Fundamentals of Global Strategy Chapter 7 Global Branding

Chapter Global Branding As companies expand globally , a brand like Coke or Nike can be the greatest asset a firm has , but it also can quickly lose its power if it comes to signify something different in every market . Successfully leveraging a brand power globally requires companies to consider aggregation , adaptation , and arbitrage strategies all at the same time , beginning with the universal heart and soul of every one of a company brands ( aggregation ) and then expressing that in suitable words , images , and music ( adaptation and arbitrage ) In doing so , allowance must be made for in execution because even the smallest differences in different markets consumer preferences , habits , or underlying cultures can make or break a brand global success . In allowing such , a key consideration is how a product current positioning in a particular market might affect the company future offerings . If a product positioning varies significantly in different markets , any products will likely have to be positioned differently as well , and this raises costs and can create operational problems . URL books 145

Global Branding Versus Global Positioning Johnson Johnson ( will not premium pricing for its brands . It believes that its popular adhesive bandages are superior to competitors products , and a premium price is a way to signal that . But even in this dimension of its marketing strategy , must allow for some improvisation as it expands around the world and pushes deeper into countries . the company accepts lower margins in a developing market and sometimes delivers a smaller quantity of a product to make it more affordable . For instance , it might sell a of instead of the larger box it markets in the developed world or a bottle of baby shampoo instead of a one . Carefully adhering to a particular positioning is both aggregation and adaptation this creates uniformity in different world markets , but it also serves to define target segments as the company enters new countries or regions . Consider the decision by , the British company , to stick to premium pricing wherever it does business , even when it enters a new market . By projecting a premium positioning for brands such as Johnnie Walker Black , vodka , Captain Morgan rum , gin , and Guinness stout , and foregoing price cutting to grow volume , it loyal consumers who will pay for its products . Rather than sell its products functional , successfully markets its drinks as either sophisticated , as it does with , or cool , as it does with Captain Morgan in its recent Got a Little Captain in You ?

ad campaign . Global Positioning of MasterCard Back in 1997 , the MasterCard brand did not stand for any one thing . The parent run through different advertising campaigns in 10 years and was losing market share at home and abroad . Fixing the brand was a key element of the turnaround . Working with , the company developed the highly successful priceless campaign . The positioning created by priceless allowed MasterCard to integrate all its other campaigns and marketing practices within the United States , and this became a marketing platform that formed the basis for many globalization decisions . books 146

Up until that time , every country used a different agency , a different campaign , and a different strategy . The success of priceless as a platform in the United States helped the company persuade other countries to adopt one , single approach , which , over time , produced a consistent global positioning . The priceless campaign now appears in more than 100 countries and more than 50 languages and informs all brand communications . Starting with a locally developed positioning and then successfully expanding it globally is one way to approach the global branding and positioning challenge . More typically , companies start by identifying a unique consumer insight that is globally applicable in order to create a global positioning platform . No matter which route is selected , successful global branding and positioning requires ( a ) identifying a globally robust positioning new positioning was readily accepted across all markets because of the quality of the insight and its instant recognition across cultural boundaries ( clarity about roles and responsibilities for decision making locally and globally . There was a shared understanding of how the primary customer insight should be used at every stage in the process and which aspects of the branding platform were nonnegotiable expectations for performance were clearly and communicated on a global basis and a strategic partnership with a single advertising agency allowed for consistent , seamless execution around the world . By providing a single , unifying consumer insight that defines the brand positioning , MasterCard has created economies of scale and scope and , hence , from aggregation principles . The company uses adaptation and arbitrage strategies in its approach to implementation . It empowers local teams by inviting them to create content for their own markets within a proven , globally robust positioning framework . Additional , ongoing research generates insights that allow local marketers to create a campaign that they truly feel has local resonance while at the same time maintaining the core brand positioning . Brand managers act ( 2007 , October 31 ) URL books 147

