Strategic Brand Management

Exeter MBA and MSc – Day 3

Lecture 1
Global Brand Strategy

Jack Buckner

1
 Why?

Access to new markets

Less competition?

Reduce costs through economies of scale

Recognition of global consumers – and global
opportunities

Increasing globalisation of the retail/channel
environment - Internet

Global profile necessary for success

Perception – the competition will get there first

Or come here … fast

Why not?

Costs are often greater than expected

Risks of losing brand control – unless
carefully planned growth (yet more costs)

Cultural barriers often underestimated
(more than the consumer barriers)

Dilution of core management / brand
leadership

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 A warning on the literature

Most of the global brand literature is written
by brand types….

Not sleazy financiers who want to make a
quick buck overseas…..

…and there are plenty of sleazy financiers
out there

Global Strategic Brand Management

Brand Consumers

Product / Service

SLEAZY FINANCE
TYPES
Sales Forces
Retailers
Head office

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 Expansion Overseas
METHOD ADVANTAGES DISADVANTAGES

Subsidiary Brand control Cost and resources

Lack of local expertise
Alliance Combines Role clarity
Joint Venture experience Resource duplication?
Distributor Quick and cheap Limited brand control

Licensee Profitable and Lack of brand control

limited resources
from parent

Going overseas

Most of the literature concerns strong
domestic brands going global

The resources exist to expand via
subsidiaries

Distributors and licensees may be the only
viable route for small brands

Global competition (driven by the Internet)
forces global expansion before strong
domestic market share established

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 Can a brand afford not to expand overseas?

Single European market

Internet

Communications

Travel

“Globalisation” of key consumer groups –
Tweens

…BUT timing is critical

Global Brand Strategy

Internal Analysis
– Organization
– Brand expression
– Marketing

External Analysis
– Conventions
– Brand perception
– Brand recognition

Sicco Van Gelder – Global Brand Strategy

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 Advantages in Global Branding/Marketing

Economies of scale

Lower marketing costs

Power and scope

Consistency in brand image

Ability to leverage good ideas quickly

Uniformity of practice

Keller – Chapter 14

Disadvantages in Global branding/marketing

Consumer differences

Differences in consumer response

Differences in brand and product
development

Differences in the legal environment

Differences in marketing institutions

Differences in administrative procedures

Keller Chapter 14

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 The Key Debate
STRUCTURE Advantages Disadvantages

Centralised Strong brand Weak country

control management
Mix Brand and local Confusion and
management duplication of
balance functions/
resources
De-
De-centralised Strong country Weak global
management brand

Dell computers

Established in 1984 by Michael Dell

Pioneered direct sales model

Low cost, high value brand

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 Dell global expansion

Established European subsidiaries in late
1980’s

Asia- Pacific early 1990’s

1996 - e-commerce

Repeated core business / branding model
across Europe

Dell in China

Targeted corporate market first

Authorized distributors

First market to operate a “hybrid”
hybrid” business model

Manufacturing plant

530 toll free numbers in 258 cities

Local promotional events – advertising and direct
mail

2001 – Smart PC – lower price model

2003 China – Dell’
Dell’s fourth largest market,
growing by 50% pa

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 Global Brand Management

Global organizations like global branding
strategies….

….and global product ranges

Markets like to customize product ranges….

…. And sometimes the brands themselves

The Key Tensions

Global Brand Manager The local markets

Or here
Or here

They say it won’t

sell here

Or here
Or here

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 Alternative Management Systems
Let’s discuss and
decide what’s in
the best interests
of the brand Let’s be
realistic about
Just Do It the US

If you don’t do it –
you’ll never get a job
in HQ

Eurobrands management

Three phases
– Decentralised
– Centralised
– Decentralised with strong coordination

Intermediate policies most successful across
Europe

Kapferer – Chapter 12

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 Global Brand/Marketing Planning

Strong brands define roles and

responsibilities

Coca-Cola and Nestle’s alternative planning
systems

Clarity is more important than the system

The “Mix” approach to global

branding

Core branding elements most centralized –
brand identity, core products, R and D

Secondary branding elements most debated
– advertising, in-store

Below the line branding often most de-
centralized – pr, sponsorship

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 The Lure of Global Branding

Successful global brands
– Stimulate the sharing of insights and best
practices across countries
– Support a common global brand-
brand-planning
process
– Assign managerial responsibility for brands in
order to create cross-
cross-country synergies and to
fight local bias
– Execute brand-
brand-building strategies
Aaker and Joachimsthaler – the lure of global branding

Assigning responsibility

Business Management Team
– Create global brands without weakening local brand strength
– Encourage adoption of brand building programmes
– P and G

Brand Champion
– Senior global executive the brand champion
– Approves all brand-
brand-stretching decisions
– Sony and the Gap

Global Brand Manager
– Similar to brand champion but less senior
– Brand steward approach

Global Brand Team
– Involve country management in additional responsibilities
– Develops joint guidelines

Aaker and Joachimsthaler – the lure of global branding

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 Starbucks in Japan
Third largest coffee market in the world
Retail rentals in Tokyo very expensive
Local competition – Doutor and Pronto
Customisation – smaller portions, limited local
product range
Standard – names of offerings, no-smoking
policy, store size
Howard Schultz “they said we would not
succeed in Japan. It shows the power of
believing in what you do.”
BUT – 2002 17% decline in traffic
Increased local product range (Rice/Salmon
wraps)

McDonalds in China
“McDonalds can both stimulate social
change and uphold traditional ways of
interacting.”
“..the meanings attached to a brand
name can be malleable and sometimes
paradoxical in societies where cultural
norms are in flux.”
Brand Image and cultural traditions
The natural trend for global brands is
to minimise adaptation
Eckhardt and Houston – Cultural paradoxes in Brand Meaning:
McDonalds in Shanghai, China

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 Some Global brand issues

The European debate

The role of the UK within Europe

US market entry for non-US brands

Management of Asia

China and its relation to Asia

Global key account management

Western Europe
Nordic Europe
Sweden Norway
Denmark Finland

Anglo-Saxon The Netherlands Germany

Europe Germany
United Kingdom Central Europe
Luxemburg
Ireland Austria Switzerland
Belgium

France Italy

Mediterranean Europe
Spain Portugal Greece Italy

Jean-Claude Usunier – Marketing Across Cultures (Prentice-Hall)

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adidas Global Brand Management Evolution

1993 – Big 4 – Germany, USA, France and

UK

1996 – Big 7 – USA, Germany, UK,
France, Italy, Japan, Scandinavia

1998 – Regional Management – USA,
Europe, Asia, Latin America

Issues remain – role of US, Japan and Asia,
Eastern Europe

adidas Global Branding Process

August (16) – Brand Strategy Meeting

September – January (12-
(12-16) – Global product
range design and development

January(12) – Range review

January-
January-March(9-
March(9-12) – Product range revision and
concept development

March(9) – Global Marketing Meeting

April-
April-June(8-
June(8-6) – Country marketing and sales

June-
June-December(6-
December(6-2) – Range ordering and
marketing finalisation

January – Product and marketing launch

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