From a supply-side or cost perspective, the primary advantages of a global marketing program are the manufacturing efficiencies and lower costs that derive from higher volumes in production and distribution. The more that strong experience curve effects exist—driving down the cost of making and marketing a product with increases in production—the more economies of scale in production and distribution from a standardized global marketing program will prevail.

Another set of cost advantages arises from uniformity in packaging, advertising, promotion, and other marketing communication activities. The more uniform, the greater the potential savings. A global corporate branding strategy such as Sony’s is perhaps the most efficient means of spreading marketing costs across both products and countries. Branding experts maintain that using one name can save a business tens of millions of dollars a year in marketing costs.13

As Chapter 13 noted, L’Oréal has pursued an aggressive global growth strategy, prompting one business writer to christen the company “the United Nations of beauty.” Its Maybelline line is the best-selling brand in many Asian markets, while eastern Europeans prefer L’Oréal’s French brands, and African immigrants in Europe go for the U.S. brand Dark and Lovely. L’Oréal ensures its business remains sound on a local level by establishing national divisions. Because Brazilian women traditionally bought their cosmetics from door-to-door sales reps, the company introduced personal beauty advisers at department stores there. As the one-time head of L’Oréal’s head of luxury products said, “You have to be local and as strong as the best locals but backed by an international image and strategy.”14

A global brand profile can communicate credibility.15 Consumers may believe that selling in many diverse markets is an indication that a manufacturer has gained much expertise and acceptance, meaning the product is high quality and convenient to use. An admired global brand can also signal social status and prestige.16 Avis assures its customers that they can receive the same high-quality car rental service anywhere in the world, further reinforcing a key benefit promise embodied in its slogan, “We Try Harder.”

Maintaining a common marketing platform all over the world helps maintain the consistency of brand and company image; this is particularly important where customers move often or media exposure transmits images across national boundaries. Gillette sells “functional superiority” and “an appreciation of human character and aspirations” with its razors and blades brands worldwide. Services often desire to convey a uniform image due to consumer movements. For example, American Express communicates the prestige and utility of its card worldwide.

One global marketer notes that globalization can increase sustainability and “facilitate continued development of core competencies with the organization . . . in manufacturing, in R&D, in marketing and sales, and in less talked about areas such as competitive intelligence . . . all of which enhance the company’s ability to compete.”17 Not having to develop strictly local versions speeds a brand’s market entry. Marketers can leverage good ideas across markets as long as the right knowledge transfer systems are put into place. IBM has a Web-based communications tool that provides instant multimedia interaction to connect marketers. MasterCard’s corporate marketing group helps facilitate information and best practices across the organization.18

Finally, a standardized global marketing program may simplify coordination and provide greater control of communications in different countries. By keeping the core of the marketing program constant, marketers can pay greater attention to making refinements across markets and over time to improve its effectiveness. Chapter 3 described the rationale for the MasterCard “Priceless” campaign. Here is how it became a global blockbuster.

Differences in cultural values, economic development, and other factors across nationalities lead customers to behave very differently. For example, the per capita consumption of alcoholic beverages varies dramatically from country to country: in liters consumed per capita annually, the Czech Republic (8.51) and Ireland (7.04) drink the most beer; France (8.14) and Portugal (6.65) drink the most wine; and South Korea (9.57) and Russia (6.88) drink the most distilled spirits.20

Product strategies that work in one country may not work in another. Tupperware, which makes the bulk of its annual sales overseas—57 percent from emerging markets—needed to adjust its products to satisfy different consumer behavior. In India, a plastic container paired with a spoon becomes a “masala keeper” for spices. In Korea, stain-resistant canisters are ideal for kimchi fermentation. Larger boxes work as safe, airtight “kimono keepers” in Japan. In France, its more expensive cookware line does much better than in the United States, where customers buy more plastic containers. Tupperware parties in France feature cooking lessons more than selling. India has followed suit, introducing the stylish Ultimo line of kitchenware.21

Linguistic differences across countries can twist or change the meaning of a brand name. Sound systems that differ across dialects can make a word problematic in one country but not another. Cultural context is key. Customers may actually respond well to a name with potentially problematic associations. The questions are how widespread the association is, how immediate it is, and how problematic it actually would be.

