Managing Brands over geographic boundaries and market segments.

University of Toronto, Scarborough **We aren't endorsed by this school
Apr 26, 2023
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Managing Brands over geographic boundaries and market segments. Regional Market Segments Regionalization seems to run counter to globalization. Marketers are more interested in regional marketing today than previously because there is high-quality data available about purchasing behavior both in-store and online. For example, online platforms such as Facebook and Google include geotargeting as a key feature, which can identify and track consumers down to their specific location. These targeting options make it possible to target different customer segments with different offerings by dynamically varying product attributes and pricing based on what consumers are seeking. Syndicated data made available by companies such as AC Nielsen provides insights about where consumers live, where they shop, and what media they use. Therefore, a regional targeting strategy can make a brand more relevant and appealing to any one individual. Regionalization can have downsides. Marketing efficiency may suffer, and costs may rise with regional marketing. Moreover, regional campaigns may force local producers to become more competitive or blur a brand's national identity. The upside, however, is that marketing can have a stronger impact. - Regionalization is an important recent trend that perhaps on the surface, seems to run counter to globalization. - Reasons for regional marketing Need for more focused targeting. The shift from national advertising to sales promotions - Drawbacks Production headaches. Marketing efficiency may suffer, and costs may rise. Other Demographic and Cultural Segments Any market segment may be a candidate for a specialized marketing and branding program. For example, it the importance for marketers to consider age segments and how younger consumers can be brought into the consumer franchise.As another example, the 2000 census revealed that Asians and Hispanics accounted for 79 million of 281 million people in the United States and an estimated $1 trillion in annual purchasing power. - Marketing Based on Age: Of particular interest to marketers in recent years is the segment of millennials. These are consumers who were born after 1980 and have various distinct traits that single them out from a marketing standpoint. - Marketing based in ethnicity: Although much marketing has targeted baby boomers, millennials, Hispanics, and other demographic and psychological groups, many critics argue that firms have not effectively targeted the African American market. The rationale for Going International/ why should a brand focus on global market? A number of well-known global brans such as apple, google, coca-cola etc have derived their sales and profits from international markets. This has encouraged many firms to market their brands internationally, for the following reasons: - Perception of slow growth and increased competition in domestic markets - Belief in enhanced overseas growth and profit opportunities - Desire to reduce costs from economies of scale. - Need to diversify risk. - Recognition of global mobility of customers Advantages of Global Marketing Programs - Economies of scale in production and distribution: From a supply-side or cost perspectie, the primary advantages of a global marketing program are the manufacturing efficiencies and lower costs that derive from higher volumes in production and distribution. The more that strong experience curve effects exist—driving down the cost of making and marketing a product with increases in production—the more economies of scale in production and distribution from a standardized global marketing program will prevail. - Lower marketing costs : Another set of cost advantages arises from uniformity in packaging, advertising, promotion, and other marketing communication activities. The more uniform, the greater the potential savings. Branding experts maintain that using one name can save businesses tens of millions of dollars a year in marketing costs. - Power and scope: A global brand profile can communicate credibility.Consumers may believe that selling in many diverse markets is an indication that a manufacturer has gained much expertise and acceptance, meaning the product is high quality and convenient to use. An admired global brand can also signal social status and prestige and enable consumers to signal their identity, particularly as global citizens. - Consistency in brand image: Maintaining a common marketing platform all over the world helps maintain consistency of the brand and company image; this is particularly important where customers move often, or media exposure transmits images across national boundaries. Services often desire to convey a uniform image due to consumer movements. - Ability to leverage good ideas quickly and efficiently: Not having to develop strictly local versions speeds a brand's market entry. Marketers can leverage good ideas across markets as long as the right knowledge transfer systems are put into place. MasterCard's corporate marketing group helps facilitate information and best practices across the organization. - Uniformity of marketing practices: Finally, a standardized global marketing program may simplify coordination and provide greater control of communications in different countries. By keeping the core of the marketing program constant, marketers can pay greater attention to making refinements across markets and over time to improve its effectiveness. Disadvantages of Global Marketing Programs - Differences in consumer needs want, and usage patterns for products: Differences in cultural values, economic development, and other factors across nationalities lead customers to behave very differently. For example, the per capita consumption of alcoholic beverages varies dramatically from country to country. One consequence of the differences is that strategies that work in one country may not work in another. Here is an example highlighting the importance of understanding the local culture and customs prior to launching a global brand. When Krispy Kreme doughnuts crossed the Atlantic from the United States to the United Kingdom in 2003, it was faced with a market in the United Kingdom that was unfamiliar
