A global brand is the product or services that bring along their identity (brand) which is available in many nations and, though it may differ from one country to another, the localized versions have a common goal and a similar identity. In other words, global brands carry one brand name or logo together with it. A global brand can carry one name or logo and thus be recognized worldwide, however, the product may not be of the same standard at all. Global branding can be influenced by some the issues like social and culture, the economics of the country, and political condition in a country. Besides, a lot of the marketers in the world are facing the problem of customizing or standardize their products and services. Marketers tend to influence by major challenges before they went for global branding, at the same time, the marketers should also make decisions to customize or standardize their products or services because this could help them in expanding their brand and maximize their profit.
Issues that Influences Global Branding
Culture is the cumulative concept that consists of knowledge, belief, customs, practices and any other habits acquired by people as members of society. A culture operates primarily by setting loose boundaries for individual behavior. Culture, in effect, provides the framework within which individuals and households function as mention by. A major consequence of culture influence is its impact on consumption patterns of individuals and institutions or may be towards to some brand.
The economic environment involves factors that influence the consumers purchase behavior and their spending habits. The level and distribution of income vary between nations. This is very important for a marketers to develop their brand in this time as we know when economics is in good condition, the purchasing power of the consumer is high, because with their increase of the monthly income. Therefore, the consumer will switch to better quality of brand. However, when the economics is not in good condition, we know that the purchasing power of the customer will drop because of poor economic condition and lead to low monthly income will cause people switch from a better quality brand to medium or lower quality brand. For example, Nike is a famous global brand where the product from this brand is mostly targeted to those people that have high income. People will tent to choose to purchase this kind of brand if they have high purchasing power or high monthly income. When comes with the brand Power from Bata, which this product from this brand is mostly targeted to the medium income or low income customer. People will tent to choose the product that is suits to their monthly income and due to low purchasing power.
The economic environment involves factors that influence the consumers purchase behavior and their spending habits. The level and distribution of income vary between nations. There are two different economies which countries can be divided into the subsistence and industrial one. When a country has a subsistence economy the consumption mainly consists of the country’s own agricultural, which limits their ability to act globally. An industrial economy means local market here and it consists of different international competitors who present various kinds of products or services in to a nation which it does not limits the ability to act globally. Due to this, marketers must notice the main trends and spending standards on both the local and international side in industrial economies. This shows that firms need to have an understanding of the economic policies and how a market is developing, to be able to meet the competition on a market and to be able to satisfy the market demand. In order to success in global market, the marketers must make sure the demand of the market is being fulfilled, at the same time, marketers that need to success in global branding they should match the time of success in fulfilling the market demand and execute the global branding strategy. Besides, marketers must take these facts into consideration when for example setting a price for a product or services, since it will be affected by the aspects. International firms must understand the economic development of the markets and they also need to know how development of market can affect their own marketing strategy and their decisions whether to standardize or customize their brand when they successfully enter a foreign market. but there is defect for the marketer where the different economies and their purchasing power causing the marketers difficult to carry out a cohesive strategy, especially when it comes to pricing which it mention by.
The political environment involves laws, administration and pressure groups that affect and restrict different governments and individuals in a specific society. The political environmental development affects the firm’s marketing decisions which is mention by whether the firms want to choose to bring their brand to enter foreign market or not or expand it in the local market. In my opinion, the firm must be aware of the country’s political risks, how their government imposed taxes to good or services, expropriations, threats of equity intensity and the governing parties’ attitudes toward the political regulations when acting on a market. Besides that, markets with strict political environment and high political risks, firms are more likely to decide not to operate on the market or bring the brand to that particular country as it will hinder their ability to operate effectively and profitably or went for brand establishment. Markets with few political regulations and perceived level of risk are on the other hand more likely to attract international financiers, marketers, investors to bring in other brand into that particular country.
Challenges for Global Branding
Customization vs. Standardization
The major challenge for global branding is the marketer making decision on their brand whether they need to standardize or customize the brand of their own. Standardization can be known as Globalization, whereby Standardization is offering a uniform product on a regional or worldwide basis. Minor alterations are usually made to meet local regulations and market conditions. Customization also known as Localization whereby its appropriate changes are made to match with the local changes. Marketers have to deal with several problems when they try to bring their brand into the foreign market. The major problem that face by the marketer is to catch up the customer needs and learn about market characteristics of each country. If the marketers want to be successful in different countries crucial decision should be made in choosing either to standardize their product and service’s brand or customize it to meet the local market demand and maximize profit at the same time.
