Global brand power for an organisation

 

Introduction

 

The essay focuseson effects of developing global brand, such as impacts on production, positionand promotion in individual target country, the challenges from variouscultures and customer behaviour with some successful and unsuccessful examplesof famous global brand organisations. First, the essay discusses the balance ofstandardisation and customisation for product and brand when organisationsconsider launching globalisation. Second, the essay explains development ofglobal brand may bring more benefits for organisations through economics ofscale. Moreover, cultural differences may make the organisations hard todevelop their global brand, such as language barriers, customer value, variouscustoms and legal reasons. Finally, the tendency of developing global brand,such as building global brand leadership and effective global brand managementteam, is presented.

 

The world isbecoming more international with the development of high technologies, such as informationtechnology. A few years ago, people did not hear of global village. Nowadays, peopleuse different products from all over the world. These products could be manufacturedand distributed thousands of miles away. Competition is becoming more intensebetween various commercial organisations. Commercial organisations need toattract new customers and retain existing customers to fight against competition.One of various ways is through brand. If organisations want to gain their salesand profits from non-domestic markets, the goal of organisations could beachieved through global brand.  

 

Globalisation is amajor problem which organisations face when they consider developing globalbrand. The main arguments for globalisation focus on the point of view that theworld is not only becoming smaller but also becoming similar. People’s needsare basically the same. The development of world culture is formed by globalcommunications, such as the activities of multinational organisations. Theworld culture is motivating people to become the same. It should be noted thatthe landscape of global brands is changing, especially concentrating on youngerconsumers. The reason is that generally increased consumers mobility, bettercommunication capabilities, and expanding transnational entertainment optionsand lifestyles are dramatically becoming more and more similar in different countries(Keller 1998). Example, a teenager in Paris hasmore and more common points with a teenager in London,New York, Sydney or almost any other major cities inthe world because of the growth of global media, such as Internet. Thus,younger generation will be more easily influenced by broader world culturalmovements and the consequence of the trend is that standardised product andbrand will be more easily accepted by new generation through global brandingprogramme and marketing strategy (Keller 1998). Motameni and Shahrokhi (1998) arguedthat the development of global consumer products and brands is the key to thesuccess of an organisation because the world is growing internationalisation. Theirviewpoints are based on Levitt’s argument, who is a proponent of globalproducts and brands. For example, Colgate Company took three years to prepareits total anti-bacterial toothpaste. The sales of total anti-bacterialtoothpaste are 150 million dollars every year and the product is sold in 75countries (Motameni and Shahrokhi 1998). The global toothpaste brand got muchmore profits and market shares for Colgate Company. However, other argumentshighlight there are significant differences between countries, namely, marketsare actually different, even in different regions of one country. As an example, thebrand Vizir which P&G Company uses it to launch Europe market in the early1980s, but the Vizir liquid detergent did not get a success in Europe market (Keller 1998). The reason is that P&GCompany did not recognise that washing machines in Europewere not designed to accept liquid detergent. After researching the situationof target country, they made variations about the product so that modifiedproduct suited the market. On the other hand, P&G Company has varied thesmell of Camay soap, the flavour of Crest toothpaste and the formula of Headand shoulders shampoo according to target countries. P&G Company’s productsare now changed to suit different markets when it learns from its mistakes. Furthermore, the development processes ofproduct and brand have different stages in every country so that it isnecessary to vary for global brand and product in each country (Randall 2000). Otherwise,the global brand and product are not useful to getting more benefits if oneorganisation considers completely standardised development of global brand andproduct.

 

Randall (2000)loosely defined global brand is basically the same product or serviceeverywhere, with only small variations, such as Coca-Cola and McDonald’s. Theyvary their products to be suitable for local customers’ tastes. However, thevariations are not very great. Coca-Cola Company only changes the sweetnesslevel for Coke. McDonald’s adds local tastes to their menu, such as addinglocal sauce.   Furthermore, global brand includes the samebrand identity, values, the same positioning and the same marketing mix(Randall 2000).

 

It is obvious thata global brand has several advantages, such as the status and prestige ofcompany, maximising market benefits, reducing advertisement costs. According toMotameni and Shahrokhi (1998) summarised Posten’s argument, there is no betterway to build value for organisations and global consumers than to build astrong brand. It is crucial to consider different brand effects at global levelwhich drive consumers to purchase. 

 

After the organisationmakes a decision to develop its global brand through global marketing programs,are these marketing elements, such as same positioning, same package design,same pricing schedule, and same distribution plan, the most effective andefficient for the development of its brand in every country?

