Introduction
Selling products with famous and renowned names, rather than bulk merchandises or generic commodities, has long been a smart and feasible industry to be in. There is a global mentality that if a good is branded, it cost more than those that are unbranded. Customers are paying extra for the celebrated name on food products, clothing, hi-fi, shoes, as well as cars (Anholt 2003, p. 2).
One of the most productive and abundant but still basically uncultivated progresses in the global marketing aspect is the global branding. It is considered as the natural result of the huge 1990s research about the brand equity. A unique brand name and logo are used, by most of the global companies as their major standardized aspect of their marketing strategy. Still much of the traditional branding research typically acknowledges the global character of powerful brands only implicitly. Different global brand researches shows that it is important for the global brand to takes important about the global dimension of the known brands (Weitz & Wensley 2002, p. 471).
Global branding is considered as a kind of universal truth. All of the companies in different part of the globe have their own brands that are involve in same issues. All of them are facing different problem with regards to the local culture such as language differences, governmental regulations, politics and other issues (Gregory & Wiechmann 2001, p. xv).
Global branding during the 1980s was influenced by a famous 1983 Harvard Business Review article entitled The Globalization of Markets. The article focuses on the topic that different companies must leverage their “economic of simplicity” as well as sell different standardized products in different part of the world. The article also discusses the benefits of the said strategy, and that is to lower the costs as well as maintain the consistent communication of the company to their target customers (Wreden 2004). The next generation of branding was in 1990s, and it focused on the global approach. Different companies centralized their production, research, together with the technology, but localize their different marketing approaches such as the marketing distribution and Public Relations or PR in order to accommodate and meet the different cultural as well as geographical differences (Wreden 2004).
What is Global Brand?
Brand is considered as the translation or conversion of the business strategy into a consumer experience and practice that conveys in relation to a specific behavior of consumer (Van Gelder 2003, p. 15). Global brand on the other hand, is the one that is available in most of the countries in the world that eventually contributes to the similar strategic principles, positioning as well as marketing in each and every market in the world, although there is a big possibility that the marketing mix might be different. It has a considerable market shares in all of the countries and equivalent brand loyalty or also known as the brand franchise. Another important characteristics of global brand, is that it holds the same logo or brand name (Wreden 2004). It has a large amount of geographic reach, by being available or accessible in all of the major markets as well as the most minor ones (Gregory & Wiechmann 2001, p. 1).
Even though there is a lack of official definitions of global brand in the literature, it is universally established that they are considered as those brands that consumers can find under the same name in several countries with usually similar and centrally synchronized and harmonized marketing strategies (cited in Steenkamp & Batra 2003, p. 53).
Global brand has its three most important dimensions: First is that, global brand signals quality; second is that, it represents different international positive attributes; and the last is that, it represents different vehicles that are used for social responsibility (Wreden 2004).
The first dimension of global brand, which is the quality signal, signifies to the fact that different global brands carry their individual brand reputation for quality (Wreden 2004). That is why the place where it was made is no longer that important. Global brand also stands for different positive attributes such as Apple says cool in each and every country (Wreden 2004). The last dimension and considered as the most important dimension of the global brand, is the social responsibility. Social responsibility and roles of each and every international company in the world is also an important marketing strategy that can help them to maintain their position in their industry in the global market.
Nowadays, different aspects such as technologies, knowledge-based economy, innovations and other intangible assets of the global brand is regarded as one of the most important driver or motivator of the corporate value as well as growth (Gregory & Wiechmann 2001, p. 3).
Global Branding
Global branding is an important activity or task that must be done by different businesses or companies that are planning to get involve in the global market, more importantly in launching their global brand. There have been many multinational companies that are altering their brand portfolios in order to cater to the needs of their global brands (Steenkamp & Batra, p. 53). For instance, Procter & Gamble or P&G as well as Unilever both reduced the number of the brands that they are marketing around the world by disposing those products or brands that has a limited global potential (cited in Steenkamp & Batra , p. 53). Another example is the case of the telecom giant Vodafone, the company had replaced their local brand name by global Vodafone name (cited in Steenkamp & Batra, p. 53).
In global branding, the surface of the brands submitted to are usually the formal brand identity such as the logo, symbol, trademark, brand name, colors as well as the shapes; the brand position, the different marketing mix, the distribution, different strategic principles as well as the advertising (Mooji 2005, p. 14). All of the major examples of global brands are using their fully globally standardized techniques (Mooji 2005, p. 14).
