1. GLOBAL OR NATIONAL BRANDS?
Reader PhD Sorina GÎRBOVEANU
University of Craiova
Abstract:
Today, branding is such a strong force that hardly anything goes unbranded.
Branding in global markets poses several challenges to the marketers. A key
decision is the choice between global and nationals brands. This article gives
the answers to the questions: what is, what is need for, what are the
advantages, costs and risks of global and national brands? All go to the
following conclusion: use global brands where possible and national brands
where necessary.
Keywords: global branding, strategic branding
Introduction Increasingly, corporate and brand
In essence, a brand identifies the image is being recognized as a major
seller or maker. It can be a name, influence on sales. In the commercial
trademark, logo, or other symbol. Under world, where it is becoming increasingly
trademark law, the seller is granted easy from a technical point of view to
exclusive rights to the use of the brand duplicate a competitor’s offering, the
name in perpetuity. Thus brands differ creation of a favourable or different
from other assets such as patents and image may give the company a
copyrights. A brand is essentially a competitive advantage.
seller’s promise to consistently deliver a The concept of brand management
specific set of features, benefits, and was created in the 1930s by Procter
services to the buyers. The best brands and Gamble, the giant Cincinnati soap
convey a warranty of quality. But a and toiletries company. It came about
brand is even a more complex symbol. as a result of the failure to launch
A brand can convey up to six successfully a new soap at that time,
levels of meanings. Attributes: a brand Camay. P&G’s original market strength
first brings to mind certain attributes. had been founded on a soap brand
Benefits: customers are not buying called Ivory and it was felt that the sales
attributes, they are buying benefits. failure of the company was due to “too
Attributes need to be translated into much Ivory thinking”.
functional and/or emotional benefits. A strong brand reassures the
Values: the brand also says something customer; it gives confidence in terms of
about the producer’s values. Culture: the quality and satisfaction that can be
the brand may represent a certain anticipated from buying it. From all of
culture. Personality: the brand can also this comes the possibility of long-term
project a certain personality. User: the profits. Many brands are household
brand suggests the kind of consumer names today, but the concept of brand
who buys or uses the product. management has moved beyond the
Marketers must decide at which level(s) household goods categories.
to deeply anchor the brand’s identity. People with brand-management
Promoting the brand solely on one or experience in fast moving consumer
more of its benefits can be risky. The goods companies are now in demand
most enduring meanings of a brand are by financial institutions, service
its values, culture and personality. They organizations, retailers and new
define the brand’s essence [4]. technology-based companies. Their

2. marketing skills are being applied to seven “pillar” brands: Concorde, First
“own label” brands. For example, the Class, Club World, Club Europe, World
Midland Bank has introduced new Traveller, Euro-Traveller and Super
brands of accounts, with names such as Shuttle, each run by a brand manager
Vector and Orchard, which have been and a group brand manager. Customer
strongly promoted. The Halifax Building service and profitability have both
Society is moving along similar lines improved under the new system.
with its “Contents Xtra” insurance
scheme. Global Brands
Without a doubt, the concept of A global brand is defined as the
branding can fit in very well with the worldwide use of a name, term, sign,
idea of the corporate image [3]. Take symbol (visual and/or auditory), design,
British Airways, for example. Once they or combination thereof intended to
were organized on the basis of a identify goods or services of one seller
number of “marketing centers”, which and to differentiate them from those of
were essentially geographical areas competitors. Much like the experience
such as North America, Europe and with global products, there is no single
Australia. With such an organization, it answer to the question of whether or not
was very difficult to get a focus on to establish global brands. Table 1 lists
customer service and to track down the the estimated worth (equity) of the 20
real needs of customers. There is now top global brands.
an “umbrella” or “master brand”, which
is British Airways itself. Under this are
Table 1
Top 20 Global Brands
Brand Description
1. Coca-Cola Little innovation beyond its flagship brand and poor management
(United has caught up with Coke as consumers’ thirst for Cola has
States) diminished.
2. Microsoft It’s logo pops up on 400 million computer screens worldwide. But
(United virus plagues and rival Linux took some luster off Gates &Co.
States)
3. IBM A leader in defining e-business, with services making up more
(United than half of Big Blue’s sales.
States)
4. GE With acquisitions in areas from bioscience to bomb detection, it’s
(United easier to buy GE’s new theme of “imagination at work”.
States)
5. Intel No longer just inside PCs, Intel is using its muscle to set the
(United agenda for everything from wireless standards to the digital home.
