GLOBAL OR NATIONAL BRANDS?

Reader PhD Sorina GÎRBOVEANU University of Craiova

Abstract: Today, branding is such a strong force that hardly anything goes unbranded. Branding in global markets poses several challenges to the marketers. A key decision is the choice between global and nationals brands. This article gives the answers to the questions: what is, what is need for, what are the advantages, costs and risks of global and national brands? All go to the following conclusion: use global brands where possible and national brands where necessary.

Keywords: global branding, strategic branding

Introduction Increasingly, corporate and brand In essence, a brand identifies the image is being recognized as a major seller or maker. It can be a name, influence on sales. In the commercial trademark, logo, or other symbol. Under world, where it is becoming increasingly trademark law, the seller is granted easy from a technical point of view to exclusive rights to the use of the brand duplicate a competitor’s offering, the name in perpetuity. Thus brands differ creation of a favourable or different from other assets such as patents and image may give the company a copyrights. A brand is essentially a competitive advantage. seller’s promise to consistently deliver a The concept of brand management specific set of features, benefits, and was created in the 1930s by Procter services to the buyers. The best brands and Gamble, the giant Cincinnati soap convey a warranty of quality. But a and toiletries company. It came about brand is even a more complex symbol. as a result of the failure to launch A brand can convey up to six successfully a new soap at that time, levels of meanings. Attributes : a brand Camay. P&G’s original market strength first brings to mind certain attributes. had been founded on a soap brand Benefits : customers are not buying called Ivory and it was felt that the sales attributes, they are buying benefits. failure of the company was due to “too Attributes need to be translated into much Ivory thinking”. functional and/or emotional benefits. A strong brand reassures the Values : the brand also says something customer; it gives confidence in terms of about the producer’s values. Culture : the quality and satisfaction that can be the brand may represent a certain anticipated from buying it. From all of culture. Personality: the brand can also this comes the possibility of long-term project a certain personality. User: the profits. Many brands are household brand suggests the of consumer names today, but the concept of brand who buys or uses the product. management has moved beyond the Marketers must decide at which level(s) household goods categories. to deeply anchor the brand’s identity. People with brand-management Promoting the brand solely on one or experience in fast moving consumer more of its benefits can be risky. The goods companies are now in demand most enduring meanings of a brand are by financial institutions, service its values, culture and personality. They organizations, retailers and new define the brand’s essence [4]. technology-based companies. Their marketing skills are being applied to seven “pillar” brands: Concorde, First “own label” brands. For example, the Class, Club World, Club , World Midland Bank has introduced new Traveller, Euro-Traveller and Super brands of accounts, with names such as Shuttle, each run by a brand manager Vector and Orchard, which have been and a group brand manager. Customer strongly promoted. The Halifax Building service and profitability have both Society is moving along similar lines improved under the new system. with its “Contents Xtra” insurance scheme. Global Brands Without a doubt, the concept of A global brand is defined as the branding can fit in very well with the worldwide use of a name, term, sign, idea of the corporate image [3]. Take symbol (visual and/or auditory), design, British Airways, for example. Once they or combination thereof intended to were organized on the basis of a identify goods or services of one seller number of “marketing centers”, which and to differentiate them from those of were essentially geographical areas competitors. Much like the experience such as North America, Europe and with global products, there is no single . With such an organization, it answer to the question of whether or not was very difficult to get a focus on to establish global brands. Table 1 lists customer service and to track down the the estimated worth (equity) of the 20 real needs of customers. There is now top global brands. an “umbrella” or “master brand”, which is British Airways itself. Under this are

Table 1 Top 20 Global Brands Brand Description 1. Coca-Cola Little innovation beyond its flagship brand and poor management (United has caught up with Coke as consumers’ thirst for Cola has States ) diminished . 2. Microsoft It’s logo pops up on 400 million computer screens worldwide. But (United virus plagues and rival Linux took some luster off Gates &Co. States ) 3. IBM A leader in defining e-business, with services making up more (United than half of Big Blue’s sales. States ) 4. GE With acquisitions in areas from bioscience to bomb detection, it’s (United easier to buy GE’s new theme of “imagination at work”. States ) 5. Intel No longer just inside PCs, Intel is using its muscle to set the (United agenda for everything from wireless standards to the digital home. States ) 6. Disney Long the gold seal in family entertainment, but newcomers like (United Nickelodeon and Pixar are siphoning off some of its brand equity. States ) 7. Big Mac has pulled out of a two-year slump but still has to battle McDonald’s its reputation for supersizing the world’s kids. (United States ) 8. Nokia Tough times for the mobile-phone giant as its market share has (Finland ) slipped and younger buyers turn to rivals such as Samsung.

