Business Explain: International Branding Strategies

International Branding Strategies

Showing posts with label International Branding Strategies. Show all posts

What are the benefits of retailer owned brands?

1. Provide the retailer with higher margins than manufacturers' brands

2. They receive preferential shelf-space and strong in-store promotion

3. Provide quality products at low prices for consumers

What is the country-of-origin effect? What factors influence consumer perceptions?

It refers to the influence the country of manufacture can have on a consumer's positive or negative perception of a product.

1. Stereotypes about specific countries and product categories

2. Ethnocentrism

3.Manufacturing country's economy

4. Fads surrounding products

How does a firm benefit from the characteristics of a brand?

1. Helps to identify goods of a seller or group of sellers

2. Differentiate one's goods from those of competitors

3. Convey a firm's marketing strategy and positioning to the markets

What impact can a corporate brand have?

1. Reduce cost

2. Give customers a sense of community

3. Provide a seal of approval

4. Create common ground

What is brand equity? Which components of a brand create competitive advantage?

The incremental utility or value added to a product by its brand name. It is estimated by subtracting the utility of physical attributes of the product from the total utility of a brand. Brand equity thus increases cash flow to the business. This idea is based on that the brand of a firm is a valuable asset that is taken into account in a firm's balance sheet.

It is composed of brand awareness, brand loyalty, perceived quality, and the brand's associations.

What are the factors that influence brand portfolio strategy?

A brand portfolio refers to when a company includes multiple brands in their brand portfolio. Most commonly, this is a strategy used to cater country or region specific needs and use different brands in different countries. The structure of these portfolios can be;

1. Product brand
About one brand, one product and one promise (i.e. the brand name is used for one single product only). Nowadays, there are few such brands - they have some sort of "original" product with a range extension. Eg. Magnum (ice cream), Pepsodent, Dove. However, you can still sometimes find pure product brands among washing powders and detergents, in various countries.

2. Line brand
Extension of a specific concept over several product categories (i.e. the same brand concept covers different types of products). Eg. ICA Asia includes a variety of products, from coconut milk to noodles.), SantaMaria also makes various line brands.

3. Range brand
Similar to line brand but holds a more long-term perspective of the extension strategy (one brand name is used for a group of products with the same type of function). Eg. Max Factor Face Finity (various make-up products for facial skin), Max Factor Lipfinity (various products for the lips), Marabou stands for a range of chocolate products. [This means it is easy for them to gain credibility in extending to more chocolate products (in the range), but also difficult to create a different line of products.]

4. Single brand name
Single promise over a range of products belonging to the same area of competence. Zoega (range of coffee blends), Lipton tea, Max Factor (make-up), L'Oréal (beauty products).

5. Umbrella brand
Overarching, well-known master brand supports own- product brands in its portfolio, and in different markets. (Sometimes it is used as a corporate brand as well, but it is not always the case.) Eg: Virgin, Google, Coca-Cola (Corp. & umbrella brands), P&G, Unilever (umbrella only).

6. Endorsing brand
Master brand only acts as a guarantor concerning a specific aspect. Eg. Fairtrade, ISO 9000, Kate Moss for Topshop, Erdem for H&M.

What is the process of brand-strategy development and how is it used in a high-value brand?

In order to establish a strong international brand, marketers must develop and implement a consistent and informed marketing strategy by the following steps.

1. Analyzing the competition

2. Identifying target customers

3. Decide on the positioning within the chosen market

4. Develop a consistent marketing communication strategy

5. Decide on global versus local content mix

6. Create a balance between brand elements

7. Establish an international brand equity measurement system.

What are the characteristics of a brand?

1. Attributes
Such as safety.

2. Benefits
Feeling more secure with a product than another.

3. Image
Brand is in tune with the values of the consumer.

4. Personality
The personal attributes of the product, such as cool, relaxed, attractive, professional etc.

5. Consistency
Quality is always ensured when buying from a certain brand.

6. Differentiation
The offer is different to other offers.

7. Equity
The value provided to the firm and stakeholders.

What is the function of a brand?

