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 McDonald’s – Same positioning? – Same package design? – Same pricing schedule? – Same distribution plan?

Global brand defined as
• Consumer perception about McDonald’s 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. .

. • What remains consistent market-to-market are the values communicated and delivered by the brand.Global brand factor • The brand’s – positioning – advertising strategy – Personality – look and feel – same but allow for regional customization.

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 .

–Perception of excellence –Same name.Several advantages –Highly attractive. 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% .

Hofstede’s cultural model • Hofstede’s 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 • “Culture’s Consequences” and “Cultures and Organizations: Software of the Mind” • Scores for each country explain why people and organizations in various countries differ. . comparative data.

Uncertainty avoidance .Individualism . extended to nearly 90 Five different poles make up the cultural index: .How do we measure cultural distance? Geert Hofstede’s Cultural Index .Power distance .National character survey .116.(Long term orientation) .000 IBM employees .Masculinity .72 countries and 20 languages Original scores for 56 countries.

5D Model PDI 100 LTO UAI 100 100 0 Work-related values to consumptionrelated values 100 IDV 100 MAS .

Examples of Hofstede’s Dimensions .

Comparison of cultural dimensions More information on www.geert-hofstede.com .

design. nature. subtle • LTO/STO – STO: sense of urgency. entertainment . testing. technology. persuasion. well-groomed – Low: results are important. direct.Cultural dimensions and advertising appeal • Power distance – High: status symbols. we. facts – COL: high context. master-learner relationships… – Low: independence. indirect. presence and importance of elders. less role differentiation • Uncertainty avoidance – High: explanations. reverse sexism… – FEM: less endorsement. caring. change. I…). entertainment. structure. explicit (you. symbols. domination. “empowered” consumers • Individualism/Collectivism – IDV: low context. comparative advertising. success. groups • Masculinity/Femininity – MAS: winning. direct style – LTO: build trust. data.

buying intention. short term effect – Low PDI. Switzerland.Advertising models and culture (1/2) • Sales-response model – Simple stimulus-response model – Very direct. IDV. persuasive and direct – US. Germany. UK. France…) . Low UAI (Anglo-Saxon model) • Persuasion model – Short term shift in attitude. indirect style – FEM. IDV (Netherlands. Scandinavia. demonstrations. testimonials). and brand preference through providing arguments – “Lecture” form (presenters. Austria… • Involvement model – Build relationships between consumers and brands by creating emotional closeness – Brand becomes a “personality”. “buy now” strategy. MAS.

Advertising models and culture (2/2) • Awareness model – Create awareness to differentiate brands from similar brands – Associations.. emotion often linked with product category – Low IDV. stability…) . entertaining/story. cohesion to subculture – Very culture specific (symbols of status. Latin America. metaphors. China • Symbolism model – Turn the brand into a symbol/code. low MAS (Spain. Latin America.) • Emotions model – Create positive attitude and brand loyalty – Builds connections between brands and emotions. make friends to build trust and dependence – Japan. success.. Asia. build trust. indirect – Low IDV (Spain. self-expression. humor. Africa) • Likability model – Liking the advertisement will lead to liking the brand – Indirect.

global/local paradox . 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. 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.Standardization vs. Degree of adaptation.

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? .

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? . social.Psychosocial characteristics • Attitudes toward the product – Are the basic psychological.

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)

in every market  and there is great similarity in execution (pricing. packaging. advertising) across cultures .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.

differences in tastes from culture to culture compel global companies to adapt to local conditions . literally.What kind do not lend themselves • Food is one category where.

• All of Intel's competitors are global.Intel • Intel. • Intel is a global brand without significant local adaptation • Holds true for Disney. whose products and markets make it easier for executives to establish a truly global brand with a memorable catch-phrase: "Intel inside. which stands for family entertainment in all cultures .“ • 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.

– Inherent market differences that can exist from country to country.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. .

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

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

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

Shell and McDonald's became symbols of a host of complaints about globalization. Disney.Favoring local brands • Criticism of global brands by activists opposed to globalization • Nike. • 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.  Revenues were lopsided -.3% of the brands provided 63% of revenues -. Unilever was struggling under the weight of some 1.and the company was not growing.600 brands in more than 50 countries. .  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). – Local brands with strong positions in single countries (including Wishbone salad dressing in the United States and Persil detergent in England). – regional brands (such as a spread called Flora in the United Kingdom and Becel in Germany).

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

 MTV responded to the change in climate. MTV Europe (MTVE) has a presence in 41 countries with multiple languages and formats and nearly 50% local programming.  Today. such as VIVA in Germany and MCM in France.MTV  Advertisers called on MTV to offer local programs.  Their products were not uniformly branded in all countries  Strong local competitors emerged. . either because  could not afford pan-European coverage  their products were available only locally.

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

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

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 .Risks of taking brand global  Underestimating the investment in spending and time for a market to become aware of the brand. try it.

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

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

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

allowing for a focused. regardless of true physical ability. • 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.Emotion • A brand is not a brand unless it competes along emotional dimensions. • Elevated the discussion beyond tangible aspects of the shoe or apparel to what the customer feels when wearing and performing in Nike gear. yet massmarket offer. .

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

. • In essence. • HSBC  excellence in financial services with its deep knowledge of local custom and practice. wants and tastes. • Brands adapt to the local marketplace while fulfilling a global mission.Adaptability • Global brands must respect local needs. it is communicating a “glocal” advantage.

.How are Global Brands Managed? • Several management traits that are employed by leading global brands.

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

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

. • Global brand management teams implement processes to create.The Team • Global brands demand a global brand management team. • Regional and international organization is in place to maintain brand leadership. review and improve brand performance. • 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.

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

• 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. there must be consistent and widespread brand equity measurement.Measurement Systems • In order to sustain a global brand’s long-term position. .

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

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

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

security. • It was unique for a credit card company to say to consumers. companionship and 'making time for yourself'. • Consumers now focus on lifestyle and quality.S. 'you are what you buy'. • Their core values are family.• The U. 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.“ . "It's not about what you buy. and on the concept of 'rewarding yourself for what you've earned'. it's about how you take care of yourself.

Global branding : positioning AND properties .

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

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

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mango and tropical mint shakes in Hongkong – .Some trends • McDonald’s does not standardise its product –Provides beer in Germany –Wine in France –Coconut.

– The French hardly drink orange juice at breakfast .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.

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. .

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