83 Table 1 (continued from the previous page) Brand Description 9. Toyota With rock-solid quality and the edge in hybrid cars, the Japanese ( ) auto maker is on track to overtake Ford in worldwide sales. 10. Marlboro The no. 1 name in cigarettes has cut prices and upped marketing (United to beat back the challenges of higher taxes and fewer smokers. States ) 11. Mercedes With wobbly profits and quality problems, the luxury car brand is (Germany ) struggling to retain premium status. 12. Hewlett- Covering everything from digital cameras to service, the IT giant Packard wants to dominate the middle ground between Dell and IBM. (US) 13. Citibank New CEO Charles Prince has spurred on global expansion and (United boosted the consumer credit division. States ) 14. American A recent federal court ruling that allows banks to issue Amex Express cards should give the brand another boost. (United States ) 15. Gilette Despite the tougher competition from Schick, the King of Blades (United still reigns new products like the battery-powered M3Power. States ) 16. Cisco This networking behemoth used slick TV ads and key acquisitions (United like Linksys to extend its reach. States ) 17. BMW This Bavarian auto maker is powering higher sales with raft of ( Germany ) new models from the sleek 6 Series sports coupe to the X3 baby SUV. 18. Honda Overtaken by Nissan at home and falling further behind rival (Japan ) Toyota in the U.S. market. 19. Ford Ford is trying to make quality “Job One” again after am (United embarrassing run of glitches, but leery consumers haven’t yet States ) regained trust. 20. It was late to the LCD TV boom, and the PS2 (Japan ) is slipping. Worse, rival Samsung is in Sony’s face. Source: Cateora, Ph., Graham, J., Bruning, E., International Marketing, McGraw-Hill Ryerson, Toronto, 2006, pg. 323

