Global Marketing 6

global branding: three keys for global brand success

Kevin Lane Keller

INTRODUCTION

Many companies have been global marketers for decades – firms like Nestlé, Shell, Bayer, and Toshiba have sold their products around the world for years. In more and more product cate- gories, the ability to establish a global profile is becoming virtually a prerequisite for success. In luxury goods such as jewelry, watches, and hand- bags, where the addressable market is a relatively small percentage of the global market, a global profile is essential to grow profitably. Marketers for luxury brands such as Prada, Gucci, Cartier, and Louis Vuitton have long managed lucrative global franchises.

Besides the need for a larger customer base to achieve necessary economies of scale, compa- nies may look to sell outside their domestic market for a number of different reasons: better perceived profit opportunities in international markets than in the domestic market; a need to diversify risk and reduce their dependence on any one market; a desire to counterattack global competitors in their home markets; and a real- ization that their customers are going abroad and require international service.

But global competition is intensifying as new firms make their mark on the international stage. The automotive market is becoming a worldwide free-for-all. In Chile, for example, because there are no domestic auto manufac- turers, imports come from all over the world, including 14 different brands of Chinese cars, trucks, and commercial vehicles. Competition in developing markets has also intensified. In China’s exploding mobile-phone market, Motorola found their market share drop in half over a two-year period because of inroads made by Nokia and different Asian competitors.

Competition arising from firms based in developing markets is also heating up (see EMERGING MARKETS). In various developing markets, India’s Tata Motors have launched the people’s car whose spartan features are offset by a rock-bottom price. Eyeing more developed markets down the road, Tata can

afford to charge a fraction of what other auto manufacturers charge because of their reduced development costs and innovative distribution strategy that requires dealers to participate in the final assembly.

India’s Mahindra Motors are not even going to wait before entering developed markets. Their four-door, diesel-powered short-bed trucks are tackling the competitive small utility vehicle (SUV) and truck markets in Europe, Asia, and the United States with a promise of superior fuel economy. To offset a lack of image and reputation, Mahindra are targeting three groups in the United States that are believed to be most receptive to their appeals: consumers who identify themselves as ‘‘green’’; people who have bought their other main automotive product, Mahindra tractors; and Indian expatriates.

Given the significant growth opportunities offered by international markets, developing a global strategy can be of paramount impor- tance to brand builders everywhere. For many companies, however, global branding has been a mixed blessing. On the one hand, a global branding program can lower marketing costs, realize greater economies of scale in production, increase distribution efficiencies, and provide a long-term source of revenue. On the other hand, if not designed and implemented properly, a global branding program may fail as a result of ignoring important differences in consumer behavior and/or the competitive environment in the individual countries.

The goal for any brand builder, obviously, is to obtain as many of the benefits of global branding as possible while minimizing the poten- tial risks and downside. Not surprisingly, many companies have experienced both tremendous success and embarrassing failures in their global branding efforts. It is not always the case that the most successful brand in one country will find success in other countries. Although US retail giant Wal-Mart have had some success entering the overseas markets in Latin America and China, despite concerted efforts, they found themselves having to withdraw from both the German and South Korean markets.

The goal of this article is to share some common themes or guidelines for success that have emerged in global branding (see Johansson, 2009 for more detail). We outline three keys

Wiley International Encyclopedia of Marketing, edited by Jagdish N. Sheth and Naresh K. Malhotra. Copyright © 2010 John Wiley & Sons Ltd

2 global branding: three keys for global brand success

for global brand success: (i) understand the global consumer context, (ii) build a solid global marketing foundation, and (iii) strike a balance in global brand management. They represent global branding fundamentals that provide the necessary foundation for creating a strong global brand. We raise a number of different issues and offer a number of different examples in each case.

UNDERSTAND THE GLOBAL CONSUMER CONTEXT

First – and perhaps most fundamental – it is important to recognize that international markets vary in terms of consumer behavior and all the different marketing forces and other factors that impact them (see BASE OF THE PYRAMID MARKETS: CULTURE INSIGHTS AND MARKETING IMPLICATIONS). As a result, consumers may vary accordingly in their perceptions, beliefs, attitudes, images, experiences, behaviors, and so on, toward both the brand itself as well as the product category in general. These differences can have profound implications on building and managing brand equity across geographical boundaries.

