if the image of the country of origin (COO) remains constant. According to Benyon & Dunkerley (2000) in case of change, both upgrading (Japan from shoddy to high quality) and downgrading (American values have become ambiguous for some they are positive for other negative) will determine the brands image and acceptance. Global brands may be products that are not standardized at all. For example Knorr soups and sauces: the packages with brand name and logo as found in supermarkets around the world provides the global brand image yet the contents follow local tastes (Benyon & Dunkerley, 2000).
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Branding literature suggests that managers should be consistent in branding decision. Mooij (2009) says that this consistency may be difficult to sustain in managing global brands. The implication is that when new brands are introduced to new cultural contexts brand meanings are reinterpreted and change. In addition, Mooij (2009) also says that brands can make emotional connections to consumers and these can vary in different social and cultural contexts. Global consumers may derive different meanings from brands than those intended in the home market, putting organizations in a dilemma.
There are no global brands as their image and perceptions are affected by other factors such as the user of the brand and the country of origin effect. What is your opinion?
Global branding is much more associated with US companies and later the Japanese. US companies which became prominent internationally after the Second World War pursued an ethnocentric approach. Doyle (2008) says that they sold to a willing overseas market the products that had been successful in the home market usually with only the minimum necessary adaptation. Schroeder, Salzer-Mörling & Askegaard (2006) researched that the global brands and their meaning universes constitute central elements in these mediated messages through representations of central ideas about the good life, initiating new value systems and measures. They further say that global brands are not absorbed in local consumer cultural contexts through processes of direct copying and imitation of their cultures of origin neither in transitional societies. Therefore globalization is not synonymous with homogenization but rather with a plurality of consumption forms that exist more or less parallel in different contexts (Schroeder, Salzer-Mörling & Askegaard, 2006).
Brands as a phenomenon and branding as a strategic practice constitute central elements in globalizing business ideoscape (Schroeder, Salzer-Mörling & Askegaard, 2006) Schroeder, Salzer-Mörling & Askegaard (2006) mentioned that brand’s; global as well as local, symbolic universe is definitely among the world’s most powerful image generating media-scapes, image-centered, narrative based accounts of strips of reality, and what they offer to those who experience and transform. This is mainly oriented towards the content of the brands. The traditional perception of branding has been short-sighted and has cast brands as being cynically manipulative.
The real value of a global brand lies in its ability to persuade and please consumers. It is time for global brands to prove their worth to consumers, their guidance to employees and business partners and as a result of these activities their value to shareholders (Knowles, Diamantis & El-Mourhabi, 2004). In addition, Knowles, Diamantis & El-Mourhabi (2004) says that this is due to the overly skewed attention given to one group of stakeholders namely shareholders. This does not imply that technically the best products or services will always win consumers over, but it implies that the knowledge of what consumers need, how they behave, how they think, how they perceive value and how they reason and decide defines such outcomes (Knowles, Diamantis & El-Mourhabi, 2004).
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Although global brands are perceived to be more value added for the consumer either through better quality or by enhancing the consumer’s self perception as being cosmopolitan, sophisticated and modern (Czinkota, Ronkainen & Moffett, 2008). When a product that is sold globally requires repairs, parts or services, the problems of obtaining, training and holding a sophisticated engineering or repair staff are not easy to solve. Czinkota, Ronkainen & Moffett (2008) thus indicated that if a global brand breaks down and repair arrangements are not up to standard, the brand image suffers. The country of origin (COO) of a product, typically communicated by the phrase “made in (country)”, has considerable influence on quality perceptions. Czinkota, Ronkainen & Moffett (2008) mentioned that “the perception of global brands manufactured in certain countries is affected by a built-in positive or negative assumption about quality” (p. 290).
Discuss with examples. Your essay should include a critical review of key concepts such as COO, the complexity of brand origin due to globalization, and its impact on brand perceptions
A brand may be sold worldwide and show all the characteristics of a global brand, but that does not necessarily make it a brand that is perceived as global by consumers in all countries (Mooij, 2009). According to Mooij (2009) a global brand usually originates in a particular country and in some cases, in spite of being global, it is associated with that nation. Consumers say they like global brands because they usually offer more quality and better guarantees than other products. In this context, Mooij (2009) noted that global brands are viewed as very dynamic, always upgrading themselves coming up with new products all the time. At the same time some global brands managers may have lost interest in a certain product, although the founders of many strong global brands were specialists obsessed with the product (Mooij, 2009). The majority of originally local brands have managed to become successful global brands because they have been continuously innovative, using new technology and research. An example is that Coca-Cola has always been one of the first brands to penetrate developing markets and to create strong position in these markets (Mooij, 2009).
