Global Advertising

Cross national cultural understanding Standardization vs adaptation Global branding and positioning-Message & media strategy

Global brand defined as

Basically same product or service everywhere with only small variations like Coca-Cola and McDonalds Same positioning? Same package design? Same pricing schedule? Same distribution plan?

Global brand defined as

Consumer perception about McDonalds in United States is different from perception about it in developing countries Everyday, low priced, convenient symbol for America However a status symbol in India, Russia or Thailand

Global brand factor

Must achieve more than a third of its sales outside of its home country and have a visible external market presence. A global brand is one that is available in
many nations may differ from country to country local versions have common values and a similar identity.

Global brand factor

The brands
positioning advertising strategy Personality look and feel same but allow for regional customization.

What remains consistent market-to-market are the values communicated and delivered by the brand.

Why Go Global?
Harness the coherence and scale of a global brand as well as the closeness of a local brand to succeed
Often referred to as the 70/30 principle, 70% of the brand must remain absolutely consistent, 30% reflecting flexibility market-to-market

Several advantages
Highly attractive. Perception of excellence Same name, appearance Status & prestige Maximising market benefits Reduce advertisement costs Better way to build value of brand

Cultural differences
Deodorant usage in Men What percentage of men use deodorants
USA= 80% Sweden= 55% Italy= 28% The Philippines= 8%

Cultural differences
House cleaning in Women Should a house be dusted and polished 3 times a week
Italy=86% UK=59% France=55% Germany= 49% Australia=33% USA=25%

Hofstedes cultural model

Hofstedes 4D or 5D model Quantitative and longitudinal study of cultural differences between countries Why some concepts of motivation do not work in all countries in the same way Cultures Consequences and Cultures and Organizations: Software of the Mind Scores for each country explain why people and organizations in various countries differ, comparative data.

How do we measure cultural distance?

Geert Hofstedes Cultural Index
- National character survey - 116.000 IBM employees - 72 countries and 20 languages
Original scores for 56 countries, extended to nearly 90

Five different poles make up the cultural index: - Power distance - Uncertainty avoidance - Individualism - Masculinity - (Long term orientation)

5D Model
PDI 100 LTO UAI

100
100

Work-related values to consumptionrelated values

100 IDV

100 MAS

Examples of Hofstedes Dimensions

Comparison of cultural dimensions

More information on www.geert-hofstede.com

Cultural dimensions and advertising appeal

Power distance
High: status symbols, presence and importance of elders, master-learner relationships Low: independence, empowered consumers

Individualism/Collectivism
IDV: low context, direct, explicit (you, we, I), data, facts COL: high context, indirect, symbols, entertainment, groups

Masculinity/Femininity
MAS: winning, success, domination, persuasion, comparative advertising, reverse sexism FEM: less endorsement, caring, less role differentiation

Uncertainty avoidance
High: explanations, testing, technology, design, structure, well-groomed Low: results are important, change, subtle

LTO/STO
STO: sense of urgency, direct style LTO: build trust, nature, entertainment

Advertising models and culture (1/2)

Sales-response model
Simple stimulus-response model Very direct, buy now strategy, short term effect Low PDI, IDV, MAS, Low UAI (Anglo-Saxon model)

Persuasion model
Short term shift in attitude, buying intention, and brand preference through providing arguments Lecture form (presenters, demonstrations, testimonials), persuasive and direct US, UK, Germany, Switzerland, Austria

Involvement model
Build relationships between consumers and brands by creating emotional closeness Brand becomes a personality, indirect style FEM, IDV (Netherlands, Scandinavia, France)

Advertising models and culture (2/2)

Awareness model
Create awareness to differentiate brands from similar brands Associations, metaphors, humor, build trust, indirect Low IDV (Spain, Asia, Latin America...)