States)
6. Disney Long the gold seal in family entertainment, but newcomers like
(United Nickelodeon and Pixar are siphoning off some of its brand equity.
States)
7. Big Mac has pulled out of a two-year slump but still has to battle
McDonald’s its reputation for supersizing the world’s kids.
(United
States)
8. Nokia Tough times for the mobile-phone giant as its market share has
(Finland) slipped and younger buyers turn to rivals such as Samsung.
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3. Table 1
(continued from the previous page)
Brand Description
9. Toyota With rock-solid quality and the edge in hybrid cars, the Japanese
(Japan) auto maker is on track to overtake Ford in worldwide sales.
10. Marlboro The no. 1 name in cigarettes has cut prices and upped marketing
(United to beat back the challenges of higher taxes and fewer smokers.
States)
11. Mercedes With wobbly profits and quality problems, the luxury car brand is
(Germany) struggling to retain premium status.
12. Hewlett- Covering everything from digital cameras to service, the IT giant
Packard wants to dominate the middle ground between Dell and IBM.
(US)
13. Citibank New CEO Charles Prince has spurred on global expansion and
(United boosted the consumer credit division.
States)
14. American A recent federal court ruling that allows banks to issue Amex
Express cards should give the brand another boost.
(United
States)
15. Gilette Despite the tougher competition from Schick, the King of Blades
(United still reigns new products like the battery-powered M3Power.
States)
16. Cisco This networking behemoth used slick TV ads and key acquisitions
(United like Linksys to extend its reach.
States)
17. BMW This Bavarian auto maker is powering higher sales with raft of
(Germany) new models from the sleek 6 Series sports coupe to the X3 baby
SUV.
18. Honda Overtaken by Nissan at home and falling further behind rival
(Japan) Toyota in the U.S. market.
19. Ford Ford is trying to make quality “Job One” again after am
(United embarrassing run of glitches, but leery consumers haven’t yet
States) regained trust.
20. Sony It was late to the LCD TV boom, and the PS2 video game console
(Japan) is slipping. Worse, rival Samsung is in Sony’s face.
Source: Cateora, Ph., Graham, J., Bruning, E., International Marketing, McGraw-Hill
Ryerson, Toronto, 2006, pg. 323
Figure 1 dramatizes the extent of (BMW). In fact, U.S. dominance is much
U.S. company domination of global deeper that the rankings reflect.
branding. No other country remotely A successful brand is the most
approaches the brand values held by valuable resource a company has [1].
American companies. U.S. companies The brand name encompasses the
account for fourteen of the top twenty years of advertising, good will, quality
global brands (70 percent) across both evaluation, product experience, and
consumer goods and industrial sectors. other beneficial attributes the market
Others countries within the top twenty associates with the product. Brand
rankings are Finland (Nokia) in image is at the very core of business
telecommunications, Japan (Toyota, identity and strategy. Customers
Honda, and Sony) and Germany everywhere respond to images, myths,
and metaphors that help them define
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4. their personal and national identities between countries. Another advantage
within a global context of world culture is that sales may increase because
and product benefits. Global brand play travellers will see their favourite brands
an important role in that process. The advertised and distributed in other
value of Kodak, Sony, Coca-Cola, markets. Third, trade channels are more
McDonald’s, Toyota, and Marlboro is ready to accept a global brand that has
indisputable. One estimate of the value been advertised in their market. Finally,
of Coca-Cola, the world’s most valuable a worldwide recognized brand name is
brand, places it over $70 billion and a power itself, especially when the
growing. In fact, one authority country-of-origin associations are highly
speculates that brands are so valuable respected. Japanese companies have
that companies will soon include a developed a global reputation for high
“statement of value” addendum to their technology and quality and their names
balance sheets to include intangibles on products give buyers instant
such as the value of their brands. confidence that they are getting good
Naturally, companies with such strong value.
brands strive to use those brands But there are also costs and risks
globally. In fact, it appears that even to global branding. A single brand name
perceived “globalness” leads to may not be as appealing as locally
increases in sales. The Internet and chosen names. If the company replaces
other technologies are accelerating the a well-regarded local name with a global
pace of the globalization of brands. name, the changeover cost can be
Even for products that must be adapted substantial. The company will have to
to local market conditions, a global inform millions of people that its brand
brand can be successfully used with still exists but under another name.