Global Brand Structures Multinational companies typically operate with one of three brand structures ( a ) a dominant , a , or ( a hybrid structure . A brand structure is most common among firms with relatively limited product or market diversity , such as Shell , or Nike . structures , in contrast , are often used by ( mostly industrial ) companies , such as Nobel , that have multiple national or local brands or by such as Gamble ( that have expanded internationally by leveraging their power brands . The most commonly used structure is a hybrid ( think of Corolla cars or Dairy Milk chocolate ) consisting of a mix of global ( corporate ) regional , and national brands or different structures for different product divisions . In many companies , global branding evolves as the company enters new countries or expands product offerings within an existing country . Typically , expansion decisions are made incrementally , and often on a , or basis , without considering their implications on the overall balance or coherence of the global brand portfolio . As their global market presence evolves and becomes more closely interlinked , however , companies must pay closer attention to the coherence of their branding decisions across national markets and formulate an effective global brand strategy that transcends national boundaries . In addition , they must decide how to manage brands that span different geographic markets and product lines , who should have custody of international brands and who is responsible for coordinating their positioning in different national or regional markets , as well as making decisions about use of a given brand name on other products or services , To make such decisions , companies must formulate a coherent set of principles to guide the effective use of brands in the global marketplace . These principles must the company brand architecture , that is , provide a guide for deciding which brands should be emphasized at what levels in the organization , how brands are used and extended across product lines and countries , and the extent of brand coordination across national boundaries . Fox Brands An Example of a Hybrid Strategy 11 URL books 148

Like many European companies , the German corporation , has globalized mostly via acquisitions , and , consequently , it has a portfolio of localized brands with a national heritage and good local market shares . As the portfolio grew , escalating media costs , increased communication and stronger linkages across markets , and the globalization of distribution created pressures for parsimony in the number of the firm brands and the consolidation of architecture across countries and markets . executives understood very well that a focus on a limited number of global strategic brands can yield cost economies and potential . At the same time , they also knew that they needed to develop procedures for managing the custody of these brands , and that these should be clearly understood and shared throughout all levels of the organization , thus promoting a culture focused on global growth . They knew that failing to do so would likely trigger territorial power struggles between corporate and local teams for control of the marketing agenda . While many companies would have focused on deciding between sacrificing local brand equity to develop global power brands ( aggregation ) or continuing to global marketing economies of scale by investing separately in its portfolio of local brands ( adaptation ) chose an ingenious middle path . choice serves as a model for globalization of marketing concepts without loss of local brand equity through the grouping of all its brands under the umbrella Fox brand . In each country , retained the local brand name but it with the Fox umbrella brand . In most cultures , the fox is seen as clever , selfish , and sort of character who would buy a money brand but not a brand so cheap that its quality might be compromised . By using a fox to represent smart and cunning shoppers , has created a global power brand concept that can travel to almost any culture to enrich a local local brands that individually could not have been globalized . But the scale economies gains from this program are more managerial than economic in nature . Programs and ideas to promote the Fox brands , and the concept of detergents , are managed centrally and offered as a menu to all local markets in which these brands participate . Thus , a manager experienced in managing one of the Fox families of brands in one market can be transferred to another market and rapidly reach effective levels of performance . Because each brand still requires local investment , economies of scale are more modest . URL books 0797 ?

149 Compare success to the failures of its major competitors as they tried to fully their brand portfolios . Years ago , for example , attempted to its European laundry detergent operations . In 2000 , the company renamed its popular Fairy laundry detergent in Germany Dawn to position the latter as a global brand . There was no change in the product formulation . But by the end of 2001 , market share of Dawn in Germany had fallen drastically . While Fairy had represented a familiar and trusted brand persona to German consumers , Dawn meant nothing . With the renaming , the bond between consumers and the brand was broken not even changing the brands name back to Fairy could restore it . This experience suggests that attempting to achieve global brand positioning by deleting local brands can be problematic . In fact , a strategy of acquisition , and the subsequent shedding , of local brands by multinationals may actually create fragmentation in consumer demand rather than be a force . Such a scenario is particularly plausible if one or more of the local brands have reached icon status . Icon brands do not necessarily have distinctive features , deliver good service , or represent innovative technology . Rather , they resonate deeply with consumers because they possess cultural brand equity . Most of these brands fall into lifestyle categories food , apparel , alcohol , and automobiles . Arnold ( 2007 ) and Arnold ( 2004 ) URL books 150