Well-known brand consultancy Lexicon employs linguists to help make these assessments for clients.22 The agency has uncovered names that would have been a sexual insult in

Colombian Spanish, been sacrilegious in Hindi, conveyed impotence in Japanese, and translated as “prostitute” in Hebrew. GM went ahead and used the LaCrosse model name for its Buick line in Canada so it could leverage its U.S. advertising, even though the word was slang for masturbation in French-speaking Quebec. The hope was that its more formal English meaning as a well-known sport would dominate there.23

Consumers in different parts of the world feel differently about marketing activity.24 U.S. consumers tend to be fairly cynical toward advertising, whereas Japanese view it much more positively. Differences also exist in advertising style: Japanese ads tend to be softer and more abstract in tone, whereas U.S. ads are often richer in product information.

Price sensitivity, promotion responsiveness, sponsorship support, and other activities all may differ by country, and these differences can motivate differences in consumer behavior and decision making. In a comparative study of brand purchase intentions, U.S. consumers were twice as likely to be affected by their product beliefs and attitudes toward the brand itself, whereas Koreans were eight times more likely to be influenced by social normative beliefs and what they felt others would think about the purchase.25

Products may be at different stages of their life cycle in different countries. Moreover, the perceptions and positions of particular brands may also differ considerably across countries. Figure 14-3 shows the results of a comprehensive study of leading brands (of all kinds, including people and country brands) in different parts of the world according to the BrandAsset Valuator measurement technique (see Brand Focus 9.0). Relatively few brands appear on all the lists, suggesting that, if nothing else, consumer perceptions of even top brands can vary significantly by geographic region.

The nature of competition may also differ. Europeans tend to see more competitors because shipping products across borders is easy. Germany’s Mittelstand—small and mid-sized companies with fewer than 500 people—employ more than 70 percent of German workers and contribute roughly half of the country’s GDP. They are especially formidable competitors. Blending high technology with a focus on quality, they weathered the recession well in Europe’s largest market (82 million people).26

One of the challenges in developing a global ad campaign is the maze of constantly changing legal restrictions from country to country. At one time, laws in Venezuela, Canada, and Australia stipulated that commercials had to be physically produced in the native country. Canada banned prescription drug advertising on television. Poland required commercial lyrics to be sung in Polish. Sweden prohibited advertising to children. Malaysia did not allow lawyers or law firms to advertise. Advertising restrictions have been placed on the use of children in commercials in Austria, comparative ads in Singapore, and product placement on public television channels in Germany. Although some of these laws have been challenged or are being relaxed, numerous legal differences still exist.

Channels of distribution, retail practices, media availability, and media costs all may vary significantly from country to country, making implementation of the same marketing strategy difficult. Foreign companies struggled for years to break into Japan’s rigid distribution system that locks out many foreign goods. The penetration of cable television, cell phones, supermarkets, and so on may also vary considerably, especially in developing countries.

In practice, it may be difficult to achieve the control necessary to implement a standardized global marketing program. Local offices may resist having their autonomy threatened. Local managers may suffer from the “not invented here” syndrome and raise objections—rightly or wrongly—that the global marketing program misses some key dimension of the local market. Local managers who feel their autonomy has been reduced may lose motivation and feel doomed to failure.

As we explained in Chapter 2, to build brand resonance, marketers must (1) establish breadth and depth of brand awareness; (2) create points-of-parity and points-of-difference; (3) elicit positive, accessible brand responses; and (4) forge intense, active brand relationships. Achieving these four steps, in turn, requires establishing six core brand building blocks: brand salience, brand performance, brand imagery, brand judgments, brand feelings, and brand resonance. In each and every market in which marketers sell the brand, they must consider how to achieve these steps and create these building blocks. Some of the issues that come into play are discussed in the following subsections.

To best capture differences in consumer behavior, and to guide our efforts in revising the marketing program, we must revisit the brand positioning in each market. Recall that brand positioning means creating mental maps, defining core brand associations, identifying points-of-parity and points-of-difference, and crafting a band mantra. In developing a global brand positioning, we need to answer three key sets of questions:

1. How valid is the mental map in the new market? How appropriate is the positioning? What is the existing level of awareness? How valuable are the core brand associations, points-of-parity, and points-of-difference?

2. What changes should we make to the positioning? Do we need to create any new associations? Should we not recreate any existing associations? Should we modify any existing associations?

3. How should we create this new mental map? Can we still use the same marketing activities? What changes should we make? What new marketing activities are necessary?