The brands satisfy and benefit both buyers and sellers.

For buyers - to reduce

1. Search costs by helping them identify specific products

2. Perceived risk by providing an assured level of quality

3. Psychological risk by eliminating negative social consequences of using the wrong brand

For sellers - to facilitate

1. Repeat purchases

2. Introduction of new products

3. Promotional efforts and premium pricing

4. Communication of identical messages to target customers

What are the elements of a brand?

1. Legal instrument
Mark of ownership with name, logo, and design as well as trademark.

2. Logo
Name, term, symbol, and design which emphasises product characteristics.

3. Company
Recognisable corporate name and image, and defines the corporate personality.

4. Risk reducer
Confidence that the expectations will be fulfilled.

5. Identity system
More than just a name and holistic structure that includes the brand's personality.

6. Image in consumers' minds
Consumer centred and the reality is the consumer's perception.

7. Value system
Consumer relevant values imbue the brand.

8. Personality
Psychological values that are communicated through PR and packaging.

9. Relationship
Consumers have an attitude towards the brand and the brand towards the consumers.

10. Adding value
Non-functional extras, value satisfier, aesthetics.

Is Coca-Cola a global brand? Has it been adapted and why?

The success of The Coca-Cola Company revolves around five main factors; a unique and recognized brand, quality, marketing, global availability and ongoing innovation. Coca-Cola should be considered a global brand, since it is known worldwide by it's trademark, Coke or Coca-Cola, and can be found basically anywhere we travel.

The drink is the same in every country, although with minor adaptations to make use of the resources in the different areas and reap the cost benefits.

What are the benefits of retailer owned brands?

1. Provide the retailer with higher margins than manufacturers' brands

2. They receive preferential shelf-space and strong in-store promotion

3. Provide quality products at low prices for consumers

When to choose a follower strategy?

1) Few legal/technological or financial barriers to inhibit entry
2) It has sufficient resources/competencies to overwhelm the pioneer's advantage

When to choose a pioneering strategy?

1) New product market is insulated from entry.

- by strong patent protection.
- differentiated product/proprietor technology.
- by Substantial investment requirements.
- by positive network effects.

2) Firm has sufficient size, resources and competencies to take full advantage of its pioneering position and preserve it in the face of later competitive entry.

3 Basic ways in which a company can react to a competitor's activities.

Not taking action,
Repositioning the existing offerings, and
Adding new offerings.

Not taking action

The decision to ignore a competitor's actions reflects a company's belief that these actions either will have no material impact on the company's market position or that the competitive threat is not sustainable and will dissipate by itself. In the same vein, a company might not react to a competitor's price reduction if it believes that this low-priced position is not sustainable in the long-term.

Repositioning the existing offering

2 ways: It might change the offering's value proposition to increase its appeal to current customers or, alternatively, it might reposition the offering to appeal to a different customer segment.

Repositioning to increase the offering's value for current customers.

Because value is a function of benefits and costs, enhancing the value of an offering might be achieved in two ways: by increasing benefits and by decreasing costs.

Increasing an offering's benefits

To increase the attractiveness of its offering, a company might choose to

enhance the functional benefits of the offering (by improving the offering's performance),
increase the monetary benefits (by adding monetary rewards), and
increase the psychological benefits (by enhancing the offering's image).

For each of these strategies to succeed, the increase in benefits must actually be perceived as such by customers; improving the offering's performance on attributes that are unobservant by customers is not likely to enhance its customer value.

Decreasing an offering's costs - As in the case of increased benefits, decreasing an offering's costs can be achieved by decreasing its functional, monetary, and psychological costs. Because the price of an offering is typically the most important component of customers' costs, price reduction and adding monetary incentives are the most common forms of cost decreases.

