Country of origin effect and global brands

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TERM PAPER : MARKETING TOPIC: COUNTRY OF ORIGIN EFFECT AND GLOBAL BRANDS

KOMAL MACHAIAH 1PI10MBA71 SECTION B MARKETING SPECIALIZATION

Country of origin effect and global brands

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Country of Origin Effect on Global Brands Introduction Brands are used as external cues to taste, design, performance, quality, value, prestige, and so on. In other words, the consumer associates the value of the product with the brand. The brand can convey either a positive or a negative message about the product to the consumer and is affected by past advertising and promotion, product reputation, and product evaluation and experience. In short, many factors affect brand image. One factor that is of great concern to multinational companies that manufacture worldwide is the country of origin effect on the markets perception of the product. Country-of-origin effect (COE) can be defined as any influence that the country of manufacture, assembly, or design has on a consumers positive or negative perception of a product. A company competing in global markets today manufactures products worldwide, when the customer becomes aware of the country of origin there is the possibility that the place of manufacture will affect product or brand image. The country the type of product, and the image of the company and its brands all influence whether the country of origin will engender a positive or negative reaction. A variety of generalization can be made about country of origin effects on products and brands. Consumers tend to have stereotypes about products and countries that have been formed by experience, hearsay, and myth. Consumers have broad but somewhat vague ideas about specific countries and specific product categories that they judge best: English tea, French perfume, Chinese silk, Italian leather, Japanese electronics, Jamaican rum and so on. Stereotyping of this nature is typically product specific and may not extend to other categories of products from these countries. Designer labels such as Ferragamo, Gucci, and Versace are affected in that they now must include on the label Made in China because the silk comes from China. The lure to pay $195 and up for scarves Made in Italy by Ferragamo loses some of its appeal when accompanied with a Made in China label. The irony is that 95 per cent of all si lk comes from China which has the reputation for the finest silk but also a reputation of producing cheap scarves. The best scarves are made in France or Italy by one of the haute couture designers. Honda, which manufactures one of its models almost entirely in the US, recognizes this phenomenon and points out how many component parts are made in America in some of its advertisements. On the other hand, others have a stereotype of Japan as producing the best automobiles. A recent study found that US automobile producers may suffer comparatively tarnished images regardless of whether they actually produce superior products.

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Countries are also stereotyped on the basis of whether they are industrialized, in the process of industrializing, or developing. These stereotypes are less product specific; they are more a perception of the quality of goods and services in general produced within the country. Industrialized countries have the highest quality image, and products from developing countries generally encounter bias. In Russia, for example the world is divided into two kinds of products: own and imported. Russians prefer fresh, home grown food products but imported clothing and manufactured items. Companies hoping to win loyalty by producing in Russia have been unhappily surprised. Consumers remain cool towards locally produced Polaroid cameras and Philips irons. On the other hand, computers produced across the border in Finland are considered high quality. For Russians, country of origin is more important than brand name as an indicator of quality. South Korean electronics manufacturers have difficulty convincing Russians that their products are as good as Japanese ones. Goods produced in Malaysia, Hong Kong, or Thailand are more suspect still. Eastern Europe is considered adequate for clothing but poor for food or durables. Turkey and China are at the bottom of the heap. There is also the tendency to favour foreign made products even from industrialized countries. A survey of consumers in the Czech Republic found that 72 per cent of Japanese products were considered to be of the highest quality, German goods followed with 51 per cent, Swiss goods with 48 per cent, Czech goods with 32 per cent and, last the United States with 29 per cent. European consumers affection for American products is quite fickle. The affinity for Jeep Cherokees, Budweiser beer, and Bose sound systems of the 1990s had faded to outright animosity towards top American brands as a protest of American political policies. In China, anything Western seems to be the fad. If it is western, it is in demand even at prices three and four times higher than those of domestic products. In most cases such fads wane after a few years as some new fad takes over.

Country of Origin: A Brands Best Friend?

