MARK 4700 Exam 2 Study Guide Chapter 10 International Branding and Promotion Global Branding Issues o Building a global brand Some products such as food are harder to brand globally because they are more culturally dependent Industrial or luxury products with relative product uniformity more easily lend themselves to global branding A global brand follows standard and uniform brand positioning across all key markets Components from an integrated communication plan that needs to be executed and then maintained over many years to build on the global brand Advertising copy tone and content brand slogans brand logos brand icons such as packaging What Products are Most Suited to a Global Branding Approach some products are harder to brand globally because they are more culturally dependent industrial products with relative product uniformity more easily lend themselves to global advertising Varying Brand Image In developing global brands a marketing manager has to decide what brand image to project across markets Findings show that in countries such as China France and Belgium where the degree of separation between high and low power status individuals is high brand images should stress social and sensory needs Similarly in countries where individualism is low as in much of Asia brand images that stress group membership and affiliation are likely to be more successful Dangers of Global Branding Too much standardization rigid control from headquarters and the inability to make allowances for the stage of market growth in each country Difficulty imposing the same brand image that underlies the global brand campaign in all markets Global brands can be seen in light of the policies of the homecountry government attracting protests and even acts of terrorism The same brand image may be difficult to achieve in all markets Markets in developing countries may want more practical attributes stressed whereas higher income markets may welcome a campaign built around intangible attributes that stress status style and well being o Branding strategies No Brand Adv o Lower production cost o Lower marketing cost o Lower legal cost o Flexible quality and quantity control Dis o Severe price competition o Lack of market identity Branding Adv o Better identification and awareness o Better chance for product differentiation o Possible brand loyalty o Possible premium pricing Dis o Higher production cost o Higher marketing cost o Higher legal cost Private Distributor or Retailer Brand Adv o Better margins for dealers o Possibility of larger market share o No promotional problems Dis o Severe price competition o Lack of market identity Manufacturer s Brand Adv o Better price due to more price inelasticity o Retention of brand loyalty o Better bargaining power o Better control of distribution Dis o Difficulty for small manufacturer with unknown brand or identity o Brand promotion required Multiple Brands In One Market Adv o Market segmented for varying needs o Creation of competitive spirit o Lower inventory cost o Avoidance of negative connotation of existing brand o More retailer shelf space gained o No damage to existing brand s image Dis o Higher marketing cost o Higher inventory cost o Loss of economies of scale Single Brand In One Market Adv o Marketing efficiency o More focused marketing permitted o Elimination of brand confusion o Advantage for product with good reputation halo effect Dis o Market homogeneity assumed o Harm to existing brand s image when trading up down o Limited shelf space Local Brands Adv o Meaningful names o Local identification o Avoidance of taxation on international brand o Quick market penetration by acquisition of local brand o Variations of quality and quantity across markets allowed Dis o Higher marketing cost o Higher inventory cost o Loss of economies of scale o Diffused image Worldwide Brand Adv o Max market efficiency o Reduction of advertising costs o Elimination of brand confusion o Advantage for culture free product o Advantage for prestigious product o Easy identification recognition for international travelers o Worldwide uniform image Dis o o o o o o Market homogeneity assumed Problems with black and grey markets Possibility of negative connotation Quality and quantity consistency required LDC s opposition and resentment Legal complications o Brand Extensions A new product can be introduced with lower incremental advertising expenditures by using a well known and previously established brand names Allows a firm with an existing presence in overseas markets to quickly establish its new products Using a well known brand name with a reputation for quality Extend aura of high quality to the new product Allow new product to be introduced with lower incremental advertising expenditures Comfort level and familiarity associated with a well known brand can motivate customers to choose the new product over a competitor s Building on company image and expertise Communicating unique or designer attributes Ways Launch the same product in a different form Adding a brand name to related products often used together companion products Dangers in Brand Extensions Original brand and product may be damaged when the brand image is extended to undesirable products and settings There must be a fit between the original product and the proposed product brand extension Private Branding Issues o Occurs when a manufacturer cedes control over marketing to a retailer or distributor such that the manufacturer supplies goods but the retailer sells those goods under its brand names o Advantages Private branding provides a quick and relatively low cost approach to penetrating foreign markets Globally private labels have increased in prominence because their quality have improved o Disadvantages The seller fails to establish any relationship with the ultimate buyer and therefore has little control over the marketing relationship No say on the prices charged and receives little direct feedback from the market o Manufacturer of consumer goods cedes control over marketing to a retailer or distributor Manufacturer supplies goods Retailer sells those goods under its own brand names Original manufacturer s identity is lost Their margins tend to be lower on sales of private brands Service after sales support cannot be used to develop long term ties with the ultimate buyer o Marketing Issues with Private Labeling Useful means of test marketing products in markets whose potential is likely to grow