2. Introduction
Multinational companies are expanding globally
as protectionist barriers are removed.
The foreign companies wield immense power
leading to stiffer competition.
Companies are venturing into new foreign
markets or pursuing global branding as a form
competitive strategy.
Expanding into foreign market and standardizing
strategies is aimed at gaining global brand
leadership
3. Target Markets and Mode of
Entry
Selection of a target market entails analysis of its
size, growth rate, saturation, accessibility,
competition, and how it links to overall company’s
objectives.
Market targeting seeks to meet the needs of
diverse customer segments for instance, niche,
multi-segment, concentrated, and narrowcasting
marketing strategies.
There are different modes of entry into the
foreign markets – Licensing, joint ventures,
franchising, exporting, or foreign direct
investment
4. Four Seasons Hotel – Franchising
Strategy
Four Seasons Hotel, a Canadian chain of hotel is
famous for venturing into new global markets as part of
its global expansion strategy.
The brand will enter the Brazilian market through a
franchise owned by the Iron House Real Estate and
Tamweelview European Holdings joint venture.
The development will include an elegant and modern 29
story tower with 13 floors meant for the residential units
and 16 floors for the Hotel.
The investors were attracted by Four Seasons’ trendy
concept of combining a luxury hotel with branded
residences as well as market demand.
5. InterContinental Hotels Group
(Holiday Inn) – Franchising Strategy
InterContinental Hotels Group operates a chain
of Holiday Inn hotels and it prefers the
franchising to expand its brand globally.
The company lends its business system or model
and trade name/trademark to a franchisee for ten
to twenty years.
There are more than 1000 Holiday Inn stores
globally.
The strategy provides low-risk, low-cost means
of entry into a new market as compared to other
approaches
6. Apple Inc. – Global Branding
Strategy
The global brand is achieved through
its perceived value that allows its
hardcore customers to purchase
Apple’s products at a premium price.
The firm’s unique branding strategy is
centered on being innovative to
arouse consumers’ emotions by
capitalizing on their aspirations,
passion, lifestyle, and imagination
7. Global Branding
Global brand presence is created using a distinct
design, sign, term, name, or a combination
thereof to gain a competitive advantage in the
market.
The world is increasingly becoming
interconnected and globalized which gives the
concept of branding greater prominence.
Global brand leads to greater global awareness
or visibility as compared to a local brand.
Branding conveys a prestige factor that the
company is committed to the global marketplace
8. Apple Inc. – Global Branding
Strategy
Apple Inc. enjoys greater economies of scale that
allows it to sustain its global branding strategy.
Cultural differences and language barriers make it
hard to globalize the global branding campaigns.
Apple’s global brand is linked to its seamless
omnichannel experience for the consumer.
Consumers are at the epicenter of its operations
thus, it is very predatory with regards to meeting
their needs.
From 2013, Apple was been ranked as the most
valuable brand globally.
9. Hilton Hotel - Global Branding
Strategy
Hilton usually depends on a top-down global
brand strategy to guarantee brand
standardization across the global
marketplace.
The company is positioned as a global ultra-
luxury brand mostly linked with superior
individualized customer services and world-
class deluxe facilities.
The hotel’s employee recruitment and training
are focused on instilling service standards to
meet and exceed customer needs.
10. Conclusion
More companies will seek to venture
into the foreign market as a result of
protectionists barriers being cleared.
They will seek to expand their
businesses but, market saturation and
increased competition would
necessitate adoption of global
branding strategy that guarantees a
competitive advantage
11. References
1. Aaker, D. A. (2012). Building strong brands. Simon and Schuster.
2. Aaker, D. A., & Joachimsthaler, E. (2014). The lure of global branding. Harvard
business review, 77, 137-146.
3. Cai, L. A., & Hobson, J. P. (2014). Making hotel brands work in a competitive
environment. Journal of Vacation Marketing, 10(3), 197-208.