For example, consider the following (Hollis, 2008). The median age in India and China is roughly 25 years, whereas in Japan, Germany, and Italy it is around 43. When asked if they are more concerned with getting a specific brand than the best price, roughly two-thirds of Ameri- cans agreed as compared to around 80% in Russia and India. A lot of these differences in consumer behavior reflect cultural differences that can be pronounced across countries. Hofstede (1980) identifies four cultural dimensions that differen- tiate countries (with countries or areas that score high and low):

1. Individualism versus collectivism. In collec- tivist societies, the self-worth of an indi- vidual is rooted more in the social system than in individual achievement (high: Japan; low: United States).

2. High versus low power distance. High power distance cultures tend to be less egalitarian (high: Russia; low: Nordic).

3. Masculine versus feminine. This dimen- sion measures how much the culture is dominated by assertive males versus

nurturing females (high: Japan; low: Nordic).

4. Weak versus strong uncertainty avoid- ance. Uncertainty avoidance indicates how risk aversive people are (high: Greece; low: Jamaica).

At the same time, many countries do not vary much on one or more of these various consider- ations, suggesting that differences in marketing activity can create unnecessary or ineffective marketing activity. An important key to global marketing success is understanding consumers in different markets, recognizing what they know and feel, and could potentially value about the brand, and, as described below, tailoring marketing programs to their desires as a result.

Obviously, the fewer the differences in consumer behavior found across markets, the more effective a standardized marketing program will be. Some types of products travel better across borders than others. New products often represent promising candidates for standardization. While mature products may have vastly different histories (or even positions) in different markets, consumer knowledge for new products is generally the same everywhere because perceptions are yet to be formed. Many of the leading internet brands – Google, eBay, and Amazon – have made relatively quick progress in overseas markets. In addition, high-end products also benefit from standard- ization because a high quality or prestige image often can be marketed similarly across countries. On the other hand, food and beverage marketers find it more challenging to standardize their products as they have to contend with widely varying tastes and cultural habits and norms.

Developing markets. In understanding cons- umer behavior in a global context, because of the wide income and economic disparity involved, some of the biggest differences are found between consumers in developing or emerging (e.g., the BRICS countries: Brazil, Russia, India, China, and South Africa) versus developed markets (Mahajan, De Moraes, and Wind, 2000; Khanna and Palepu, 2006). These differences can have profound implications forhow brands should be marketed (see EMERGING MARKETS).

global branding: three keys for global brand success 3

For example, consider channels of distribu- tion. Eighty percent of consumers in developing markets buy their products from tiny bodegas, stalls, kiosks, and mom-and-pop stores not much bigger than a closet, which Procter & Gamble call high-frequency stores. Smaller packaging and lower sales prices are often critical when incomes and housing spaces are limited. Unilever’s 4-cent sachets of detergent and shampoo have been successful in rural India, where 70% of the country’s population still lives. Coca-Cola’s sales jumped when they moved to a smaller, 200-ml bottle in India, selling it for 10–12 cents in small shops, bus-stop stalls, and roadside eateries. Recognizing that their cost structure made it difficult to compete effectively in developing markets, Procter & Gamble have devised a number of cheaper, clever ways to make the right kinds of products to suit consumer demand there.

Fundamentally, marketers must rethink all aspects of their marketing program in developing markets. As another example, high cell-phone penetration in developing markets makes mobile marketing an attractive option. A pioneer in China, Coca-Cola China created a national campaign asking Beijing residents to send text messages guessing the high temperature in the city every day for just over a month, for a chance to win a one-year supply of Coke products. The campaign attracted more than four million messages over the course of 35 days. In Africa, mobile-phone operator Celtel invested in rural services by introducing the Me2U service, by which callers could send airtime credit to other mobile phones. Because most Africans do not have bank accounts, it has become a convenient and cheap way to transfer money, even substituting for cash in some villages.

BUILD A SOLID GLOBAL MARKETING FOUNDATION

The second guideline emphasizes the impor- tance of building a solid global marketing foun- dation. A solid global marketing foundation results when (i) the proper marketing infrastruc- ture is put into place; (ii) the right marketing partners are enlisted; and (iii) steps are not skipped in brand building.

