Post on 26-Oct-2014
description
The Global Brand Face -Off
Definition :
Globalization has been defined as the production and
distribution of products and services of a homogenous
type and quality on a worldwide basis.
Why?
the fact that foreign sales account for more than 50 per
cent of the annual revenues of companies such as
Hewlett Packard, IBM, Johnson and Johnson, Mobil,
Motorola, Procter & Gamble, etc..
Yesterday’s Globalism
In yesterday’s one-size-fits-all world, big companies could often migrate
something that was a hit in the U.S. or Europe by tweaking the language
and advertising .
Examples:
Mercedes-Benz, traded on its reputation for building highly engineered
automobiles to drive into foreign markets.
Coca-Cola Co. and Marlboro cigarettes traded on their “American-ness” to
create large overseas followings.
Sony Corp. found that compact, economical, and reliable electronics like
the Walkman, struck a chord with people everywhere.
Today’s Globalism
Things have changed.
No company can safely assume there will be viable foreign markets
for an existing product.
Any company seeking to expand globally needs to ask if its
offerings are culturally and socially appropriate for its targeted
market.
“ Global Brand Doesn't mean having the same brand everywhere”
“It means having an overarching strategy that optimize brand effectiveness in local, regional & international market “
What is a Global brand ?
Available in most countries in the world
Have a similar positioning in all markets
Carry one brand name and/or logo
Has substantial market share in all countries and comparable brand loyalty
"Going global" has 3 very different meanings.
One meaning is to begin selling products and services to other parts of the world.
A second meaning is to begin outsourcing labour to another part of the world.
Third meaning is to begin buying materials from another part of the world
Why do companies go global
Increased sales ( expanded market reach )
Higher profits
Reduction of dependence on traditional market
Ability to diversify manufacturing and distribution capability
New knowledge, experience and enhance domestic competitiveness
Global competitiveness
Ability to spread risk
Benefits of going global
Espoir cosmetic company wanted to take the decision on to whether develop a
global branding initiatives or a carry on with the firms existent domestic marketing
concept. �Espoir cosmetic had received a tantalizing offer sponsorship of the sequel to
the Hollywood hit “Diana’s she devil” movie. �For Natasha Singh, the movie was an ideal vehicle for global brand building. �Vasylko Mazur, head of the eastern Europe was particularly up set. As per the
Mazur Eastern Europe is different from the rest of the world movie based
promotion won't do anything for sale in that region.
A brief about the case
As Diana's she devils was a hit two years ago, and
their research suggested that the sequel will probably be an even bigger draw.In this �sequel stars are from Europe, Asia and South America -Our fastest growing
markets. And they would call it � ”Espoir’s anniversary line” Espoir’s archival, Revlon –
also did same attempt in 2000 bond film, Die another day. �
A central website for product customization.
1. Culture difference between geographies ( need different management style
and marketing approaches )
2. Difference in regulation and taxation
3. Language barrier
4. Changed mindset
Problem occurs when company goes global
1. one size-fits all global strategies may not be effective, even in countries where
they used to work well.
For example,
the Guatemala-based fast-food chain polio Campero has been growing rapidly in
the United States because consumers have an
appetite for fried chicken that tastes different from KFC's. To retain its position as
the market leader, KFC might have to cater to ethnic or regional tastes too instead
of sticking to a strategy of homogeneity in it’s home market.
Two major implication for global marketers.
2. The corporate HQ can not tackle the global-local dilemma on its own,
it need the help of local executives.‡
Singh should develop a corporate-level marketing policy in consultation
with senior executives from the company's key markets.‡
Espoir has to identify a core line of products that is standard across all
markets, and it has to create lines that are country specific.
For example
The Japanese version of the Honda Accord is small and sporty, the American model is
relatively large, and the European edition is short and narrow, with the stiff and sporty
ride Europeans prefer. Despite selling three kinds of Accords, Honda maintains
a uniform image by emphasizing environmental friendliness and high performance in
all three markets. The energy that the country team will put into the local initiative will
generate more sales than a half hearted buy-in to Singh's global program
Global Branding strategy for Espoir Cosmetics :-
Identify differences in consumer behavior
Adjust the branding program accordingly through the choice of brand elements
Balance between Standardization and Customization
• Espoir cosmetics need to blend local & global elements proportionately • Challenge of course , is to get the right balance – to know which elements to customize or which to standardize (‘be global, act local’)
•Some of the factors suggested for more standardized global marketing programs are:-I.Common customer needsII.Global customers & channelsIII.Favorable trade policies & common regulationsIV.Transferrable marketing skills
Global platform strategy
The global challenge
Global market size: standardization
Local differentiation: customization
Strategy: Determine best combination of global and local activities for
competitive advantage
Forces calling for global products (standardization):
Convergence in customer preferences and income across target countries with economic
development and trade
Competition from successful global products
International brand awareness
Cost benefits from standardization
Falling costs of trade with greater globalization
Forces calling for local products (customization):
Differences in customer preferences and income across target countries
Build local brand recognition
Competition from successful domestic products
Regulatory requirements (quality, safety, technical specifications, domestic content)
High costs of trade create separate markets
International business managers make decisions about what should be global versus local:
Products
Technology and inputs
Manufacturing
Brands
Marketing
Distribution
Example: Wal-Mart must compete with both international players such as Carrefour and local
retailers
Conclusion