4. Diniz, C. (2014). The luxury market in Brazil: Market opportunities and
potential. Springer.
5. Douglas, S. P., Craig, C. S., & Nijssen, E. J. (2012). Integrating branding
strategy across markets: Building international brand
architecture. Journal of International Marketing, 9(2), 97-114.
6. Michael, S. C. (2014). Can franchising be an economic development strategy?
An empirical investigation. Small business economics, 42(3), 611-620.
7. Steenkamp, J. B. (2017). Global Brand Strategy: World-wise Marketing in the
Age of Branding. Springer.
8. Terpstra, V., Foley, J., & Sarathy, R. (2012). International marketing. Naper
Press.
9. Tsai, H. T., & Eisingerich, A. B. (2013). Internationalization strategies of
emerging markets firms. California Management Review, 53(1), 114-135.
10. Tutite, S. (2015). Iron House joint venture to bring first four seasons to Brazil.
Retrieved From https://goo.gl/HpHb3N
11. Alon, I., Ni, L., & Wang, Y. (2012). Examining the determinants of hotel chain
expansion through international franchising. International Journal of
Hospitality Management, 31(2), 379-386.
Notas del editor
Globally, many protectionist barriers are being cleared allowing multinational companies to explore new opportunities for business growth. The new ventures benefit the economy especially the consumers who have wider choices; nonetheless, for small companies, such ventures are considered as a death sentence (Terpstra, 2012). The foreign companies wield immense power from seasoned marketing and management skills, powerful brands, superior products, advanced technology, and substantial financial resources. Many companies strive to gain competitive hence; they opt to enter foreign markets or pursuing global branding (Tsai, 2013). Application of such market entry and global branding strategies varies country by country to suit the specific competitive circumstances and market conditions.
The different companies choose to localize or standardize their strategies in the emerging markets while seeking global brand leadership. Strategic branding seeks to establish an emotional bond and communicate the firms’ values to the target customer base (Tsai, 2013). A company should seek to enter a new market very early after selecting it and assessing its attractiveness to establish a stronger brand identity and to capture a bigger market share. This case analysis will examine global branding by Hilton Hotel and Apple Inc.; secondly, it will also examine target marketing and modes of entry applied by Four Seasons Hotel and Holiday Inn Hotels.
Most companies analyze a market’s worth based on some factors such as if the size of the market is big enough to be profitable considering own operating costs; its growth rate, its market saturation rate or ability to be unique, and its accessibility or ability to maneuver (Terpstra, 2012). Other factors include resources that can sustain competition and if the market links to the company’s mission and objectives. Many firms target their customers in a manner that meets the needs of the different customer segments. For instance, it can opt for a multi-segment marketing strategy that responds to demographic among other market changes like an economic recession (Steenkamp, 2017). Secondly, concentrated marketing that targets a select segment of consumers. Thirdly, niche marketing that targets a unique group of customers.
Additionally, they can opt for narrowcasting or micro-targeting focusing on collecting pertinent data related to consumers extracted from their catalogs, phones or tax records. Some companies integrate such targeting strategies especially in the emerging market given their increasing number of the middle class (Tsai, 2010). Some companies opt to outsource their production function then sell the now expensive products in the developed economies. Additionally, some companies opt to partner or acquire foreign companies as part of target marketing strategy since entering a new market is very capital intensive and cultural issues can impede the entry decision (Michael, 2014).
There are different forms of international entry modes that a company can pursue. Companies seek a market entry strategy that necessitates deeper investment and involvement. They are ready to accept a greater risk for greater control over strategy and operations. Such a move entails seeking higher investment returns in exchange for deeper involvement (Tsai, 2013). Mostly, if a target market experiences political instability, the investment risk also increases; hence, companies select an entry strategy that safeguards assets. Besides, the companies are focused on analyzing the import regulations and restrictions like low quota limits or high tariffs, size of the market, demand, and overhead costs in making the final decision regarding the mode of market entry (Terpstra, 2012). For instance, a company can opt for franchising or licensing when the cost of local production is low.