A multiple choice question: is Land Rover British, German or American? Or none of the above? Thats right - its Chinese. The Shanghai Automotive Industry Corporation (SAIC) recently acquired the brand and the rights to all its past models for US$140 million. The acquisition sends a clear signal that cultural links between brands and the countries that produced them are in jeopardy. Consider IBMs ThinkPad or Miller Lite. These two American brand icons are owned by the Chinese and South Africans. The Swiss Toblerone is

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no longer Swiss. In fact the heritage of many brands is changing shape as ownership alters across national borders. But how does this affect the brand? Ill tell you more about that soon, but first let me ask you this: does the notion that ThinkPad and Land Rover are Chinese cause you to rethink your ideas about brands quality and authenticity? Would you think twice about buying a Toblerone because it no longer comes from the land of chocolate? My guess is that you answered no to these questions. The fact is that country of origin has a strong influence on a brand during its birth and childhood. Then, once the image of the country has been embedded into the brands personality, fashioning its identity and influencing its consumers perceptions, it seems to leave its stamp on the brand for good. At least the numbers available from brands which have changed nationality indicate this to be so. Leveraging the power of a country in brand building seems most effective at the beginning of the brand story. As the brand matures, it gathers other material that contributes to its identity reputation, financial record, management personalities, and so on, are all elements that are likely to help the brands image alter in later life. And what does this mean for your brand? Should you leverage your native country as a branding statement? And, if so, how? Its not an easy path to forge and one which you should treat with care because it isnt necessarily all good. Once a Danish brand, called Sun Top, was an enormous success in the Middle East. The brand based its entire identity on being Danish. Because of its great success, the company was happily bought by local owners in Saudi Arabia. But then the controversial cartoon depicting the Prophet Mohammad appeared in a Danish newspaper. In the consumers mind, Sun Top was still so strongly associated with Denmark that its reputation became tarnished in the Middle East along with that of Denmark. The crisis resulted in a total halt on sales and the company is now struggling to survive. Now for the upside of country of origin branding. Many companies have found great value in fostering an association with the brands nationality. The approach was capitalized on by the Swiss who, almost a century ago, discovered that by uniting their nationhood with an industry which was so much a part of the visitors perception of Switzerland, both Switzerland and that industry would profit from their mutually compatible reputations. The industry was the chocolate industry. Switzerland was well-known for its hundreds of small chocolatiers, all of whom competed fiercely against each other. Finally, the worlds first country brand board, which still exists, was formed with the sole purpose of supervising the use of the Made in Switzerland tagline and of the iconic Swiss flag which, incidentally, was the foundation for an equally well-recognized logo that of the Red Cross. Today, no-one can adopt Made in Switzerland without having strong links to the country. And the boards quality control seems to be working. As I often joke, if you had the choice of two identical cars, with the same price tag, but one was built in Turkey and the other in Switzerland, which would you choose. Be honest, most of us are going to go for the Swiss version, coming, as it

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does, with all that Swiss reputation for precision engineering. By choosing the Swiss car youve proven that country of origin as a branding statement has its influence on even you. Speaking of you, as a web user, you have absolutely no idea about many websites countries or origin. How does all this bear on your own brands website? Should it remain an emanation from anywhere or should it claim a national identity? Well, that depends pretty much on common sense. If you sell products or services that are strongly associated with your country, then share your brands nationality. If youre selling food or clothes from France or Italy, encourage your brands French or Italian flavor to ring through to the audience. If you sell technology services or promote innovation, the fact that youre from the U.S., Japan or Germany could add strength to your brands and its websites image. Then again, if it doesnt add positively to your brands value proposition, nationality should be given a low profile. Try the two-car test on your own product. If someone had to choose between two identical products, one of them being yours, would its nationality encourage or discourage the person to select your brand? If it would make no difference, why share your country of origin? Remember, your audience is international and not every country is in everyones good books all the time. So, before you plaster your nations flag all over your website, ask yourself if it would add emotional value to your product or service. Beware your conclusion itself may be emotional, despite the fact that we live in a supposedly global community.

