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Jack Buckner

Strategic Brand ManagementStrategic Brand Management

Exeter MBA and MSc Exeter MBA and MSc –– Day 3Day 3

Lecture 1 Lecture 1

Global Brand StrategyGlobal Brand Strategy

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Why?Why?

�� Access to new marketsAccess to new markets

�� Less competition?Less competition?

�� Reduce costs through economies of scaleReduce costs through economies of scale

�� Recognition of global consumers Recognition of global consumers –– and global and global opportunitiesopportunities

�� Increasing globalisation of the retail/channel Increasing globalisation of the retail/channel environment environment -- InternetInternet

�� Global profile necessary for successGlobal profile necessary for success

�� Perception Perception –– the competition will get there firstthe competition will get there first

�� Or come here Or come here …… fastfast

Why not?Why not?

�� Costs are often greater than expectedCosts are often greater than expected

�� Risks of losing brand control Risks of losing brand control –– unless unless

carefully planned growth (yet more costs)carefully planned growth (yet more costs)

�� Cultural barriers often underestimated Cultural barriers often underestimated

(more than the consumer barriers)(more than the consumer barriers)

�� Dilution of core management / brand Dilution of core management / brand

leadershipleadership

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A warning on the literatureA warning on the literature

�� Most of the global brand literature is written Most of the global brand literature is written

by brand typesby brand types……..

�� Not sleazy financiers who want to make a Not sleazy financiers who want to make a

quick buck overseasquick buck overseas……....

�� ……and there are plenty of sleazy financiers and there are plenty of sleazy financiers

out thereout there

Brand

Product / Service

Consumers

Global Strategic Brand Management

SLEAZY FINANCE

TYPES

Sales Forces

Retailers

Head office

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Expansion OverseasExpansion Overseas

Lack of brand controlLack of brand controlProfitable and Profitable and

limited resources limited resources

from parentfrom parent

LicenseeLicensee

Limited brand controlLimited brand controlQuick and cheapQuick and cheapDistributorDistributor

Role clarityRole clarity

Resource duplication?Resource duplication?

Combines Combines

experienceexperience

AllianceAlliance

Joint VentureJoint Venture

Cost and resourcesCost and resources

Lack of local expertiseLack of local expertise

Brand controlBrand controlSubsidiarySubsidiary

DISADVANTAGESDISADVANTAGESADVANTAGESADVANTAGESMETHODMETHOD

Going overseasGoing overseas

�� Most of the literature concerns strong Most of the literature concerns strong domestic brands going globaldomestic brands going global

�� The resources exist to expand via The resources exist to expand via subsidiariessubsidiaries

�� Distributors and licensees may be the only Distributors and licensees may be the only viable route for small brandsviable route for small brands

�� Global competition (driven by the Internet) Global competition (driven by the Internet) forces global expansion before strong forces global expansion before strong domestic market share establisheddomestic market share established

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Can a brand afford not to expand overseas?Can a brand afford not to expand overseas?

�� Single European marketSingle European market

�� InternetInternet

�� CommunicationsCommunications

�� TravelTravel

�� ““GlobalisationGlobalisation”” of key consumer groups of key consumer groups ––

TweensTweens

�� ……BUT timing is criticalBUT timing is critical

Global Brand StrategyGlobal Brand Strategy

�� Internal AnalysisInternal Analysis

–– OrganizationOrganization

–– Brand expressionBrand expression

–– MarketingMarketing

�� External AnalysisExternal Analysis

–– ConventionsConventions

–– Brand perceptionBrand perception

–– Brand recognitionBrand recognition

Sicco Van Gelder – Global Brand Strategy

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Advantages in Global Branding/MarketingAdvantages in Global Branding/Marketing

�� Economies of scaleEconomies of scale

�� Lower marketing costsLower marketing costs

�� Power and scopePower and scope

�� Consistency in brand imageConsistency in brand image

�� Ability to leverage good ideas quicklyAbility to leverage good ideas quickly

�� Uniformity of practiceUniformity of practice

Keller – Chapter 14

Disadvantages in Global branding/marketingDisadvantages in Global branding/marketing