Proper marketing infrastructure. A crit- ical success factor for many brands has been their manufacturing, distribution, and logistical advantages in domestic and foreign markets (see DESIGNING A GLOBAL SUPPLY CHAIN: OPPORTUNITIES

AND CHALLENGES; GLOBAL SOURCING STRATEGY: AN EVOLUTION). This has involved (i) creating the appropriate marketing infrastructure ‘‘from scratch’’ (if necessary); as well as (ii) adapting to capitalize on the existing marketing infrastructure in other countries (Craig and Douglas, 2000).

Since international markets vary greatly in terms of existing infrastructure, companies have gone to great lengths to insure consistency in product quality. Through the years, Nestle have invested in systems, equipment, and so on, so that proper production and distribution infras- tructure could be put into place that would otherwise not have existed. For example, Nestle devised ‘‘milk roads’’ in China to overcome local deficiencies in transportation and distribution systems.

More often, however, companies have to adapt operations and/or invest in foreign partners in order to succeed abroad. One of the most crucial global investments is the establishment of a reliable distribution system (Arnold, 2000). Companies often differ in their approach to distribution, and the results can be dramatic. For example, Coca-Cola’s distribution strategy and ability to adapt to specific regional concerns (e.g., the necessity for vending machines in Japan) has been a key to their global success.

Sometimes, companies mistakenly adapt infrastructure strategies that were critical success factors, only to discover that these changes eroded the brand’s competitive advantage. For example, Dell Computer initially abandoned their direct distribution strategy in Europe and instead decided to establish a traditional retailer network through existing channels, with poor results. Ignoring critics who claimed that a direct distribution model would never work in Europe, Dell revamped their direct approach and relaunched their personal computer line with a new management team to execute the direct model that the company had pioneered in the United States, finding greater success as a result.

4 global branding: three keys for global brand success

Developing a proper marketing infrastructure is especially important in developing markets. India still struggles with poor infrastructure and highly restrictive labor laws. Its retail channel structure, although improving, still lags. The quality of public services – education, health, provision of water – is also often lacking. In China, after a series of high-profile product quality scares and crises, government standards were put in place for product quality and safety standards in manufacturing to try to assure over- seas consumers and gain their trust.

Right marketing partners. In developing their infrastructure, most global brands have marketing partners of some form in their inter- national markets, ranging from joint venture partners, licensees or franchisees, distributors, ad agencies, and other marketing support personnel. One common reason for establishing brand partnerships is access to distribution. For example, Guinness have very strategically used partnerships to develop markets or provide expertise that the company lacked with their own personnel or capabilities. Partners can also help to make sure supply and distribution chains operate smoothly in different markets. With 226 offices in 70 countries, Seattle-based freight-forwarder Expeditors International help firms keep track of 3000 shipping containers and 2 million pounds of airfreight around the world.

Successful brand partnerships can become key components to overall profitability for each of the parent companies. The value of a part- nership can extend far beyond increased sales or access to distribution. Good partners share ‘‘brand values’’ that help maintain brand consis- tency across markets. For example, McDonald’s fierce commitment to product and service stan- dardization is one reason why the retail outlets are so similar all over the world. To achieve such consistency, McDonald’s handpick their global partners one by one in order to find ‘‘compulsive achievers’’ who will put forth the desired effort.

Avoiding branding shortcuts. Building a brand in a new international market needs to be done from the ‘‘bottom-up’’ – both strategically and tactically. Strategically, this means concentrating on building awareness first before building the brand image (i.e., to ‘‘lay the foundation’’ for the

brand). Tactically, or operationally, this means determining how to best create sources of brand equity in new markets. In other words, the means by which a brand was built in one market (e.g., the particular product, distribution, commu- nication, or pricing strategies and marketing activities) may not be appropriate in another market even if the same overall brand image may be desired.

Many times marketing programs have to be adjusted because the brand is at an earlier stage of development in its new market (see MARKET ENTRY AND EXPANSION). In such situations, consumer education about the product itself may need to accompany brand development efforts. When Coca-Cola moved into developing markets in Asia, they encountered consumers who loved the brand, but had never drunk the product before. Not realizing it needed to be chilled, they required education as to the fact that it should be drunk cold.

