International brands and their management

The World’s top 20 brands -Interbrand 2006 (click on the link and find out more) 1. Coca-Cola 2. Microsoft 3. IBM 4. GE 5. Intel 6. Nokia 7. Toyota 8. Disney 9. McDonald’s 10 Mercedes-Benz 11. Citigroup 12. Marlboro 13. Hewlett-Packard 14. American Express 15. BMW 16. Gillette 17. Louis Vuitton 18. Cisco 19. Honda 20. Samsung

What are brands? - visual identities Name Symbol Packaging Strap-line E.g ‘Oil of Ulay’ in UK became ‘Oil of Olay’, its global name E.g ‘Marathon’ became ‘Snickers’

What are brands? -legal property In UK we have The Trade Marks Act (1944) European registration can be obtained thro’ the EU International registration can be obtained thro’ the Madrid Protocol (29 nations only) Excludes U.S.A., New Zealand and Australia

The conventional brand model* A brand is a product or service made distinctive by its positioning and its personality Note there is no distinction between product and service *Hankinson and Cowking, 1993

Positioning* Defines the brand’s point of reference with respect to the competitive set. *Hankinson and Cowking, 1993

A unique combination of functional and symbolic attributes Personality* A unique combination of functional and symbolic attributes *Hankinson and Cowking, 1993

Functional attributes: For example: Personality* Functional attributes: Tangible attributes, intrinsic to the product For example: Duracell's products are designed to give you maximum power. Whatever your power needs, it will last longer with Duracell *Hankinson and Cowking, 1993

Personality* Symbolic attributes Intangible attributes, extrinsic to the product For example: All about Virgin Want to find out how Virgin happened, why we do things differently, or what Richard Branson gets up to in his spare time? Click below to find out everything you ever wanted to know about Virgin. *Hankinson and Cowking, 1993

Has this brand got a functional or symbolic personality?

The branding objective: The brand - consumer fit The consumer Physical needs Psychological needs A notional budget The brand Functional attributes Symbolic values Price positioning Hankinson and Cowking, 1993

International brand strategies: -Multi-domestic branding To retain local brand loyalty Companies which have grown by acquisition E.g. 65% of Heinz products do not carry the Heinz label Declining strategy

International brand strategies: - Corporate brand endorsement Typical of growth through acquisition E.g. Nestle endorses Polo, Buitoni, Herta (sausages) Brands in different markets Also as a positioning strategy Renault endorses Clio, Laguna, Espace Cars for different market segments

International brand strategies - Monolithic corporate brands IBM BMW ( with the recent exception of the Mini) Cathay Pacific Japanese companies: Yamaha Mitsubishi Honda All the top 20 brands are corporate brands

International brand strategies - Low profile monolithic corporate brands Brands aimed at stock markets E.g. General Motors makes Chevrolet, Vauxhall, Opel Louis Vuitton owns Hennessy, Moet, Dior, De Beers?

Why corporate brands? Maximises brand exposure Builds recognition Offers all the benefits of brand stretching...

What does brand stretching do? Transfers existing brand knowledge to new products/services Existing brand knowledge reduces the consumer’s risk reduces distributors’ risks reduces launch costs Builds brand exposure further Enhance sales of other products?

The management of corporate brands* Leadership Culture Identity Image * Hatch and Schultz, 2003

Brand strategy matrix Product formulation Standardised Adapted Fully adaptive Nescafe Proposition adaptive Gordon’s Gin Product adaptive Shell McDonald’s Fully Global Coke Nike Standardised Adapted Standardised Brand proposition Adapted

Factors favouring fully global brands Dahhringer and Cunliffe 1986 The use of universal symbols to override cultural differences E.g. Coke uses children/youth E.g. McDonald’s uses golden arches Regional appeals to a similar culture Social segments open to received culture Brands with generic national personalities: Marlboro (American) Chanel No. 5 (French) Buitoni (Italian) Walker’s (Scottish)

Fully global branding does not mean global advertising Different executions can lead to the same proposition E.g. Bacardi (no.1 spirit brand) tailors its advertising to local markets: In Europe it is about sun. sea and sand In the U.S. its about health awareness and diet-consciousness

Characteristics of strong international brands (Young and Rubicam Brand Power survey) Weight (dominance) In terms of market share Innovation Clear brand focus Length (stretch) Ability to extend into new product markets Breadth (brand franchise) Demographic and cultural spread International appeal Depth (commitment) Having an intimate relationship with customers (e.g. ‘cult status’) Brand loyalty