1. CHAPTER:14 Managing Brands Over Geographic Boundaries and Market Segments

2. Learning Objectives
Understand the rationale for developing a global brand
Outline the main advantages and disadvantages of developing a standardized global marketing program
Define the strategic steps in developing a global brand positioning
Describe some of the unique characteristics of brand building in developing markets like India and China

3. Regional Market Segments
A regionalization strategy can make a brand more relevant and appealing to an individual
Downsides:
Marketing efficiency may suffer and costs may rise with regional marketing
Regional campaigns may force local producers to become more competitive
Upside:
Marketing can have a stronger impact

4. Other Demographic and Cultural Segments
Demographic differences often serve as the rationale for a separate branding and marketing program
Younger generation may be more easily influenced by trends and broad cultural movements due to media exposure
Brands can tap into global sensibilities of the youth market

5. Other Demographic and Cultural Segments
Some consumers may not like being targeted on the basis of their being different
Since that reinforces their image as outsiders or a minority
They may feel alienated or distanced from the company and brand

6. Rationale for Going International
Forces that have encouraged many firms to market their brands internationally:
Perception of slow growth and increased competition 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 mobility of customers

7. Rationale for Going International
The marketing program for a global brand consists of:
Product formulation
Package design
Advertising program
Pricing schedule
Distribution plan

8. Advantages of Global Marketing Programs
Economies of Scale in Production and Distribution
Lower Marketing Costs
Power and Scope
Consistency in Brand Image
Ability to Leverage Good Ideas Quickly and Efficiently
Uniformity of Marketing Practices
Economies of scale in production and distribution
Manufacturing efficiencies and lower costs that derive from higher volumes in production and distribution.
The more that strong experience curve effects exist, the more economies of scale in production and distribution from a standardized global marketing program will prevail.
Lower marketing costs
Arises from uniformity in packaging, advertising, promotion, and other marketing communication activities.
The more uniform, the greater the potential savings.
Power and scope
A global brand profile can communicate credibility.
An admired global brand can also signal social status and prestige.
Consistency in brand image
Maintaining a common marketing platform all over the world helps maintain the consistency of brand and company image.
Services often desire to convey a uniform image due to consumer movements.
Ability to leverage good ideas quickly and efficiently
Not having to develop strictly local versions, speeds a brand’s market entry.
Marketers can leverage good ideas across markets as long as the right knowledge transfer systems are put into place.
Uniformity of marketing practices
A standardized global marketing program may simplify coordination and provide greater control of communications in different countries.
By keeping the core of the marketing program constant, marketers can pay greater attention to making refinements across markets and over time to improve its effectiveness.

9. Disadvantages of Global Marketing Programs
Differences in Consumer Needs, Wants, and Usage Patterns for Products
Differences in Consumer Response to Branding Elements
Differences in Consumer Responses to Marketing Mix Elements
Differences in Brand and Product Development and the Competitive Environment
Differences in the Legal Environment
Differences in Marketing Institutions
Differences in Administrative Procedures
Differences in consumer needs, wants, and usage patterns for products
Differences in cultural values, economic development, and other factors across nationalities lead customers to behave very differently.
Product strategies that work in one country may not work in another.
Differences in consumer response to branding elements
Linguistic differences across countries can change the meaning of a brand name.
Sound systems that differ across dialects can make a word problematic in one country but not another.
Differences in consumer responses to marketing mix elements
Price sensitivity, promotion responsiveness, sponsorship support, and other activities all may differ by country.
These differences can motivate differences in consumer behavior and decision making.
Differences in brand and product development and the competitive environment
Products may be at different stages of their life cycle in different countries.
The nature of competition also differs.
Differences in the legal environment
One of the challenges in developing a global ad campaign is the changing legal restrictions.
Venezuela, Canada, and Australia stipulated that commercials had to be physically produced in the native country.
Canada banned prescription drug advertising on television.
Poland required commercial lyrics to be sung in Polish.
Differences in marketing institutions
Channels of distribution, retail practices, media availability, and media costs all may vary significantly from country to country.
Makes implementation of the same marketing strategy difficult.
The penetration of cable television, cell phones, supermarkets, and so on may also vary considerably, especially in developing countries.
Differences in administrative procedures
It may be difficult to achieve the control necessary to implement a standardized global marketing program.
Local offices may resist having their autonomy threatened.