Figure 1 dramatizes the extent of (BMW). In fact, U.S. dominance is much U.S. company domination of global deeper that the rankings reflect. branding. No other country remotely A successful brand is the most approaches the brand values held by valuable resource a company has [1]. American companies. U.S. companies The brand name encompasses the account for fourteen of the top twenty years of advertising, good will, quality global brands (70 percent) across both evaluation, product experience, and consumer goods and industrial sectors. other beneficial attributes the market Others countries within the top twenty associates with the product. Brand rankings are Finland (Nokia) in image is at the very core of business telecommunications, Japan (Toyota, identity and strategy . Customers Honda, and Sony) and Germany everywhere respond to images, myths, and metaphors that help them define 84 their personal and national identities between countries. Another advantage within a global context of world culture is that sales may increase because and product benefits. Global brand play travellers will see their favourite brands an important role in that process. The advertised and distributed in other value of Kodak, Sony, Coca-Cola, markets. Third, trade channels are more McDonald’s, Toyota, and Marlboro is ready to accept a global brand that has indisputable. One estimate of the value been advertised in their market. Finally, of Coca-Cola, the world’s most valuable a worldwide recognized brand name is brand, places it over $70 billion and a power itself, especially when the growing. In fact, one authority country-of-origin associations are highly speculates that brands are so valuable respected. Japanese companies have that companies will soon include a developed a global reputation for high “statement of value” addendum to their technology and quality and their names balance sheets to include intangibles on products give buyers instant such as the value of their brands. confidence that they are getting good Naturally, companies with such strong value. brands strive to use those brands But there are also costs and risks globally. In fact, it appears that even to global branding. A single brand name perceived “globalness” leads to may not be as appealing as locally increases in sales. The Internet and chosen names. If the company replaces other technologies are accelerating the a well-regarded local name with a global pace of the globalization of brands. name, the changeover cost can be Even for products that must be adapted substantial. The company will have to to local market conditions, a global inform millions of people that its brand brand can be successfully used with still exists but under another name. careful consideration. Heinz produces a Even the company’s local managers multitude of products that are sold may resist the name change ordered under the Heinz brand all over the from headquarters. The world. Many are also adapted to local overcentralization of brand planning and tastes. In the , for programming may dissipate local example, Heinz Beans Pizza (available creativity that might have produced with cheese or sausage) was a runaway even better ideas for marketing the hit, selling over 2.5 million pizzas in the product. first six months after its introduction. In Even when a company has the British market, Heinz’s brand of promoted its global brand name baked beans is one of the more popular worldwide, it is difficult to standardize its products. The British consumer eats an brand associations in all countries. average of 16 cans annually, for a sales Heineken beer, for example, is viewed total of $1.5 billion a year. The company as a high-quality beer in Canada, as a realizes that the consumers in other grocery beer in the United Kingdom, countries are unlikely to rush to stores and as a cheap beer in Belgium. Cheez for beans pizzas, but the idea could Whiz, a Kraft General Foods Cheese lead to the creation of products more spread, is viewed as a tasty snack suited to other cultures and markets. spread in Canada and as a coffee What are the advantages [4] of a flavourer in Puerto Rico. global brand name? One main Ideally a global brand gives a advantage is economy of scale in company a uniform worldwide image preparing standard packaging, labels, that enhance efficiency and cost promotions, and advertising. Advertising savings when introducing other economies result from using products associated with the brand standardized ads and the fact that name, but not all companies believe a media coverage increasingly overlaps single global approach is the best. 85 Indeed, we know that the same brand umbrella, returned the candies to does not necessarily hold the same their original names. The pet food meanings in different countries. In division adopted and for addition to companies such as Kodak, cat foods and Pedigree for dog food as Kellogg, Coca-Cola, Caterpillar, and the global name replacing KalKan. To Levi’s that use the same brands support this global division that account worldwide, other multinationals such as for over $4 billion annually, Mars also Nestlé, Mars, Procter&Gamble, and developed a website for the pet food Gillette have some brands that are brands. The site functions as a “global promoted worldwide and other that are infrastructure” that can be customized country specific. Among companies that locally by any Pedigree Petfoods branch have faced the question of whether or worldwide. For instance, Pedigree not to make all their brands global, not offices can localize languages and all have followed the same path. For information on subjects as veterinarians example, despite BMW’s worldwide and cat-owner gatherings. successes, only recently did the company create its first global brands National Brands position. A different strategy is followed by Companies with successful the Nestlé Company, which has a stable country-specific brand names must of global and country-specific national balance the benefits of a global brand brands in its product line. The Nestlé against the risk of losing the benefits of name itself is promoted globally, but its an established brand. And some brand global brand expansion strategy is two- names simply do not translate. The cost pronged. In some markets it acquires of reestablishing the same level of well-established national brands when it brand preference and market share for can and builds on their strengths – there the global brand that the local brand are 7,000 local brands in its family of must be offset against the long-term brands. In other markets where there cost savings and benefits of having only are no strong brands to be local, people one name worldwide. In those markets to be regional, and technology to be where the global brand is unknown, global. It does, however, own some of many companies are buying local the world’s largest global brands; Nestlé brands of products that consumers want is but one. and revamping, repacking, and finally Unilever is another company that relaunched them with a new image. follows a similar strategy of a mix of Unilever purchased a local brand of national and global brands . In Poland, washing powder, Biopan, that had a 9 Unilever introduced its Omo brand percent share of the market in Hungary; detergent (sold in many other after relaunching, market share rose to countries), but it also purchased a local about 25 percent. brand, Pollena 2000. Despite a strong When Mars, a U.S. company that introduction of two competing brands, includes candy and pet food among its Omo by Unilever and Ariel by product lines, adopted a global strategy, Procter&Gamble, a refurbished Pollena it brought all its products under a global 2000 had the largest market share a brand even those with strong local year later. Unilever’s explanation was brand names. In Britain, the largest that East European consumers are candy market in Europe, M&Ms were leery of new brands; they want brands sold as and candy was that are affordable and in keeping with sold under the name Marathon to avoid their own tastes and values. Pollena association with knickers , the British 2000 is successful not just because it is word for women’s underpants. To bring cheaper but because it chimes with the two candy products under the global local values. 