of Global Brand Structure The kinds of issues a company must resolve as it tries to shape a coherent global branding strategy its globalization it has expanded internationally and how it has organized its international operations . At any given point , the structure of a brand portfolio a company past management decisions as well as the competitive realities the brand faces in the marketplace . Some companies , such as and , expanded primarily by taking domestic power brands to international markets . As they seek to expand further , they must decide whether to further extend their power brands or to develop brands geared to specific regional or national preferences and how to integrate the latter into their overall brand strategy . Others , such as and , grew primarily by acquisition . As a consequence , they relied mainly on strategies , building or acquiring a mix of national and international brands . Such companies must decide how far to move toward greater harmonization of brands across countries and how to do so . This issue is particularly relevant in markets outside the United States , which often are fragmented , have distribution , and lack the potential or size to warrant the use of heavy advertising needed to develop strong brands . a company international brand structure is shaped by three sets of factors ( a ) based characteristics , et characteristics , and ( underlying market dynamics . Characteristics characteristics the full array of past management decisions . First , a company administrative particular , its organizational the template for its brand structure . Second , a international expansion or organic affects how its brand structure evolves over time . What is more , the use of strategic alliances to broaden the geographic scope of the firms operations often results in a melding of the brand strategies of the partners . Third and fourth , the importance of corporate identity and the diversity of the product lines and product divisions also determine the range and number of brands . URL books 151

An appreciation of a company administrative heritage is critical to understanding its global brand structure . A firm that has historically operated on a highly decentralized basis , in which country managers have substantial autonomy and control over strategy as well as operations , is likely to have a substantial number of local brands . In some cases , the same product may be sold under different brand names in different countries . In others , a product may be sold under the same brand name but have a different positioning or formulation in different countries . Firms with a centralized organizational structure and global product divisions , such as or , are more likely to have global brands . Both adopted a corporate branding strategy that emphasizes quality and reliability . Product lines are typically standardized worldwide , with minor variations in styling and features for local country markets . Firms that expand internationally by acquiring local companies , even when the primary goal is to gain access to distribution channels , often acquire local brands . If these brands have high local recognition or a strong customer or distributor franchise , the company will normally retain the brand . This is particularly likely if the brand does not occupy a similar positioning to that of another brand currently owned by the . and are examples of companies following this type of expansion strategy . Expansion is often accompanied by . Between 1960 and 1990 , Nestle expanded by acquiring a number of companies in a range of different , mostly in the food and beverage segment . These acquisitions included global brands such as Perrier and San ( mineral water ) confectionery companies such as and , pet food companies and brands such as and , and grocery companies such as , Crosse , and . The resulting proliferation of brands created the need to consolidate and integrate structures . Firms that have expanded predominantly by extending strong domestic , power brands into international markets primarily use brand strategies . for instance , has rolled out several of its personal products brands , such as and Pampers , into international markets . This strategy appears most effective when customer interests and desired product attributes are similar worldwide and brand image is an important cue for the consumer . URL books 152