The recommendation to avoid shortcuts suggests some patience on the part of marketers. Firms may have to ‘‘backtrack’’ to an earlier stage of brand development in these new markets and engage in a set of marketing programs and activities that the brand – in its existing markets – had long since moved beyond. Although the time taken to build the brand in new markets may be compressed because of greater financial resources and a keener understanding of effective strategies and tactics, it could still take some time. The temptation – and often mistake – is to export the current marketing program because it seems to basically ‘‘transfer’’ or ‘‘work.’’ Although that may be the case, the fact that a marketing program can meet with acceptance or even some success in a market does not mean that it is the proper marketing activity in terms of building a strong, sustainable brand equity there.

For example, when Nike made a big push into Europe in the early 1990s, they were too aggres- sive in their approach and overrelied on their well-known American sports stars. Although athletes such as Michael Jordan, Bo Jackson, and Wayne Gretzky were known to varying degrees in Europe, they represented sports (i.e., basket- ball, football, baseball, and hockey) that were not as popular in Europe as they were in America. As a result, the ads that were so captivating in

global branding: three keys for global brand success 5

the United States generated much less fanfare in Europe. The brand met with some success, but failed to live up to its potential. Nike manage- ment soon came to realize that Nike’s brand mantra of ‘‘authentic athletic performance’’ had a different meaning in the European culture. Instead of using American heroes playing Amer- ican sports, Nike adopted a more ‘‘grassroots approach’’ to better reflect authentic athletic performance ‘‘European style.’’ Soccer, or foot- ball, thus became an indispensable ingredient, and Nike sales began to rise accordingly.

Not taking shortcuts helps to create marketing momentum and support from a growing customer base in the new market. Red Bull deliberately adopted a phased roll- out program in entering a new market with imposed scarcity to help drive up interest and demand in their new functional energy drink product. Jamaica-based Digicel have success- fully conquered many politically unstable third-world countries such as Papua New Guinea, Haiti, and Tonga by developing product and programs that appeal to the poor consumers who are typically otherwise over- looked. The fierce loyalty of these consumers helps to protect Digicel from any overly aggressive government actions or interventions.

STRIKE A BALANCE IN GLOBAL BRAND MANAGEMENT

Ideally, a single marketing program could be devised and implemented that would turn out to be the most effective and efficient possible option for each and every country in which the brand is to be sold. There are many advantages to launching such a globally consistent marketing program for a brand: economies of scale in production and distribution; lower marketing costs; power and scope; consistency in brand image; ability to leverage good ideas quickly and efficiently; and uniformity of marketing practices.

Unfortunately, such uniformly optimal global marketing programs are rarely possible. One implication of the similarities and differences across international markets is the need to blend local and global elements in marketing programs. The best examples of global brands retain a thematic consistency and alter specific

elements of the marketing mix in accordance with consumer behavior and the competitive situation in each country. An oft-heard – and sometimes modified – expression of prescriptive advice to marketers of global brands is to ‘‘Think Global, Act Local.’’ In that spirit, HSBC are even explicitly positioned as ‘‘The World’s Local Bank.’’

Perhaps the quintessential global brand, Coca-Cola, deliberately keep the basic look and packaging of their Coke brand the same everywhere (except in countries where laws dictate use of local language). Yet, the company simultaneously stress that the brand be relevant and well positioned relative to competition in different markets. They use different advertising agencies in different countries in order to make the brand feel local and be well positioned relative to local competition. For example, in Australia the advertising appeals to the same ‘‘classic, original’’ ideals but in a very Australian fashion. As a result, Coke becomes entwined with the cultural fabric of the country, just as it has in the United States. Over time, this yields an advantage with younger generations who do not even think of Coke as an imported brand. An illustrative example that Coca Cola recount is of a Japanese family visiting the United States for the first time: the young son, upon passing a vending machine, joyfully exclaimed to his parents, ‘‘Look, they have Coke here too!’’

Most brands are adapted to some extent to reflect differences in consumer behavior, brand development, competitive forces, and the legal or political environment across markets (see STANDARDIZATION/ADAPTATION OF INTERNATIONAL MARKETING STRATEGY). Even global brands undergo some changes in product features, packaging, channels, pricing, or communications in different global markets. Some aspects of the marketing program tend to be adjusted less frequently or dramatically than others (e.g., brand elements such as brand names, logos, packaging, and signage) whereas others are adjusted more frequently or vary more dramatically across markets (e.g., advertising and other communications and especially distribution channels). Even something as simple as a brand name may involve various decisions in terms of the use of dual names, choices between phonetic or

6 global branding: three keys for global brand success

semantic translations, and so on (Zhang and Schmitt, 2001; Hong et al., 2002).