Made where? Italy is to shoes as Switzerland is to watches, synonymous with high-end luxury and superlative craftsmanship. Brands like Prada, Armani, Gucci and Bruno Magli have something beyond mere authenticity: they enjoy a unique, Italian resonance that crosses cultures. But production of high-end footwear is expensive. Other then sewing machines, no technology exists that can help workers generate high production runs of leather shoes. Further, production of the average shoe involves from forty to a few hundred stages. Italy was the worlds largest exporter of shoes in all product ranges, until the 1980s when its position was overtaken by China and Hong Kong, which specialize in making products that require cheap labor. Asia holds about two-thirds of the worlds footwear market, while Western Europe has only ten percent. Ironically, among EU countries, Italy is the biggest importer of shoes and shoe components from Eastern Europe. In 2001, Italy imported 41 percent of its leather footwear components, of which nearly 72 percent came not from Asia but from Eastern Europe, particularly Romania, thanks to regional agreements that allow easy access to the Common Market for these developing producers.

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What this means is that the shoes you bought, which say made in Italy on the sole, may very well in fact have been made in Romania and marketed and sold under an Italian brand. Its one thing when your sneakers come from a developing country, but those who shell out top dollar for a pair of expensive Italian shoes may balk upon learning that they probably were not made in Italy at all. Eros Scattolin, international public relations executive, faces this situation at Geox, a shoe brand headquartered in the Italian province of Treviso. Founded in 1995, the company now sells to 51 countries and boasts a turnover of 181 million (US$211M). Although Geox considers itself an Italian brand, it depends heavily on outside countries to make its shoes. For instance the company owns a plant in the Romanian city of Timisoara, which employs 2,000 locals to work under the direct supervision of 50 Italian masters. Says Scattolin, From our point of view, it doesn't matter where you produce, but how you do it. We could keep on producing our shoes in Italy but they should cost much more. Instead, while a small segment of Geoxs production is in fact still in Italy, the company works in Romania, Slovakia, Mexico and China as well. Scattolin believes that in spite of the sentimentality that people might attach to shoes made in Italy, outsourcing was the way of the future for the Italian shoe industry. Outsou rcing is a must, not a choice, he insists. You have to go abroad in those low labor market cost countries if you want to keep a fair price, and I would add, if you want to survive. He claims that outsourcing to cheaper locations does not challenge the integrity of the company itself, which keeps all logistics, marketing and financial departments in Italy, so that the brain and soul [of Geox] is Italian, [while] the body is foreign. Scattolin is not alone in his assessment. K2 is the number one ski brand in the world, and bills itself as a dyed in the wool American brand, since 1947. Last seasons advertising promoted K2 as an American Classic. But since the end of 1999 the company has been building its skis not in America but in its one million square foot plant near Guangzhou City in China.

Recently K2 added Rawlings to its stable of authentic American brands. That would be the Rawlings that makes baseballs and baseball equipment, among other products, and is the brand of choice for Major League Baseball in the US. Despite what can arguably be called an authentic red, white and blue identity, all of Rawlings production is based in Asia, save for baseballs made for the Major Leagues, which will continue to be made in Turrialba, Costa Rica, according to Dudley Mendenhall, Senior Vice President of Finance of K2 Inc. (The only thing keeping Major League baseball production in Costa Rica is that the Major Leagues obsession with statistics demands that no portion of the game -- even the location where the baseballs are made -- change significantly. As Mendenhall wryly points out, It would be a disaster if one year after we moved the Major League baseball production to China, the home run average in the Major League doubles.)

