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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..

Yesterdays Globalism
In yesterdays 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.

Todays 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

Why do companies go global

"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

Benefits of going 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

A brief about the case


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 Dianas 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.

As

Diana's

she

devils

was

hit

two

years

ago,

and

their research suggested that the sequel will probably be an even bigger draw. this In sequel stars are from Europe, Asia and South America -Our fastest growing markets. And they would call it Espoirs anniversary line Espoirs archival, Revlon

also did same attempt in 2000 bond film, Die another day.

A central website for product customization.

Problem occurs when company goes global


1. Culture difference between geographies ( need different management style and marketing approaches ) 2. Difference in regulation and taxation

3. Language barrier
4. Changed mindset

Two major implication for global marketers.

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 its home market.

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 needs II. Global customers & channels III. Favorable trade policies & common regulations IV. 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

Conclusion
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