Global branding is one of the answers in the problem that is caused by the fast growing and developing global market that is pushed or caused by the globalization, different technologies as well as the innovation.
Advantages of Using Global Brand Name
In most of the categories as well as industry in the business world, companies are not competing with their products but with their brands. It is a battle between the improved and better products that are distinguished and well positioned against the other brands in the same category (Mooji 2005, p. 13).
There are many reasons or advantages in moving towards the global brands. Yip (1995), said that globalization can help to yield the economies of scale as well as the scope in R&D, manufacturing as well as marketing (cited in Steenkamp & Batra). Hassan & Katsanis (1994) also added that the strategic appeal of the global brand increases as the meaningful segments of consumers around the world develop together with their similar demands and preferences (cited in Steenkamp & Batra). The most important aspect is that Neff (1999) said that the globalization can help to speed up the time of a brand in order to market by helping to reduce the time-consuming local modification (cited in Steenkamp & Batra).
Global Branding can help to improve the R&D and Innovation Processes
One of the most important characteristics of the global brand is its availability in most of the countries in the world (Mooji 2005, p. 14). The said character is mixed with the principle that was implemented by P&G, thinking global but acting local. The said principle and characteristics pushes different companies who are practicing global branding, to improve their R&D and innovation by letting their franchise from their partner countries to innovate on their own.
One of the most important example or case that is suited in this advantage is the McDonald’s. In 2004, the company is already offering their services and products via more than 30,000 distribution points in over 119 countries in the world. The company is already serving their 47 million customers everyday (Mooji 2005, p. 14).
Innovation and R&D is important because it can help the company to maintain their efficiency by offering their customers something new. Although the company has their standard specifications for their technologies, client services, hygiene and other operations systems, other aspects of the company are working locally like its products as well as its communications and communications to their customers (Mooji 2005, p. 14).
Global branding can help many companies to communicate to their customers in local way but maintaining their quality and standard in international or global way. The aspect had helped the McDonald’s to be successful by offering their advertisements and other customer relation activities as well as offering different products and services that has a local touch. Examples of this is that McDonald’s is offering different types of burgers for different part of the world such as the Kiwi Burger of New Zealand, the Maharaja Mac of India, the Prosperity Burger of Malaysia, the Teriyaki Burger of Japan, the McKroket of the Netherlands, the McLaks or the grilled salmon burger of the Norway as well as the Croque McDo or the hot ham and cheese sandwich in France (Mooji 2005, pp. 14 – 15).
Global branding had also helped the company to become sensitive to the culture and custom of their customers. This pushes or motivates the company to focus their innovation activities to the religions and beliefs of their target customers. One of the most important innovations that was done and implemented by the company was their offering of the meal-less Friday sandwich. They offered their Fillet-O-Fish as their consideration to the belief of the Catholic during their meatless Friday, by letting them enjoy the delicacy of McDonald’s even in the said day (Commonwealth Department of Immigration and Multicultural and Indigenous Affairs 2007).
Another important innovation of the company that is related to the said subject is their offering of their very own Halal burger. The said strategy had helped the company to get the attention of their Muslim customers by offering them other menu aside from salad and desert (Commonwealth Department of Immigration and Multicultural and Indigenous Affairs 2007).
The ability of the company to manage their innovations and R&D, together with their courage to enter into the global branding had helped them to become of the world’s most renowned or famous restaurant or fast food chain. Another important thing is that the company was one of the top 10 best global brands in 2006, having its position in top 9. See appendix A to see the list of top ten best global brands.
Global branding had helped the company to grow in the international market as well as create a local image that capture the hearts of their local customers at the same time, helping the image or the reputation of the company as a whole.
Global Branding can help to Increase the Strategic Appeal of the Company
Advertisement is one of the most important factors in order to help the brand name or the reputation of the company to level up. It also has a huge part in helping to increase the demands and eventually the sales of the products that the company is offering. One of the best examples for this advantage is the case of the Coca-Cola. The said beverage is already sold in over 200 countries around the globe (Mooji 2005, p. 14). The most important factor that helped the company to be in its position in the global market is its ability to campaign using their different global advertising as well as their ability and activities to increase their relationship to their local country partner (Mooji 2005, p. 14). This had helped the company to become the number 1 in the top global brands in 2004, far from its position in 2003 as being ranked as the number 4 and continued its success trough 2006.