Because the brand is often at an earlier stage of development when going abroad, we often must first establish awareness and key points-of-parity. Then we can consider additional competitive considerations. In effect, we need to define a hierarchy of brand associations in the global context that defines which associations we want consumers in all countries to hold, and which we want consumers only in certain countries to have. We have to determine how to create these associations in different markets to account for different consumer perceptions, tastes, and environments. Thus, we must be attuned to similarities and differences across markets.

As this discussion suggests, although firms are increasingly adopting an international marketing perspective to capitalize on market opportunities, a number of possible pitfalls exist. Before providing some specific tactical guidelines as to how to build global customer-based brand equity, we first turn to two fundamentally important contrasts in global branding: standardization versus customization, and developing versus developed markets.

Increasingly, marketers are blending global objectives with local or regional concerns. From these perspectives, transferring products across borders may mean consistent positioning for the brand, but not necessarily the same brand name and marketing program in each market. Similarly, packaging may have the same overall look but be tailored as required to fit the local populace and market needs. For example, Danone’s kids’ yogurts are sold under a variety of names—Danonino, Danoontje, Danimals—in over 120 countries, while a general manager leads a central team that coordinates and oversees the local marketing efforts.32

In short, centralized marketing strategies that preserve local customs and traditions can be a boon for products sold in more than one country—even in diverse cultures. Fortunately, firms have improved their capabilities to tailor products and programs to local conditions. Flexible manufacturing technology has decreased the concentration of activities, and advances in information systems and telecommunications have allowed increased coordination.

Domino’s Pizza tried to maintain the same delivery system everywhere but had to adapt the model to local customs in launching its brand overseas. In Britain, customers thought anybody

knocking on the door was rude; in Kuwait, the delivery was just as likely to be made to a limousine as to a house; and in Japan, houses were not numbered sequentially, making finding a particular address difficult.

Although Heineken is seen as an everyday brand in the Netherlands, it is considered a “top-shelf” brand almost everywhere else. A case of the beer costs almost twice as much in the United States as the most popular U.S. brand, Budweiser.33 For a long time, Heineken’s slogan in the United Kingdom and other countries—”Heineken Refreshes the Parts Other Beers Can’t Reach”—was different from its U.S. positioning.

As these examples suggest, top brands adapt their marketing programs in different parts of the world. We next review the four major elements of a marketing program—product, communications, distribution, and pricing strategies—in terms of adaptation issues.

Communication Strategy

Advertising is one area of marketing communications in which many firms face challenges internationally. Although the brand positioning may be the same in different countries, creative strategies in advertising may have to differ to some degree. One highly successful recent global brand campaign promoted Johnnie Walker Scotch.

Johnnie Walker

The top Scotch brand of Diageo—the largest multinational wine and spirits company—has its roots in nineteenth-century Scotland. In 1908, the brand itself was launched, including the iconic logo of a cane-wielding man clad in boots and a top hat striding forward, in honor of the founder John, or “Johnnie,” Walker. Every type of Johnnie Walker Scotch has a label color to denote type and quality and signify usage occasion. More recently, at about the turn of the century, the brand experienced a downturn, and sales dropped almost 10 percent. A new ad agency determined that the brand needed to better establish its “World Cup–level” icon status. The insight to achieve that goal was that a new generation of men shared a common desire to move forward and improve themselves in some way. Renowned ad agency BBH reversed the logo image so the “Striding Man” would be moving from left to right, to signify personal progress. With a slogan, “Keep Walking,” a campaign was launched in 120 countries via 30 TV ads, 150 print ads, radio ads, Web sites, sponsorships, internal awards, and a cause program to support the brand’s purpose. A five-minute film, The Man Who Walked Around the World, featured actor Robert Carlyle cleverly outlining Johnnie Walker’s brand history in one continuous, flowing shot. The global brand concept was creatively applied in different markets to make it locally recognizable and relevant. In Africa, a key target for brand growth, Johnnie Walker is put forth as a symbol of personal success. Billboards and magazine ads there feature champion Ethiopian runner Haile Gebrselassie “running for gold.”36

Different countries can be more or less receptive to different creative styles. For example, humor is more common in U.S. and UK ads than, say, in German ads. European countries such as France and Italy are more tolerant of sex appeal and nudity in advertising.37 The penetration of satellite and cable TV has expanded broadcast media options, making it easier to simultaneously air the same TV commercial in many different countries. U.S. cable networks such as CNN, MTV, and the Cartoon Network, and other networks such as Sky TV in Commonwealth countries and Star TV in Asia have increased advertisers’ global reach.