The relative importance placed by the on its corporate identity also brand structure . Companies such as General Electric ( GE ) and Apple place considerable emphasis on corporate identity in the communications strategies . In the case of GE , Imagination at Work is associated with a corporate reputation dedicated to turning innovative ideas into leading products and services that help alleviate some of the world toughest problems . Equally , Apple uses its apple logo to project the image of a vibrant innovator in the personal computer market . Increasingly , companies use their corporate identity as a means of reassuring customers and distributors that the company is reliable and stands behind its products . As a result , even companies with highly diverse product as on the corporate brand name ( and its logo ) to project an image of reliability . A fourth determinant of a company brand structure is the diversity , or , conversely , the interrelatedness of the product businesses in which the is involved . Firms that are involved in closely related product lines or businesses that share a common technology or rely on similar core often emphasize corporate brands . Corporation , for example , is involved in a wide array of product businesses worldwide , ranging from displays and optics to health care products to cleaners to and . All rely heavily on engineering skills and have a reputation of being . The use of the brand provides reassurance and reinforces the firm reputation for competency and reliable products worldwide . Pharmaceutical Companies Try Global Branding In Paris , stomach ulcers are treated with in Chicago , it is called . These two products are , in fact , exactly the same drug . is the brand of is its French counterpart . Unlike manufacturers of consumer goods , the pharmaceutical industry traditionally has been wary of creating big , international brands . But that is about to change . Take a look at pharmacists shelves . Viagra is there . So are for arthritis pain , the antidiabetic agent , and the anticoagulant . It is perhaps surprising that companies did not consider global branding sooner because a drug works for everybody in the same way in every country . While the industry has become global from a technological and geopolitical perspective , few companies have mastered globally integrated marketing practices . But URL books 153

change is fast . As more people travel internationally and the Internet makes including drug available for doctors and patients , companies want to avoid any brand inconsistencies while maximizing exposure . Another force is growing standardization of the regulatory environment . With the establishment of the European Medical Evaluations Agency , for example , which approves drugs for all the members of the European Union , the borders are coming down . Japan has also adapted its approval system to facilitate the entry of Western products . And then there is ( advertising . While doctors and health care professionals remained the targets for pharmaceutical marketing , branding was unnecessary . But companies are preparing for the spread of beyond the shores of the United States . The introduction of global branding anticipates the transition to a more market . Pressure to cut or contain costs is perhaps the most powerful driver behind the industry move to global branding . Mega mergers were a way to contain the costs of research and development and pipeline products , yet the big companies still need about five new blockbuster products each year to return the promised growth . Global branding promises reduced marketing costs and much faster and higher product rollout . Local market conditions , such as reimbursement policies , however , may still override the benefits of global strategies and therefore inhibit the globalization of brands . Local will be key to success . cost savings may therefore be slow in coming . Even with a centralized , global brand , most companies will still likely use local agencies for their marketing campaigns . Factors Three factors play an important role in brand architecture the nature and scope of the target market , the product cultural associations , and the competitive market structure . When companies target a global market segment with relatively homogeneous needs and preferences worldwide , global brands provide an effective means of establishing a distinctive global identity . Luxury brands such as , Moet and , and Louis , as well as brands such as , and are all targeted to the same market segment worldwide and benefit from the cachet URL books 154

provided by their appeal to a global consumer group . Sometimes it is more effective to segment international markets by region and target regional segments with similar interests and purchase behavior , such as . This provides cost efficiencies when such segments are readily accessible through targeted regional media and distribution channels . A critical factor brand structure is the extent to which the product is associated with a particular culture , that is , the extent to which there are strong and deeply ingrained local preferences for specific products or product variants ( think of beer ) or the products are an integral part of a culture ( think of bratwurst , soccer teams ) The stronger the cultural association , the less likely it is that global product brands will thrive instead , local branding may be called for . A third driver of a company brand structure is the products competitive market structure , defined as the relative strength of local ( national ) versus global competitors in a given product market . If markets are fully integrated and the same competitors compete in these markets worldwide , as in aerospace , the use of global brands helps provide competitive differentiation on a global basis . If strong local , national , or regional competitors , as well as global competitors , are present in a given national or regional market , the use of a branding structure , including global corporate or product brands as well as local brands , is desirable . for example , beyond promoting its power brands , has introduced several local and regional brands that cater to specific market tastes around the world . Use of Country of Origin Effects in Global Branding 51 Whether you prefer obscure imports or something mainstream , most beer brands like to invoke their country of origin . Guinness comes from Ireland , Corona is Mexican , and are Dutch , and is a truly American brand . The use of country of origin effects is an essential part of beer branding . Using the country of origin as part of the brand equity is free , so companies can avoid having to build an image from scratch over decades . For a long time , Foster used a kangaroo in its advertisements , while , from URL books 155

