Dr. Lucy Ting Lucy.Ting@manchester.ac.uk Lecture 5 Dr. Lucy Ting Lucy.Ting@manchester.ac.uk

Agenda Globalisation and Standardisation Hybrid Strategy The republic of technology Advantages Disadvantages Hybrid Strategy “Glocalisation” “Post-global Brand”? Influencing Factors to Global Brands? Issues of Global Brands Grey Market Counterfeiting Cultural Heterogeneity

Globalisation “A powerful force drives the world toward a converging commonality, and that force is technology” (p92) “ Everywhere everything gets more and more like everything else as the world’s preference structure is relentlessly homogenised” (p.93) “[People everywhere want] goods of the best quality and reliability at the lowest price” (P93) Levitt (1983), “The Globalisation of Markets,” Harvard Business Review, 61(3), pp. 92-102

Standardisation Globally standardised marketing mix/program that are advanced, functional, reliable and low-priced for all.

Advantages E.g. Economies of scale in production and distribution Lower marketing costs Consistency in brand image Ability to leverage good ideas quickly and efficiently Power and scope Uniformity of marketing practices Zou and Cavusgil (2002), “the GMS: A Broad Conceptualisation of Global Marketing Strategy and Its Effects on Firm Performance,” Journal of Marketing, 66(4), pp. 40-56

Power and Scope A global brand profile may communicate credibility An admired global brand can also signal social status and prestige Alden et al. (1999), “Brand Positioning Through Advertising in Asia, North America, and Europe: The Role of Global Consumer Culture,” Journal of Marketing, 63(1), pp. 75-87; Steenkamp et al. (2003), “How Perceived Globalness Creates Brand Value,” Journal of International Business Studies, 34(1), pp. 53-65

Uniformity A standardised global marketing program may simplify coordination and provide greater control of the way the brand is being marketed in different countries Keller (2008), “Strategic Brand Management”

Disadvantages E.g. Differences in consumer needs, wants, and usage patterns for products Differences in consumer response to marketing mix elements Differences in brand and product development and the competitive environment Differences in the legal environment Differences in marketing infrastructure Differences in administrative procedures Zou and Cavusgil (2002), “the GMS: A Broad Conceptualisation of Global Marketing Strategy and Its Effects on Firm Performance,” Journal of Marketing, 66(4), pp. 40-56

Consumer Response Consumers in different parts of the world vary in their attitudes toward and opinions about marketing activities. Lee and Green (1991), “Cross-Cultural Examination of the Fishbein Behavioural Intentions Model,” Journal of International Business Studies, 22(2), pp. 289-305

Is Levitt right? Goods can be the easiest to standardise, whereas branding and particularly advertising are not moving toward greater standardisation Because customers and competitive conditions differ across countries or because powerful local managers will not stand for centralized decision making, they argue, global marketing just won't work. Boddewyn et al. (1986), “Standardization in the International Marketing: Is Ted Levitt in fact right?” Business Horizon, 29(6), pp. 69-75; Quelch and Hoff (1986), “Customizing global marketing”, Harvard Business Review, 72(4), -p. 153-164

Hybrid Strategy “It’s often a mistake to set out to create a worldwide strategy. Better results come from strong regional strategies, brought together into a global whole.” Ghemawat (2005), “Regional Strategies for Global Leadership,” Harvard Business Review, 83(12), pp. 98-108

Glocalisation At best, global marketing activities may exist on a strategic level, while on an operational level and a tactical level, they are less appropriate, if at all realistic and possible to implement Svensson (2002), “Beyond global marketing and the globalisation of marketing activities,” Management Decision, 40(6), pp. 574-583

Post-Global Brand Different Brands Same Brand Same products or concepts B D Different products or concepts A C Kapferere (2007), The New Strategic Brand Management

What makes some brands easier to be standardised than others? Product categories? Price level? Turn-over rate? Consumer behaviour?

Grey Market To reach public accessibility, brands must align their prices on the local economic level. However, when a price gap exists among countries not too far apart in distance, a grey market grows, disturbing the sales and trade goodwill invaded by parallel imports. Kapferere (2007), The New Strategic Brand Management

Counterfeiting 1,000% of increase in counterfeit goods in Europe between 1998-2004 $650 billion current worth of the international counterfeiting business InsideCounsel; Mar2008 Issue 196, p14

Cultural Heterogeneity Global brands are Trojan horses through which transnational corporations colonize local cultures…..The interjection of global brands into local cultures paradoxically produces heterogeneity as global brands take on a variety of localized meanings Thompson and Arsel (2004), “The Starbucks brandscape and consumers’ (anticorporate) experiences of globalization,” Journal of Consumer Research, 31(3), pp. 631-642