with doughnuts. Rather than introduce Krispy Kreme as a breakfast food, the company decided to leverage the British tradition of bringing cakes to work for special occasions. It positioned Krispy Kreme doughnuts as a communal experience that could be purchased in bulk and shared with coworkers. - Differences in brand and product development and the competitive environment: Linguistic differences across countries can twist or change the meaning of a brand name. Sound systems that differ across dialects can make a word problematic in one country but not another. Cultural context is key. Customers may actually respond well to a name with potentially problematic associations. The questions are how widespread the association is, how immediate it is, and how problematic it actually would be. - Differences in the legal environment: One of the challenges in developing a global advertising campaign is the maze of constantly changing legal restrictions from country to country. For example, Canada banned prescription drug advertising on television. Poland required commercial lyrics to be sung in Polish. Sweden prohibited advertising to children, and Brazil recently instituted similar laws. Malaysia did not allow lawyers or law firms to advertise. Advertising restricts the use of children in commercials in Austria, comparative ads in Singapore, and product placement on public television channels in Germany. - Differences in marketing institutions: Channels of distribution, retail practices, media availability, and media costs all may vary significantly from country to country, making implementation of the same marketing strategy difficult. Foreign companies struggled for years to break into Japan's rigid distribution system that locks out many foreign goods. The prevalence of online shopping, smartphones, supermarkets, and so on may also vary considerably, especially in developing countries. - Differences in administrative procedures : In practice, it may be difficult to achieve the control necessary to implement a standardized global marketing program. Local offices may resist having their autonomy threatened. Local managers may suffer from the "not invented here"syndrome and raise objections—rightly or wrongly—that the global marketing program misses some key dimension of the local market. Local managers who feel their autonomy reduce may lose motivation and feel doomed to failure. Standardization vs Customization - According to Levitt, because the world is shrinking-due to leaps in technology, communication, and so forth-well-managed companies should shift their emphasis from customizing items to offering globally standardized products that are advanced, functional, reliable, and low priced for all. Standardization vs Customization - Blending global objectives with local or regional concerns - "Think global. Act local" - A global brand has a clear consistent equity across geographies: same positioning, same benefits, plus local tailoring if needed. Global Brand Strategy To build brand equity, it is often necessary to create different marketing programs to address different market segments. - Identify differences in consumer behaviour How they purchase and use products What they know and feel about brands - Adjust the branding program. Choice of brand elements Nature of supporting marketing program Leverage of secondary associations Building a Global Brand- global brand positioning To best capture differences in consumer behavior, and to guide our efforts in revising the marketing program, it is highly recommended that companies evolve a global brand positioning which derives from a deep understanding of how brands must be positioned across various markets.Recall that brand positioning means creating mental maps, defining core brand associations, identifying points-of-parity and points-of- difference, and crafting a brand mantra. Many companies have a global brand positioning document that typically addresses a number of questions. The answers to these questions will guide how to structure a global brand positioning and will help identify which aspects of a brand's positioning can be modified based on local considerations. These questions include: - How valid is the mental map in the new market? What is the level of awareness? How valuable are the associations? - What changes need to be made on the mental map? - By what means should this new mental map be created? Global Customer-Based Brand Equity - To build customer-based brand equity, marketers must: 1. Establish breadth and depth of brand awareness. 2. Create-points-of-parity and points-of-difference. 3. Elicit positive, accessible brand responses. 4. Forge intense, active brand relationships. - Achieving these four steps, in turn, requires establishing six core brand building blocks. Core Brand Building Blocks: Creating brand salience, Developing brand performance , Crafting brand image , Eliciting brand responses. Example: positive brand judgments , Creating brand feelings , Cultivating resonance For example, brand managers should be aware of how the sequential timing of introduction can impact brand salience and brand perceptions across different markets. Different orders of introduction can profoundly affect consumer perceptions about what products the brand offers, the benefits supplied, and the needs satisfied. Brand imagery associations may vary