Emotions model
Create positive attitude and brand loyalty Builds connections between brands and emotions, emotion often linked with product category Low IDV, low MAS (Spain, Latin America, Africa)

Likability model
Liking the advertisement will lead to liking the brand Indirect, entertaining/story, make friends to build trust and dependence Japan, China

Symbolism model
Turn the brand into a symbol/code, cohesion to subculture Very culture specific (symbols of status, success, self-expression, stability)

Standardization vs. adaptation

Debate in marketing since Buzzell (1968) and Levitt (1983) Factors encouraging standardization
Economies of scale in production Economies in R&D Economies in marketing Global competition Shrinking of world market Converging, homogeneous cultures

Factors encouraging adaptation

Differing use conditions Government and regulatory influences Local competition Differing consumer behavior patterns True to marketing concept

Degree of standardization, Degree of adaptation, global/local paradox

Need for adaptation

High

Degree of cultural grounding

Low Industrial/Technology intensive Consumer

Nature of product
Source: Czinkota and Ronkainen

Factors affecting adaptation

Consumption patterns Psychosocial characteristics

Cultural criteria

Consumption patterns
Pattern of purchase
Is the product purchased by relatively the same consumer income group from one country to the other? Do the same family members motivate the purchase or dictate brand choice in all target countries? Do most consumers expect a product to have the same appearance? Is the purchase rate the same regardless of the country? Are most purchases made at the same kind of retail outlet? Do most consumers spend the same amount of time making the purchase?

Pattern of usage
Do most consumers use the product for the same purpose? Is the product used in different amounts from one area to another? Is the method of preparation the same in all target markets? Is the product used along with other products?

Psychosocial characteristics
Attitudes toward the product
Are the basic psychological, social, and economic factors motivating the purchase and use of the product the same for all target markets? Are the advantages/disadvantages of the product in the minds of consumers basically the same from one country to another? Does the symbolic content of the product differ from one country to another? Is the psychic cost of purchasing and using the product the same?

Attitudes toward the brand

Is the brand name equally known and accepted in all target countries? Are customer attitudes toward the package basically the same? Are customer attitudes toward pricing basically the same? Is brand loyalty the same throughout target countries for the product?

Cultural criteria
Does society restrict the purchase and/or use of the product to a particular group? Is there a stigma attached to a product?

Does the usage of the product interfere with tradition in one or more of the targeted markets?
Does the message of the product correspond to core cultural values? How do the different dimensions of culture influence the purchase and use of the product?

Global brands
Handful of truly global brands exist today, despite the increased globalization of markets Companies need not always create onesize-fits-all global brands just because the world appears to be shrinking Adapting brands to local conditions will on many occasions be the best approach

Global brands
Global companies need global brands to some extent Global and local brands can be part of a successful marketing mix at any spot along the continuum. Decisions to use a combination of local and global brands -- called the "hybrid" approach -- depend on many factors, including products, industry, local cultures and the nature of the competition.

Which Global brands are most valuable

TOP TEN BRANDS IN 2011 1 2 3 4 5 6 7 8 9 10 Coca-Cola IBM Microsoft Google GE McDonald's Intel Apple Disney Hewlett-Packard 71,861 ($m) 69,905 ($m) 59,087 ($m) 55,317 ($m) 42,808 ($m) 35,593 ($m) 35,217 ($m) 33,492 ($m) 29,018 ($m) 28,479 ($m)

Features of global brands

Some common features
consistent name that is easy to pronounce corporate sales are globally balanced with no dominant market the essence and positioning of the brand is the same the world over they address the same customer needs, or the same target segment, in every market and there is great similarity in execution (pricing, packaging, advertising) across cultures

What kind do not lend themselves

Food is one category where, literally, differences in tastes from culture to culture compel global companies to adapt to local conditions

Intel
Intel, whose products and markets make it easier for executives to establish a truly global brand with a memorable catch-phrase: "Intel inside. Intel has a smaller number of buyers [than many other global companies] and all of those buyers are using computer chips for the same purpose. All of Intel's competitors are global. Intel is a global brand without significant local adaptation Holds true for Disney, which stands for family entertainment in all cultures

The hybrid approach

Reibstein and Day see what they term "countervailing pressures"
slowed the march toward global brands and make the hybrid approach more appealing. Inherent market differences that can exist from country to country.

The hybrid approach

KFC, formerly Kentucky Fried Chicken, has 5,000 restaurants in the U.S. and 6,000 in other countries. learned that it cannot open restaurants globally based on its U.S. model In Japan, KFC sells tempura crispy strips. In Holland, it features potato-and-onion croquettes. In China, KFC's chicken gets spicier the farther inland one travels.