�� Consumer differencesConsumer differences

�� Differences in consumer responseDifferences in consumer response

�� Differences in brand and product Differences in brand and product

developmentdevelopment

�� Differences in the legal environmentDifferences in the legal environment

�� Differences in marketing institutionsDifferences in marketing institutions

�� Differences in administrative proceduresDifferences in administrative procedures

Keller Chapter 14

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The Key DebateThe Key Debate

Weak global Weak global

brandbrand

Strong country Strong country

managementmanagement

DeDe--centralisedcentralised

Confusion and Confusion and

duplication of duplication of

functions/ functions/

resourcesresources

Brand and local Brand and local

management management

balancebalance

MixMix

Weak country Weak country

managementmanagement

Strong brand Strong brand

controlcontrol

CentralisedCentralised

DisadvantagesDisadvantagesAdvantagesAdvantagesSTRUCTURESTRUCTURE

Dell computersDell computers

�� Established in 1984 by Michael DellEstablished in 1984 by Michael Dell

�� Pioneered direct sales modelPioneered direct sales model

�� Low cost, high value brandLow cost, high value brand

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Dell global expansionDell global expansion

�� Established European subsidiaries in late Established European subsidiaries in late

19801980’’ss

�� AsiaAsia-- Pacific early 1990Pacific early 1990’’ss

�� 1996 1996 -- ee--commercecommerce

�� Repeated core business / branding model Repeated core business / branding model

across Europeacross Europe

Dell in ChinaDell in China

�� Targeted corporate market firstTargeted corporate market first

�� Authorized distributorsAuthorized distributors

�� First market to operate a First market to operate a ““hybridhybrid”” business modelbusiness model

�� Manufacturing plantManufacturing plant

�� 530 toll free numbers in 258 cities530 toll free numbers in 258 cities

�� Local promotional events Local promotional events –– advertising and direct advertising and direct mailmail

�� 2001 2001 –– Smart PC Smart PC –– lower price modellower price model

�� 2003 China 2003 China –– DellDell’’s fourth largest market, s fourth largest market, growing by 50% pagrowing by 50% pa

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Global Brand ManagementGlobal Brand Management

�� Global organizations like global branding Global organizations like global branding

strategiesstrategies……..

�� …….and global product ranges.and global product ranges

�� Markets like to customize product rangesMarkets like to customize product ranges……..

�� ……. And sometimes the brands themselves . And sometimes the brands themselves

The Key TensionsThe Key Tensions

They say it won’t

sell here

Global Brand Manager

Or hereOr here

Or hereOr here

The local markets

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Alternative Management SystemsAlternative Management Systems

Just Do It

Let’s discuss and

decide what’s in

the best interests

of the brand Let’s be

realistic about

the US

If you don’t do it –

you’ll never get a job

in HQ

Eurobrands Eurobrands managementmanagement

�� Three phasesThree phases

–– DecentralisedDecentralised

–– CentralisedCentralised

–– Decentralised with strong coordinationDecentralised with strong coordination

�� Intermediate policies most successful across Intermediate policies most successful across

EuropeEurope

Kapferer – Chapter 12

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Global Brand/Marketing PlanningGlobal Brand/Marketing Planning

�� Strong brands define roles and Strong brands define roles and

responsibilitiesresponsibilities

�� CocaCoca--Cola and Cola and NestleNestle’’s s alternative planning alternative planning

systemssystems

�� Clarity is more important than the systemClarity is more important than the system

The The ““MixMix”” approach to global approach to global

brandingbranding

�� Core branding elements most centralized Core branding elements most centralized ––

brand identity, core products, R and Dbrand identity, core products, R and D

�� Secondary branding elements most debated Secondary branding elements most debated

–– advertising, inadvertising, in--storestore

�� Below the line branding often most deBelow the line branding often most de--

centralized centralized –– pr, sponsorshippr, sponsorship

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The Lure of Global BrandingThe Lure of Global Branding

�� Successful global brandsSuccessful global brands

–– Stimulate the sharing of insights and best Stimulate the sharing of insights and best

practices across countriespractices across countries

–– Support a common global brandSupport a common global brand--planning planning

processprocess

–– Assign managerial responsibility for brands in Assign managerial responsibility for brands in

order to create crossorder to create cross--country synergies and to country synergies and to

fight local biasfight local bias

–– Execute brandExecute brand--building strategiesbuilding strategies

Aaker and Joachimsthaler – the lure of global branding

Assigning responsibilityAssigning responsibility

�� Business Management TeamBusiness Management Team–– Create global brands without weakening local brand strengthCreate global brands without weakening local brand strength