careful consideration. Heinz produces a Even the company’s local managers
multitude of products that are sold may resist the name change ordered
under the Heinz brand all over the from headquarters. The
world. Many are also adapted to local overcentralization of brand planning and
tastes. In the United Kingdom, for programming may dissipate local
example, Heinz Beans Pizza (available creativity that might have produced
with cheese or sausage) was a runaway even better ideas for marketing the
hit, selling over 2.5 million pizzas in the product.
first six months after its introduction. In Even when a company has
the British market, Heinz’s brand of promoted its global brand name
baked beans is one of the more popular worldwide, it is difficult to standardize its
products. The British consumer eats an brand associations in all countries.
average of 16 cans annually, for a sales Heineken beer, for example, is viewed
total of $1.5 billion a year. The company as a high-quality beer in Canada, as a
realizes that the consumers in other grocery beer in the United Kingdom,
countries are unlikely to rush to stores and as a cheap beer in Belgium. Cheez
for beans pizzas, but the idea could Whiz, a Kraft General Foods Cheese
lead to the creation of products more spread, is viewed as a tasty snack
suited to other cultures and markets. spread in Canada and as a coffee
What are the advantages [4] of a flavourer in Puerto Rico.
global brand name? One main Ideally a global brand gives a
advantage is economy of scale in company a uniform worldwide image
preparing standard packaging, labels, that enhance efficiency and cost
promotions, and advertising. Advertising savings when introducing other
economies result from using products associated with the brand
standardized ads and the fact that name, but not all companies believe a
media coverage increasingly overlaps single global approach is the best.
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5. Indeed, we know that the same brand umbrella, Mars returned the candies to
does not necessarily hold the same their original names. The pet food
meanings in different countries. In division adopted Whiskas and Sheba for
addition to companies such as Kodak, cat foods and Pedigree for dog food as
Kellogg, Coca-Cola, Caterpillar, and the global name replacing KalKan. To
Levi’s that use the same brands support this global division that account
worldwide, other multinationals such as for over $4 billion annually, Mars also
Nestlé, Mars, Procter&Gamble, and developed a website for the pet food
Gillette have some brands that are brands. The site functions as a “global
promoted worldwide and other that are infrastructure” that can be customized
country specific. Among companies that locally by any Pedigree Petfoods branch
have faced the question of whether or worldwide. For instance, Pedigree
not to make all their brands global, not offices can localize languages and
all have followed the same path. For information on subjects as veterinarians
example, despite BMW’s worldwide and cat-owner gatherings.
successes, only recently did the
company create its first global brands National Brands
position. A different strategy is followed by
Companies with successful the Nestlé Company, which has a stable
country-specific brand names must of global and country-specific national
balance the benefits of a global brand brands in its product line. The Nestlé
against the risk of losing the benefits of name itself is promoted globally, but its
an established brand. And some brand global brand expansion strategy is two-
names simply do not translate. The cost pronged. In some markets it acquires
of reestablishing the same level of well-established national brands when it
brand preference and market share for can and builds on their strengths – there
the global brand that the local brand are 7,000 local brands in its family of
must be offset against the long-term brands. In other markets where there
cost savings and benefits of having only are no strong brands to be local, people
one name worldwide. In those markets to be regional, and technology to be
where the global brand is unknown, global. It does, however, own some of
many companies are buying local the world’s largest global brands; Nestlé
brands of products that consumers want is but one.
and revamping, repacking, and finally Unilever is another company that
relaunched them with a new image. follows a similar strategy of a mix of
Unilever purchased a local brand of national and global brands. In Poland,
washing powder, Biopan, that had a 9 Unilever introduced its Omo brand
percent share of the market in Hungary; detergent (sold in many other
after relaunching, market share rose to countries), but it also purchased a local
about 25 percent. brand, Pollena 2000. Despite a strong
When Mars, a U.S. company that introduction of two competing brands,
includes candy and pet food among its Omo by Unilever and Ariel by
product lines, adopted a global strategy, Procter&Gamble, a refurbished Pollena
it brought all its products under a global 2000 had the largest market share a
brand even those with strong local year later. Unilever’s explanation was
brand names. In Britain, the largest that East European consumers are
candy market in Europe, M&Ms were leery of new brands; they want brands
sold as Treets and Snickers candy was that are affordable and in keeping with
sold under the name Marathon to avoid their own tastes and values. Pollena
association with knickers, the British 2000 is successful not just because it is
word for women’s underpants. To bring cheaper but because it chimes with
the two candy products under the global local values.
