Transcript Lecture 5: Global Branding

Lecture 5
Dr. Lucy Ting
[email protected]
Agenda
• Globalisation and Standardisation
– 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
products or
concepts
Different
products or
concepts
Same Brand
B
D
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 19982004
• $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