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MAR002-6 Brand Mgt. & Research

Global Branding Strategy

Lecture 12

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What is marketing?

Marketing Involves: Focusing on the needs and wants of

customers

Identifying the best method of satisfyingthose needs and wants

Orienting the company towards the process

ofproviding that satisfaction Meeting organisational objectives

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What is international marketing?

Different Levels of InternationalMarketing Export marketing

International marketing

Global marketing

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Environmental influences oninternational marketing

Socio/CulturalLanguageReligion

AestheticsValues and

attributesSocialorganisation

Material culture

PoliticalOperationalrestrictions

Discriminatoryrestrictions

Physical actions

Environmental

Influences onInternationalMarketing

LegalLocal domestic laws

International lawHome domestic law

TechnologicalSatellite

Communications

ISDNInternetWWW

The ElectronicSuperhighway

EconomicDeveloped economiesEmerging economies

Less developedeconomies

Currencymovements

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Social/cultural influences

Coca-Cola: 2 Litre bottles too big for Spanish fridges Pronunciation in China Kooke Koula

A thirstymouthful of candle wax Johnsons Floor Wax:

Made Japanese floors slippery The Japanese do not wear shoes indoors

McDonalds: The white face ofRonald McDonald A white face is seen as a death mask in Japan

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Social influences

"Future consumer markets will be concentratedin the fast growing emerging markets wheresmall and large enterprises will find profitableopportunities tomeet health ,education and

nutrition needs" UN people & tomorrows markets

80% world population currently live in developingcountries

By 2025, 85%population will live in emergingmarkets

2 out of every 5 people currently live in China andIndia

In the next 50years, the African population will

treble

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Regional breakdown of globalpopulation (bn)

Other Asia

Africa

India

China

Latin America

Europe

North America

0 0.5 1.0 1.5 2.0 2.5

Source: United Nations (1996)

1995

2050

0 2.5

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Worlds mega cities

By 2010, 50%ofpeople will live in urbanareas

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

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Environmental


LegalLocal domestic lawsInternational lawHome domestic law

EconomicDeveloped economiesEmerging economiesLess developedeconomies

Currencymovements

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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

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The economic environmentGross National Income per capita (US$)

Luxembourg 48 560 USA 34 280 Denmark 28 490 Netherlands 27 390

Germany 25 420 United Kingdom 24 340 Singapore 21 630 Greece 17 520 Hungary 11 990

South Africa 10 910 Poland 9 370 Chile 8840 Uruguay 8 250

Brazil 7 070 Thailand 6 230 Turkey 5 830 Philippines 4 240

China 4 070 Indonesia 2 890 India 2 820 Zimbabwe 2 220 Vietnam 2 070

Bangladesh 1 620 Nigeria 790 Tanzania 520 Sierra Leone 460

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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

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Political

Operational restrictions

Discriminatory restrictions

Physical actions

Environmental


Technological

Satellite

Communications

ISDN

InternetWWW

The Electronic

Superhighway

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Political environment

A risk due to asudden or gradualchange in a local

political environmentthat isdisadvantageous orcounter productive

toforeign firms andmarkets

Government actionswhich may constitutepotential risk for thefirm:

Operational restrictionseg. exchange controls oremployment policies

Discriminatoryrestrictions eg. specialtaxes and tariffs

Physical actions egnationalisation, riots andwar

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Technological considerations

Increased ease and speed ofcommunication

High rate of technological change Global access to the World Wide Web

Projected 765 million users by end 2005

Importance ofEnglish language for webusers

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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

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Diversity of stakeholder interest

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The challenges of the internationalmarketing environment #1

Culture Often diverse and multicultural

Markets

Widespread and sometimes fragmented Data

Difficult toobtain and sometimes expensive

Politics Regimes vary in stability, political risk becomes an

important variable

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The challenges of the internationalmarketing 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 andregulatory bodies

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The challenge of internationalmarketing environment #3

Stakeholders Commercial, home country and host country

Business Diverse rules, culturally influenced

Control Difficult to control and co-ordinate across

markets

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International marketing strategiesSuccess and Failure

Failure arises from: inability tofind right market niche unwilling to adapt products

products not perceived as sufficiently unique vacillating commitment assigning the wrong people picking the wrong partners

inability tomanage local stakeholders mutual distrust/lack of respect between HQ &

management inability to leverage ideas to all countries

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Regional Market Segments

Regionalization is an important recent trendthat, perhaps on the surface, seems to runcounter to globalization.

Reasons for regional marketing Need for more focused targeting The shift from national advertising to sales

promotions

Drawbacks Production headaches Marketing efficiencymay suffer and costs may rise

Keller 2007

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Other Demographic and CulturalSegments

For example, the importance formarketers to consider age segments andhow 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 millionpeople in the United States and anestimated $1 trillion in annualpurchasing power.

Keller 2007

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Rationale for Going International

Perception of slow growth and increasedcompetition 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 mobilityofcustomers

Keller 2007

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Advantages ofGlobal Marketing Programs

Economies of scale in production anddistribution

Lower marketing costs

Power and scope Consistency in brand image

Ability to leverage good ideas quickly andefficiently

Uniformityofmarketing practices

Keller 2007

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Disadvantages ofGlobal Marketing Programs

Differences in consumer needs, wants,and usage patterns for products

Differences in brand and product

development and the competitiveenvironment

Differences in the legal environment

Differences in marketing institutions Differences in administrative procedures

Keller 2007

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Standardization vs. Customization

According to Levitt, because the world isshrinkingdue to leaps in technology,communication, and soforthwell-managed companies should shift theiremphasis from customizing items tooffering globally standardized products

that are advanced, functional, reliable,and low priced for all.

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Standardization vs. Customization

Blending global objectives with local orregional concerns

Think global. Act local. A global brand has a clear consistentequity across geographies: samepositioning, same benefits plus localtailoring if needed

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Building a Global Brand

How valid is the mental map in the newmarket?

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 mentalmap be created?

Keller 2007

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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-difference3. Elicit positive, accessible brand responses

4. Forge intense, active brand relationships

Achieving these four steps, in turn, requiresestablishing six core brand building blocks.

Keller 2007

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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

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Questions for Global BrandingPositioning

How valid is the mental map in the new market? Howappropriate is the positioning? What is the existinglevel of awareness? How valuable are the core brandassociations, points-of-parity, and points-of-difference?

What changes sh

ould we

make t

othe

positi

oning? D

owe need to create any new associations? Should we

not re-create any existing associations? Should wemodify any existing associations?

How should we create this new mental map? Can westill use the same marketing activities? What changes

should we make? What new marketing activities arenecessary?

Keller 2007

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Building Global Customer-Based BrandEquity

In designing and implementing amarketing program to create a strongglobal brand, marketers want to realizethe advantages of a global marketingprogram while suffering as few of itsdisadvantages as possible

Keller 2007

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