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6. Neither Canada nor Australia is The trend today is toward a
represented in the top 100 global "borderless world." In Europe, custom
brands, as their branding strategy is duties, border delays, and other
predominately national. They do not impediments to inter-European trade
have well-developed consumer goods are rapidly diminishing. Companies are
and services sectors, as in the U.S., eager to launch new brands as
and most of their companies cater to Eurobrands. P&G launched its
local consumer markets. Of the top ten detergent Ariel as a Eurobrand. Mars
brands in Australia, only two are in has replaced its Treets and Bonitas
consumer products (Woolworth’s, in brands names with M&M's worldwide
food, and Billabong, in casual clothing). and changed its third largest United
Five of the remaining eight brands are Kingdom brand - Marathon – to the
from firms in the financial services Snikers name that it uses in the United
sector. Commonwealth Bank, Westpac, States. Unilever is now seeking to
ANZ, National Australia Bank, and St. market its various detergent brands –
George’s Bank. The other three brands All, Omo, Persil, Presto, Skip, and Via –
are Testra, in telecommunications, under fewer labels.
Australian Post, government services, Clearly some brand names have
and Ansell, health care supply. gained worldwide acceptance. Such
Large and small companies must companies as Kodak, McDonald's, IBM,
also consider rises in nationalistic pride Sony, and Coca-Cola would not think of
that occur in some countries and their using different brand names as they
impact on brands. In India, for example, enter additional countries.
Unilever considers it critical that its
brands, such as Surf detergent and Lux Conclusions
and Lifebuoy soaps, are viewed as Branding is a major issue in
Indian Brands. Just as it’s the case with product strategy. Branding is expensive
products, the answer to the question of and time-consuming, and can make or
when to go global with a brand is, “It broke a product. The most valuable
depends - the market dictates”. brands have a brand equity that is
In the past, most companies considered an important company
established new brand names that asset. The best brand name suggest
made sense in their country [4]. When something about the product’s benefits;
they later attempted to introduce their suggest products qualities; are easy to
brand into foreign markets, some pronounce, recognize, and remember;
companies discovered that the existing are distinctive; and do not carry
brand name was not appropriate. The negative meanings or connotations in
name was difficult to pronounce, other countries or languages.
offensive, funny, meaningless, or To growing globalization of
already co-opted by someone else. The markets that gives rise to
company would be forced to develop a standardization must be balanced with
new brand name for the same product the continuing need to assess all
when it was introduced in other markets for those differences that might
countries. P&G had to create a different require adaptation for successful
brand name for its Pert Plus shampoo acceptance. The premise that global
when it introduced it in Japan (called communications and other worldwide
Rejoy) and the United Kingdom (called socializing forces have fostered
Vidal Sassoon). Using different brand homogenization of tastes, needs, and
names for the same product comes at a values in a significant sector of the
high cost, however. The company has population across all cultures is difficult
to prepare different labels, packaging, to deny. However, more than one
and advertising. authority notes that in spite of the forces
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7. of homogenization, consumers also see advertising, good will, quality evaluation,
the world of global symbols, company product experience, and other beneficial
images, and product choice through the attributes the market associates with the
lens of their own local culture and its product. Brand image is at the very core
stage of development and market of business identity and strategy.
sophistication. Each brand must be A global brand is the worldwide
viewed in light of how it is perceived by use of a name, term, sign, symbol
each culture with which it comes in (visual and/or auditory), design, or
contact. What is acceptable and combination thereof intended to identify
comfortable within one group may be goods or services of one seller and to
radically new and resisted within others, differentiate them from those of
depending on the experiences and competitors. Even when a company has
perceptions of each group. promoted its global brand name
A brand is essentially a seller’s worldwide, it is difficult to standardize its
promise to consistently deliver a specific brand associations in all countries.
set of features, benefits, and services to Sometimes, companies are forced
the buyers. The best brands convey a to develop a new brand name for the
warranty of quality. But a brand is even same product when it is introduced in
a more complex symbol. A strong brand other countries, a strategy of mixing
reassures the customer; it gives national and global brands. Companies
confidence in terms of the quality and with successful country-specific brand
satisfaction that can be anticipated from names must balance the benefits of a
buying it. The concept of branding can global brand against the risk of losing
fit in very well with the idea of the the benefits of an established brand.
corporate image. Increasingly, The major inference to draw from
corporate and brand image is being all of this is that wise companies will
recognized as a major influence on globalize those elements that make or
sales. save substantial sums of money and
A successful brand is the most localize those that competitive
valuable resource a company has. The positioning and success require.
brand name encompasses the years of
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