Favoring local brands

Conditions favoring local over global brands
include unique market needs low frequency of purchase, so that brand loyalty passes from one generation to another through family traditions Relative unimportance of advertising, which makes it harder for global companies to change loyalty patterns

Favoring local brands

Growing concentration of retail buying power -- labeled "growing channel power" Can lead to heightened price sensitivity on the part of the buyer. Wal-Mart's goal to offer low prices every day can constrain companies wishing to sell their products through Wal-Mart stores.

Favoring local brands

Criticism of global brands by activists opposed to globalization Nike, Disney, Shell and McDonald's became symbols of a host of complaints about globalization. Responded by establishing codes of conduct and improving labor practices, but the antiglobalization movement served notice that high-profile brands carried risks.

Managing Brands in global markets

Unilever and Music Television Networks (MTV). Various challenges faced by global firms to sell their products and services worldwide. Developing brands for global markets is more complex.

Unilever
In the 1990s, Unilever was struggling under the weight of some 1,600 brands in more than 50 countries. Revenues were lopsided -- 3% of the brands provided 63% of revenues -- and the company was not growing. In 2002, Unilever launched a program to reduce its number of brands to 400 "core" brands so that it could concentrate its resources on fewer products.

Unilever
The company combined branding strategies by placing the 400 in three categories: international brands (such as Dove and Lipton), regional brands (such as a spread called Flora in the United Kingdom and Becel in Germany), Local brands with strong positions in single countries (including Wishbone salad dressing in the United States and Persil detergent in England).

MTV
MTV entered Europe in 1987 with panregional programs in English. Programming was provided to cable operators at no charge, and all revenue came from advertising. Within a few years, however, things changed. .

MTV

Advertisers called on MTV to offer local programs, either because

could not afford pan-European coverage their products were available only locally, Their products were not uniformly branded in all countries

Strong local competitors emerged, such as VIVA in Germany and MCM in France. MTV responded to the change in climate. Today, MTV Europe (MTVE) has a presence in 41 countries with multiple languages and formats and nearly 50% local programming.

How MTV adapted to local conditions

Day and Reibstein cite several factors in MTV's ability to adapt to local conditions. 1. MTV realized that the local advertising sales market was much bigger than the pan-European market. 2. Changes in technology allowed separate satellite feeds to each country. 3. MTV managed to address local content and advertising concerns, while simultaneously leveraging its powerful global brand identity -- the anti-establishment voice of young people.

Risks of taking brand global

Erroneously assuming the brand communicates the same meaning market-to-market, resulting in message confusion Over-standardizing or over-simplifying the brand and its management, resulting in a culture of discouraged innovation at the local level Use of the wrong (or tried and true) communications channels, resulting in inappropriate spending and ineffective impact

Risks of taking brand global

Underestimating the investment in spending and time for a market to become aware of the brand, try it, and adopt it

Not investing in internal brand alignment to ensure that regional employees understand the brand values and benefits and are able and willing to communicate and deliver consistently
Failing to modulate performance metrics based on local variables

Interbrand
Interbrand has identified a consistent set of principles shared by successful global brands.

Recognition
Well-performing brands enjoy strong awareness among consumers and opinion leaders. Recognition represents the nexus of perception and reality, enabling brands to rapidly establish credibility in new markets.

Consistency
High degree of consistency in visual, verbal, sonic and tactile identity across geographies. Deliver a consistent customer experience worldwide McDonalds has returned to its roots by simplifying their core offer, and adhering to a shared message globally. McDonalds appropriately modifies its approaches for greater regional relevance.
Restaurants in France are more caf-like in appearance and the menu is tailored to the local culture. Espresso is in quick supply and the chairs are neither molded plastic nor bolted to the floor.

Emotion
A brand is not a brand unless it competes along emotional dimensions. Brands can achieve the loyalty of consumers by tapping into human values and aspirations that cut across cultural differences. Nike has appealed to the athlete in all, regardless of true physical ability, allowing for a focused, yet massmarket offer. Elevated the discussion beyond tangible aspects of the shoe or apparel to what the customer feels when wearing and performing in Nike gear.