 

Generally speaking,global brand impacts on organisation’s products and services. Thus, it isuseful to consider that products and services are standardisation or customisationat a global level. Aaker (1991) summarised Ted Levitt’s viewpoint, which is thatthe tastes and styles all over the world are becoming more homogeneous becauseof the spread of TV, Internet and other technologies. Keller (1998) also summarisedTed Levitt’s viewpoint, which is that companies need to learn to ignoreregional and national differences if the world is one large market. However, othercritics think it is necessary to point out that even McDonald’s does not standardiseits product (Keller 1998). McDonald’s and Coca-Cola are famous examples ofglobal brands. As a famous global marketer, McDonald’s, has also modified andadapted its successful menu to develop overseas markets. McDonald’s providesbeer in Germany, wine in France, and coconut, mango, and tropical mintshakes in Hong Kong and hamburgers are madewith different meat, such that McDonald’s prepares a lamb burger and offers nobeef products on the menu in the first Indian restaurant (Keller 1998).

 

On the other hand,global economies of scale could give unbelievable competitive advantage to organisationsthrough global brand so that local competitors’ brands can not respond quickly.For example, Gillette is one of the companies which has successfully developedglobal brand. According to Gillette Company’s estimate, 1.2 billion people useat least one Gillette product every day. Gillette Company enjoys the benefitsfrom huge economies of scale by selling a few types of products to every singlemarket. The basis of developing global brand is that the domestic product isnot assumed to be introduced to another country (Kotler and Keller 2006). Many companies have tried to launch global brandwith a world product which is required some adaptations. However, Randall(2000) supported Levitt’s viewpoint to argue that economies of scale couldactually overcome preferences of local market by making single and standardisedmodel to offer value of money for consumers. Nevertheless, the argument needsto be tested in every market of real world because organisations will take arisk if the market preference is not clear. It is essential to balance betweentaking into account all different consumers’ preferences and ignoring themcompletely. Therefore, transforming a brand into a global brand needs to suitseveral basic requirements. Randall (2000) summarised, firstly, the brandshould have obvious competitive advantage which is distinguished from othercompetitors. Secondly, the cost will be raised to a new level as soon as globalsales are reached through global brand. Then, the organisation has to consideraffording such costs to fight against local brands and other global brands fromother organisations. Finally, there must be a segment which is so big enough tosupport the development of global brand in each target country.

 

Global brand hasan effect on the position of product. A global brand’s positioning may vary inevery country. Normally, the global brand’s position is influenced by economy, expenditurelevel and culture of target country. For example, McDonald’s seems to be thesame brand all over the world. McDonald’s uses the same name, appearance andproducts with not great variation, however, the consumer’s perception aboutMcDonald’s in the United States is very different from consumer’sperception in developing countries. Randall (2000) illustrated that McDonald’sis everyday, low-priced, convenient symbol for an American, however, it is astatus symbol for customers in Moscow or Thailand.

 

Furthermore,global brand also impacts on the promotion of product. Then, organisations haveto consider some normal factors to make some variations in order to develop itsglobal brand because of legal reasons in different parts of the world,different pronunciations in different languages. If the global brand has notbeen made variations, the standardised brand will lead to lose the original brandessence. For instance, Diet Coke is changed and called Coca-Cola Light in Europe because of legal reasons. The promotion packagingfor Diet Coke is different in different parts of the world. It is obvious thatCoca-Cola’s advertisements have been adapted and developed for differentcountries. For example, Coca-Cola’s global advertisements, such as theadvertisements campaign of the 1992 Winter Olympic Games, were used by twelvelanguages before being published to 3.8 billion viewers in 131 countries (Keller1998). Furthermore, brand name normally is difficult to be standardised atglobal level. The reason is some translation problems so that these problemscould lead wrong version and misunderstanding. Hence, Johnson’s Pledgefurniture cleaner is called Pronto in Switzerland,Pliz in France, but theyretain its American brand name in the UK (Palumbo and Herbig 2000).