86 Neither Canada nor Australia is The trend today is toward a represented in the top 100 global "borderless world." In Europe, custom brands, as their branding strategy is duties, border delays, and other predominately national. They do not impediments to inter-European trade have well-developed consumer goods are rapidly diminishing. Companies are and services sectors, as in the U.S., eager to launch new brands as and most of their companies cater to Eurobrands. P&G launched its local consumer markets. Of the top ten detergent Ariel as a Eurobrand. Mars brands in Australia, only two are in has replaced its Treets and Bonitas consumer products (Woolworth’s, in brands names with M&M's worldwide food, and Billabong, in casual clothing). and changed its third largest United Five of the remaining eight brands are Kingdom brand - Marathon – to the from firms in the financial services Snikers name that it uses in the United sector. Commonwealth Bank, Westpac, States. Unilever is now seeking to ANZ, National Australia Bank, and St. market its various detergent brands – George’s Bank. The other three brands All, Omo, Persil, Presto, Skip, and Via – are Testra, in telecommunications, under fewer labels. Australian Post, government services, Clearly some brand names have and Ansell, health care supply. gained worldwide acceptance. Such Large and small companies must companies as Kodak, McDonald's, IBM, also consider rises in nationalistic pride Sony, and Coca-Cola would not think of that occur in some countries and their using different brand names as they impact on brands. In India, for example, enter additional countries. Unilever considers it critical that its brands, such as Surf detergent and Lux Conclusions and Lifebuoy soaps, are viewed as Branding is a major issue in Indian Brands. Just as it’s the case with product strategy. Branding is expensive products, the answer to the question of and time-consuming, and can make or when to go global with a brand is, “It broke a product. The most valuable depends - the market dictates”. brands have a brand equity that is In the past, most companies considered an important company established new brand names that asset. The best brand name suggest made sense in their country [4]. When something about the product’s benefits; they later attempted to introduce their suggest products qualities; are easy to brand into foreign markets, some pronounce, recognize, and remember; companies discovered that the existing are distinctive; and do not carry brand name was not appropriate. The negative meanings or connotations in name was difficult to pronounce, other countries or languages. offensive, funny, meaningless, or To growing globalization of already co-opted by someone else. The markets that gives rise to company would be forced to develop a standardization must be balanced with new brand name for the same product the continuing need to assess all when it was introduced in other markets for those differences that might countries. P&G had to create a different require adaptation for successful brand name for its Pert Plus shampoo acceptance. The premise that global when it introduced it in Japan (called communications and other worldwide Rejoy) and the United Kingdom (called socializing forces have fostered Vidal Sassoon). Using different brand homogenization of tastes, needs, and names for the same product comes at a values in a significant sector of the high cost, however. The company has population across all cultures is difficult to prepare different labels, packaging, to deny. However, more than one and advertising. authority notes that in spite of the forces 87 of homogenization, consumers also see advertising, good will, quality evaluation, the world of global symbols, company product experience, and other beneficial images, and product choice through the attributes the market associates with the lens of their own local culture and its product. Brand image is at the very core stage of development and market of business identity and strategy. sophistication. Each brand must be A global brand is the worldwide viewed in light of how it is perceived by use of a name, term, sign, symbol each culture with which it comes in (visual and/or auditory), design, or contact. What is acceptable and combination thereof intended to identify comfortable within one group may be goods or services of one seller and to radically new and resisted within others, differentiate them from those of depending on the experiences and competitors. Even when a company has perceptions of each group. promoted its global brand name A brand is essentially a seller’s worldwide, it is difficult to standardize its promise to consistently deliver a specific brand associations in all countries. set of features, benefits, and services to Sometimes, companies are forced the buyers. The best brands convey a to develop a new brand name for the warranty of quality. But a brand is even same product when it is introduced in a more complex symbol. A strong brand other countries, a strategy of mixing reassures the customer; it gives national and global brands. Companies confidence in terms of the quality and with successful country-specific brand satisfaction that can be anticipated from names must balance the benefits of a buying it. The concept of branding can global brand against the risk of losing fit in very well with the idea of the the benefits of an established brand. corporate image. Increasingly, The major inference to draw from corporate and brand image is being all of this is that wise companies will recognized as a major influence on globalize those elements that make or sales. save substantial sums of money and A successful brand is the most localize those that competitive valuable resource a company has. The positioning and success require. brand name encompasses the years of

REFERENCES

[1] Cateora, Ph., Graham, J., Bruning, E., International Marketing, McGraw-Hill Ryerson, Toronto, 2006. [2] Cheverton, P., Understanding Brands, Kogan, London, 2006. [3] Christopher, M., McDonald, M., Marketing – an Introduction, Pan Books, London, 1991. [4] Kotler, Ph., Turner, R., Marketing Management – Analysis, Planning, Implementation and Control, Prentice Hall, Ontario, 1998. [5] Lendrevie, L., Lévy, J., Lindon, D., Mercator – théorie et pratique du marketing, Dunod, Paris, 2006. [6] Westphalen, M-H., Comunicator – le guide de la communication d’entreprise , Dunod, Paris, 2004.

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