Repositioning to attract new customers - In addition to increasing an offering's value for existing customers, a company might decide to reposition its offering to better address the needs of different target customers. Implies a change in the value proposition of a given offering in one of two ways: vertical or horizontal.

What is a pioneering brand? Types of Pioneers? What is Benefits of pioneering?

Brands that were first in the market. Used in reference to the first company to introduce its offering to a given market defined by a particular customer need. The company that first reached a given customer segment with its offering.

4 Types of pioneers:

Technology - The company that first introduces a new technology to a category.
Product - The company that is first to commercially introduce an entirely new product.
Business model - The company that is first to introduce a new business model.
Market pioneers - The company that first introduces a given offering to a particular target market.

Benefits of pioneering

Offers the incumbent a number of advantages not available to later entrants, including shaping consumer preferences, creating switching costs, gaining access to scarce resources, creating barriers to competitive entry, and taking advantage of the learning curve.

A pioneering company has the unique opportunity to shape customer preferences, creating a close association between its brand and the underlying customer need; they become synonymous with the entire category.

As a pioneer, a company has the opportunity to build loyalty by creating switching costs for tis customers. These switching costs could be functional (loss of the unique features of the pioneer's offering), monetary (the cost of replacing proprietary equipment or a penalty for breaking a contract), or psychological (the cost of learning the functionality of a competitor's offering).

The pioneer can benefit from preempting scare resources such as raw materials, human resources, geographical locations, and collaborator networks. Pioneer might be able to lock out competition by securing exclusive access to strategically important mineral resources. The pioneer might also preempt strategically important geographic locations in both real space and cyberspace; can also preempt the competition by forging collaborator alliances with strategically important partners such as distributors or advertisers.

Pioneer can create tech barriers to prevent competitors from entering the market. Might secure the exclusive rights to a particular invention or design that is essential for developing offerings that will successfully address a specific customer need. Being the pioneer also enables a company to establish proprietary tech standard that ensures the sustainability of its tech advantage in the marketplace.

Pioneer often benefits from learning curve advantages, allowing it to heighten production effectiveness and efficiency as its cumulative output increases over time. Being in business longer than its competitors gives the pioneer a competitive edge in technological know-how, level of workforce experience, and productivity.

Drawbacks of being a pioneer.

Doesn't always benefit the company. Pioneers face a distinct set of disadvantages that might impede rather than facilitate their market success. 3 most common include free riding, incumbent inertia, and market uncertainty.

A later entrant might be able to free ride on the pioneer's resources, including its investments in tech, product design, customer education, regulatory approval, infrastructure development, and human resource development. Alternatively, a follower could reverse-engineer the pioneer's product and improve it, while investing only a fraction of the resources required to develop the original product.

Being a market leader often leads to complacency, thus leaving technological and market opportunities open to competitors. Might also be driven by a reluctance to cannibalize existing product lines by adopting new technology or a new business model. Might also result from a "sunk-cost mentality", whereby managers feel compelled to utilize their large investments in extant technology or markets even when technological advancements and market forces make these investments unfeasible.

Another disadvantage in being a pioneer is the uncertainty associated with the offering. Whereas the pioneer has to deal with the uncertainty surrounding the technology and market demand, a follower can learn from the pioneer's successes and failures and design a superior offering. Because of the uncertainty associated with the introduction of a new offering, companies with strong brands and distribution capabilities often choose to be late-market entrants, which enables them to learn from the pioneer's experience and develop an effective and cost-efficient market-entry strategy. These companies use their brand and channel power to manage the risk associated with new product development and new market entry, allowing them to be successful late entrants into a given market.

What is the country-of-origin effect? What factors influence consumer perceptions?

How does a firm benefit from the characteristics of a brand?

1. Helps to identify goods of a seller or group of sellers

2. Differentiate one's goods from those of competitors

3. Convey a firm's marketing strategy and positioning to the markets

What impact can a corporate brand have?

1. Reduce cost

2. Give customers a sense of community

3. Provide a seal of approval

4. Create common ground