One of the successful examples of standardization brand is Coca-Cola. Coca-Cola is making business nearly all over the world and they never think about changing their product’s formula. They have a good advertisement policy and they did it well for each country still they did not change the product. Besides, for customization, the best example for the successful in customization brand is Barbie which now it become major icon of America. Barbie toys started to produce not only American character but also Indian, Jamaican, Japanese, Korean and Italian. Barbie is more than a toy for girls and now it become like an idol for them.
For many years, marketing and advertising managers have face problem like choosing customizing or standardizing as strategies for entering international markets. Managers can achieve economies of scale, message consistency, and the ability to attract common cross-national market segments through the use of global, standardized marketing programs which this is mention by. However, because of significant differences in consumers, cultural and socioeconomic conditions, and market structures, customization to local or national markets may be worth the additional expense. The major issue affect decision to customize or standardize brand image is the market condition. This is because market condition is the major indicator or the major determinant for a marketer to make crucial decision whether they want to enter certain market or not. If they choose to enter a market yet they also have to decide whether to customize or standardize their product and service’s brand.
To manage brand images successfully in global market, managers must be cognizant of and responsive to important differences across international markets. Various market conditions have been prescribed as important for determining when to customize or standardize marketing programs which this mention by. Things that relate to brand management or brand establishment of a product or a services and the condition of customer needs and want should be taken as consideration by the marketers to make decision whether to standardize or customize their brand or not. In the same time, examine each foreign market’s culture and socioeconomic environment to evaluate marketing opportunities is advisable for the manager to perform this kind of action. This is because the managers can create a better understanding towards the culture differences of the target market as well as their preferences towards a product or service and their brand as well. In this case, brand plays an important role where it can helps to attract customer to consume the product or services that a company produce.
In cultural market condition, the environmental aspects like economic, social and cultural of foreign markets have long been recommended as signals firms should use in deciding upon customized or standardized marketing programs. The cultural differences across markets are an indicator that consumers in different nations have different needs, and hence may require tailored brand images. A commonly used typology of cultural characteristics developed and tested by Hofstede (1984) has been applied in international marketing settings.
Three of Hofstede’s cultural dimensions, power distance, uncertainty avoidance, and individualism, relate to the needs-based brand image framework. Power distance is a culture’s degree of social inequality, and can be directly related to the use of social or symbolic brand image. For example, images that project social class status and affiliation like Levi’s Dockers which this brand will have more appeal the greater the culture’s power distance. Uncertainty avoidance is the cultural pattern of seeking stability and predictability as opposed to change and new experiences, and can be related to the appeal of functional (stable) and sensory (experiential) images. For instance, innovative processing and great taste is the image Molson has created for its Molson Ice beer, an image that may be unsuitable where high uncertainty cultures where risk-averse consumers have little interest in new brewing techniques and flavors. Finally, individualism is people’s tendency to value personal and individual time, freedom, and experiences, and can be related to the appeal of sensory and social images. Although Nike’s “just do it” image of individual freedom and boundless potential may work well in individualistic cultures, such an image may be less attractive to consumers in cultures where conformity is the norm. As a result, when managers consider markets that differ in one or more of the cultural dimensions related to consumer needs, brand image customization may be appropriate. When cultural conditions are similar across markets, standardization is likely to be chosen by the marketers.
In the socioeconomic condition, the national socioeconomic conditions that affect consumer spending and buying power are also important indicators for a marketer to know whether they should standardize their product in the market or not. Consumption patterns, such as the use of functional self-sufficiency products which means consumer that who have very limited economic resources and the use of symbolic and experiential products by affluent, attest to the linkage between economics, consumer needs, and brand images. Information on the socioeconomic conditions of foreign nations is very important and it is widely available and ranges from individual countries’ government census reports to comprehensive computerized databases.