In terms of print, Fortune, Time, Newsweek, and other magazines have printed foreign editions in English for years. Other publishers have also added local-language editions by licensing

their trademarks to local companies, entering into joint ventures, or creating wholly owned subsidiaries. Rolling Stone has 20 international editions outside the United States; Maxim has 27 overseas editions; and Elle has 42 editions targeting the same demographic group but tailored to the country where each is published.

Each country has its own unique media challenges and opportunities. When Colgate- Palmolive decided to further penetrate the market of the 630 million or so people who lived in rural India, the company had to overcome the fact that more than half of all Indian villagers are illiterate and only one-third live in households with television sets. Its solution was to create half-hour infomercials carried through the countryside in video vans.38 To sell Tampax tampons in Mexico, Procter & Gamble created in-home informational gatherings or “bonding sessions” akin to Tupperware parties led by company-designated counselors. Although about 70 percent of women in the United States, Canada, and Western Europe used tampons, just 2 percent of women in most of Latin America did. To overcome cultural inhibitors, P&G developed its unorthodox approach.39

Sponsorship programs have a long tradition in many countries outside the United States because of a historical lack of advertising media there. Increasingly, marketers can execute sponsorship on a global basis. Entertainment and sports sponsorships can be an especially effective way to reach a younger audience.

The first—and most fundamental—guideline is to recognize that international markets can vary in terms of brand development, consumer behavior, marketing infrastructure, competitive activity, legal restrictions, and so on. Virtually every top global brand and company adjusts its marketing program in some way across some markets but holds the parameters fixed in other markets.

The best examples of global brands often retain a thematic consistency and alter specific elements of the marketing mix in accordance with consumer behavior and the competitive situation in each country. Snuggle fabric softener offers an example of effectively custom-tailoring the marketing mix.

The success of Snuggle reflects the importance of understanding similarities and differences in the branding landscape. Although marketers typically strive to keep the same brand name across markets, in this case, the need for a common name was reduced since people generally don’t buy fabric softener away from home. On the other hand, a common consumer desire for softness that transcended country boundaries was effectively communicated by a teddy bear as the main character in a global ad campaign.

In terms of building global customer-based brand equity, many of the basic tactics we discussed in Part II of the text still apply. In particular, we must create brand awareness and a positive brand image in each country in which the brand is sold. The means may differ from country to country, or the actual sources of brand equity themselves may vary. Nevertheless, it is critically important to have sufficient levels of brand awareness and strong, favorable, and unique brand associations to provide sources of brand equity in each country. VW has struggled to gain a strong foothold in the U.S. market because, unlike its Asian import competitors, it has been less willing to modify its designs for U.S. buyers. Although it has ambitious goals for global auto supremacy, one industry analyst noted, “They need to spend much more time understanding the U.S. consumer.”52

Building a brand in new markets must be done from the bottom up. Strategically, that means concentrating on building awareness first, before the brand image. Tactically, or operationally, it means determining how to best create sources of brand equity in new markets. Distribution, communication, and pricing strategies may not be appropriate in any two markets even if the same overall brand image is desired in both. If the brand is at an earlier stage of development, rather than alter it or the advertising to conform to local tastes, marketers will try to influence local behavior to fit the established uses of the brand. Consumer education then accompanies brand development efforts.

Kellogg

When Kellogg first introduced its corn flakes into the Brazilian market in 1962, cereal was eaten as a dry snack—the way U.S. consumers eat potato chips—because many Brazilians did not eat breakfast at all. As a result, the ads there centered on the family and breakfast table—much more so than in the United States. As in other Latin American countries where big breakfasts have not been part of the meal tradition, Kellogg’s task was to inform consumers of the “proper” way to eat cereal with cold milk in the morning. Similarly, Kellogg had to educate French consumers that corn flakes were meant to be eaten with cold instead of warm milk. Initial advertising showed milk being poured from transparent glass pitchers used for cold milk, rather than opaque porcelain jugs used for warm milk. A challenge to Kellogg in increasing the relatively low per capita consumption of ready-to-eat breakfast cereals in Asia was the low consumption of milk products and the positive distaste with which drinking milk was held in many Asian countries. Because cereal consumption and habits vary widely across countries, Kellogg learned to build the brand from the bottom up in each market.53

This guideline suggests the need for patience, and the possibility of backtracking on brand development, to engage in a set of marketing programs and activities that the brand has long since moved beyond in its original markets. Marketers sometimes fail to realize that in their own country, they are building on a foundation of perhaps decades of carefully compiled associations in customers’ minds. Although the period needed to build the brand in new markets may be compressed, it will still take some time.