considerably across markets because of variations in brand history and heritage. Brand judgments must be positive in new markets— consumers must find the brand to be of good quality, credible, worthy of consideration, and superior. Finally, achieving brand resonance in new markets means that consumers must have sufficient opportunities and incentives to buy and use the product, interact with other consumers and the company itself, and actively learn and experience the brand and its marketing. Questions for Global Branding Positioning - How valid is the mental map in the new market? How appropriate is the positioning? What is the existing level of awareness? How valuable are the core brand associations, points of parity, and points of difference? - What changes should we make to the positioning? Do we need to create any new associations? Should we not re-create any existing associations? Should we modify any existing associations? - How should we create this new mental map? Can we still use the same marketing activities? What changes should we make? What new marketing activities are necessary? Building Global Customer-Based Brand Equity - In designing and implementing a marketing program to create a strong global brand, marketers want to realize the advantages of a global marketing program while suffering as few of its disadvantages as possible. Ten Commandments of Global Branding (sos) 1. Understand similarities and differences in the global branding landscape: The first—and most fundamental—guideline is to recognize that international markets can vary in terms of brand development, consumer behavior, marketing infrastructure, competitive activity, legal restrictions, and so on. Virtually every top global brand and company adjusts its marketing program in some way across some markets but holds the parameters fixed in other markets. Marketers should also resist the attempt to view a single continent or country as a unified market with similar tastes. 2. Don't take shortcuts in brand building: In terms of building global customer-based brand equity, many of the basic tactics we discussed in Part II of the text still apply. In particular, we must create brand awareness and a positive brand image in each country in which a brand is sold. The means may differ from country to country, or the actual sources of brand equity themselves may vary. Building a brand in new markets must be done from the bottom up. Strategically, that means concentrating on building awareness first, before the brand image. Tactically, or operationally, it means determining how to best create sources of brand equity in new markets. Distribution, communication, and pricing strategies may not be appropriate in any two markets,even if the same overall brand image is desired in both. If the brand is at an earlier stage of development, rather than alter it or the advertising to conform to local tastes, marketers will try to influence local behavior to fit the established uses of the brand. Consumer education then accompanies brand-development efforts. 3. Establish marketing infrastructure: A critical success factor for many global brands is their manufacturing, distribution, and logistical advantages. These brands have created the appropriate marketing infrastructure, from scratch if necessary, and adapted to capitalize on the existing marketing infrastructure in other countries. 4. Embrace integrated marketing communications: Many top global firms have introduced extensive integrated marketing communications programs. Overseas markets do not have the same advertising opportunities as the expansive, well-developed U.S. media market. As a result, U.S.-based marketers have had to embrace other forms of communication in those markets—such as sponsorship, promotions, public relations, merchandising activity, and so on—to a much greater extent 5. Cultivate brand partnerships: Most global brands have marketing partners of from in their international markets, ranging from joint venture partners, licenses or franchisees, and distributors, to advertising agencies and other marketing support people. By exporting existing brands of the firm into the new market, by acquiring existing brands already sold in the new market but not ownedby the firm and by creating some form of brand alliance with another firm. 6. Balance standardization and customization: O ne implication of similarities and differences across international markets is that marketers need to blend local and global elements in their marketing programs. The challenge, of course, is to get the right balance—to know which elements to customize or adapt and which to standardize. Some of the factors often suggested in favor of a more standardized global marketing program include the following:• Common customer needs• Global customers and channels• Favorable trade policies and common regulations• Compatible technical standards• Transferable marketing skills 7. Balance global and local control: Building brand equity in a global context must be a carefully designed and implemented process. A key decision in developing a global marketing program is choosing the most appropriate organizational structure for managing global brands. In general, there are three main approaches to organizing for a global marketing effort: 1. Centralization at the home office or headquarters 2. Decentralization of decision-making to local foreign markets 3. Some combination of centralization and decentralization 8. Define operable guidelines: Brand definitions and guidelines must be established, communicated, and properly enforced so marketers in different regions have a good understanding of what they are and are not expected to do. The goal is for everyone within the organization to understand the brand's meaning and be able to translate it to satisfy local consumer preferences. Brand definition and communication often revolve around two related issues. First, some sort of document, such as a brand charter or a global brand positioning statement document, should detail what the brand is and what it is not. Second, the product line should reflect only those products consistent with the brand definition. 9. Implement a global brand equity measurement system: A global brand equity management system defines the brand equity charter in a global context, outlining how to interpret the brand positioning and resulting marketing program in different markets, as suggested by the previous global branding commandment. With the global brand strategy template in place, brand tracking can assess progress, especially in terms of creating the desired positioning, eliciting the proper responses, and developing brand resonance.
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