Global Branding –Distinctions and Imperatives

Tung-lung Steven Chang

Fifth SGBED Research Symposium Nanjing, China

11-12 December 2015

Outline

Jaguar and Zulily Global Branding: Imperatives and Distinctions

Global Branding in China

Jaguar and Julily

Ford’s Acquisitions -- Jaguar & LR

Acquiring Jaguar at $2.5 billion in 1989, Ford hoped to turn Jaguar into a high-volume brand that could compete with BMW and Mercedes-Benz.

Made huge investments in manufacturing technology to increase quality and reliability of Jaguar via its platform policy.

Ford bought Land Rover for $2.7 billion with similar intention in 2000.

Ford introduced Jaguar X-Type (Mondeo engine) sedan in 2001 to lure younger buyers. It was sold poorly due to its conservative styling.

Land Rover placed last in J.D. Power’s 2007 rankings of initial quality and dependability.

Ford’s Branding Results for JLR

Sales Trajectory in US

Jaguar

Land Rover

Facts – The feeling of exclusivity was eroded. JLR prestige and emotional attachment declined.

If Branding Can Be Done RightJaguar and Land Rover were sold in 2008 to Tata with some doubts. Jaguar brand alone saw sales surge 42% globally in

2013, with Canadian sales up a stunning 96%. JLR overall sales were up 19% to 425,006 in 2013,

and 462,209 in 2014, est. 500,000 in 2015.

Lesson – Tata Group has preserved and build on the heritage and competitiveness of JLR brands, while keeping their identities intact.

Zulily’s Branding in e-Retailing IPO at $22 in Nov. 2013. Offered some promise of differentiation by

selling clothing from lesser-known brands.Peak at $73.50 on 28 Feb. 2014.In its eagerness to keep growing, Zulily

began to add more established brands. This led to greater churn as shoppers

looking for big labels could easily buy them elsewhere, including on Amazon.

Zulily’s Sales Trajectory

Zulily’s Branding Lesson –Co-exist with the Giant

Zulily’s trajectory shows the risk of losing branding focus in e-commerce.

QVC Group ( of Liberty Interactive) proposed to acquire ZU for $18.75 a share on 18 Aug. 2015. The deal was completed at $2.4B on Oct. 1, 2015.

Lesson – Being an e-commerce company in the U.S. has increasingly come to mean one thing: figuring out how to coexist with Amazon.

Global Branding: Distinctions and Imperatives

Research on International Branding

Source: Adapted from Whitelock & Fastoso (IMR 2007)

Global Branding Imperatives

Brand name: Standardization vs. Adaptation

Brand architecture: e.g., Douglas, et al. (JIM 2001); Townsend, et al. (JIBS 2009)

Brand positioning: e.g., Wong & Merrilees (IMR 2007)

Brand portfolios: e.g., Schuiling & Kapferer (JIM 2004)

Brand execution: e.g., Aaker & Joachimsthaler (HBR 1999)

Differentiation vs. Identity

Competing via “comparative differentiation”: Coca-cola as “the real thing”; while Pepsi as “young people’s drink”

Competing via “superlative identity”: Chanel as “a Dream of Identity”1; while Christian Lacroix as “the image of bright sunshine with the culture of Mediterranean”

Perfection vs. Authenticity

Competing via “utilitarian function”: Seiko and Lexus as “functional excellence”

Competing via “hedonistic symbol”: Hermes and Ferrari as “symbolic status”

Brand Distinctions

Building Global brand leadership

Stimulate the sharing of insights and best practices across countries

Support a common global brand-planning process

Assign managerial responsibility for brands to create cross-country synergies and to fight local bias

Execute brilliant brand-building strategies

“Managers who stampede blindly toward creating a global brand without considering whether such a move fits well with their company or their markets risk falling over a cliff.” -- Aaker & Joachimsthaler

Global Branding in China

Marketing the Brand Heritage –

Chinese consumers appreciate and make buying decisions based on the rich cultural heritage associated with the brand. Gieves & Hawkes, for instance, is viewed in China as high class and high quality due to its history of being the ceremonial uniforms supplier of the British Royal family, British Army, and Royal Navy.

Consumer Tastes for Brand Heritage

Play down China Luxury Risk

Despite the risk of economic slowdown in China, Hermès expects demand for its pricey handbags and fashion to remain resilient and grow 8% this year.

Hermès reported strong sales/profit growth for the first-half of 2015. Global sales [Net profit] rose 22% [17%] to €2.3B [€483M, up from €413M in 2014].

Strategic Shift in Global Expansion

Shifting from Scale to Productivity –

Some global luxury retailers are scaling down their store expansion and focus on revamping and upgrading existing stores in China due to slower growth in the luxury sector, including Louis Vuitton, PPR Group’s Gucci, Burberry and Richemont.

Chinese Consumers’ Brand Interactions

Chinese consumers are becoming more technology savvy and are increasingly using social media to find and interact with brands, and post comments on their products.

Consumers in China are more actively engaged with social media: 57% of Chinese shoppers followed the brands on social media, while the global figure was 38% (PwC).

Global Branding Endeavors

Define benefits and experiences that make brands relevant, distinctive, and credible to customers, and develop strategies to differentiate brands through superior positioning relative to competitors.

Strengthen brand and market position (reposition) through streamlined marketing communications.

Use digital marketing and social media effectively to meet business goals via deep media data and analytics.

Digital Marketing in China – J & JSocial media marketing– In 2013, 15% of its ad spend was digital; it will be over 40% in 2015. (ahead of China's general internet ad spending share)

Real-time marketing (FIFA 2014)Digital marketing for Captive Audience (China 2015)Digital storytelling of philanthropic campaigns (China 2015)

Gloria Struck

Live Your Dreams!