Managing Brands Across Boundaries and Segments Chapter 14

Why go Global? Slow growth and competition domestically Profit opportunities overseas Diversify risk Emerging economies Consumer mobility

Global Marketing Disadvantages Consumer difference for usage, needs, wants Consumer response to marketing mix elements (poor retailing) Competitive environment varies (local brands) Restrictions from legal environment (product endorsements, comparative ads) Cultural differences (hi/lo context countries) Advertising regulations (native production)

Strategy Terms Brands & Advertising can be globalized or localized Products & Services can be standardized or customized

Global Brands Suggested: For worldwide firms like IBM When the brand is the creator like Tommy To enable product adaptation for tourists and over the Internet To ease the process of brand extension To gain credibility

Conditions Favoring Global Brands 1.Social and cultural changes - new values, new role models, new demographics 2.Technology brings standardization 3.Cultural stereotypes help brand proliferation (BMW=made by German craftsmen) 4.Single production centers deliver a unified product

Global Identity Management: Lego Universal concept of play from Denmark Product has 378 different sets with 1720 elements Centralized production in 5 factories Only localized elements are sales brochures in 25 languages Universal toy with global image

Product Adaptation STANDARDIZE Brand name Product positioning Warranties Packaging Advertising theme CUSTOMIZE Distribution Personal selling Pricing Media selection

When is Product Standardization Best? In markets with similar economies If segments are customers, not countries When lifestyles are similar For industrial and hi-tech products With centralized authority

Globalization & Standardization Criteria Industry/Product Category Factors Company competitive factors Global/ standardized Local/ customized Cultural Factors Attitudes toward foreign images

Company and Competitive factors Airlines standardize image management and customize tactical decisions like pricing Mary Kay cosmetics uses a global image and product standardization Coke customizes the product and localizes advertising but retains a global brand image

Industry and Product Category Factors Product category differences - light use of deodorant in Germany so customization is necessary Automotive industry differences - India imports few options for purchase; imports are customized for Indian consumer use

Attitudes Toward Foreign Images Cognitive component - knowledge consumers have about the country of brand origin Affective component - emotional feelings and attitudes about country of brand origin

Cultural Factors Physical artifacts. diamonds mean Africa, coffee means Columbia Language. spoken and written; tone, inflection, character, etc. Values. social norms: collectivism vs. individualism; time orientation Customs. Gerber baby food jar label

Styles and Themes in Global Identity Management 1.Brand naming (GM car Nova means “No go” in Mexico) 2.Color (Hundai uses Korean colors) 3.Shape (Building orientation [chi] and design [feng shui]) 4.Styles (ornamental for Thai brand) 5.Themes (Western independence & individualism; Eastern harmony & affiliation)

Matrix of Strategies Standardized product Localized communication KLM, Mercedes, Fiat Levis jeans Customized Product Localized communication Nestle chocolate, Nescafe Unilever brands: Vif, Viss, Jif Worldwide standardized product and global communication Montblanc pens, American Express, Cartier jewelry Customized product Global communication Douwe Egberts coffee Esprit, Esso

Qualities of Multi-Cultural Advertisements Recognize the culture of the category Reflect the culture of the brand Respect the culture of the consumer

Factors for Selecting a Car JAPAN Self expression Driving sensation Comfort Quality Sporty handling Personal USA Self expression Comfort Driving Sensation Personal Innovation Sporty handling EUROPE Self expression Quality Comfort Value Driving sensation Innovation

BMW Advertising Message by Location Japanese are told to “Feel the sensation of speed and performance.” Americans are told to “Sit back and relax in leather cushioned seats.” Europeans are told about “Expert engineering and extended warranties.”

Cultural Differences: Talking to women about intimate moments France - woman bathing for her husband portrays seductive power Japan - man would never enter a woman’s bathroom Italy - macho man with admiring wife Austria - Paris background is seductive Greece - sexy woman with few clothes

Standardize or Customize? No one product for every country Expensive to produce variety Global branding, local usage “Think global, act local” optimizes brand and product adaptation

Breathe Right Strips Video Case How did the company localize the brand? How did they globalize the product? What was the best source of product promotion for the brand? What advertising strategy was used and how was it implemented?