 

Development ofglobal brand will be challenged by different customer behaviours from variouscountries. Customer behaviour is dramatically different from various markets oftarget countries. The following data reveals the different results of customerbehaviours about annual beverage consumption. One of the highest consumption ofcarbonated soft drinks is in the United States. The number is 203.9liters per capita consumption. Italyis the lowest. Relatively, Italyis one of the highest per capita consumption of bottled water. The number is164.4 liters per capita consumption, but the United Kingdom is only 20 liters. Forbeer market, Ireland and theCzech Republic are over 150liters per capita, and Franceis the lowest with 35.9 liters (Kotler and Keller 2006). As another example,Green Giant Company decided to develop its local brand to become a globalbrand. The company introduced a canned sweet corn as the product of developingglobal brand. However, Green Giant Company found the French added their productto salad and ate them cold, the British put them into a sandwich and pizza, andJapanese children ate them as a meal after lecture time. Similarly, afterGeneral Foods launched its orange drink to become a world brand, they found thatthe Germans did not like its brand name, the British did not like its taste andthe French did not drink orange juice during breakfast time (Keller 1998). Obviously,the same product which is launched as a global product and brand is difficultto be sold in various countries because of different customer behaviours andthe extent to acceptance.

 

On the other hand,the culture of the target country gradually influences customer behaviour sothat the development of global brand will meet obstructions. Customers do notappreciate brand essence so that they are not satisfied with products andservices. For instance, Walt Disney launched the Europe Disney theme parkoutside Parisin 1992. They are criticised because they do not take account of local culturefactors, which are a number of local French customs and values, such as servingwine with meals. However, after Disney Paris theme park renaming, it finallybecame Europe’s biggest tourist attraction bymaking a number of changes and adding local culture and values. (Kotler andKeller 2006) Similarly, Coca-Cola Companyeven offers wine with meals to replace cappuccino in Italy. However, as a global brandpioneer, P&G Company learned a lesson so that the company was aware ofimportance of understanding culture and customer behaviour for launching aglobal brand. P&G Company tried to sell the same diaper to Japanese parentsas the diapers were sold in the United States when Procter & Gamble enteredJapanese market with Pampers disposable diapers in 1977 (Keller 1998). Initially,P&G Company gets great success, but they found the growth is slowed when itis challenged by a Japanese competitor which entered the diaper market with anew design. P&G Company clearly found its market share declined from 90percent to under 10 percent from company’s statistics (Keller 1998). After itanalysed the problem, P&G Company found the problem is that they did notrecognise differences of culture and customer behaviours between Japan and the United States. The difference isthat Japanese housewives went to laundry daily and used diapers only at night,but American housewives did weekly. Therefore, P&G Company regained marketshare after they make a little variation, such as smaller and thinner diapers,so as to make the diapers better to suite to Japanese market.

 

Moreover,organisations have to meet great challenges, such as customer loyalty forglobal brand. Customers’ brand loyalty problem will be enlarged at globalmarket level. Global brand of the organisation meets a real challenge not only fromother global brands but also the brands of local competitors. Accordingly, theorganisation has to take into account how to identify, attract and retain amarket in each country because it is difficult to assess customer loyalty for aglobal brand. Palumbo and Herbig (2000) agreed Alden’s viewpoint and claimed brandswith a global image can get their competitive power and value from customers’improved self-worth and status by purchasing of brand. The reason is thatcustomers may purchase certain global brands to reinforce their self-worth andstatus in a specific global segment so that customer loyalty for global brandis reinforced. However, customer loyalty for global brand can be improved byorganisations to create awareness and image for their brands (Palumbo andHerbig 2000).  

 

Otherwise, organisations can get higher prices or higher margins fromdeveloping global brand. Aaker and Joachimsthaler (2000) claimed an organisation can help enhanceshareholders’ value through launching global brand and building global brandleadership. They thought global brand leadership is not only global brand butalso organising for brand leadership. Such an organisation really needs aneffective global brand management team because developing a global brandstrategy will coordinate and balance the brand strategies of individual targetcountries, utilise an organisation’s human resource, culture and allocate theresources of building global brand (Aaker and Joachimsthaler 2000). Therefore, Aaker and Joachimsthaler (2000) argued that anyorganisations which are seeking to build or improve their global brand andglobal brand leadership and relationship have to assign managerialresponsibility for developing global brand and carry out their grand globalbrand building programme with best practices in individual target countries. Forexample, the relationship which Procter & Gamble Company built was that ithas restated its core purpose of improving the lives of its consumers, andSamsung Company talked about creating brilliant products and services tocontribute to a better global society, namely, to human society all over theworld (Clifton 2003).

 

Conclusion

 

One organisationgets more market share and profits through developing global brand although itwill meet a lot of problems. In the near future, any organisation which want tolaunch and improve their global brand need to understand similarities and differencesin the global branding landscape. Furthermore, it is useful to balance globaland local control, balance standardisation and customisation of product andbrand and consider key elements of global marketing for any organisation (Kotlerand Keller 2006). In addition, the tendency of developing global brand is to buildglobal brand leadership and focus on building effective global brand managementteam which is necessary to launch global brand marketing programme.

 

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