Four Seasons Hotel, a Canadian chain of hotel is famous for venturing into new global markets using diverse modes of market entry. The hotel’s expansion strategy seeks to ensure it continually provide its superior services and maintain its status as the world’s top high-end hotelier (Tutite, 2015). In 2017, Four Seasons Hotel will seek to enter the Brazilian market. The Iron House Real Estate in partnership with Tamweelview European Holdings will franchise the Four Seasons brand by constructing a Hotel in Parque da Cidade, in the city of São Paulo that will provide 84 residential units and 254 luxury guest rooms (Tutite, 2015). The hotel will be known as Four Seasons Hotel São Paulo at Nações Unidas will sit on an 82,000 square metre of land with mixed-used development inclusive of lush green spaces. The development will include an elegant and modern 29 story tower with 13 floors meant for the residential units and 16 floors for the Hotel. The opening of the hotel will concede with the Iron’s House hundredth anniversary celebrations (Tutite, 2015).
The investors were attracted by Four Seasons’ trendy concept of combining a luxury hotel with branded residences which it adopted in 1982. The franchise will be the initial venture in the Brazilian market by Four Seasons (Tutite, 2015). The iconic luxury brand is famous for owning properties such as the Four Seasons Hotel New York, London (Park Lane), George V (Paris), and other marvelous resorts in Maldives and Bora Bora. The company is also a pioneer and industry leader in managing branded residential products, since first introducing the concept in 1982. Through the franchise, the company is confident of exploring opportunities and penetrating the Latin America market. As an emerging market, there is great potential in Brazilian market given the high number of luxury and outbound travelers (Diniz, 2014). The strong partners and a prime location will attract more guests who are attracted by Four Seasons’ standards of quality and culture.
InterContinental Hotels Group operates a chain of Holiday Inn hotels and it prefers the franchising to expand its brand globally. Holiday Inn began using franchising in the 1960s to support its expansion strategy in the United States. The hotel chain owns more than 1000 stores in different countries (Alon, 2012). As the franchisor, the company lends its business system or model and trade name/trademark to a franchisee for a particular period of time then they are paid an initial fee (Michael, 2014). Besides, they are paid ongoing royalties for the right to do business under its system and name. Franchising is the most preferred mode of market entry, especially in the service or hospitality industry (Michael, 2014). The concept leads to low operational costs and faster growth in comparison to acquisitions. Later, the advancement in international traveling forced many American hotel groups to expand globally. The strategy gained prominence and it was introduced around the world.
The firm sought to explore opportunities brought by the large travel market and developed infrastructure. Furthermore, it acts as low-risk, low-cost means of entry into a new market. Besides, franchising leverages the cultural knowledge and expertise of local managers (Alon, 2012). Lastly, it facilitates quick geographic expansion for Holiday Inn. Nonetheless, the main advantage is that the agreements are rigid and it is challenging to manage numerous geographically dispersed franchisees in many countries (Michael, 2014). The franchise agreement usually last for between twenty to thirty years with a fixed amount being paid yearly. Holiday Inn is very selective since it analyzes the financial stability and experience of the franchisee (Alon, 2012). The firm usually terminates the contracts when contractual agreements are not met.
The global brand is achieved through its perceived value that allows its hardcore customers to purchase its products at a premium price. The firm’s unique branding strategy is centered on being innovative to arouse consumers’ emotions by capitalizing on their aspirations, passion, lifestyle, and imagination (Steenkemp, 2017). The user experience creates a memorable experience or identity that links to the brand promise. The customer experience is then included in its branding strategy. For instance, the firm’s ‘Shot on iPhone’ campaign sought to prove the iPhone camera’s sheer versatility and connect to its customer base (Douglas, 2012). Such emotional connections create brand loyalty in the global marketplace.