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Workers principally in China and the Philippines produce the rest of the 126-year-old companys baseballs, mitts, and equipment. This year K2 also bought Worth, a softball equipment producer in America, which has been based in Tullahoma, Tennessee, since 1912. In 2004, Mendenhall says, K2 will look at transitioning certain aspects of Worths production to K2s plant in China. Todays sports brands, Mendenhall contends, are all about quality and price points. As long as these are taken care of, customers no longer care where the product is made. In any event Mendenhall says, You cannot compete in retail if you manufacture in the USA. Mendenhall claims that his company can get the same (or better) quality for a product made in Asia, while paying up to twenty times less for the labor as the company could get in the US. He believes strongly that K2 enjoys the number one spot because other ski brands are completely hung up on producing principally in Austria or Central Europe, which are not as competitive as Asia. There is always room for a high-end European product or pair of skis, but they will not be able to lead categories, he explains. Atomic makes a big deal about manufacturing in Austria. But they are losing market share because there are only so many people who want to part with $1,200 for a pair of skis (1,028). When asked what the overall quality of the workmanship of the skis was from China -- where there is no tradition of either skiing or ski manufacturing -- Mendenhall insists, The quality is better. Not the same. Better. The K2 5500 Ski has been named the Best Value Ski of the Year for two years running by Ski magazine. Similar to the situation with Geox, research, design and communications for K2 remains in the companys home plant, which is based on Vashon Island in Washington. While Mendenhall is emphatic that his brand suffers absolutely no stigma from K2s ski production in Asia, a quick browse of the Internet, does find hold-outs making noise about human rights abuses and other issues of offshore production. Given the culture of the hardcore ski and boarding crowd, it is not surprising that sites like Fourt2.com, which promotes online guerilla warfare, take a dim view of K2s move to Asia. One contributor goes so far as to make the claim that the skiing community as a whole supports the free Tibet campaign, and therefore, cannot support K2s move to China.

Possibly, however, most consumers -- and perhaps some activists -- are simply unaware of the extent of outsourcing in the world today. A case in point would be the cut flower industry in Europe, which depends heavily on imports from Kenya. Englands national flower, the rose, is mainly grown for the British by Kenyans, citizens of the countrys former colony. Sally Peters, in the London office of the Kenya Flower Council, says that close to 80 percent of the roses bought in the UK come from Kenya. Kenya is the worlds biggest flower exporter, she says, accounting for 25 percent of the cut-flower export market into the EU, to a

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value of 153 million yearly ($179M), making cut flowers Kenyas second largest industry behind tea. On Mothers Day in the UK, roughly 30 million Kenyan roses are sold in the UK alone. The majority of people do not know the roses are grown in Africa, says Peters. People just are not concerned about where these flowers are coming from. Sometimes there is an outcry from the public, as witnessed recently in Canada, but generally it is never expected to heavily affect business. On May 14, 2003, an internal memo sent by the president and CEO of CN Rail, Mark Hunter, barred CN employees from using the word Canadian in describing the company (formerly known as Canadian National). The Canadian Press reported Transport Minister David Collenette calling the situation obscene, adding that the 84-year old brand is a great Canadian institution, one of the best railways in North America and we shouldnt apologize for being Canadian (from an article by Maria Babbage September 19, 2003). Canadian in spirit the company may be, but in 1999 the company merged with Americanbased Illinois Central. The memo suggested that continued use of the title Canadian National in the companys correspondence, email and voice mail would lead to confusion with our customers and the general public. Still the brand stewards believe the outrage will subside without lasting effect to the brand. Mark Hallman, spokesman for CN Corporate Issues, dismissed the outcry as merely a tempest in teapot. He notes that, The CN brand was voted one of the top 50 corporate logos of all time in 2000. (In a panel sponsored by the Financial Times and Report on Businessmagazine, CN was voted number 38.) Referring to the study, Hallman says, It was the only Canadian brand to make the list, and the CN name is based on that corporate logo. We are trying to get consistent brand identification across the entire system in Canada and the United States. This is purely a branding exercise, and really, much ado about nothing. He does admit that the immediate resentment the move has caused on the part of both employees and government ministers was not anticipated. But, he points out, in todays business environment, dropping the identification with Canada and making the brand name the same as the corporate logo, simply makes the best brand sense.

