INTERNATIONAL BRANDING OF TRANSNATIONAL COMPANIES IN THE FMCG MARKET
After studying chapter 11, the student must:
• international branding factors;
• the main trends in brand management of an international company;
• the main international branding strategies;
• tools for adapting the global brand in the markets of different countries;
be able to
• evaluate the impact of factors of the international branding environment on brand management in an international company;
• classify international branding strategies;
• Evaluate the advantages and disadvantages of international branding strategies
• Technology management brands of an international company.
International branding factors
In conditions of strengthening the role of leading multinational companies, as well as competition among them, effective branding is one of the effective measures to increase the company's competitiveness in world markets. The diversity of business and product areas, the need to compete in heterogeneous markets (often in a number of countries) - all this makes branding more complex and more meaningful in terms of the company's success.
The modern world is increasingly exposed to the processes of globalization. At the same time, more companies are entering the international market. Companies starting international operations face a number of difficulties, because there is a need to take into account a number of international factors that are different from those that are present in the local market of the company. Brand management of an international company has a number of features related to the specifics of the international environment.
The paradox of the present time lies in the simultaneous strengthening of the processes of integration and disintegration in the most diverse spheres of public life. With the intensification of globalization processes, competition in the world market has significantly worsened. Along with transnational companies, new players appear, which attempt to penetrate the markets of as many countries as possible. This can be achieved through the creation of a brand known throughout the world. At the same time, within the framework of the socio-cultural environment of each people, there is a system of values, relations, norms of behavior that are expressed in a certain way. In such conditions, when implementing branding events, it becomes extremely important to implement adaptation.
If the product goes out or in the future will reach the international level, then for its success it is necessary to make a number of changes in the brand management policy, to which the company is forced by the following reasons:
- the sociocultural environment of different markets is different;
- different markets are in different economic situations and at different levels of development;
- the brand on them is also at different levels of development;
- the goods are used differently;
- the reaction of consumers to the same information is different.
At the same time, ideally the brand should have the same name in each market, unified packaging, the same target groups in each country, be easily pronounced and perceived for the population. For example, toothpastes Colgate-Palmolive have the same name, motif
tion, advertising, packaging in almost 80 countries around the world. It is a corporation that managed to implement the formula "One product, one treatment", optimal for effective international branding, received huge savings.
Thus, the main trend in the management of brands of an international company is now the confrontation between the strategies of globalization and adaptation of brands in the world market. This trend gives rise to a number of factors that must be taken into account in the brand management of international companies.
All the factors of the international brand management environment can be divided into two main groups (Figure 11.1). 1 2 3
Fig. 11.1. International factors of brand management
The first group includes factors that are caused by globalization processes. One of such factors is the appearance of global segments in the market. All socio-cultural Studies emphasize convergence of life styles. There are fewer differences between top executives in Japan and Germany than between leaders and employees within Germany itself. In addition, identification models operate on a worldwide basis: some Chinese women identify themselves with Americans, others with French women, and now the number of those who identify themselves with the Korean type of beauty is growing.
The management of the brands of an international company is influenced by organizational factors. For example, the centralization or decentralization of the management of an international company directly affects the policy in the field of brands. The fact that in Europe the production of detergents for Procter & amp; Gamble concentrates on one factory, allows you to use the standard product offer everywhere and simultaneously spread technical innovations to all countries. In markets where the commodity advantage is a key moment of brand positioning, such centralization of production, research and development work limits the opportunities for differentiation on a local basis.
The factors caused by the process of globalization include the presence of unexplored segments in the market. New, unexplored segments do not have an inherited value system. Here, everything has to be created anew, and the brand is able to do it. That is why nothing can prevent the global marketing of brands of high-tech goods, computers, the Internet, photographic equipment, electronic products, as well as telecommunications or services. In such markets, the only benchmark is the brands themselves. The change should only affect the themes of advertising campaigns, which is due to the need to take into account the level of economic development of the country.
In general, globalization is possible and undoubtedly desirable in markets revolving around mobility. This applies to various media, hotel business, car rental, airlines, as well as image and sound transmission.
In addition to the factors of globalization, there are factors hindering globalization processes . Such factors also have a direct impact on brand management of an international company.
The main of these factors are the "cross-cultural differences of consumers." In each national environment, there are certain customs, traditions, stereotypes and, accordingly, consumer preferences, characteristic only for a given environment. This factor should be taken into account when choosing the brand name, packaging development, the way of positioning and promotion to the market.
In modern conditions, the name of the brand has evolved from a simple way of identifying goods in a certain communicator of the company's distinctive values in general and the brand in particular. When choosing a brand name, international companies tend to seek the optimal name that can be used around the world. However, sometimes when choosing the optimal brand name there are difficulties. In world practice, there are a number of examples of an unsuccessful brand name when entering the markets of certain countries. Here are some of them:
- Mitsubishi Pajero in Spain is in tune with the phrase "slap in the face";
- Ford Pinto in Latin America sounds like a "spy";
- Fiat Uno in Finland is in tune with the word "sucker";
- Fiat Regatta in Sweden is very similar to the word "grumbler";
- Fiat Marea in Spain is similar to the expression "sea sickness";
- Chevrolet Nova in Spain is in tune with the combination of "what does not travel".