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The success in building and establishing global brand relies heavily on both the external and internal factors. Doole & Lowe (2005) determined that “customers ultimately decide the success of a brand, and their perception of a brand is affected by the appeal of the total product and service offer and the supporting marketing mix” (p. 214). In this context consistency to customer perception of the brand is required but at the same time the brand must be receptive to cultural differences. Fioroni & Titterton (2009) established that consumers look at global brands as symbols of cultural ideals and through these they develop a global identity. The perception of consumers is that by purchasing and consuming brands that individuals feel they are citizens of the world and in less industrialized countries a sense of belonging to something which is bigger and more important is developed (Fioroni & Titterton, 2009).
Global brands always compete among themselves, and this obliges the companies which own them not to limit their efforts to building superiority on traditional lever which include price, performance and image (Fioroni & Titterton, 2009). People believe that brands global character also shows itself in the way it manages dissent and non-acceptance. The relationship between a brand and consumers in a specific cultural context must be looked into in depth, hence putting together the specific cultural significance a brand is founded on (Fioroni & Titterton, 2009). The perception of brands such as being young and witty can be used in all cultures, but the unique and independent trait may be highlighted more in the United States and that of being funny and optimistic in Japan.
Even when brands are accepted in more than one culture, communication will have to be culture relevant, and that means more than translating a central message (Mooij, 2009). Toyne & William Nigh (1997) researched that country of origin (COO) of brands are typically beyond the domain of marketing. The key issue as far as the country of origin a particular brand is concerned is where a negative image is conveyed. Local brands may be at disadvantaged compared to those produced in areas with significant country equity, but much greater problems are faced with regional and global brands. For example, Toyne & Nigh (1997) commented that a Sony product manufactured in Taiwan, Korea, or the United States may not be viewed in the same light as one made in Japan. Toyne & Nigh (1997) also noted that “firms increasingly source, produce, and market their products on a global basis and, on the other we realize that customers hold certain biased views towards products manufactured in other countries” (p. 555).
According to Roll (2006) a products country of origin acts like a heuristic or rule thumb for consumers. He also says that consumers will rely on the origin of a product when they are unable to detect the true quality of the product before purchase. For example, Roll (2006) says that consumers typically infer the quality of Japanese car from the “halo effect” of Japan’s association with high-quality, reliable products. In this context, country image is used as what scholars call an “extrinsic cue”, a piece of information that is distinct from the product characteristics but tells the consumer something about the product (Roll, 2006). Brands give confidence to buyers in situations where knowledge about the product is limited. Doole & Lowe (2005) mentioned that consumer perceptions of COO are usually based on national stereotypes, for example Japanese products tend to be regarded as high quality, reliable and miniaturized and German products as well engineered.
The COO effect can have a negative or positive effect on brand value. Doole & Lowe (2005) noted that products from developing countries are often seen by Western consumers as low quality, reliable and usually copies of products from developed countries. They also say that this was the perception of Japanese products too some decades ago and shows that it is possible to change consumer attitudes (Doole & Lowe, 2005). Overcoming people perceptions and COO is often the first challenge for international marketers who must prove that their product does not reinforce negative stereotypes (Doole & Lowe, 2005). Consumers are becoming more aware of these differences and make increasingly sophisticated decisions based on COO. Doole & Lowe (2005) established that brands such as Nike and Gap that use garment making contractors in emerging countries provide the guarantee of the quality of merchandise from those countries. As a result the brand guarantee supersedes the possible negative country stereotype (Doole & Lowe, 2005).
In conclusion, brands add value to specific products. In this context global brands have values that can be measured in tens of billions of dollars hence good brand management is very fundamental. Global corporations have charged their products that are materially interchangeable for competing products with sentiments, imagery and focused more on these added values than on the usage element of the brand. However local brands have been made strong by including intangible elements such as persona and uniqueness, this is may not be effective for developing strong global brands. Across dissimilar cultures we should understand that consumers have different insights and they decide themselves which values they derive from the use of a brand. It should also be noted that global brands that do not tie into the needs and wants of consumers in different countries will fail.