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AN EXPLORATORY STUDY TO UNDERSTAND COUNTRY OF ORIGIN AFFECT (by Isabelle Schuiling and Jean-Jacques Lambin Summary) DO GLOBAL BRANDS BENEFIT FROM A UNIQUE WORLDWIDE IMAGE ? Introduction The trend towards increased globalisation had a major impact on the branding strategies of international companies. In the past, international firms would develop brands that were adapted to the needs of local markets, under a multi-domestic marketing approach. They tend now to favour the development of global brands that ideally have the same product, the same name and the same positioning in all markets, under a global marketing approach. This is well illustrated by the example of Unilever that is at the end of the process of eliminating three quarter of its portfolio of brands to only keep 400 brands that have international presence or international potential. Many reasons can explain the acceleration of global brand development. Next to important economies of scale that a global brand can bring to the company, the advantage of benefiting from a unique worldwide image across markets is considered by managers as an important advantage to manage brands on a global basis. The objective of this article is to question whether these global brands do really benefit from a unique image in all markets. Many global brands have been first strong local brands in their country of origin before being expanded in the rest of the world. Are their image different in their country of origin versus other countries? For example, is the Mercedes brand image the same in Germany than in other countries? Is the image of Barilla pasta similar in Italy than in the rest of the world? And what about Godiva perception in Belgium versus other countries? Some recent research has evaluated whether the fact of being global could influence brand purchase (Steenkamp, Batra and Alden 2003, Holt, Quelch and Taylor 2003, Alden, Steenkamp and Batra 1999) but no research has been conducted so far to understand if global brands really benefit from a unique global image everywhere and whether this image is different in the country of origin versus the rest of the world. In this article, we will first establish what the strategies of international companies are in the development of global brands, second, we will review the impact of the country of origin on the perception of brands and third, we will evaluate, via an exploratory testing, what their images are in different countries. Strategies for global brand creation :

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International companies have traditionally followed two types of strategies to create their global brands. One strategy has consisted of expanding successful local brands on international markets. This strategy has been followed over decades by many multinational firms. For example, a brand like Evian was first a successful local brand in France before it was expanded on a worldwide basis. Evian has now become the leading global brand in the worldwide mineral water market. This is also the case of Barilla that was initially a strong local brand in Italy and is now the successful worldwide leading pasta brand that we all know. Nivea from Beiersdorf in Germany was also first a successful local brand before becoming the European cosmetic leader. Even Coca-Cola is part of this first group of brands. The advantages of this first strategy is to build on a winning local brand proposition and increase the chances of success. It also permits to build progressively a brand on a global basis that is less risky and less expensive for the company. If the expansion is not successful, the financial losses will be limited. The second strategy has consisted of creating global brands from the start. These brands are launched on a worldwide basis quasi at the same time. This is the most recent strategy adopted by certain multinationals such as Procter and Gamble. The creation of global brands such as Pringles, Swiffer or Kangoo are good examples of this strategy. The key advantage is to rapidly build a world brand with the same name and positioning in every market and benefit from substantial economies of scale. The risk is of course to invest massively on a worldwide basis without being sure of a worldwide success. The majority of existing global brands have been created following the first strategy. These brands were first strong local brands in their home country before being expanded internationally. Only a few number of most recent global brands have been global as from the start. Most global brands have therefore a country of origin. In this article, the analysis will focus on this group of brands. The advantage of benefiting from a worldwide image The advantages of moving to global marketing have been discussed for many years in the marketing literature (Buzzell 1968, Levitt 1983, Jain 1989, Boddewijn, Soelh and Picard 1986, Huszagh, Fox and Day 1986, Quelch and Hoff 1986 Douglas and Wind 1987, Craig and Douglas 2000). The advantages of building global brands are well known. The most important one is the possibility to benefit from large economies of scale. These economies of scale can be generated in all parts of the business system. The concentration of R&D efforts in few international locations, the rationalisation of the manufacturing process and the standardisation of the marketing program lead to very large economies of scale that generate important cost reductions.The latter improves significantly the company financial performance.The second advantage that has often been highlighted is the creation of a unique worldwide image. This brings worldwide coherence in the brand image, enables the company to develop one advertising campaign and leverages the use of international media. This also leads to substantial reduced costs in the communication area. The key question of this article is to review whether global brands really benefit from this advantage. Influence from the country of origin of global brands We know from research that the country of