10. Global Brand Strategy Global Customer-Based Brand Equity
Global Brand Positioning
Global brand strategy
In building brand equity, different marketing programs need to be created to satisfy different market segments. Therefore:
Differences in consumer behavior need to be identified.
How consumers purchase and use products and what they know and feel about brands.
Branding program need to be adjusted accordingly through the choice of brand elements, the nature of the actual marketing program and activities, and the leveraging of secondary associations.

11. Global Customer-Based Brand Equity
Creating brand salience
Crafting brand image
Eliciting brand responses
Cultivating resonance
Global customer-based brand equity
To build customer-based brand equity, marketers must:
Establish breadth and depth of brand awareness.
Create points-of-parity and points-of-difference.
Elicit positive, accessible brand responses.
Forge intense, active brand relationships.
Creating brand salience
Product introductions in the domestic market are sequential, stretched out over a longer period of time than the nearly simultaneous introductions that occur overseas.
Different orders of introduction can profoundly affect consumer perceptions about what products the brand offers, the benefits supplied, and the needs satisfied.
Crafting brand image
One challenge in global marketing is to meaningfully refine the brand image across diverse markets.
A desirable brand personality in one market may be less desirable in another.
Eliciting brand responses
Brand judgments must be positive in new markets.
Blending inner (enduring and private) and outer (immediate experiential) emotions can be difficult, given cultural differences across markets.
Cultivating resonance
Achieving brand resonance in new markets means that consumers must have sufficient opportunities and incentives to buy and use the product, interact with other consumers and the company itself, and actively learn and experience the brand and its marketing.

12. Global Brand Positioning
Because the brand is at an earlier stage of development when going abroad:
Awareness and key points-of-parity need to be established first

13. Standardization and Customization
Product Strategy
Communication Strategy
Distribution Strategy
Pricing Strategy
Standardization and customization
Centralized marketing strategies that preserve local customs and traditions can be a boon for products sold in more than one country.
Flexible manufacturing technology has decreased the concentration of activities, and advances in information systems and telecommunications have allowed increased coordination.
Product strategy
Due to the relative expense, many smaller companies tried to sell their products without sufficient market research.
As a result, they sometimes became aware of consumer differences only after the introduction of the product.
Marketing research reveals that product differences are not justified for certain countries.
From a corporate perspective, a solution to the trade-off between global and local brands is to sell both types of brands as part of the brand portfolio in a category.
Communication strategy
Although the brand positioning may be the same in different countries, creative strategies in advertising may have to differ to some degree.
Johnnie Walker Scotch
Each country has its own unique media challenges and opportunities.
Marketers can execute sponsorship in a global basis.
Entertainment and sports sponsorships can be an especially effective way to reach a younger audience.
Distribution strategy
Lacking many global retail powerhouses, companies often differ in their approach to distribution, and the results can be dramatic.
Coca-Cola vending machines in Japan
As in domestic markets, firms will often want to blend push and pull strategies internationally to build brand equity.
Sometimes companies mistakenly adapt strategies that were critical factors to success, only to discover that they erode the brand’s competitive advantage.
Pricing strategy
Marketers need to understand in each country what consumer perceptions of the value of the brand are, their willingness to pay, and their elasticities with respect to price changes.
Pressures for international price alignment have arisen, in part because of the increasing numbers of legitimate imports and exports and the ability of retailers and suppliers to exploit price differences through “gray imports” across borders.

14. Developing Vs. Developed Markets
BRICS (Brazil, Russia, India, China and South Africa)
Most important developing markets
They do not yet have the infrastructure, institutions, and other features that characterize more fully developed economies in North America and Western Europe
The product category itself may not be well developed
The marketing program must operate at a very fundamental level
Developing vs. developed markets
“Three As” model for emerging markets strategy:
Applicability - Product must suit local culture.
Availability - Product must be sold in channels that are relevant to the local population.
Affordability - Product can’t be priced out of the target market’s range.

15. Figure 14.4 - Ten Commandments of Global Branding

16. To Sum Up…
Marketers are blending global objectives with local or regional concerns
Some of the biggest differences in global marketing occur between developed and developing or emerging markets
In entering a new market of any kind, it is necessary to identify differences in consumer behavior and adjust the branding program accordingly