Even in advertising, it is not uncommon to have the same creative theme globally, but to adapt the specific execution to appropriate local markets (see INTERNATIONAL ADVERTISING – IS THERE STILL A STANDARDIZATION VERSUS LOCAL ADAPTATION DEBATE?). Apple Computer’s ‘‘Mac vs. PC’’, which was voted the best US ad campaign of 2006 by Adweek magazine, features two actors bantering. One is hip-looking (Apple), and the other is nerdy-looking (PC). Apple dubbed the ads for Spain, France, Germany, and Italy, but chose to reshoot and rescript for the United Kingdom and Japan – two important markets with unique advertising and comedy cultures. The United Kingdom followed a similar formula but tweaked the jokes to reflect British humor; the Japanese ads avoided direct comparisons and were more subtle in tone. GE’s ‘‘Ecomagination’’ ad campaign retains the same message globally, but substitutes different ad creative and executions in Asia and the Middle East to reflect the cultural interest there.

The challenge, of course, is to determine the nature of the balance in the marketing program – which elements to customize or adapt and which to standardize. This balance can depend on a host of factors, for example, the cultural flavor of the brand or unique characteristics of the market in question. Customization may imply adjusting some aspect of the marketing program and/or the desired brand image (e.g., by the creation or deletion of brand associations). In some cases, because of differences in consumer behavior or because of historical market factors, brand positions may fundamentally be different in different markets (Aaker and Joachimsthaler, 1999).

• Heineken beer is a high-end superpremium offering in the United States, but more middle-of-the-road in their Dutch home market.

• The domestic image of Honda automobiles in Japan, on the other hand, is richer and the brand is more strongly associated with speed, youth, and energy than in overseas markets such as the United States, where it is seen as a reliable, quality vehicle.

• The Toyota Camry is the quintessential middle class car in the United States, but is positioned at the high end in China, even though the cars in the two markets differ only in very cosmetic ways.

Even if the positioning does not vary for a brand, the specific products and services that are emphasized may still vary. IBM have a two track approach with their services business: in the United States, where clients often are econo- mizing, they focus on helping with cost cutting; whereas in developing markets, where clients are seeking to modernize and catch up with other countries, they help customers with their technology infrastructure.

Not sufficiently adjusting marketing for a global brand in a new market can lead to negative consequences. Much of the success of Finland’s Nokia in cell phones has been due to their intense focus on innovation, design, and engineering in producing a wide range of products that vary in quality, price, and so on. This range has allowed them to be successful in both developing and developed markets. Despite this global success, however, they found their market share slip- ping in the United States when they failed to customize their cell phones to the various wire- less carriers. Improving their partnership with wireless carriers resulted in greater retail pres- ence in showrooms and stores, a critical success factor in that market.

As another example, despite some financial success, Korea’s LG decided to hire a number of top executives from Western firms to help transform themselves from what they saw as ‘‘an engineering powerhouse that excelled in manufacturing and selling in different parts of the world’’ to a ‘‘globally efficient, trend-setting organization.’’ The new executives were charged with standardizing the hodgepodge of processes and systems that LG had developed in different markets in purchasing, the supply chain, marketing, and other areas. In particular, a single agency (London’s Bartle, Bogle, and Hegarty) was given global responsibility in marketing to sell an increasing number of higher-end products.

Finally, another issue in adaptation is the country of origin (see “COUNTRY OF ORIGIN” AS BRAND ELEMENT). Country of origin can

global branding: three keys for global brand success 7

clearly play a different role in positioning brands in foreign versus domestic markets. Domestically, country-of-origin associations may attempt to stir feelings of patriotism and cultural heritage, but in foreign markets, it may be a means to leverage existing perceptions and beliefs about the home country. Even a perception of globalness for a brand – by sending a quality signal, tapping into cultural myths, and reinforcing a sense of social responsibility – can improve brand evaluations (Holt et al., 2004; Steenkamp et al., 2003).

There are numerous examples of companies that leverage country-of-origin associations to help position their brands globally: ‘‘German engineering’’ for BMW and Mercedes, ‘‘Aussie good cheer’’ for Foster’s beer, and ‘‘French elegance’’ for Chanel, Dior, and Louis Vuitton. A Western image can be helpful in developing markets, as Coca-Cola discovered in China (Batra et al., 2000). Part of their success against local cola brand Jianlibao was due to the brand’s symbolic values of modernity and affluence. But not all country images are positive, and country-of-origin effects can be tricky when complex multicountry component and assembly are involved, posing challenges to global marketers (Tse and Lee, 1993).