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origin has an impact on product perception. Many studies have been conducted in this area (COO research) and they show that the country of origin of the products had an impact on consumers evaluation of these products (Schooler 1971, Han and Terpstra 1988, Hong and Wyer 1989, Samiee 1994). The studies have indicated that consumers have a tendency to better evaluate local products than foreign products (Nagashima 1977, Kaynak and Cavusgil 1983, Han 1989, Bilkey and Nes 1982, Schooler 1971, Sharma and Shimp 1995), although that this bias varied across consumer segments and countries (Heslop and Papadopoulos 1993, Shimp and Sharma 1987). Recently, some authors have shown that brands perceived as coming from a non local country of origin, especially from Western countries were preferred to brands seen as local and that was not only linked to perceived quality but also to social status (Batra, Alden and Steenkamp 2000). No work has however been done to identify whether the country of origin of global brands has an impact on their image. Recent studies on global brands evaluate whether the fact of being global could be an advantage for consumers. Some have indicated that perceived brand globalness (PBG) could create perception of brand superiority (Shocker, Srivastava and Ruekert 1994, Kapferer 1992) and perception of brand prestige. Some others have highlighted the fact that global brands could also connote cosmopolitan, sophistication and modernism (Friedman 1990). Other authors have also tested whether factors such as status, country, quality, citizenship or American values (Holt, Quelch and Taylor 2003) would influence the preference for global brands. No work has been developed to evaluate whether the image of global brands is similar in their country of origin versus the rest of the world. We consider that global brands might benefit from a stronger image in their country of origin. As they were initially strong local brands, they might benefit from the characteristics of local brands. Recent research on local brands (Kapferer and Schuiling 2003) has shown that local brands benefit from a better image that international brands on key brand equity elements. In particular, consumers evaluate local brands as much more trustworthy than international brands. Exploratory testing To better understand global brand images, we have conducted an exploratory research on a selection of global brands from the large international data base from Young and Rubicam (known as the Brand Asset Valuator). These global brands have been selected from a sample of 347 global brands and 9739 people interviewed in 1999-2000 covering twelve product categories in the food sector (a list is provided in attachment 1). It included the four largest European countries - UK, Germany, France and Italy. For each brand, 48 image attributes were available to consumers to evaluate brands. We will focus our analysis on the attributes most often used by people to evaluate these brands. These image attributes were (by order of importance) : High quality, trustworthy, good value, simple, down to earth, friendly and traditional. This exploratory research showed that the image of global brands was very different in their country of origin versus other countries where they were also present. As indicated in table 1, global brands benefit in their country of origin from a better image on key brand image attributes. They are perceived as delivering better quality and generating

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more trust than global brands in other countries. Their image is also stronger on the attributes of good value and down to earth. They are also seen as more traditional, that is quite logical as they have been first strong local brands in their home country. Table 1: Image attributes of global brands Attributes (%) Global brands in Global brands in their country of other countries origin (N=289) (N=58) (b) (a) High quality 31.2 24.3* Trustworthy 29.3 17.9 * Goodvalue 19.9 16.8 * Simple 19.1 17.2 Down to earth 18.8 14.7* Friendly 13.8 14.4 Traditional 20.5 12.7 * *Statistically different (a) versus (b) at p<0.05 and N= Number of brands Interestingly, the analysis also shows, as indicated in table 2, that global brands benefit from a significantly higher level of awareness in their country of origin (86%) versus other countries (73%). They even also enjoy a higher usage level in their home country (48%) versus other countries (37%).

Table 2: Awareness and usage levels of global brands Variables Global brands in Global brands in their country of other countries origin (N=289) (N=58) (b) (a) Awareness -% 86 73* Usage -% 48 37* *Statistically different (a) versus (b) at p<0.05 and N= Number of brands

This confirms the strength of global brands in the countries where they have first been created versus other markets where they have been later expanded. We will also illustrate these findings by taking two specific examples of very known global brands: Evian and Barilla. If we compare Evian in its country of origin, France, versus other countries covered in the database, we find that the image of Evian is stronger in France on key attributes such as high quality, trustworthy, good value, down to earth, simple and traditional versus Italy, UK and Germany, as indicated in table 3.

