Learn Strategic Brand Management
Brand Equity In Question
Strategic Implications Of Branding
Brand And Business Building
From Private Labels To Store Brands
Brand Diversity: The Types Of Brands
The New Rules Of Brand Management
Brand Identity And Positioning
Launching The Brand
The Challenge Of Growth In Mature Markets
Sustaining A Brand Long Term
Adapting To The Market: Identity And Change
Growth Through Brand Extensions
Handling Name Changes And Brand Transfers
Brand Turnaround And Rejuvenation
Managing Global Brands
Financial Valuation And Accounting For Brands
A great deal has been written on the subject of global brands, but what exactly do we know about them? In fact very little, until recently when the subject was further clarified by the three studies outlined below. Two of these studies focus on the benefits of having – that is, being perceived as having – a global image.
But how does perceived brand globalness (PBG) create value? There are a number of reasons for creating a global brand – economies of scale, synergies between countries, the speed with which innovations created worldwide can be brought onto the market, the existence of exploitable global segments and finally, as has already been suggested, the benefits of having an international image.
Today, in the age of cultural integration, modernity is expressed via internationalism. The perception of globalness would therefore increase perceived value. It is symptomatic that, in countries throughout the world, young people’s favourite brands are usually international, whereas the reverse is true for adults.
One of the studies (Alden, Steenkamp and Batra, 1999) set out to validate this hypothesis. In a quantitative study carried out in the United States and South Korea, the authors demonstrated that perceived globalness (the fact of being perceived to be selling products worldwide) exerted a strong influence over purchase decisions.
But contrary to expectation, this influence was not because perceived globalness enabled consumers to participate in a global culture. In fact, perceived globalness primarily influenced the perceived quality, and second the perceived prestige, of the brand.
These effects were however not quite as strong for ethnocentric consumers, that is, those who were more focused on national values. These results needed to be extended to other countries and include other criteria for consumer segmentation, since the cultural connections between South Korea and the United States are well known. This was done by Holt, Quelch and Taylor (2003) when they studied how global perceptions drive value, using a sample of 1,800 respondents in 12 countries. According to the study, perceived globalness influences brand preferences via five levers:
To their credit, Holt et al segmented the consumers. In the seven segments that resulted – from ‘pro-west’ to ‘anti-globalisation’ – the hierarchy of the five levers was completely different. How people understand and value global brands is very segmented. Countries are also heterogeneous. China, for instance, is both pro and anti American values: it has consumers belonging to both groups.
Muslim countries such as Indonesia, Turkey and Egypt are very influenced by the perception of globalness. However, one should recall that the interviewees were not laypeople, but well off ones, probably with a westernised life-style. People in India, Brazil and South Africa were not very much influenced by perceptions of globalness; is it because they have a strong local culture they are proud of? Finally, those least influenced by the perception of brand globalness are US consumers.
This should not be a surprise: the Americans do not consider that the choice of other countries is relevant. It is an ethnocentric country. Also, since many of the socalled global brands are American in origin, their status is ambiguous. They are selling everywhere in the world but they seem to be deep local brands.
Schuiling and Kapferer (2004) have compared the distinctive properties of local and international food brands, separating, however, international brands in their home country from the same brands in other countries. In fact, their data show that the best brand profile is that of the international brands in their home country. No wonder: countries export their best in class brands.
The data also show how global brands really differ from local ones. Working on a database of 507 brands in four countries, and 9,739 respondents, Schuiling and Kapferer have isolated the discriminant properties of each type of brand: local (that is, sold in one country, whatever its perception by the public) and international (sold in all countries, whatever the perception of the public).
The authors first notice that on the whole local brands that have been present for a much longer time in the country are endowed with a higher brand awareness score than more recent international arrivals. Since brand awareness is correlated with image, are the so-called differences of image only an outcome of this brand awareness gap? When the data are adjusted for awareness, there do remain differences in image, some negative, some positive, as evidenced by Table below.
How global and local brands differ (in percentages, after adjusting for brand awareness level)
It is noticeable that, compared with local brands, global brands have a significant deficit on:
On the other hand, they outperform local brands on the following levers:
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