International brands and their management

The World’s top 20 brands -Interbrand 2006 (click on the link and find out more)

1. Coca-Cola

2. Microsoft

3. IBM

4. GE

5. Intel

6. Nokia

7. Toyota

8. Disney

9. McDonald’s

10 Mercedes-Benz

11. Citigroup

12. Marlboro

13. Hewlett-Packard

14. American Express

15. BMW

16. Gillette

17. Louis Vuitton

18. Cisco

19. Honda

20. Samsung

What are brands?- visual identities

• Name• Symbol• Packaging• Strap-line

• E.g ‘Oil of Ulay’ in UK became ‘Oil of Olay’, its global name

• E.g ‘Marathon’ became ‘Snickers’

What are brands?-legal property• In UK we have The Trade Marks Act

(1944)• European registration can be obtained

thro’ the EU• International registration can be

obtained thro’ the Madrid Protocol (29 nations only)• Excludes U.S.A., New Zealand and

Australia

*Hankinson and Cowking, 1993

The conventional brand model*

• A brand is a product or service made distinctive by its positioning and its personality

• Note there is no distinction between product and service

*Hankinson and Cowking, 1993

Positioning*

• Defines the brand’s point of reference with respect to the competitive set.

*Hankinson and Cowking, 1993

Personality*

• A unique combination of functional and symbolic attributes

Personality*

• Functional attributes:• Tangible attributes, intrinsic to the

product• For example:

Duracell's products are designed to give you maximum power.

Whatever your power needs, it will last longer with Duracell

*Hankinson and Cowking, 1993

Personality*

• Symbolic attributes• Intangible attributes, extrinsic to the

product• For example:

*Hankinson and Cowking, 1993

All about Virgin

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Has this brand got a functional or symbolic personality?

The branding objective:The brand - consumer fit

The consumer

• Physical needs

• Psychological needs

• A notional budget

The brand

• Functional attributes

• Symbolic values

• Price positioning

Hankinson and Cowking, 1993

International brand strategies:-Multi-domestic branding

• To retain local brand loyalty• Companies which have grown by

acquisition• E.g.

• 65% of Heinz products do not carry the Heinz label

• Declining strategy

International brand strategies:- Corporate brand endorsement

• Typical of growth through acquisition• E.g.

• Nestle endorses Polo, Buitoni, Herta (sausages)

• Brands in different markets

• Also as a positioning strategy• Renault endorses Clio, Laguna, Espace

• Cars for different market segments

International brand strategies- Monolithic corporate brands

• E.g.• IBM• BMW ( with the recent exception of the Mini)• Cathay Pacific• Japanese companies:

• Yamaha• Mitsubishi• Honda

• All the top 20 brands are corporate brands

International brand strategies- Low profile monolithic corporate brands

• Brands aimed at stock markets• E.g.• General Motors makes Chevrolet,

Vauxhall, Opel• Louis Vuitton owns Hennessy,

Moet, Dior, De Beers?

Why corporate brands?

• Maximises brand exposure• Builds recognition• Offers all the benefits of brand

stretching...

What does brand stretching do?

• Transfers existing brand knowledge to new products/services

• Existing brand knowledge • reduces the consumer’s risk• reduces distributors’ risks• reduces launch costs

• Builds brand exposure further• Enhance sales of other products?

The management of corporate brands*

• Leadership• Culture• Identity• Image

* Hatch and Schultz, 2003

Brand strategy matrix

Fully adaptive

•Nescafe

Proposition adaptive

•Gordon’s Gin

Product adaptive

•Shell•McDonald’s

Fully Global

•Coke•Nike

Sta

nd

ard

ised

Ad

ap

ted

Bra

nd

pro

pos i

tion

Product formulation

Standardised Adapted

Factors favouring fully global brands Dahhringer and Cunliffe 1986

• The use of universal symbols to override cultural differences

• E.g. Coke uses children/youth• E.g. McDonald’s uses golden arches

• Regional appeals to a similar culture• Social segments open to received culture• Brands with generic national personalities:

• Marlboro (American)• Chanel No. 5 (French)• Buitoni (Italian)• Walker’s (Scottish)

Fully global branding does not mean global advertising

• Different executions can lead to the same proposition

• E.g. Bacardi (no.1 spirit brand) tailors its advertising to local markets:

• In Europe it is about sun. sea and sand• In the U.S. its about health awareness

and diet-consciousness

Characteristics of strong international brands (Young and Rubicam

Brand Power survey)• Weight (dominance)

• In terms of market share• Innovation• Clear brand focus

• Length (stretch)• Ability to extend into new product markets

• Breadth (brand franchise)• Demographic and cultural spread• International appeal

• Depth (commitment)• Having an intimate relationship with customers (e.g.

‘cult status’)• Brand loyalty