The temptation—and often the mistake—is to export the current marketing program because it seems to work. Although that may be the case, the fact that a marketing program can meet with acceptance or even some success doesn’t mean it is the best way to build strong, sustainable global brand equity. An important key to success is to understand each consumer, recognize what he or she knows or could value about the brand, and tailor marketing programs to his or her desires.

Observing that many large companies simply diluted formulas to make less expensive products, Hindustan Lever, an Indian subsidiary of Unilever, made a substantial commitment to R&D and innovation to better serve the Indian market. These efforts resulted in completely new products that were both affordable and uniquely suited to India’s rural poor, including a high-quality combination soap and shampoo, and that were backed by successful new sales and marketing tactics specifically developed to reach remote and highly dispersed populations. Hindustan Lever trained 50,000 to go door-to-door in India to educate consumers there and sell soap, toothpaste, and other products.54

A critical success factor for many global brands is their manufacturing, distribution, and logistical advantages. These brands have created the appropriate marketing infrastructure, from scratch if necessary, and adapted to capitalize on the existing marketing infrastructure in other countries. We noted above that channels especially vary in their stages of development. Chain grocers have a 50 percent share in China, 40 percent in Russia, but only 15 percent in India.55 Concerned about poor refrigeration in European stores, Häagen-Dazs ended up supplying thousands of free freezers to retailers across the continent.56

Companies go to great lengths to ensure consistency in product quality across markets. McDonald’s gets over 90 percent of its raw materials from local suppliers and will even expend resources to create the necessary inputs if they are not locally available. Hence, investing to improve potato farms in Russia is standard practice because French fries are one of McDonald’s core products and a key source of brand equity. More often, however, companies have to adapt production and distribution operations, invest in foreign partners, or both in order to succeed abroad. General Motors’s success in Brazil in the 1990s after years of mediocre performance came about in part because of its concerted efforts to develop a lean manufacturing program and a sound dealership strategy to create the proper marketing infrastructure.57

A number of top global firms have introduced extensive integrated marketing communications programs. Overseas markets don’t have the same advertising opportunities as the expansive, well-developed U.S. media market. As a result, U.S.-based marketers have had to embrace other forms of communication in those markets—such as sponsorship, promotions, public relations, merchandising activity, and so on—to a much greater extent.

To help make the quintessentially Vermont brand Ben & Jerry’s more locally relevant in Britain, the company ran a contest to create the “quintessential British ice cream flavor.” Finalists covered the gamut of the British cultural spectrum and included references to royalty (Cream Victoria and Queen Yum Mum), rock and roll (John Lemon and Ruby Chewsday), literature (Grape Expectations and Agatha Crispie), and Scottish heritage (Nessie’s Nectar and Choc Ness Monster). Other finalists included Minty Python, Cashew Grant, and James Bomb. The winning flavor, Cool Britannia, was a play on the popular British military anthem Rule Britannia and consisted of vanilla ice cream, English strawberries, and chocolate-covered Scottish shortbread.58

Consider how DHL employed a wide range of communication options to strengthen its global brand.

Most global brands have marketing partners of some form in their international markets, ranging from joint venture partners, licensees or franchisees, and distributors, to ad agencies and other marketing support people. One common reason for establishing brand partnerships is to gain access to distribution. For example, Guinness has very strategically used partnerships to develop markets or provide expertise it lacked. Joint venture partners, such as with Moet Hennessey, have provided access to distribution abroad that otherwise would have been hard to achieve within the same time constraints. These partnerships were crucial for Guinness as it expanded operations into the developing markets that provide almost half its profits. Similarly, Lipton increased its sales by 500 percent in the first four years of partnering with PepsiCo to distribute its product. Lipton added the power of its brand to the ready-to-drink iced tea market, while PepsiCo added its contacts in global distribution.

Barwise and Robertson identify three alternative ways to enter a new global market:60

1. By exporting existing brands of the firm into the new market (introducing a “geographic extension”)

2. By acquiring existing brands already sold in the new market but not owned by the firm

3. By creating some form of brand alliance with another firm (joint ventures, partnerships, or licensing agreements)

They also identify three key criteria—speed, control, and investment—by which to judge the different entry strategies.