In different cultures, even the basic colors are often endowed with different meanings, which significantly complicates the task of achieving total unification of color solutions. Therefore, when promoting goods to different countries, especially when developing packages, labels, one must find compromise solutions that are adequately perceived by consumers and acceptable to them in the widest possible geographical space.
Along with cross-cultural differences of consumers of different countries, there is also such an aspect as economic differentiation. The level of economic development of different countries can be significantly different. Therefore, the company's brand management policy should take this factor into account. There are several approaches to solving this problem.
The first approach is to adapt commodity lines to markets. Nobody sells the same machines in China and Europe. For the Chinese market, automakers use simpler models.
The second approach is related to the segmentation of the commodity line. For example, Arc International, the world's leading glassware manufacturer, has divided the entire range into three subcategories - everyday, modern and official, and each of the families has a positive name. In developed countries, many people will not buy goods from the everyday family, but in many developing countries the same dishes are bought as a gift.
The third approach is the phased introduction of innovations. So, the group Danone is fully positioned on the concept of "good health". This is a fairly broad concept, and it can not mean the same thing in India and Scandinavia. In fact, Danone distinguishes three stages of development, corresponding to three levels of maturity of the market: quality and safety, health and nutrition, active health. The markets at each of these stages are offered the launch of products that correspond to the existing understanding of such a broad concept as "health."
In addition to the above international aspects of brand management, there is another factor, such as differences in categories. Although the goods may have the same name, they do not mean the same thing in a particular country. Thus, in different countries, the same obvious goods must be positioned in accordance with the value of a particular category present in them.
For example, at first glance, it seems possible to sell the simple yogurt Danone, whether flavored Danone Kid or Danone Bio, to all buyers in the same way Europe. However, despite this appearance, yogurt is a typical case of intolerance associated with the existence of different circumstances in each of the markets at the time of the first presentation of the goods. So, in France, a simple yogurt is considered to be the standard - a symbol of good health, while fruits and fragrances have been added to it much later. In the Anglo-Saxon countries, where there were no pharmacies of the French type, yogurt was first introduced as a product with a low fat content and the addition of fruit for pleasure, and in this sense it was a commodity for adults. Consequently, in different countries the motivation to purchase goods in the yoghurt market is formed by completely different motivations, which is connected with the way the creation of this market in these countries initially took place. Moreover, the result of the existence of these distinct motivations is that in the same countries, the same goods are perceived in a different light.
In different countries, the same product can belong to to different segments. In this case, it deals with different competitors and is oriented to different purposes. If we talk about the automotive industry, for example, in Italy, a small family car, nevertheless, remains the main car, which can accommodate all family members. This determines the appearance of structural expectations, which differ from those that exist in France, where this segment corresponds to the second or even the third car in the family. Another problem arises in connection with Germany: in this country, such a segment simply does not exist.
The next factor hindering globalization is the problem of difference in meaning. Sometimes the impression of the same understanding of words can be created, when things are quite different. Even simple words such as nature and well-being & quot ;, in different countries mean not the same thing. But even if they are understood in the same way, it is still necessary to make sure that the same conception of the concept in different countries is the best way of communication. That's why Procter & amp; Gamble has created, depending on the country, different versions of the brand Mr. Clean, remaining, however, within the overall strategy. Naturally, the symbols of the concept of radiance have changed in accordance with the culture of the country. In France, it was reflected with the help of the idea of a mirror, and in the USA the emphasis was on the reflection of light from water.
Another factor that inevitably has to be taken into account by companies entering foreign markets is the difference in legislation and legal norms of different countries. Laws that talk about the definition of goods, the right to sell, the authorization of alcohol advertising and its execution, as well as the use of children in advertising, are significantly different. So, none of the yogurts sold by Danone USA can be represented as yogurt in the European Community - these products contain too much starch and stabilizers, which by law does not allow to refer this product to yoghurt .
In addition, there is such a factor as competition from local companies. Most of the failures in bringing the brand to the foreign market are due to the presence of a strong local competitor. Therefore, one of the main tasks of brand management of an international company is to fight against entrenched regional prejudices, which give local brands a preference for international brands, which is especially characteristic for the UK and the USA.
There are a number of other factors of international branding. Each factor affects the activities of a company in different ways. It all depends on the characteristics of the organization itself, brand features, geographic coverage. Nevertheless, all of the above factors should be taken into account to some extent when managing the brands of an international company.
Thus, in the management of brands of an international company, one can observe the following development trend. As in other functional areas of company management, in the brand management, the influence of two opposite processes - globalization and localization - can be traced. Each company promoting its brand in the foreign market faces a choice one of these two directions and accordingly develops a certain strategy of brand management.
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