Global Branding Strategies - Research Paper Example

Executive summary The report examines the reasons why some companies adopt similar names for their products in different countries and the circumstances when this may not be favourable. It may be necessary to maintain the same brand name in international markets if there is a need to portray certain good qualities about the mother company, if a company has expanded through organic growth, if the company sells a limited range of products or if the company employs similar technology, if there is a hierarchal organisational structure and if there is a wish to leverage domestic power to other international markets. However, there may be certain circumstances that necessitate the use of different brand names like when a company expanded through mergers, when certain products are preferred in some not all countries or when there is need to distinguish certain lines of products. (Aaker, 1996) Introduction The world is becoming increasingly global. Companies are not just focusing on local markets in their service and product provision. They are now looking for new and more promising markets outside their borders and also need to incorporate market forces coming from their global competitors. The corporate world is now characterised by a fast flow of products internationally, advertisement is also done across borders and there is a need to ensure that marketing strategies reflect these changes. (Kapfer, 1997) Brands are a fundamental part of any company’s key strategy. This is because brands give firms an identity. Keller (1998) asserts that brands help to strengthen their customer base and also to take away power from retailers alone. Aaker and Keller (1990) go on to add that a brand helps to solidify ones position in any market. However, there are some key questions that arise when dealing with the issue. Firms need to ask themselves whether they would like to maintain the same brand name in a different countries and locations. Firms who choose to do this could justify their actions by claiming that this allows them to maintain their identity throughout. On the other hand some firms may decide to take up different brands within the different countries that they will choose to operate. Such firms may believe that brand names need to reflect demand and the needs of a particular country. These questions need to be addressed so as to ensure that a given company take advantage of all the opportunities available in the international market. Reasons why a company should market its products under a global brand name Some companies may have made quite a name for themselves in the domestic markets. Their products may have such a unique place in their product markets such that they have considerable influence there. It would therefore be advisable to maintain the same brand for such companies when venturing into global markets. Caller (1996) asserts that this will go a long way in ensuring that such companies are able to leverage their power in the domestic market to international markets. A good example of such a company is Coca Cola. It started with a very strong image in its domestic market and decided to maintain its name throughout its market. Another aspect that could make certain companies stick to the same brand name is the integration of regional markets. For example in Europe, there are numerous countries that are now operating under the same currency and targeting each other. Consequently, it would be advisable to create brand names that can accommodate numerous countries all at once. The European Union has changed the traditional approach of locally centred products. There is a need to incorporate brands for the EU markets. (Featherstone, 1990) Some companies may be dealing with certain products that have relatively equal levels of demand in the target markets they are dealing with. A good example of such a company is Shell. The Company deals with various petroleum products. These are items that are in high demand in different parts of the world. It was therefore advisable to create the same products and names so that all their markets can identify this with them. Besides that, some companies may have limited product ranges. This is especially in relation to the above named company; Shell. Because most of the products are clearly defined and few, there is need to maintain a universal brand name in whichever country Shell chooses to operate in. This is also something that can be seen clearly in companies such as Benneton and Kellogs. On the other hand, there may be some companies that have markets that are quite clearly defined. They realise that no matter which part of the world, they re located, those markets will identify with their name. A good example of such a company is Nike. The company tailors its products for sportsmen; this is their ideal market. It should however be noted that sports is an international activity, therefore sportsmen can relate to the brand name since they travel to different parts of the world and have different admirers in many countries of the world. This could be the reason why Nike chooses certain well known celebrities in the sports world to market their products. Another factor that helps this company stand out from others in the world is the fact that it has a very captivating logo. This is something that sticks very easily in its clients’ minds and helps in the solidification of its market. This visual identification acts as a strong point for the success if the company’s brand. (Douglas et al, 1996) Sometimes some companies may have a strong tradition. It is common to find that such companies have been in operation for decades. It therefore becomes necessary to retain same brand names even when the company chooses to expand so as to deal with its brand baggage. One might find that such companies have managers who may be resistant to change and may feel that altering the company’s name to suite their image in a particular foreign country. On the other hand, it may be necessary to remain loyal to some of the vested interests of that particular company thereby maintaining the same brand name worldwide. For example the company Louis Vitton was named after its founder in the twentieth century. The company has other branches in the world but has stuck to its brand name because it has a rich tradition. The proprietor has done a good job with the company and maintaining his name throughout can be seen as a way of paying homage to his efforts. (Kapferer, 1997) The way a certain company chose to expand is another determinant factor of whether or not certain company would choose to maintain their brand structure. For example, if a company has expanded into international markets through organic growth as opposed to acquisitions, then it may be more appropriate to maintain the same brand name for that particular company because they are not obliged to incorporate the needs of their new partners into their products. In line with this, it may be necessary to consider what type of organisational structure prevails within a certain company and what kind of administrative heritage the company has undergone. If a company has been administered by managers from the same family or by the proprietor of the company, it would make more sense to stick to one brand name in the international market. Bartlett and Ghoshal (1989) assert that companies that have a highly centralised management system where a certain manger will control daily operations of branches in other countries, then it may be necessary to have the same name for their products. It is necessary to adopt the same name in the global market when a company deals with standardised products throughout its international markets, then it is quite common to find that those companies will maintain the