According to Barwise and Robertson, there are trade-offs among the three criteria such that no strategy dominates. For example, the major problem with geographic extensions is speed. Because most firms don’t have the necessary financial resources and marketing experience to roll out products to a large number of countries simultaneously, global expansion can be a slow, market-by-market process. Brand acquisitions, on the other hand, can be expensive and often more difficult to control than typically assumed. Brand alliances may offer even less control, although they are generally much less costly.

The choice of entry strategy depends in part on how the resources and objectives of the firm match up with each strategy’s costs and benefits. Procter & Gamble would enter new markets in categories in which it excels (diapers, detergents, and sanitary pads), building its infrastructure and then bringing in other categories such as personal care or health care. Heineken’s sequential strategy was slightly different. The company first entered a new market by exporting to build brand awareness and image. If the market response was deemed satisfactory, the company licensed its brands to a local brewer in hopes of expanding volume. If that relationship were successful, Heineken might then take an equity stake or forge a joint venture, piggybacking sales of its high-priced brand with an established local brand.61 As a result, Heineken is the world’s third-largest brewer in volume, selling in more than 170 countries with a product portfolio of over 250 brands. With brewing operations in about 70 countries and export activities all over the world, Heineken is the most international brewery group in the world.62

Companies are sometimes legally required to partner with a local company, as in many Middle Eastern countries, or when entering certain markets, such as insurance and telecoms in India. In other cases, companies elect to establish a joint venture with a corporate partner as a fast and convenient way to enter complex foreign markets. Fuji Xerox, initially formed to give Xerox a foothold in Japan, has been a highly successful joint venture that dominated the Japanese office equipment market for years and has even outperformed Xerox’s U.S. parent company. Joint ventures have been popular in Japan, where convoluted distribution systems, tightly knit supplier relationships, and close business–government cooperation have long encouraged foreign companies to link up with knowledgeable local partners.63

Finally, some mergers or acquisitions result from a desire to command a higher global profile. U.S. baby food maker Gerber agreed to be acquired by Swiss drug maker Sandoz in part because it needed to establish a stronger presence in Europe and Asia, where Sandoz has a solid base. Sandoz later merged with Ciba-Geigy and now is part of the Novartis group of companies.64

As these examples illustrate, different entry strategies have been adopted by different firms, by the same firm in different countries, or even in combination by one firm in the same country. Entry strategies can also evolve over time. Through its licensee Coca-Cola Amatil, Coca-Cola not only sells its global brands such as Coke, Fanta, and Sprite in Australia; it also sells local brands it has acquired such as Lift, Deep Spring, and Mount Franklin. One of Coca-Cola’s objectives with these acquisitions is to slowly migrate demand from some of the local brands to global brands, thus capitalizing on economies of scale. Branding Brief 14-4 describes how global brand powerhouse Nestlé has entered new markets.

As we discussed in detail above, one implication of similarities and differences across international markets is that marketers need to blend local and global elements in their marketing programs. The challenge, of course, is to get the right balance—to know which elements to customize or adapt and which to standardize.

Some of the factors often suggested in favor of a more standardized global marketing program include the following:

• Common customer needs

• Global customers and channels

• Favorable trade policies and common regulations

• Compatible technical standards

• Transferable marketing skills

What types of products are difficult to sell through standardized global marketing programs? Many experts note that foods and beverages with years of tradition and entrenched customer preferences and tastes can be particularly difficult to sell in a standardized global fashion. Unilever has found that preferences for cleaning products such as detergents and soaps are more common across countries than preferences for food products.

High-end products can also benefit from standardization because high quality or prestige often can be marketed similarly across countries. Italian coffee maker illycafé maintained a “one brand, one blend” strategy across the globe for years, offering only a single blend of espresso made of 100 percent Arabica beans. As Andrea Illy, CEO of his family’s business, stated, “Our marketing strategy focuses on building quality consumer perceptions—no promotions, just differentiating ourselves from the competition by offering top quality, consistency, and an image of excellence.”65

The following are likely candidates for global campaigns that retain a similar marketing strategy worldwide:

• High-technology products with strong functional images: Examples are televisions, watches, computers, digital cameras, and automobiles. Such products tend to be universally understood and are not typically part of the cultural heritage. Taiwan’s HTC has employed its “quietly brilliant” brand positioning and “YOU” brand campaign to reinforce its reputation as one of the world’s most innovative smartphone providers.66

• High-image products with strong associations to fashionability, sensuality, wealth, or status: Examples are cosmetics, clothes, jewelry, and liquor. Such products can appeal to the same type of market worldwide.

