A brand is a collection of perceptions that may be positive or negative about a name or symbol of a product/service. It goes beyond short-lived product features to include emotional benefits and associations. At their heart, brands create trust with stakeholders. A misconception is that global branding seeks to pursue an identical name, product, and marketing message worldwide. This practice is uncommon and often counterproductive. Most brands are not global in this sense. Procter & Gamble has over 89 brands, but only a handful are promoted identically worldwide.
Its well-known laundry detergent is sold in some countries as Tide and in others as Ariel. A global branding strategy is a cross-national process to improve and harmonize a brand. The goal of a global brand strategy is to develop strong brands in all countries through a continuous improvement process using organization structure, processes, and culture to allocate brand-building resources, to create synergies, and to coordinate and leverage multiple country brand strategies. Brands are becoming more valuable. In a globalizing world, brands can protect firms from international competition.
Ariel Laundry Detergent
The marketplace is confusing and cluttered with the entry of more players and the introduction of products with short lives. There is a shift, especially in industrialized countries, from manufacturing products to providing services, which are harder to evaluate and compare. Buyers lead busier lives and have less time to discern among products and sellers. So there is a need for the decision shortcuts and simplification provided by trusted brands. The lowering of trade barriers and freer information flows make it easier for brands to cross borders and be exploited internationally. The economic center of gravity is shifting from low-growth industrialized countries to rapidly growing emerging countries.
While consolidation is often emphasized in industrialized countries, enthusiasm is the theme in growing parts of the world. In industrialized countries, brandsmay exploit loyalty among aging consumers, while in emerging countries they may reach out to their large population of younger consumers that is climbing the economic ladder. From emerging markets, indigenous brands (such as Tata, Lenovo, Infosys, and China Mobile) are gaining strength in international competition. Brands (such as IBM, Goldman Sachs, and Morgan Stanley) are important also in the business-to-business space because of their reputation for expertise, reliability, and security.
Other recent trends include the proliferation of media among which consumers can now choose. Environmental issues are also growing in importance. Positioning a product close to environmental issues strengthens a brand. And some trends, such as being online, have become necessary to bolster brands. Brands can appreciate, like McDonalds, or depreciate in value, like Starbucks. The rise and fall of brands is in part tied to the popularity of their product category. Private equity groups are on the lookout to buy tarnished brands to restore their health. Managers should review their corporate practices that may tarnish their brands, such as Wal-Mart's labor relations, Microsoft's market dominance, and Nike's international contract manufacturing. Most brands fail.
Over 30,000 consumer products are launched each year, but less than a tenth have any staying power. Myopic companies reduce the quality of their products or stretch their brands unwisely, only to spend years attempting to repair the damage. Starbucks' strong brand was commoditized by overexpanding to over 13,000 coffee shops too quickly, which diminished its cachet. Brands that survive may be vulnerable to competing brands from retailers who also sell their private labels, from generic manufacturers, and from imitators where intellectual property protection is weak. They are also affected by the rise and fall of product categories, such as the Internet or unhealthy carbonated beverages.
A global branding strategy has to overcome various execution difficulties. It needs to understand the varying needs of many markets and be very creative to satisfy them. It must overcome coordination problems, varying coverage of agencies, and available media. It also needs to craft a process and design an organization to develop, strengthen, and leverage a brand.
The Global Branding
Francesco Zinzaro
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