in Finland , relies heavily on its unusual provenance in its marketing . Images of Finland stark landscapes adorn communications material and bottle labels . Swiss watchmakers certainly know the value of their Swiss made brand . The Federation of the Swiss Watch Industry actively polices all uses of the term and has strict guidelines on how it may be used on clocks and watches . In a similar vein , the French leverage their reputation for good wine , cooking , and fashion and the Italians view themselves as the masters of style . German companies have been particularly effective in leveraging country effects . Of Top 100 Global Brands in 2008 , 10 were German automobile brands ( Volkswagen , and Audi ) while brands in technology ( SAP and ) clothing ( Adidas ) services ( and cosmetics ( were also represented . Together , this group of German brands is valued at over 98 billion . Germany was second only to the United States in the number of brands making the Top 100 list . It should come as no surprise , then , that Germany itself was ranked the best overall country brand in the 2008 Roper Nation Brands Index , which measures the world perception of each nation as if it were a public brand . Fifty nations were measured in the study . The United States , the world leading branding powerhouse , ranked seventh . So what is it about German brands , and the country that produces them , that is so special ?

Two words might be all the explanation that required discipline and quality . German companies are highly disciplined in their approach to creating , introducing , and selling brands . They have the ability to consistently produce products that are of lasting value . German engineering is a term closely associated with the country automobile industry , which has seen a level of global success second only to the Japanese automakers . In fact , between 1990 and 2000 , and more than doubled their sales in the United States alone . Why do customers like German brands ?

German companies are widely admired for their intense focus on product quality and service , thought to be less interested in competing on price and strict about adhering to safety and other government standards . URL books 0797 ?

156 , a maker of premium automobiles , is one such revered brand . Founded in 1917 in Munich , Germany , as Bavarian Motor Works , produced aircraft engines during World War , then built motorcycles in 1923 and went on to make cars in 1928 . In recent years , has been recognized as much for its innovative , quality marketing as for its cars . But Germany branding power extends well beyond automobiles . whose name comes from the Latin for snow white , was created in late 1911 . From its origins as a simple cream , has now grown into a global manufacturer of a broad range of cosmetic and personal care products . was voted the most trusted brand in 15 countries in the Readers Digest survey of European Trusted Brands 2007 . Adidas , named after its founder Adolf ( Adi ) Das ) is an company that today is a global leader in sports footwear , apparel , and accessories . In 1996 , Adidas equipped Olympic athletes from 33 countries with its athletic gear . Adidas athletes won 220 medals , including 70 gold , and apparel sales increased 50 . SAP , founded in 1972 , is the worlds largest business software company and the software supplier overall . The company employs almost people and serves more than customers in over 120 countries . Other global brands , from ( pharmaceuticals ) to Becks ( beer ) to Boss ( clothing ) to Braun ( consumer products ) are a testament to the fact that Germany is , and will continue to be , a prolific producer of some of the world finest products . It is Germany disciplined approach to quality that inspires consumer loyalty to German brands . Market Dynamics Finally , while the firms history and the product markets in which it operates shape its brand structure , market ongoing political and economic integration , the emergence of a global market infrastructure , and consumer and continually change the context in which this evolves . URL books 157