same name. Such companies rarely vary their products in different countries. Examples are Sony and Siemens. These companies normally deal with the products that have the same components the world over. Mot of the time, these companies can be seen marketing their products on the basis of their quality and dependability. This is a message that is echoed the world over. Sometimes some products may be needed by various countries located throughout the world. It may therefore be necessary to introduce a product that will have the same brand name throughout. For example Procter and Gamble introduced pampers into the international market. Because the company felt that almost all mothers would like a diaper that allows their babies to remain dry, then there was a need to ensure that the message was spread throughout the world. This similar demand was a platform for their brand image and allowed them to use the same name for the same qualities required. Schmitt and Simenson (1997) claim that companies may want to portray strong corporate images. This mostly arises when particular companies deal with highly competitive international markets. This is mostly witnessed in the Information Technology sector for example, IBM. This company normally places its logo on all its products sold throughout the world. Normally the company has a desire to project the image that it is quite reliable. Another company is Apple. This company wants to depict a string brand image worldwide by placing its apple logo in different products sold worldwide. On the other hand, some firms may be dealing with products that are not quite different from each other or those that employ the use of certain skills. For example, GE normally sends products that involve the use of engineering skills in order to create them. For example, it has medical equipment and even generators. These products are not necessarily the same but they have similar technology. By maintaining the same brand name, the company is able to illustrate that all its products regardless of their type have been engrained with the company’s qualities of reliability and reassurance in technology. Circumstances that would necessitate the use of different brand names in different countries There are times when certain products carry different strengths in different markets. This could be as a result of their cultural values. Consequently, taking those brands as they are and introducing them to foreign markets without slightly modifying them to suite local needs may result in failure. Such companies then opt to change their brand names too suite the relative strength of that particular market. In addition, Court et al (1997) assert that there may instances when certain countries have markets that are heavily divided. This means that such countries have distribution that is of a smaller scale than the mother countries. It may therefore not be a very good idea to continue with the same brand name in such countries. This is because establishment of a strong brand name normally involves a great deal of investment in advertisement. Yet this investment will not yield the same returns on investment and may therefore not be a very economical choice to make. (Olins, 1989) Some international companies may choose to merge with others in their target markets. This may be because the local companies have operated for lengthy periods of time in those target countries and may understand the local markets quite well. After such mergers, companies may opt to rename their products so as to incorporate the new companies. It may be difficult to penetrate their target market if their names do not appeal to domestic markets as recommended by the domestic companies. Beside this, certain companies that join given international companies deal with certain products. It is very likely that those companies will be stick to the names of those products so that the local market can identify with them. An example of a company that did was Best Foods. The company has been expanding internationally through the use of acquisitions. In a country like Chile, the company acquired a sauce company; it therefore had to include the brand names of those sauces under its wing. Similarly, in Germany, the company acquired a company dealing with the sale of mashed potatoes called Pffani. It still has some of the Pfanni brand names under its wing too. Afterwards, the company then makes the local company a base that will allow them to distribute some of their products. (Parsons, 1996) Some companies have numerous products which they deal with. This is especially with regard to companies that deal with food products. It may therefore be better to introduce certain brand names to certain countries only if those products do very well in those particular companies. One such company is Best Foods. The company has certain products that are just limited to its mother country like Pffani potatoes. On the other hand, it also has certain brands that are common in its international market. These include; Knorr Hellmans (Barwise et al,1992) There are times when certain companies may choose to take up a hybrid structure. In such a structure, there are products that have the same brand name in various countries but there may be others that have been tailored for certain countries. For example Coca Cola uses the same name for the cola brand. On the other hand, it has also introduced certain brand names that are easily identified with specific countries since those particular countries may have a need for that particular product. For example, there is caffeine free Coke found in counties where people seem to be health conscious. It also has Diet Coke. This is doing well in western countries where many members of the population are careful about their calorie intake. This product is not available in African countries because those countries are not particularly keen about loosing weight since some of them prefer looking fat. In Scandinavia, the company has introduced TabXtra which is a cola drink containing no sugar. This was done because the culture in that country is such that certain people are not very enthusiastic about sweet foods. The United Kingdom also has its own cola brand called Lilt. This drink is unique in that it comes in different fruit flavours. Consequently, this has received good responses from the market because this is something that suites their tastes. (Alden, 1999) Some countries may choose to market their products under different names so that they can clearly distinguish various products. (Parsons, 1996) For example a company like Mars uses the same product name for drinks and food products created by the company. The food products are mainly biscuits, cakes and the like. However, Mars also produces products meant for pets. It is therefore necessary to differentiate this through the use of different product names. Conclusion Global branding is an intricate issue because what applies to another company may not necessarily appeal to another. It is therefore necessary to customise global branding strategies to suite the specific circumstances facing a certain company. Reference: Aaker, D. (1996): Building Strong Brands; New York: The Free Press. Aaker, D. and Kevin Keller (1990): Consumer Evaluations of Brand Extension; Journal of Marketing, 54, 1, 27-33 Alden, et al (1999): Brand Positioning Through Advertising in Asia, North America and Europe: The Role of Global Consumer Culture; Journal of Marketing, 63, 75-87 Bartlett, Christopher A. and Ghoshal, S. (1989): Managing Across Borders; Boston, MA: Harvard Business School Press Barwise et al (1992): Brand Portfolios; European Management Journal, 10, 3 (September), 277-285 Caller, Linda (ed.) (1996): Researching Brands; Amsterdam: ESOMAR. 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