The nation’s GDP per capita is one common indicator in socioeconomic condition which the figure of the GDP per capita gives managers an overall assessment of a nation’s income and thus its ability to spend money on goods and services. When countries that have greatly differ in GDP per capita or other socioeconomic indicators, managers should consider customizing their brand image unless they are targeting similar market segments or have a product that is positioned as a functional product or low cost brand. When socioeconomic conditions are similar across countries and market segments, standardization of brand image should be a suitable strategy for the marketers.
Considering the Hofstede’s cultural dimension and socioeconomics influences, the managers tent to choose to customize global brand image when cultural variations power distance, uncertainty avoidance, individualism across markets are high than when cultural variations across markets are low. On the other situation, managers tent to choose to standardize global brand image when cultural variations across markets are lower when cultural variations across markets are high. In socioeconomic, managers are more likely to customize global brand image when socioeconomic variations of market segments across markets are high than when socioeconomic variations across markets are low. Conversely, managers are more likely to standardize global brand image when socioeconomic variations across markets segments are low than when socioeconomic variations across markets segments are high.
Strategy Recommendations for Global Branding
Brand strategy is important as it influence people’s perception of a brand in such a way that they are persuaded to act in a certain manner. In addition that most brand strategies aim to persuade people to buy, use, and donate again by offering them the usage experience. As branding is typically an activity that is undertaken in a competitive environment, the aim is also to persuade people to prefer the brand to competition. A global brand needs to provide relevant meaning and experience to people across multiple societies. To do so, the brand strategy needs to be devised that takes account of the brand’s own capabilities and competencies, the strategies of competing brands, and the outlook of consumers (including business decision makers) which has been largely formed by experiences in their respective societies. There are four broad brand strategy areas that can be employed.
- Brand Domain. Brand domain specialists are experts in one or more of the brand domain aspects (products/services, media, distribution, solutions). A brand domain specialist tries to pre-empt or even dictate particular domain developments. This requires an intimate knowledge, not only of the technologies shaping the brand domain, but also of pertinent consumer behavior and needs. The lifeblood of a brand domain specialist is innovation and creative use of its resources. For example Google, this companies are successful because of their company brand was consistent and not because keywords got them to the top. Consumer recognizes their brand, because of the quality of service or product they provided. They feel justified, and likely to buy from them. However, to build a brand it takes serious work and large amount of resource.
- Brand Reputation. Brand reputation specialists use or develop specific traits of their brands to support their authenticity, credibility or reliability over and above competitors. A brand reputation specialist needs to have some kind of history, legacy or mythology. It also needs to be able to narrate these in a convincing manner, and be able to live up to the resulting reputation. A brand reputation specialist has to have a very good understanding of which stories will convince consumers that the brand is in some way superior.
- Brand Affinity. Brand affinity specialists bond with consumers based on one or more of a range of affinity aspects. A brand affinity specialist needs to outperform competition in terms of building relationships with consumers. This means that a brand affinity specialist needs to have a distinct appeal to consumers, be able to communicate with them affectively, and provide an experience that reinforces the bonding process.
- Brand Recognition. Brand recognition specialists distinguish themselves from competition by raising their profiles among consumers. The brand recognition specialist either convinces consumers that it is somehow different from competition, as is the case for niche brands, or rises above the melee by becoming more well-known among consumers than competition. The latter is particularly important in categories where brands have few distinguishing features in the minds of consumers. In some cases, a brand recognition specialist needs to be able to outspend competition to gain unbeatable levels of awareness. In other cases, a brand recognition specialist needs to convince a loyal following of consumers that it is unique. For example, if a product name can be associated with a certain tagline, logo or attribute (safety and Volvo; “Just do it” – Nike) a certain level of brand recognition is present.
To conclude, marketers should take concern on the factors that influence their brand like Social and Culture, Economic and Political Environment. Before marketers heading to international market, they must understand the other country’s factors that have been mentions previously. This is because successful global branding can help marketers make sure their brand name to have long life span in the international market. Infinite life span of a brand is important because it can help the marketer to success in long – term planning. Besides, customizing and standardizing always the major challenges that face by the marketers. Some of the marketer tent to customize their brand and some choose to standardize. In cultural market condition, the environmental aspects like economic, social and cultural of foreign markets are the factors that need to take concern by the marketer to make decision whether to standardize or customize their brand.