• Services and business-to-business products that emphasize corporate images in their global marketing campaigns: Examples are airlines and banks.

• Retailers that sell to upper-class individuals or that specialize in a salient but unfulfilled need: By offering a wide variety of toys at affordable prices, Toys’R’Us transformed the European toy market, getting Europeans to buy toys for children at any time of the year, not just Christmas, and forcing competitors to level prices across countries.67

• Brands positioned primarily on the basis of their country of origin: An example is Australia’s Foster’s beer, which ran the “How to Speak Australian” ad campaign for years in the United States.

• Products that do not need customization or other special products to be able to function properly: ITT Corporation found that stand-alone products such as heart pacemakers could easily be sold the same way worldwide, but that integrated products such as telecommunications equipment have to be tailored to function within local phone systems.68

Building brand equity in a global context must be a carefully designed and implemented process. A key decision in developing a global marketing program is choosing the most appropriate organizational structure for managing global brands. In general, there are three main approaches to organizing for a global marketing effort:

1. Centralization at home office or headquarters

2. Decentralization of decision making to local foreign markets

3. Some combination of centralization and decentralization

In general, firms tend to adopt a combination of centralization and decentralization to better balance local adaptation and global standardization.69 Some firms such as GE, Intel, and AstraZeneca have adopted a T-shaped country organization that localizes customer-facing operations to allow for fast, detailed marketing actions while at the same distributing back-end activities (manufacturing, product development, R&D) across countries.70

In many, if not most, markets, the cost savings of standardization may not outweigh the revenue potential from tailoring programs to different groups of consumers.71 Each aspect of the marketing program is a candidate for globalization. Which elements of the marketing program should we standardize, and to what degree?72 Cost and revenue should be the primary considerations in deciding which elements of the marketing program will be adapted for which country.

Riesenbeck and Freeling advocate a mixed strategy, standardizing the “core aspects” of the brand (those that provide its main competitive edge) but allowing local adaptation of “secondary aspects.” According to their approach, branding, positioning, and product formulation are more likely to be standardized, and advertising and pricing less so; distribution is most often localized.73

Many global companies divide their markets into five or so regions, for example, Europe, Asia, Latin America, North America, and Africa/Middle East. A key theme is the need to balance global and local control. Coca-Cola, for example, distinguishes between local marketing activities that would appear to dilute brand equity and those that are not as effective as desired. Headquarters would stop the first from occurring but would not stop the latter, leaving the activity’s appropriateness to the local manager’s judgment but also holding him or her responsible for its success. Similarly, Levi Strauss has balanced global and local control with a “thermometer” model. Marketing elements below the “freezing point” are fixed: “brand soul” (akin to brand essence or mantra) 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 it feels is appropriate for its region.

Firms often centralize advertising, consolidating their worldwide ad accounts and shifting most or all of their advertising billings to agencies with extensive global networks, to reduce costs and increase efficiency and control. Nevertheless, Braun’s and Levi Strauss’s regional managers have been able to bar a global campaign from their area. Unilever’s regional managers who seek to substitute their own campaigns must produce research showing that the global plan is inappropriate. Coca-Cola and Procter & Gamble have taken the middle ground, developing a global communications program but testing and fine-tuning it in meetings with regional managers.74

Brand definitions and guidelines must be established, communicated, and properly enforced so marketers in different regions have a good understanding of what they are and are not expected to do. The goal is for everyone within the organization to understand the brand’s meaning and be able to translate it to satisfy local consumer preferences. Brand definition and communication often revolve around two related issues. First, some sort of document, such as a brand charter, should detail what the brand is and what it is not. Second, the product line should reflect only those products consistent with the brand definition.

Coca-Cola has a strategy document that clearly articulates the company’s 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 (for example, the 19 steps to cook and bag french fries).

