The Global Brand Face -Off

Definition :

Globalization has been defined as the production and

distribution of products and services of a homogenous

type and quality on a worldwide basis.

Why?

the fact that foreign sales account for more than 50 per

cent of the annual revenues of companies such as

Hewlett Packard, IBM, Johnson and Johnson, Mobil,

Motorola, Procter & Gamble, etc..

Yesterday’s Globalism

In yesterday’s one-size-fits-all world, big companies could often migrate

something that was a hit in the U.S. or Europe by tweaking the language

and advertising .

Examples:

Mercedes-Benz, traded on its reputation for building highly engineered

automobiles to drive into foreign markets.

Coca-Cola Co. and Marlboro cigarettes traded on their “American-ness” to

create large overseas followings.

Sony Corp. found that compact, economical, and reliable electronics like

the Walkman, struck a chord with people everywhere.

Today’s Globalism

Things have changed.

No company can safely assume there will be viable foreign markets

for an existing product.

Any company seeking to expand globally needs to ask if its

offerings are culturally and socially appropriate for its targeted

market.

“ Global Brand Doesn't mean having the same brand everywhere”

“It means having an overarching strategy that optimize brand effectiveness in local, regional & international market “

What is a Global brand ?

Available in most countries in the world

Have a similar positioning in all markets

Carry one brand name and/or logo

Has substantial market share in all countries and comparable brand loyalty

"Going global" has 3 very different meanings.

One meaning is to begin selling products and services to other parts of the world.

A second meaning is to begin outsourcing labour to another part of the world.

Third meaning is to begin buying materials from another part of the world

Why do companies go global

Increased sales ( expanded market reach )

Higher profits

Reduction of dependence on traditional market

Ability to diversify manufacturing and distribution capability

New knowledge, experience and enhance domestic competitiveness

Global competitiveness

Ability to spread risk

Benefits of going global

Espoir cosmetic company wanted to take the decision on to whether develop a

global branding initiatives or a carry on with the firms existent domestic marketing

concept. �Espoir cosmetic had received a tantalizing offer sponsorship of the sequel to

the Hollywood hit “Diana’s she devil” movie. �For Natasha Singh, the movie was an ideal vehicle for global brand building. �Vasylko  Mazur, head of the eastern Europe was particularly up set. As per the

Mazur Eastern Europe is different from the rest of the world movie based

promotion won't do anything for sale in that region.

A brief about the case

As Diana's she devils was a hit two years ago, and

their research suggested that the sequel will probably be an even bigger draw.In this �sequel stars are from Europe, Asia and South America -Our fastest growing

markets. And they would call it � ”Espoir’s anniversary line” Espoir’s archival, Revlon –

also did same attempt in 2000 bond film, Die another day. �

A central website for product customization.

1. Culture difference between geographies ( need different management style

and marketing approaches )

2. Difference in regulation and taxation

3. Language barrier 

4. Changed mindset

Problem occurs when company goes global

1. one size-fits all global strategies may not be effective, even in countries where

they used to work well.

For example,

the Guatemala-based fast-food chain polio Campero has been growing rapidly in

the United States because consumers have an

appetite for fried chicken that tastes different from KFC's. To retain its position as

the market leader, KFC might have to cater to ethnic or regional tastes too instead

of sticking to a strategy of homogeneity in it’s home market.

Two major implication for global marketers.

2. The corporate HQ can not tackle the global-local dilemma on its own,

it need the help of local executives.‡ 

Singh should develop a corporate-level marketing policy in consultation

with senior executives from the company's key markets.‡ 

Espoir has to identify a core line of products that is standard across all

markets, and it has to create lines that are country specific.

For example

The Japanese version of the Honda Accord is small and sporty, the American model is

relatively large, and the European edition is short and narrow, with the stiff and sporty

ride Europeans prefer. Despite selling three kinds of Accords, Honda maintains

a uniform image by emphasizing environmental friendliness and high performance in

all three markets. The energy that the country team will put into the local initiative will

generate more sales than a half hearted buy-in to Singh's global program

Global Branding strategy for Espoir Cosmetics :-

Identify differences in consumer behavior

Adjust the branding program accordingly through the choice of brand elements

Balance between Standardization and Customization

• Espoir cosmetics need to blend local & global elements proportionately • Challenge of course , is to get the right balance – to know which elements to customize or which to standardize (‘be global, act local’)

•Some of the factors suggested for more standardized global marketing programs are:-I.Common customer needsII.Global customers & channelsIII.Favorable trade policies & common regulationsIV.Transferrable marketing skills

Global platform strategy

The global challenge

Global market size: standardization

Local differentiation: customization

Strategy: Determine best combination of global and local activities for

competitive advantage

Forces calling for global products (standardization):

Convergence in customer preferences and income across target countries with economic

development and trade

Competition from successful global products

International brand awareness

Cost benefits from standardization

Falling costs of trade with greater globalization

Forces calling for local products (customization):

Differences in customer preferences and income across target countries

Build local brand recognition

Competition from successful domestic products

Regulatory requirements (quality, safety, technical specifications, domestic content)

High costs of trade create separate markets

International business managers make decisions about what should be global versus local:

Products

Technology and inputs

Manufacturing

Brands

Marketing

Distribution

Example: Wal-Mart must compete with both international players such as Carrefour and local

retailers

Conclusion