Term Paper, 2009
19 Pages, Grade: 1,0
2. What makes a brand ‘global’?
3. The ‘local’ brand character
4. Efficiency of branding strategies: global vs. local
4.1 The relevance of local aspects for international marketing
4.2 The rise of Global Branding
5. Standardization vs. adaptation of international marketing
Nowadays western world consumers face an infinite quantity of products that are in many cases sold in numerous countries all over the world. Modern communication technologies allow multinational companies to perform their marketing strategies on a global level, due to the possibility of executing cross-border transactions more and more efficiently in the short term. However in what way has the consequential development of growing together an effect on marketing relevant socio-cultural differences?
The following paragraphs treat first and foremost the significance of intercultural aspects for global and local marketing strategies. Gathering different point of views towards brand characters shows the interest of a non-categorized thinking concerning brand perception. The initial definitions ‘global‘-‘local’ brands are already suggestive of the ambiguous character of brands. Analyzing adaptation and standardizing branding strategies leads finally to the principal result of this work: reasoning that successful global branding always implies the creation of a strong brand personality.
One of the most essential challenges in a globalized world is the question how to deal with cultural differences and communities. Amalgamate of national elements brings people together and separates them at the same time because all kinds of fusion include a certain risk of friction. As an element of the globalizing transformation process, the product marketing needs to adapt to the new communication conditions by evaluating the necessity of acting global or local. The aim of marketing strategies is, of course, to reach a large number of consumers worldwide or in a special region, who feel attracted to the nature of a product in a certain way. There is no doubt about the influence of cultural standards on the personal attitude towards the design, the function or the importance of a certain product. For this reason it seems unavoidable for global and local marketing, to respect national or global standards of behavior, taste, time, politeness etc. In a few words: to analyze the target group’s culture. This work shows the bandwidth of branding relevant cultural standards, as well as their degree of significance for the marketing of different kinds of products. It is about throwing a look on possibilities of adapting a product to consumer preferences that are strongly connected to ‘national images’1 and ‘collective identities’2. The aim is to prove through the perception of nations as ‘imagined communities’ the main thesis of this paper: a successful brand, whether it ‘seems’ to be global or local, requires establishing a strong and stable personality.
First of all we try to find an answer to the question of what means “local” and “global” when we talk about branding. By defining these two terms a starting point will be developed which helps us to understand the relation of cultural aspects and the branding process.
Therefore we will take a look on intercultural challenges as well as the capability of handling these challenges, which represents the basic element of an efficient marketing strategy.
Following the consistency of national regards and attitudes brings us to the connection between standardized and specialized marketing theories. How does economic and cultural globalization influence the perception of brand images? In the first instance a clarifying overview on the different types of brands will give us a general idea about what is “global” and “local” in branding.
The notions ‘global’ and ‘local’ generally refer to a geographic point of view. The existence of any other meaning perforce requests a consensus of what is a ‘global-/local brand’ nowadays in the mind of the consumer. Corresponding to a strictly geographic and a transnational consensual point of view respectively, there are different approaches concerning the definition of a ‘global brand’:
The stickiest problem, however, seems to be the difficulty of defining exactly what is ’global’ and what is not. The ACNielsen 2001 study of global brands in consumer packaged goods answered that question by defining as ‘global’ brands those which were present in the four major regions of the world - North America, Latin America, Europe/Middle East/Africa and Asia - with at least 5 percent of sales coming from outside the home regions, and total revenues of at least $ 1bn.
(Johansson & Ronkainen 2005 : 340)
The example cited above shows, how it is possible to define a ‘global brand’ strictly according to its geographical belonging, a minimum percentage of demand from abroad as well as a certain minimum of revenues. Being in accordance with the naturally confusing character of the term ‘global’, this definition seems everything but definite and can be modified without losing any logic as we see in the following example:
Just what is a global brand? You are undoubtedly familiar with local brands, sold in parts of a domestic market; national brands, found throughout the domestic market; and pan-regional brands, sold in two or more countries. Global brands have a much greater geographic reach being available in all major markets and most minor ones. What’s more, they are perceived as being global by consumers. Like Mc Donald’s, Coca-Cola, and Sony, global companies possess worldwide reputations and images.
(Gregory & Wiechmann 2002: 1)
Generally speaking there is a common position about the aspect of a global uniformity of ‘global brands’ that could be regarded as the particular characteristic of this kind of brand. Consequently we start from the assumption that ‘global’ is first and foremost related to the similarity of the brand name and the marketing strategy:
The global corporation operates with resolute constancy - at low relative cost - as if the entire world (or major regions of it) were a single entity; it sells the same things in the same way everywhere.
(Levitt 1983: 92)
Although there is a dearth of formal definitions of ‘global brand’ in the literature, it is commonly agreed that they are brands that consumers can find under the same name in multiple countries with generally similar and centrally coordinated marketing strategies.
(Steenkamp, Batra & Alden 2003: 53)
Nevertheless there is no doubt about the existence of brands being considered as ‘global’, which do not comply with this general definition as the case of the French Company L’Oréal exemplifies:
While many companies seek to homogenize their brands to make them more attractive to a wide variety of cultures, L’Oréal products have been aimed in a different direction. CEO Owen-Jones wants each of them to exemplify its source country, turning what many marketing experts might consider a restriction factor into a solid marketing virtue.
(Gregory & Wiechmann 2002: 69)
For this reason, the ‘global brand’ should be defined in this paper as ‘a product that can be demanded in averagely populated regions of all continents, and which is symbolizes a certain cultural brand image, whose global character bases on being an integral part of a worldwide costumer consciousness’. However, the cultural brand image which is considerably characterized by national values becomes more subtly differentiated and standardized respectively, all with the aim of selling a large number of the ‘global’ product.
As an effect of the non-reversible extent of globalization, modern marketing research focuses mainly on ‘global branding’. Owing to this fact, there are a relatively small number of definitions applying to the term ‘local brand’. One of the most cited was formulated by Wolfe (1991: 50), who defines as being local ‘brands that exist in one country or in a limited geographical area.’ Apart from the deficit of not limiting that mentioned area which could also be the whole world: This definition does not contain any figurative sense of what the consumer associates with the expression ‘local brand’. In Oliver’s definition we do neither find any further specification of this local area, as he calls it the ‘home market ’. Nevertheless goes deeper by explaining the fact that ‘local brands’ cannot be sold outside of their ‘home market’: being ‘idiosyncratically ’on the one hand, or on the other hand being linked with trade regulations is what make them ‘local’:
Such local brands fall into two categories:
(1) Brands which are similar to other brands in other countries in terms of formulation, function and appearance but which for a number of reasons -for example, tariff barriers, established competition in overseas markets, trademark problems or lack of interest on the part of their owners - are not sold outside their home markets.
1 As a ‘nation’ is generally defined as an ‘imagined community’, there is no doubt about the existence of ‘national images’, e.g. ‘incorporated values’ etc.
2 ‘Collective identities’ ‚ as well as ‘individual identities’, base on the dichotomy ‘us’ versus ‘them’. The identification with certain a group requires the dissociation with another group which is elementary for what we call a ‘collective identity’ (Cf. Van den Bulck & Van Poecke, 1995:2-3).
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