Many companies seek to create a global brand presence by using a distinct design, sign, term, name, or a combination thereof to gain a competitive advantage in the market (Aaker, 2014). The world is increasingly becoming interconnected and globalized which gives the concept of branding greater prominence. A brand name has a same culture and core values, positioning, core benefits, and product formulation which the company can exploit to increase its market share (Steenkemp, 2017). Global brand leads to greater global awareness or visibility as compared to a local brand. Besides, building a brand name allows a company to achieve economies of scales as development costs are spread over large volumes. Such branding conveys a prestige factor that the company is committed to the global marketplace (Douglas, 2012). Also, the company is able to optimize the product to be a household name linked to the country of origin. Lastly, the brand name is a company’s most valuable resource since it can be linked the company’s many years of goodwill, social media exposure, product experience, and advertising.
Apple Inc. enjoys greater economies of scale that allows it to sustain its global branding strategy. Many companies fail to create a global brand since they do not consider whether such a strategy suits their market or the company (Steenkemp, 2017). Cultural differences and language barriers make it hard to globalize the global branding campaigns. Secondly, it is very difficult to impose a brand in all markets since the brand image might mean different in different countries. Nonetheless, Apple Inc. successfully implements a global brand leadership that penetrates the global marketplace (Douglas, 2012).
Apple’s global brand is linked to its seamless omnichannel experience for the consumer. It keeps customers at the center of its operations thus; it is able to anticipate customer needs allowing it to introduce exceptional product designs translating into record breaking sales (Douglas, 2012). According to Forbes and Intrabrand, the firm is the most valuable global brand ousting Coca-Cola at the top since 2013 (Steenkemp, 2017). In 2016, the brand was valued at $154.1 billion followed by Google ($82.5 billion) at a distant second, Microsoft ($75.2 billion), Coca-Cola ($58.5 billion), and Facebook ($52.6 billion) closing the top five most valuable global brands (Steenkemp, 2017).
Hilton usually depends on a top-down global brand strategy to guarantee brand standardization across the global marketplace. The hotel chain usually focuses on a niche market characterized by affluent world travelers, big corporate companies, businessmen, and wealthy individuals (Cai, 2014). The target groups in such a niche market have identical expectations thus; Hilton’s brand identity must be consistent at each location. The company is positioned as a global ultra-luxury brand mostly linked with superior individualized customer services and world-class deluxe facilities (Cai, 2014). Hilton’s global brand which is equated to a superior customer service truly creates a competitive advantage leading to greater global credibility and customer recognition. The exceptional customer service supports its differentiation strategy allowing it to compete effectively.
The hotel’s employee recruitment and training are focused on instilling service standards to meet and exceed customer needs. The service standards ensure guests have a greater sense of control, convenience, and comfort (Aaker, 2012). Additionally, it provides a twenty-four hour personalized services seek to ease stresses related to travel. The hotel usually runs simple errands for many of their clients who might be inconvenienced. The global brand strategy seeks to identify common needs for its target markets and customers. Ultimately, the customers feel rejuvenated, pampered, and understood (Aaker, 2012). Besides, it offers a standardized welcoming environment, superior hygiene, security, and luxury amenities which lead to overall enjoyable experience.
As discussed it is evident that more companies will seek to venture into the foreign market as a result of protectionists barriers being cleared. They will seek to expand their businesses to increase their profitability by penetrating new markets. Nonetheless, such expansion leads to market saturation and increased competition. Hence, the companies adopt a global branding strategy that guarantees a competitive advantage. With regards to target marketing and entry into foreign markets, the report has analyzed Holiday Inn’s and Four Seasons Hotel’s franchising strategies. Similarly, the report analyzed Hilton Hotel’s unique global branding strategy which is focused on providing excellent customer service as well as Apple’s branding strategy which focuses on arousing customers emotions.