Uniqueness
Express a unique position to all internal and external audiences. Effectively use all elements in the communications mix to position within and across international markets. Apple has creatively addressed its marketing mix while consistently ensuring that its people embody its most ownable and beneficial brand attribute innovation.

Adaptability
Global brands must respect local needs, wants and tastes. Brands adapt to the local marketplace while fulfilling a global mission. HSBC
excellence in financial services with its deep knowledge of local custom and practice.

In essence, it is communicating a glocal advantage.

How are Global Brands Managed?

Several management traits that are employed by leading global brands.

Seek Out Insights

Outstanding brands identify customer insights. When these insights appeal across cultures they assist in a brands adoption globally. The Economist brand appeals to its audience because they know when they are in the know. Hyundai sells two-thirds of its cars outside of Korea, has a multinational product portfolio, a worldwide slogan and fairly consistent advertising. Despite all this, it is not a truly global brand because the Hyundai name carries very different associations in each market. On the other hand, over 60% of Mercedes Benzs sales are in Europe, yet the brands associations with prestige and quality are global.

Integrate Local Intelligence

Brand guidelines are tremendous tools for ensuring consistency. Brands are dynamic never static so managing them must integrate new thought. In the case of global brands, to assume that one message can appeal uniformly to all audiences with equal relevance is unrealistic

The Team
Global brands demand a global brand management team. Regional and international organization is in place to maintain brand leadership. Companies with large brand portfolios tend to have separate managers for each brand. Brand management team reports to a senior executive officer of the company CEO has direct involvement in brand decisions. Global brand management teams implement processes to create, review and improve brand performance.

Investment
Intangible assets, including brand, now comprise the majority of the value of a company. These assets require capital investment like any other. Progressive companies and enlightened management recognize the need for appropriate communications spending.

Measurement Systems
In order to sustain a global brands long-term position, there must be consistent and widespread brand equity measurement. This will not only help brand development by highlighting and demonstrating best practice but it will also provide the brand management team with a means of monitoring global consistency.

Measurement Systems
This equity measurement should include
top-of-mind awareness overall opinion (preference, satisfaction, loyalty, recommendation) Brand image attributes Perceptions of product/service performance Brand valuation to determine the financial contribution of brand to the balance sheet.

 The company's 'Priceless' advertising campaign currently is airing in more than 90 countries worldwide.

 Every country used a different agency, a different campaign, and a different strategy. The success of 'Priceless' as a platform in the U.S. helped persuade other countries to adopt one single approach. Over time this became a consistent global positioning. 'Priceless' campaign now appears in 96 countries and 45 languages and forms the framework we use for all brand communications

 The U.S. strategy based on a lot of consumer research Insight arrived at was that there had been a significant change since the 70's attitude of, 'you are what you buy'. Consumers now focus on lifestyle and quality, and on the concept of 'rewarding yourself for what you've earned'. Their core values are family, security, companionship and 'making time for yourself'. It was unique for a credit card company to say to consumers, "It's not about what you buy; it's about how you take care of yourself.

Global branding : positioning AND properties

 Akzo Nobel creating a visual brand property for it's 14 paint brands around the world. The brands have different names, such as Dulux in the UK and Coral in Brazil. This approach allows each market to keep (for now) the local brand name that consumers know and trust. At the same time, it unifies the brands with a common brand identity and brand property - the colourful "swoosh" - intended to communicate inspiration to decorate the home. The global positioning is based on the strap line "Let's Colour".

Unilever & P&G

Unilever have successfully used a similar approach on several of their global brands. Having had a more localised culture historically compared to P&G, the company had a total mish-mash of brand names, designs and positionings. For their main laundry cleaning brands the "splat" icon was used to create some consistency in identity, even though the brand names were different. An example of this for two countries is shown below.

Some trends
McDonalds does not standardise its product Provides beer in Germany Wine in France Coconut, mango and tropical mint shakes in Hongkong

Transplants that did not work

Hallmark cards bombed in France as French prefer writing their own card Tang initially failed in France as it was positioned as a substitute for orange juice.
The French hardly drink orange juice at breakfast

Conclusion
In conclusion, global branding is not only about positioning. It's also about creating powerful brand properties which can unify brands across markets , creating economies of scale and economies of ideas.