Many of the current global brands we see today had different names before they gained global recognition. Brand names such as Brad’s Drink, Tokyo Tsushin Kogyo, Blue Ribbon Sports, Pete's Super Submarines and Computing Tabulating Recording Corporation may not sound familiar; but the names Pepsi, Sony, Nike, Subway and IBM do, don’t they? This is because they are the updated brand names of the aforementioned firms.
One of the reasons global brands change their names is to achieve brand globalisation. There are also numerous other strategies that successful companies employ; read on to find out more about them.
What is brand globalisation?
Brand globalisation refers to a scenario where brands gain recognition worldwide, for example, Apple, Google and Adidas.
In order to achieve brand globalisation in today's economic climate, firms need to:
- Identify the target market for their brand;
- Conduct market research before deciding which countries to expand to;
- Determine the category in which the brand would be positioned;
- Decide which decisions have to be taken at the central level and at the local level.
The process of brand globalisation
The impact of globalisation in recent years has led to the popularity and importance of the brand globalisation process, which consists of several phases, including:
- Defining brand identity: The first step in brand globalisation is developing a brand identity and defining its constraints. Brands also need to be careful that they don’t lose their identity throughout the globalisation process. Brands need to be aware of the fact that when they expand to different countries, the overall confidence in the brand may take a hit and it can take time to build this confidence up again. Before entering a new country, it is important that brands conduct a thorough analysis of the market conditions in the country, which should include:
- Size of existing market;
- Purchasing power;
- Consumer choices ;
- Level of competition;
- Type of distribution channels present;
- Presence of entry barriers;
- Opportunity to register the existing brand name.
- Accessing the markets: A brand is not limited to just being a name on the packaging of products, it is something that differentiates those products from its competitors and also adds value and confidence to the products. Therefore, when a brand enters a new market or country, its first initiative is fundamental in determining its long-term popularity. That is why, in this period of globalisation, brands have introduced multi-level branding with a parent brand and a daughter brand. In these situations, the parent brand can only go through the globalisation process with the assistance of the daughter brand. In such cases, the daughter brand includes the range of products. When these brands enter a new market, they usually do it using two methods, including:
- Creating a new category: This is when brands attract attention in a new market by creating a new product category altogether. A parent brand establishes itself by using the daughter brand as a point of reference in a new category. The best part about using this method is that the product has no competition and helps in better negotiations with distributors who want innovation in products. However, significant investment is required using this method as the brand needs to be marketed and advertised properly. Garnier used this innovative method to perfection when they launched Fructis Style in 2001, which ultimately helped them in becoming the segment leaders in various countries like China, Brazil and USA (source: Wisdomjobs.com).
- Segmenting a pre-existing category: The other viable option in this scenario is to launch a similar but differentiated product in a category that already exists.
- Selecting products that have been adapted to the new markets: When a brand decides to enter a new market, it is important that it adapts its products to suit the market consumers. This needs to be carried out carefully and with the help of proper strategy and the adapted products should result in rapid growth and confidence in the brand.
- Setting up local campaigns: Recently, brands are preferring to set up local campaigns in different markets compared to using a single campaign globally. Giving local subsidiaries the freedom to create their own campaigns helps in creating buzz around the brand in a new market. Red Bull has used this international marketing strategy to perfection with the Red Bull Air Race in the UK, the Red Bull Indianapolis Grand Prix in the USA and the Red Bull Soapbox Race in Jordan (source: Hubspot.com).
How do global brands compete?
Some examples of global brands that are in on-going competition with each other include; Apple vs OnePlus, Pepsi vs Coca-Cola, HP vs Dell and Lindt vs Ghirardelli. In an attempt to stand out or get one over their competition, global brands try implementing several strategies, including:
- Thinking globally: Top firms aim to be perceived as a global brand because this is what attracts consumers to their products. Airbnb used this global thought process in a business marketing strategy where they asked people across the world to accomplish random acts of hospitality for strangers and then upload a photo or a video of it, with the hashtag #OneLessStranger. This example of a marketing strategy worked wonders as within three weeks of its launch, more than 3,000,000 were following or participating in it (source: Hubspot.com).
- Controlling the dark side: Even though some firms are global brands, it does not mean that consumers always view them in a positive manner. If there are some negative perceptions of your firm, it is advisable to create campaigns that show your firm in a positive light. Another way of portraying this is to display consumer and client testimonials in advertisements and on your website and social media.
- Converting corporate social responsibility (CSR) into entrepreneurship opportunities: CSR has become an important feature in top organisations across the world. However, the impact of these activities is questionable with most of these efforts directed towards public relations. Consumers are able to see through such activities, which end up harming the goodwill and image of the firm. Hence firms must be seen doing something that actually benefits or helps the society in general.
CSR is a management concept in which organisations incorporate environmental and social concerns into their business operations. This is the best method in which organisations can achieve a balance of economic, environmental and social objectives. In fact, according to a study conducted by Cone Communications in 2017, 78% of consumers wanted organisations to address social justice issues, and a whopping 87% of consumers said they would purchase a product because the organisation supported a cause they care about. On the other hand, 76% of consumers stated that they will refuse to buy products from an organisation if it supported an issue contrary to their beliefs.
Strategies for building a successful global brand
Take a look at various strategies that will help you in building a successful global brand:
- Positioning is important: How you position your brand will help in determining if it has the potential to go global. Excellent positioning involves properly understanding your competition and then analysing your competitive advantage over them.
- Understand consumer behaviour: The behaviour of consumers is not standard across the world as consumer habits can change from country to country. This is one of the primary reasons why some brands fail when they target a global market. Barbara E. Kahn gave an apt example of business strategy which failed in her book Global Brand Power, where she mentioned that Walmart they set up outlets in China near industrial parks when consumers preferred to shop closer to their homes instead of closer to work.
- Brand translation: When you are deciding to take your brand global, ensure its name does not have a negative connotation in another language. For example, the French cheese brand Kiri changed its name to Kibi when expanding to Iran, as Kiri meant rotten in Farsi (source: entrepreneur.com).
- Broaden your mindset: When deciding on a name for your brand, ensure it is broad enough to accommodate any new products that you might introduce in the future.
If you want to learn more about brand management and international strategic marketing, Berlin School of Business and Innovation offers courses in MA in Strategic Marketing. To find out more, click here.