Balancing local and global control. A key theme with organizational structures, entry strategies, and coordination processes and mechanisms for global brands is the need to balance global and local control. Coca-Cola, for example, have distinguished between marketing activities that would appear to dilute brand equity from those that would not appear to be as efficacious as desired. Headquarters would stop the former from occurring, but would not stop the latter. They would leave it to the local manager’s judg- ment as to the activity’s appropriateness, but also hold him or her responsible for its success or failure.

Similarly, Levi’s have balanced global and local control with a ‘‘thermometer’’ model. Marketing elements below the ‘‘freezing point’’ are fixed: ‘‘brand soul’’ or essence and logos are standardized worldwide. Above the freezing point, product quality, pricing, advertising, distribution, and promotions are all ‘‘fluid,’’ meaning each international division can handle

the marketing mix elements in any way that they feel is appropriate for their region.

McDonald’s also have allowed countries and regions more latitude to customize around their basic layout and menu staples. In China, they substitute corn for fries in Happy Meals, some stores in United States blend fruit smoothies, and Australia and France have Starbucks-like lounges. In cities plagued with horrendous traffic problems – for example, Manila, Taipei, Jakarta, and Cairo – they actually deliver McDonald’s meals via fleets of motor scooters.

Brand architecture. Companies such as Kraft, Unilever, and P&G market global brands in countries all over the world, but they also have a number of local brands or ‘‘local treasures’’ as they sometimes call them, which have built up strongly resonant consumer franchises (Schuiling and Kapferer, 2004). Unilever’s local jewels, for example, include Ben & Jerry’s ice cream, Suave hair care, and Wish-Bone salad dressings in the United States; and Bovril and Marmite spreads, Peperami spicy salami, and Pot Noodle noodle snack foods in the United Kingdom. For companies with such varied brand portfolios (see MANAGING THE GLOBAL PRODUCT PORTFOLIO), their challenge in many cases is to ensure that the global brands stay relevant in local markets and, on the other hand, local brands are able to compete on a global stage in their home market or potentially even elsewhere (Douglas et al., 2001).

Nestle are a company that have benefited significantly from a balance of global and local control. Some decisions, such as branding, follow strict corporate guidelines. The company have 10 worldwide corporate strategic brands, including Nestle, Nescafe, Maggi, and Carna- tion. There are 45 different strategic worldwide product brands, including Kit Kat, Coffeemate, and Crunch. There are 25 regional corporate strategic brands, including Perugina, Findus, and Stouffer’s. There are 100 regional product brands, including Eskimo, Taster’s Choice, and Go-Cat. Finally, there are 700 local strategic brands that are important to particular countries, including Brigadeiro in Brazil.

Most other decisions, however, are primarily decided upon by the local managers. Nestle’s policy is to recognize that they are foreigners in

8 global branding: three keys for global brand success

any country outside Switzerland and to simply let the local managers run most of the business operations. For example, the company do not do corporate-level strategic planning. Instead, the top managers in each region tell headquarters what they plan to do and a combination of bottom-up or top-down approaches is used to finalize a strategy. Headquarters meet once a year with each of the country managers to discuss strategic issues. The bottom line resides with headquarters, and they have the power to force the local managers to adopt a policy, if necessary. This happened with ice cream in the United States.

The country manager classified the product as a dairy product, whereas headquarters viewed it more strategically as a frozen confectionery. The country manager proposed machines and cones, and headquarters countered with self-manufacture and direct store delivery. Today, Nestle are a strong number two in the ice cream impulse segment, and have invested in a 17% stake in Dreyer.

Establish operable guidelines. Brand definition and guidelines must be established, communi- cated, and properly enforced so that marketers in different regions have a good understanding of what they are expected to do and not to do. The goal is to clearly set the rules for how the brand should be positioned and marketed. Hence, everyone within the organization under- stands the brand’s meaning and can translate that meaning to satisfy local consumer preferences.

