Analyze the advantages and disadvantages
of using a global brand name
Nowadays the global market is quite attractive for high competition environment. In order to be visible in global market, brands can be used to play an important role. From marketing point of view, brands are the means that consumers use to distinguish products and services based on essential and non-essential attributes and they are a source of business’s differential advantage. When the company exports a product label, it has the choice between using: specific brands in each market (local brands), or a single brand for all its foreign markets (global brand). The decision between these two alternatives, which each have their advantages and drawbacks is related to the choice between standardization and adaptation of brands in foreign markets and the desire to associate a local image or a foreign image to the product. What are the advantages and disadvantages of using a global brand name? Firstly I will explain what a global brand name is, then I will analyze the advantages of using a global brand and finally I will analyze the disadvantages.
I What is a global brand name?
A global brand (examples: Coca-Cola, Benetton, IBM, Sony, Canon ...) is a brand that is marketed the same way worldwide. This means this means: * Strategic principles are identical in all markets;
* An identical position is observed in all markets. The brand positioning is the mental image associated with it. If we associate the brand with a high price or a particular age group in the domestic market, it will have the same position worldwide; * Marketing strategy is identical in all markets with a few exceptions to best adapt to local tastes and to the competition. The marketing mix should not be completely uniform because it can vary in price, the media distribution systems used, etc.. The key is that the principles underlying strategic guiding the branding is similar across the world. A global brand does not exist in nature, it must be created. In this area, it is always easier to create a global brand from scratch than to reposition or rebrand an existing national brand and try to make a brand regionally and even globally; however there are many examples of successful companies which rebranded (e.g. Twix Raider and two marks were used for the same candy bar, the first in Europe and second in the United States until the company decides to use March as Twix brand world in all its markets). Using a global brand is feasible:
* If it refers to a pattern of controlling behavior at the international level; * If it is used in markets where homogeneous consumer tastes tend to be identical (examples: non-cultural connotations, luxury goods); * If it relates to products that are universal by the globalization of its market is subject to the rule of uniformity (industrial product, perfume, cosmetic); * If it is associated with an origin that is an commercial advantage (example: Corona beer from Mexico); * If it is likely to be promoted by the media who have international distribution; * If not overly influenced by cultural and linguistic context. Table 3 the top ten global brands, 2009
Table 3 the top ten global brands, 2009 Rank | Brand | Country of origin | Sector | Value ($ millions) | 1 | Coca-Cola | USA | Drinks | 68,734 |
2 | IBM | USA | Computer services | 60,211 |
3 | Microsoft | USA | Computer software | 56,647 |
4 | GE | USA | Diversified | 47,777 |
5 | Nokia | Finland | Consumer electronics | 34,864 |
6 | McDonald's | USA | Restaurants | 32,275 |
7 | Google | USA | Internet services | 31,980 |
8 | Toyota | Japan | Automotive | 31,330 |
9 | Intel | USA | Computer hardware | 30,636 |
10 | Disney | USA | Media | 28,447 |
Using a global brand name is advantageous for...