A simple explanation of a global brand would be a brand that is marketed and sold around the world. However, many researchers don’t think that it is that simple. Simon Rothon, senior vice president of Unilever Marketing Services, in an interview, said that a wide geographic footprint doesn’t qualify a brand as a global brand. It also needs many other aspects, and the aspects may vary depending on the nature of the brand (Hollis, 2008).
Steenkamp (2017) defined a global brand into some specific features. The first feature is that the brand uses the same name and logo, which is recognized, available, and accepted in multiple regions of the world. The second feature is that it shares the same principles, values, strategic positioning, and marketing around the world. The third feature is that the management is coordinated internationally, even though the marketing mix can differ in each country.
Benefits of a Strong Brand
Here are some benefits of a strong brand.
A strong brand makes customers decision-making easier
Steenkamp (2017) stated that the human brain stores and organizes the knowledge about a product around the brand names. Higher brand recognition from a customer means that the customer can easily access knowledge about the product in the decision-making. The customer doesn’t need to involve deep thought or data processing to make a purchase.
It will be particularly important for fast-moving consumer goods (FMCG) companies, such as Nestle, P&G, and Unilever. These companies sell products that must linger on the consumers’ top-of-mind so that they can effortlessly purchase the products without having a difficult decision-making process.
Strong global brand is a competitive edge
A strong brand has a better competitive advantage in brand recognition as discussed above. Moreover, the competitive edge can also be utilized when introducing new products. For a strong brand to have loyal customers, it is usually easier and costs less to introduce new products or to test the new products before launching them (Fanaras, 2013).
For instance, it will be easier for highly known brands, such as Samsung and Apple, to introduce a new smartphone, compared to a new smartphone company’s effort to introduce its products.
Normally, credibility and brand recognition go hand in hand. A brand recognized for its credibility will have its credibility enhanced even for people who never use the brand. This credibility can be utilized to, for example, charge higher margins. For instance, EIGER’s backpack is known for its durability in tropical environments. This brand is recognized due to its credibility and thus it can obtain the benefit of charging a higher price compared to other backpack brands.
The brand image is not only perceived by the customers but also by the workforce. The best talents in the workforce tend to seek employment from a strong brand. If the company internally provides a good workplace, then the talented employees will have no reason to be seeking a way out. This is why strong brands like Amazon and Microsoft usually have low employee turnover.
Challenge of Global Brand and its Branding
Global brands usually are well-recognized brands. However, Kotler et al. (2017) stated that currently, local brands still occupy the majority of the consumer market. Most consumers, wherever they are, live a very local life. This is the main challenge for global brands. They must not only penetrate the market but also engage the consumers at a local level by considering the socio-cultural aspect of the locals.
In many cases, companies should adapt to local needs, not only in offering the product but in the product as well. Coca-Cola, for example, is sweeter in the Middle East than in the USA (Steenkamp, 2017). They still use the same brand name, logo, and packages, and consumers can easily distinguish the products from their competitors, but they have to adapt to the tongue of the people.
There are cases where big multinational companies struggled to win the local market. Dunkin Donuts has a fierce challenge from local brand J.Co Donuts in Indonesia. Seven-Eleven could not even survive in the country. Walmart can’t easily expand internationally due to the challenge. And so on. While global brands may have an edge in resources and experience, they must not underestimate the force of the local.
References Fanaras, L. A. (2013, December 16). 5 Major Benefits of a Strong Brand. Millennium Agency. https://mill.agency/creative/5-major-benefits-strong-brand/ Hollis, N. (2008). The Global Brand: How to Create and Develop Lasting Brand Value in the World Market. Palgrave Macmillan. Kotler, P., Kotler, P., Armstrong, G., & Opresnik, M. O. (2018). Principles of marketing (17th ed.). Pearson. Steenkamp, J. (2017). Global Brand Strategy: World-wise Marketing in the Age of Branding (1st ed.). Springer.
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