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Table 3: Evian key image attributes in country of origin versus other countries Key image attributes France= country of origin (a) 46.6 55.5 19.5 30.8 25.8 14.0 23.4 Germany (b) Italy (c) UK (d)

High quality Trustworthy Good value Simple Down to earth Friendly Traditional

22.3 * 10.6 * 10.3 * 14.7 * 10.3* 12.7 7.9 *

13.6 * 31.0 * 8.9* 24.0 * 15.5* 5.8 * 6.2 *

28.6 * 16.6 * 20.4 20.6* 19.2* 9.4 * 13.4 *

*Statistically different (a) versus (b) (c) and (d) at p<0.05 The situation is similar for Barilla in Italy versus other European countries, as shown in table 4. The attributes of trustworthy, good value, down to earth, traditional are rated at a significantly higher level in Italy versus other countries. Interestingly, Barilla is the only brand tested for which the attribute of high quality is lower in its country of origin versus other countries. We explain this by the fact that for Italians, Barilla is an industrial pasta and as such can not been rated high on quality versus fresh pasta. In other countries, however, Barilla is viewed as the reference in Italian pasta.

Table 4 : Barilla image attributes in country of origin versus other countries Key brand attributes France (a) Germany (b) Italy = Country of origin (c) 34.9 56.6 33.8 17.8 35.9 13.7 34.6

High quality Trustworthy Good value Simple Down to earth Friendly Traditional

56.9 * 44.8 * 26.8 * 26.8 * 16.0 * 14.1 19.3 *

40.6 17.4 * 17.2 * 18.1 10.6* 16.6 12.6 *

*Statistically different (c) versus (a) and (b) at p<0.05 , UK data not available

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This first attempt to better understand global brand images confirms that the country of origin has an impact on the brand image. This might be linked to the fact that these global brands have been first strong local brands in their home country. Consumers have often known them for many years and have developed a close relationship with them. This indicates that we need to operate a distinction when we manage global brands on a worldwide basis. Conclusions The advantages of building global brands are not only to benefit from substantial reduction of costs but also to create a unique worldwide image. We have seen that most existing global brands have been created by the internationalisation of a strong local brand. As such, they have a clear country of origin. The objective of this article was to evaluate if global brands benefited from a similar image in every country where they were present. The research, based an exploratory analysis of the Young and Rubicam data base (known as the Brand Asset Valuator), indicated that there was an important difference in the image of global brands in their country of origin versus other countries. The image was much stronger on key brand equity attributes that were most often used by consumers to evaluate brands. The difference was significant on attributes such as high quality, trustworthy, good value, down to earth and traditional. The analysis also showed that these global brands enjoyed a significant higher level of awareness and usage. This confirmed the strengths of global brands in their home countries versus other countries. We can therefore not consider that the brand image of global brands are unique or even similar in all markets. A clear distinction has to be established between the image of global brands in their country of origin and in other countries where they have been expanded later on. These findings also have important managerial implications. First, the key question is to evaluate how the global brand has been positioned over the years in different international markets because different images might also be linked to different positioning. A brand like Godiva was initially not positioned the same way in its home country Belgium versus other countries. In Japan and the United States, the brand was positioned on a more exclusive basis. This is also the case of brands such as Benetton and Zara that were positioned slightly differently in their home country than in the rest of the world. Second, it indicates that an advertising campaign that works well in the country of origin might therefore not work well in other markets. There is often a tendency to use advertising that is proven successful in the home country for the other countries. In view of the different images identified, there is a need to validate thoroughly via testing the use of the home country advertising. Third, the results show the need to regularly monitor brand images in key countries where the global brand exist and not assume that the country of origin information is sufficient. In the current context of globalisation, there is a trend to reduce local market research in order to decrease costs. Research is, however, key before deciding any important branding changes in key markets outside the country of origin. In net, this shows that the analysis of global

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brands should be contrasted depending on the country of origin, even if these brands have been present on international markets for many years. For further research, it will be interesting to confirm these results by analysing global brands indifferent sectors such as durable goods, high tech or luxury goods.

Attachments 1. Types of product category Alcohol Chocolate Beer Yoghurt Mineral water Frozen goods Chewing gum Fruit juice Coffee Ice cream Soup Pasta . 2. Brands selected Countries Brands- France (Evian Kronenbourg Danone) Italy UK (Kit-Kat Guiness Gordons Gin) Germany (Lowenbrau Mueller) . (Barilla Cinzano)

REFERENCE
http://www.uclouvain.be www.livemint.com www.citeman.com

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