Increasing political and economic integration in many parts of the world has been a key factor behind the growth of international branding . As governments remove tariff and nontariff barriers to business transactions and trade with other countries , and as people and information move easily across borders , the business climate has become more favorable to the marketing of international brands . Firms are less frequently required to modify products to meet local requirements or to develop specific variants for local markets and increasingly can market standardized products with the same brand name in multiple country markets . In many cases , harmonization of product regulation across borders has further facilitated this trend . The growth of a global market infrastructure is also a major catalyst to the spread of international brands . Global and regional media provide economical and effective vehicles for advertising international brands . At the same time , global media help lay the groundwork for consumer acceptance of , and interest in , international brands by developing awareness of these brands and the lifestyles with which they are associated in other countries . In many cases , this stimulates a desire for the brands that consumers perceive as symbolic of a coveted lifestyle . The globalization of retailing has further facilitated and stimulated the development of international manufacturer brands . As retailers move across borders , they provide an effective channel for international brands and , at the same time , increase their power . This forces manufacturers to develop strong brands with an international appeal so that they can negotiate their shelf position more effectively and ensure placement of new products . A final factor shaping the context for international branding is increased consumer mobility . While global media provide passive exposure to brands , increasing international travel and movement of customers across national boundaries provides active exposure to brands in different countries . Awareness of the availability and high visibility of an international brand in multiple countries enhances its value to consumers and provides reassurance of its strength and reliability . Increased exposure to , and familiarity with , new and diverse products and the lifestyles and cultures in which they are embedded also generate greater receptivity to products of foreign origin or those perceived as international rather than domestic . All these factors help create a climate more favorable to international brands . URL books 158

Douglas , Craig , and ( 2001 ) and ( 1989 ) Douglas , Craig , and ( 2001 ) 101 . Douglas , Craig , and ( 2001 ) 103 . 2008 , November 24 ) Douglas , Craig , and ( 2001 ) 104 . URL books 159 Formulating a Global Brand Strategy To create an effective global brand structure capable of spanning operations in different countries and product lines , companies must clearly the importance and role of each level of branding ( corporate , product division , or product brand level ) as well as the interrelation or overlap of branding at each level . They should also determine the appropriate geographic scope for each level relative to the current organizational structure . To be effective , such architecture should satisfy three key principles parsimony , consistency , and connectivity . Parsimony requires that the brand architecture should incorporate all existing brands , whether developed internally or acquired , and provide a framework for consolidation to reduce the number of brands and strengthen the role of individual brands . Brands that are acquired need to be melded into the existing structure , especially when these brands occupy similar market positions to those of existing brands . When the same or similar products are sold under different brand names or are positioned differently in each country , ways to harmonize these should be examined . A second important element of brand architecture is its consistency relative to the number and diversity of products and product lines within the company . A balance needs to be struck between the extent to which brand names differentiate product lines or establish a common identity across different products . Development of strong and distinctive brand images for different product lines helps establish their separate identities . Conversely , use of a common brand name consolidates effort and can produce . The value of corporate brand endorsement across different products and product lines and at lower levels of the brand brand needs to be assessed . The use of corporate brand endorsement as either a name or logo connects the different product brands to the company and helps provide reassurance to customers , distributors , and other partners . Implemented well , corporate brand endorsement can integrate and unify different brand identities across national boundaries . At the same time , corporate endorsement of a highly diverse range of product lines can result in dilution of image . Worse , if one product brand is damaged , corporate endorsement can spread the resulting negative effects or associations to other brands in the portfolio URL books 160