Colgate-Palmolive

Colgate-Palmolive has been a highly successful global marketer for years because of its tight focus on marketing strategies and objectives. Colgate’s “bundle books” contain, down to the smallest details, everything that Colgate knows about any given brand—and that a country or regional manager needs to know. They describe how to effectively market a particular product, including the product attributes, formulas, ingredient sourcing information, market research, pricing positions, graphics, and even advertising, public relations, and point-of-sales materials. With a bundle book, a manager in any one of the more than 200 countries and territories where Colgate sells its products can project the brand exactly like every one of her or his counterparts. As one executive noted, “As the smallest among our major competitors, we are trying to make sure that we maximize our resources. By having tightly controlled brands, we can leverage across borders rapidly.”75

As an example of deriving product strategy from a brand definition, consider Disney. Everyone at the company is exposed to the Disney brand mantra, “fun family entertainment” (see Branding Brief 2-3). To establish global guidelines, Disney’s centralized marketing group worked with members of the consumer products group for months to assign virtually every possible product to one of three categories:

• Acceptable to license without permission (like T-shirts)

• Not permissible to ever license (such as toilet paper)

• Requires validation from headquarters to license (about 20 categories, including air fresheners)

Internationally, Disney has noticed that the “gray areas” grow larger and more numerous. The company also has been trying to identify product groups that may be more amenable to localizing than others. For example, movies cannot be tailored for the European market because it is difficult to determine what will be attractive to those consumers. On the other hand, certain items may sell well in Germany but not in Japan.

Finally, for all this planning to work, there must be effective lines of communication. Coca-Cola stresses the importance of having people on the ground who can effectively manage the brand in concert with headquarters in Atlanta. To facilitate coordination, much training occurs at company headquarters; a sophisticated communication 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.

As the guidelines in Chapter 8 suggest, a global brand equity measurement system is a set of research procedures designed to provide timely, accurate, and actionable information for marketers on brands, so they can make the best possible tactical decisions in the short run and strategic decisions in the long run in all relevant markets. As part of this system, a global brand equity management system defines the brand equity charter in a global context, outlining how to interpret the brand positioning and resulting marketing program in different markets, as suggested by the previous global branding commandment.76 With the global brand strategy template in place, brand tracking can assess progress, especially in terms of creating the desired positioning, eliciting the proper responses, and developing brand resonance.

The challenge is that the marketing research infrastructure may be lacking in many countries. When DuPont set out to implement a global tracking system for its various brands, its efforts were hampered by a level of sophistication among local marketing research companies that varied considerably for the 40 primary countries in which it operated. Now marketing research firms are creating global networks of companies that help overcome this problem.

Proper design and implementation of brand elements can often be critical to the successful building of global brand equity. As Figure 4-2 showed, a number of brands have encountered resistance because of difficulty in translating their name, packaging, slogans, or other brand elements to another culture. The Science of Branding 14-1 describes some cultural differences in brand name memorability and recall.

In general, nonverbal brand elements such as logos, symbols, and characters are more likely to directly transfer well—at least as long as their meaning is visually clear—than verbal brand elements that may need to be translated into another language. Nonverbal brand elements are

more likely to be helpful in creating brand awareness than brand image, however, which may require more explicit meaning and direct statements. If the meaning of a brand element is visually clear, it can be an invaluable source of brand equity worldwide. As the old saying goes, “A picture is worth a thousand words,” so it is not surprising that the right brand logo, symbol, or character can have a huge impact on global marketing effectiveness.

The image of Ronald McDonald clearly communicates McDonald’s association with kids without the need for words. Similarly, Mr. Peanut, the Apple logo, and the M&M characters need no translation. The Nike swoosh connotes sports, Coke’s contour bottle connotes refreshment, and the Mercedes star connotes status and prestige worldwide. Perhaps the most compelling example of the importance of brand symbols is the Marlboro man.

Even nonverbal elements, however, can encounter translation problems. For example, certain colors have strong cultural meaning. Marketing campaigns using various shades of green in advertising, packaging, and other marketing programs ran into trouble in Malaysia, where these colors symbolize death and disease.78

Because of a desire to standardize globally, however, many firms have attempted to create more uniform brand elements. Pursuing a global branding strategy, Mars chose to replace its Treets and Bonitos brands with the M&M’s brand worldwide and changed the name of its third-largest U.K. brand—Marathon—to the Snickers name used in the rest of Europe and the United States.79 To create a stronger global brand, PepsiCo pulled together its dozens of company-owned brands of potato chips sold under different names and began to market them all abroad under a more uniform Lay’s logo. The company also boosted advertising and improved quality to enhance the brand image at the same time.80