–– Encourage adoption of brand building programmesEncourage adoption of brand building programmes

–– P and GP and G

�� Brand ChampionBrand Champion–– Senior global executive the brand championSenior global executive the brand champion

–– Approves all brandApproves all brand--stretching decisionsstretching decisions

–– Sony and the GapSony and the Gap

�� Global Brand ManagerGlobal Brand Manager–– Similar to brand champion but less seniorSimilar to brand champion but less senior

–– Brand steward approachBrand steward approach

�� Global Brand TeamGlobal Brand Team–– Involve country management in additional responsibilitiesInvolve country management in additional responsibilities

–– Develops joint guidelinesDevelops joint guidelines

Aaker and Joachimsthaler – the lure of global branding

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Starbucks in JapanStarbucks in Japan

Third largest coffee market in the world

Retail rentals in Tokyo very expensive

Local competition – Doutor and Pronto

Customisation – smaller portions, limited local

product range

Standard – names of offerings, no-smoking

policy, store size

Howard Schultz “they said we would not

succeed in Japan. It shows the power of

believing in what you do.”

BUT – 2002 17% decline in traffic

Increased local product range (Rice/Salmon

wraps)

McDonalds in ChinaMcDonalds in China

“McDonalds can both stimulate social

change and uphold traditional ways of

interacting.”

“..the meanings attached to a brand

name can be malleable and sometimes

paradoxical in societies where cultural

norms are in flux.”

Brand Image and cultural traditions

The natural trend for global brands is

to minimise adaptation

Eckhardt and Houston – Cultural paradoxes in Brand Meaning:

McDonalds in Shanghai, China

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Some Global brand issuesSome Global brand issues

�� The European debateThe European debate

�� The role of the UK within EuropeThe role of the UK within Europe

�� US market entry for nonUS market entry for non--US brandsUS brands

�� Management of AsiaManagement of Asia

�� China and its relation to AsiaChina and its relation to Asia

�� Global key account managementGlobal key account management

Western EuropeWestern Europe

Anglo-Saxon

Europe

United Kingdom

Ireland

Nordic Europe

Sweden Norway

Denmark Finland

The Netherlands

Germany

Luxemburg

Belgium

Germany

Central Europe

Austria Switzerland

France Italy

Mediterranean Europe

Spain Portugal Greece Italy

Jean-Claude Usunier – Marketing Across Cultures (Prentice-Hall)

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adidas Global Brand Management Evolutionadidas Global Brand Management Evolution

�� 1993 1993 –– Big 4 Big 4 –– Germany, USA, France and Germany, USA, France and

UKUK

�� 1996 1996 –– Big 7 Big 7 –– USA, Germany, UK, USA, Germany, UK,

France, Italy, Japan, ScandinaviaFrance, Italy, Japan, Scandinavia

�� 1998 1998 –– Regional Management Regional Management –– USA, USA,

Europe, Asia, Latin AmericaEurope, Asia, Latin America

�� Issues remain Issues remain –– role of US, Japan and Asia, role of US, Japan and Asia,

Eastern EuropeEastern Europe

adidas Global Branding Processadidas Global Branding Process

�� August (16) August (16) –– Brand Strategy MeetingBrand Strategy Meeting

�� September September –– January (12January (12--16) 16) –– Global product Global product range design and developmentrange design and development

�� January(12) January(12) –– Range reviewRange review

�� JanuaryJanuary--March(9March(9--12) 12) –– Product range revision and Product range revision and concept developmentconcept development

�� March(9) March(9) –– Global Marketing MeetingGlobal Marketing Meeting

�� AprilApril--June(8June(8--6) 6) –– Country marketing and salesCountry marketing and sales

�� JuneJune--December(6December(6--2) 2) –– Range ordering and Range ordering and marketing finalisationmarketing finalisation

�� January January –– Product and marketing launchProduct and marketing launch