and create lasting effects across multiple product lines . Thus , both aspects need to be weighed in determining the role of corporate brand endorsement in brand architecture . URL books 161 Managing Key Strategic Brands Companies must also think about how to globally manage and monitor key strategic brands to ensure that they build and retain their integrity , visibility , and value . This entails assigning brand custody or appointing a brand champion responsible for approving brand extensions and monitoring brand positioning . One option is to negotiate the harmonization of brand positions between corporate headquarters and country managers . This is appropriate for with strong country management that operate in product markets where brands were historically tailored to local market characteristics . A more proactive and increasingly popular solution is to appoint a brand champion responsibility for building and managing a brand worldwide . This includes monitoring the consistency of the brand positioning in international markets as well as authorizing use of the brand ( brand extensions ) on other products or other product businesses . The brand champion can be a senior manager at corporate headquarters , a country manager , or a product development group . It is critical that the brand champion report directly to top management and have clear authority to sanction or refuse brand extensions to other product lines and product businesses so as to maintain the integrity of the brand and avoid brand dilution . A third option is to centralize control of brands within a global product division . This approach is likely to be most effective when the business is targeted to a specific global market segment , with new products or brands , when there is greater consistency in market characteristics across countries , and when the company administrative heritage has only a limited history of strong country management . Benefits of Corporate Branding Corporations around the world are increasingly becoming aware of the enhanced value that corporate branding strategies can provide . A strong corporate branding strategy can add value in terms of helping the entire corporation and the management team with implementing its vision , URL books 162

creating unique positions in the marketplace for the company and its brands , and signaling a commitment to a broader set of stakeholder issues . An effective corporate branding strategy therefore enables the company to leverage its tangible and assets and promote excellence throughout the corporation . To be effective and meet such objectives , corporate branding requires a high level of personal attention and commitment from the CEO and the senior management . Examples of effective corporate brands include , Intel , Singapore Airlines , Disney , and Mercedes . In recent years , the global financial powerhouses and have both acquired a vast number of companies across the globe and have fully adopted them under their international corporate brands with great success and within a relatively short time frame . All these companies understand that a executed corporate branding strategy can confer benefits . Corporate Brand as the Face of the Company A strong corporate brand acts as the face of the company , portraying what it wants to do and what it wants to be known for in the marketplace . In other words , the corporate brand is the umbrella for the corporation activities and encapsulates its vision , values , personality , positioning , and image , among many other dimensions . Think of . It employs the same The world local bank the world . This creative platform enables the corporation to portray itself as a bridge between cultures . Simplicity An effective corporate branding strategy creates simplicity by making the top of the brand portfolio the ultimate of the corporation . is widely known for its strategy . Yet , the corporate name encapsulates all of its activities . Depending on the business strategy and the potential need for multiple brands , a corporate brand can assist management focus on the company core vision and values . Once established , it facilitates revisiting the definition of other brands in the corporations portfolio and the creation of new brand identities . Cost Savings A corporate branding strategy is often more than a architecture . corporate branding produces efficiencies in terms of marketing and advertising spending as the corporate URL books 163

brand replaces budgets for individual product marketing efforts . Even a combined corporate and product branding strategy can often enable management to reduce costs and exploit from a new and more focused brand architecture . The Apple brand has established a very strong position of being a and innovative company offering many types of products and services . Their corporate brand encapsulates the body and soul of the company , and the main messages from the company use the corporate Apple brand . Various then help to identify the individual product lines . Corporate Brands as Assets In recent years , corporate brands themselves have become valuable assets on the company balance sheet , with market values very often much beyond book value . The Best Global Brands , a leading international brand consultancy specializing in brand services and activities , has developed a method for valuing ( global ) brands . It examines brands through the lens of strength , the importance of the brand in driving consumer selection , and the likelihood of ongoing revenue generated by the brand . Each year , compiles a list of global brands for analysis based on criteria . must be substantial publicly available data for the brand . of the brands revenues must come from outside its country of origin . Tie brand must be positioned to play a significant role in the consumers purchase decision . Tie Economic Value Added ( EVA ) must be positive , showing that there is revenue above the company operating and costs . Tie brand must have a broad public and awareness . The use of these criteria excludes a number of brands one might expect to be included . The Mars and , for example , are privately held and do not have data publicly available . although it does business in international markets , does not do so under the brand and is there ore not global . Certain industry sectors are also not included in study . An URL books 164