The company proudly said that the reason behind their success is their ability and action to meet the demands of local tastes as well as cultures with nearly 400 brands in over 200 countries in the whole world (cited in Mooji 2005, p. 15). Example of this is their activities in the Middle East; the company had added the sweetness of their drinks in the said country in order to meet the demand and preferences of their prospective customers who prefer sweeter drinks (Mooji 2005, p. 15). This is different from other countries where in their customers prefer drinks that are not that sweet. Another important thing is that the company had also offer their no sugar coke in order to cater to the taste of those figure or health conscious customers.
McDonald’s is also one of the best examples for the said case. The reason behind the success of the company is its ability to relate their advertisement and other marketing strategies to the local market that they are catering to. For example, in France, the company uses the idea of Asterix and Obelisk, or the most famous historical cartoon of the nation (Mooji 2005, p. 15). It had appeal their customers in France, but it doesn’t mean that it will also affect their customers from their other partner countries.
That is the reason why, the company is establishing different image in different countries like, there are some places where in McDonald’s is considered as a place to go to for different children’s parties, like in the Philippines, while other countries prefer it as a place as a typical family restaurant, like in India (Mooji 2005, p. 15).
In China, the image of the restaurant is entirely different, it is considered as a place to go for a date, due to the fact that it presents or shows a typical Chinese restaurant by using tables for two that will allow and provide privacy (Mooji 2005, p. 15).
Global Branding can help to reduce the Time that is spent in Local Modification
Due to the fact that global brands carry one brand name and/ or logo, the manufacturer or the company that offers a given product will no longer have to spend much of their time in launching their products or services. The reason behind this is the fact that the global brand or name of the company had already established its name in the market. The reason behind this is due to the mentality of the customers. There are many reasons why the customers prefer different global brands: Kapferer (1997) said that global brands are associated or connected to the higher prestige (cited in Steenkamp & Batra 2003). The said reason can make the customers feel that if they are using or availing different products and services form a global brand, they are somewhat in or in higher level of society. Kochan (1996) and Bearden & Etzel (1982) added that, global brands are admired because of its being prestigious, together with its being relative to scarcity as well as higher price judge against the local brands (cited Steenkamp & Batra 2003). In addition to that, global brand can create aspirational and prestige appeal (cited Steenkamp & Batra 2003).
Example of this is the brand of Sprite that is part of the Coca-Cola Company. Although, Sprite is considered as another brand, global branding had helped it to become successful and feasible for many teenage. Due to the fact that the said brand is carrying the same brand, which is Coca-Cola, many of the Sprite ads are running worldwide, unchanged, while there are some that are made exclusively for different local. It had helped the company to save their time and effort by creating and establishing different local advertisement for different partner country of the company. The advertisement of the Sprite focuses only one basic theme and that is the self-reliance and to trust one’s instincts. Another important effect of global branding to the company is that it enables them to create new products or brand that focuses on a given group of their customers. Sprite focuses on the teenagers, and it had helped them to lessen their effort in doing and implementing their marketing campaign. It is due to the fact that there is a strong resemblance that is common to teenagers no matter which country is concerned (Kimmel 2005, p. 94). It had helped the company to build universal sentiments of the teens with regards to the softdrinks and other similar products (Kimmel 2005, p. 94).
Conclusion
Global branding had helped many companies to be noticed by their target market as well as to be in their current position in their industry in the global market. There have been three most important advantages or reasons why companies must used the strategy of global branding. All of the said reasons can help the company to grow in terms of size, sales as well as their position in the market. Although there have been many successful stories about global branding, there are many hindrances that can be encountered by different companies. One of this is the culture factor; it can affect the preferences, taste, demands as well as the behavior of the customers towards the products. So it is important to think and plan about the local culture and custom aspect of the partner country and use those differences in planning and implementing different marketing strategies.
Another important factor is the insatiable or ever-changing taste of the customers. That is why it is important to manage and maintain the level of innovation. Innovation can help different global companies to maintain the level of interest of their customers towards their different brands that is under one global brand.
The last factor is to maintain the high quality of the each and every brand that is included in the global brand. The reason behind it is that if one of the brands failed to satisfy the demands and needs of the customers, it can affect the name of the global brand as a whole.
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