Aaker and Joachimsthaler (1999) put it this way: ‘‘Global brand leadership means using organizational structures, processes, and cultures to allocate brand-building resources globally, to create global synergies, and to develop a global brand strategy that coordinates and leverages country brand strategies.’’ Specifically, they advocate four key ideas:

• stimulate the sharing of insights and best practices across countries;

• support a common global brand-planning process;

• assign managerial responsibility for brands in order to create cross-country synergies and to fight local bias; and

• execute brilliant brand-building strategies.

Brand definition and communication is aided with some sort of document that details what the brand is and what the brand is not. In terms of brand documentation, Coca-Cola have a strategy document that clearly articulates their strategy and how the brand positioning is manifested in various aspects of the marketing mix elements. This document sets out the parameters for the brand and, therefore, determines how much is left to chance. Similarly, McDonald’s operating manual imposes rigorous worldwide controls (e.g., the 19 steps to cook and bag French fries). Nestle ensure that branding decisions at least follow strict corporate guidelines.

Brand mantras may be especially helpful in providing easily understood brand guidelines. A brand mantra is an articulation of the ‘‘heart and soul’’ of the brand. Brand mantras are short, three- to five-word phrases that capture the irrefutable essence or spirit of the brand positioning. Their purpose is to ensure that all employees within the organization and all external marketing partners understand how the brand should be projected to the consumers so that employees and partners can adjust their actions accordingly. As noted above, Nike’s brand mantra is ‘‘authentic, athletic performance’’ and effectively translating that in different markets has been one of their keys to global success.

Disney’s brand mantra has been ‘‘fun, family entertainment.’’ To establish global guidelines for licensing, Disney assign them to one of the three categories: (i) acceptable to license without permission (e.g., T-shirts); (ii) not permissible to ever license (e.g., toilet paper); and (iii) requires validation from headquarters to license (about 20 categories – e.g., air fresheners). Internation- ally, Disney noticed that these ‘‘gray areas’’ grew bigger and more numerous. The company also try to identify those product groups that may be more amenable to localizing than others. For example, movies cannot be tailored for the Euro- pean market because it is difficult to determine what will be attractive to those consumers. On the other hand, certain items in the Disney store may sell well in Germany but not in Japan.

Finally, for all of this to work, there must be effective lines of communication and means to transfer knowledge within and across regions. Coca-Cola stress the importance of

global branding: three keys for global brand success 9

having people ‘‘on the ground’’ who can effectively manage the brand in concert with their headquarters in Atlanta. For example, to facilitate coordination, much training occurs in headquarters, a sophisticated e-mail and voice mail system is in place, and global databases are available. The goal of this heavily integrated information system is to facilitate the local manager’s ability to tap into what constitutes ‘‘relevance’’ in any particular country and then communicate those ideals to headquarters or other parts of the region. Coca-Cola are thus able to transfer product ideas within and across regions. Japan, long a hot-bed for new product ideas, has been joined by other Asian markets such as China as the company expands their product portfolio to include water, juice, tea, coffee, and even ‘‘gel’’ beverages. From China came Minute Maid Pulpy; from Hong Kong came Nestea with Aloe Pulp.

Effectively transferring successful marketing ideas from one region to another region is a key priority for many firms. Rather than developing global products for jointly owned Renault and Nissan, CEO Carlos Ghosn has mandated that companies design for local tastes and have the flexibility to export the design to other regions to tap into similar consumer trends. As an example, the no-frills Logan was developed by Renault for Eastern Europe and Latin America but it found another home in France. Along with the specific products that cross a region, ideas and a way of thinking may also transfer in the process. Ghosn teamed Nissan and Renault with Bajaj Auto to sell a $3000 car in the Indian market in part to infuse those companies with India’s low-cost design thinking: ‘‘They understand frugal engi- neering, which is something we aren’t as good at in Europe or Japan.’’

CONCLUSIONS

Increasingly, it is imperative that marketers properly define and implement a global branding strategy. Although global branding offers many potential benefits to a firm, there are also signif- icant risks. Despite these potential pitfalls, a number of marketing pioneers have successfully established global brand powerhouses over the last decade or so. On the basis of the experiences and practices of leading global brands and the

learning from academic research, this article has identified three key steps to building a successful global brand: (i) understand the global consumer context; (ii) build proper global marketing infras- tructure; and (iii) strike a balance in global brand management. Although building a strong global brand can involve a number of complex issues and considerations, successfully accomplishing these three steps can increase the odds of success.

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