example is provided by telecommunication brands , which tend to have strong national roots and have faced awareness challenges due to numerous mergers and acquisitions . The major pharmaceutical companies , while very valuable businesses , are also excluded since their consumers tend to build a relationship with the product brands rather than the corporate brand . For brands that meet the criteria , the company next looks at the current financial health of the business and brand , the brand role in creating demand , and the future strength of the brand as an asset to the business . Financial Analysis model first forecasts the current and future revenue specifically attributable to the branded products . It operating costs from this revenue to calculate branded operating profit . Next , a charge is applied to the branded profit that is based on the capital a business spends versus the money it makes . This yields an estimate of a business economic earnings . All financial analysis is based on publicly available company information . Role of Brand Analysis Brand analysis involves a measurement of how a brand customer demand at the point of purchase . It is applied to the economic earnings in order to arrive at the revenue that the brand alone generates ( branded earnings ) uses market research to establish individual brand scores against industry benchmarks to define the role a brand plays within the category . For example , role of brand is traditionally much higher in the luxury category than in the energy and utilities sector . The brand , not the business , is the principal reason consumers choose these goods and services . Brand Strength Score As brands are assets , valuing them requires an assessment of their ability to secure future earnings on behalf of the businesses that own them . Brand strength is a measure of the brands ability to secure demand , and therefore earnings , over time . Securing customer demand typically means achieving loyalty , advocacy , and favorable levels of customer trial , as well as maintaining a price premium . URL books , 155

methodology generates a discount factor that adjusts the forecasted brand earnings for their riskiness based on the level of demand the brand is able to secure . Brand strength is calculated by assessing the brands performance against a set of seven critical factors , including measures of relevance , leadership , market position , customer franchise , diversification , and brand support . Brand Value A brand value is a financial representation of a business earnings due to the superior demand created for its products and services through the strength of its brand . Brand value is the absolute financial worth of the brand as it stands today . Accordingly , the brand value can be compared to the total value of the business as it would be assessed on the stock exchange . The winner and number global brand on 2009 list , once again , is , which has topped the list for more than 20 years . IBM is number , ranks third , GE comes in fourth , and has moved up to fifth position . Rounding out the top 10 are ( Google ( Intel ( and Disney ( 10 ) Interestingly , not one of the loo Best Global Brands emanates from the developing world , at least for now . But research suggests this may soon change . With their huge populations , there is a decided shift in economic power to countries like China , India , Russia , Brazil , and Africa , and former global giants are making way for new leaders from fast developing markets . The following brands are strong leaders in their home markets and already show some early signs of globalization China ( refrigerators , beer ) India Tata ( communications and information technology , engineering , materials , services , energy , consumer products , and chemicals ) energy and materials ) steel ) Russia Lab ( information security to computer users , airline ) gas ) South Africa ( communications ) Anglo American ( mining ) beer and soft drinks ) Brazil Banco ( finance ) Vale ( mining ) cosmetics ) URL books 166

Holt , Quelch , and Taylor ( 2004 , September ) 2009 ) URL books 167 Points to Remember . As companies expand globally , a brand like Coke or Nike can be the greatest asset a has , but it can also quickly lose its power if it comes to signify something different in every market . Successfully leveraging a brand power globally requires that marketers consider aggregation , adaptation , and arbitrage strategies all at the same time . Multinational companies typically operate with one of three brand structures a , a , or a hybrid structure . A company international brand structure is shaped by three sets of factors characteristics , characteristics , and underlying market dynamics . An effective global brand structure parsimony , consistency , and connectivity . Companies must also think about how to globally manage and monitor key strategic brands to ensure that they build and retain their integrity , visibility , and value . A strong corporate branding strategy can add value in terms of helping the entire corporation and the management team with implementing its vision , creating unique positions in the marketplace for the company and its brands , and signaling a commitment to a broader set of stakeholder issues . The number global brand on 2009 list is , which has topped the list for more than 20 years . Next on the list are IBM , GE , and . Google , Intel , and Disney round out the top 10 . URL books 168