12.0 Introduction
Learning Objectives
After reading this section, students should be able to:
- Outline the elements of brand architecture.
- Explain the value of a corporate brand endorsement.
- Outline the advantages and disadvantages of global branding.
- Identify the trade-offs of centralized versus decentralized marketing decision making.
- Identify the special challenges of branding decisions in emerging markets.
- Outline the brand structures in multinational companies.
- Outline the principles guiding brands in the global market.
- Outline the factors shaping a company’s international brand structure.
- Explain the role of firm-based, product-market, and market dynamic characteristics in global branding.
- List the approaches to globally manage and monitor strategic brands.
- State the benefits of corporate branding.
A global brand has the same name and a similar image and positioning in most parts of the world. Many global companies leverage favourable brand images and high brand equity by employing combination (tiered) branding, cobranding, and brand extension strategies. Companies can create strong brands in all markets through global brand leadership. Maslow’s hierarchy is a needs-based framework that offers a way of understanding opportunities to develop local and global products in different parts of the world. Some products and brands benefit from the country-of-origin effect. Product decisions must also address packaging issues such as labelling and aesthetics. Also, express warranty policies must be appropriate for each country market.
Companies invest a lot in building their brand recognition and reputation because a brand name signals trust. “Trust is what drives profit margin and share price,” says Larry Light, CEO of Arcature brand consultancy and a veteran of McDonald’s and BBDO Worldwide and Bates Worldwide advertising agencies. “It is what consumers are looking for and what they share with one another” (Kiley, 2009).
Many emerging markets call for lower-cost goods. But how low can a company go on quality and performance without damaging the company’s brand? The challenge is to balance maintaining a global reputation for quality while serving local markets at lower cost points.
One way to resolve the challenge is to offer the product at quality levels that are the best in that country even though they would be somewhat below developed-country standards. This is the tactic Walmart has successfully used in Mexico. Walmart’s flooring, lighting, and air conditioning make its Mexican stores better than any other local stores even if they might seem Spartan to US consumers.
Core Principles of International Marketing – Chapter 9 by Babu John Mariadoss is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.
