Brand Management in the Era of Globalization

Posted on Sep 6, 2024 in Arts and Humanities

IV. Brands: Strong and Powerful

4.1 Brands

What are they – Definition

A brand is a name, sign, symbol, or a combination of these elements that identify a good, service, or a group of them (Kotler, Bowen, and Maken).

  • “If every asset we own (building, equipment) were destroyed… we could easily replace them because we will borrow the money because of the value of the brand” – McDonalds.
  • “Brands are one of the most valuable assets of a firm. Brands are more than products and services, brands say what a company is” – Scott Davis.

Why are they so important?

  • Brand equity:
    • The differential effect that knowing the brand name has on customer response to the product or its marketing.
    • Positive brand equity: favorable reaction (compared to other brands, to a non-branded version)
  • A brand wins in the marketplace not only because it delivers unique benefits or reliable services
  • They win because they build deep connections to customers/consumers.

How do we measure brand equity?

  • Differentiation: what makes the brand stand out
  • Relevance: how much consumers feel it meets their needs
  • Knowledge: how much the consumer knows about the brand
  • Esteem: how highly consumers regard the brand

Positive Brand Equity

  • Positive Brand Equity (PBE) provides a company with competitive advantages:
    • Awareness and loyalty (less effort on marketing funds)
    • Power against resellers (customers)
    • Ability to launch product line extensions
    • Barriers to price wars
  • PBE is the basis for customer equity
    • The power to rely on the brand, to create powerful and strong customer relations
    • The focus of the marketing process is to create customer equity, with brand management as a major marketing tool.

What do they mean to consumers?

  • The product must be positioned meaningfully and uniquely in the mind of the target (Trout & Ries)
  • Brands offer the emotional link between the consumer, the product, and the experience (Schmitt)
  • Relevant brands are the ones that appeal to mind, heart, and spirit (Kotler)

4.2 Creation of Brands

Brand Strategic Pillars

  1. Brand Positioning: Attributes, benefits, beliefs, and values
  2. Brand Name Selection: Selection and protection
  3. Brand Sponsorship: Manufacturer’s brand, private brand, licensing, and co-branding
  4. Brand Development: Line extensions, brand extensions, multibrands, and new brands

Brand Positioning

  • Product attributes (origin)
  • Product benefits (health)
  • Beliefs and values (sustainability)

Brand Name Selection

  • Should suggest something about product benefits and qualities.
  • Easy to pronounce, recognize, and remember.
  • Distinctive
  • Extendable
  • Translatable (or not)
  • Registrable (trademark)

Brand Management

  • Brand positioning must be continuously communicated to customers
  • Support to create awareness and preference
  • Brand experiences:
    • “A brand is a living entity and it is enriched or undermined cumulatively over time, the product of a thousand small gestures” – Disney.

Brand Attributes, Benefits, and Values

Needs States in Out-of-Home Consumption
  1. Satisfy a craving (basic)
  2. In and out (basic)
  3. Money’s worth (basic)
  4. Fill me up (emotional)
  5. Share good times (emotional)
  6. Quality ingredients (basic)
  7. I know it’s fresh (emotional-improved)
  8. Hits the spot (improved)
  9. Locally sourced (improved)
  10. Healthy choices (emotional-improved)

Basic: The basic needs

Emotional: Safety, endorsement, heritage, reputation

Improved: Individual recognition, it says something to me. Social recognition. A place to be seen.

4.3 Brands 3.0

Characteristics

  1. Expressive and collaborative media
  2. The “globalization paradox”:
    • The world is flat (Levitt)
    • The world is still round (Hunt)
    • Threat of “the others” – nationalism (Friedman & Samuelson)
    • Globalization of the economy, not of the politics (China)
    • Threat of inequality (Stiglitz)

    Companies do not try to solve the paradox, just try to manage it (as individuals do)

  3. Diverse (Jihad vs McDonald’s – Barber)

Comparison of Marketing 1.0, 2.0, and 3.0

Cultural Brands

Brands as the sense of continuity – “cultural” brands (Holt)

  1. Social, economic, and environmental issues – collective anxieties and desires
  2. Anthropology and sociology:
    • Responsive (sensible) to citizens. National against global.
    • Relevant to certain societies.
  3. Well-known global brands built (based) on global character:
    • Lexus and Dell (supply chain)
    • The Body Shop

The 3i Model

Identity: Is about positioning your brand in the mind of consumers. Positioning should be unique to be heard and noticed. Should be relevant to the rational needs and wants.

Integrity: Fulfilling what is claimed through the positioning and differentiation. Being credible, fulfilling your promise, establishing consumers’ trust in your brand.

Image: Acquiring a strong share of the consumer emotions. Your brand value should appeal to consumers’ emotional needs and wants, beyond product functionalities and features.

Creative Brands

  1. A few
  2. Influencers
  3. Expressive
  4. Collaborative
  5. Pragmatics

New Need States

Consumers are now not only looking for products and services that satisfy their needs but also searching for experiences and business models that touch their spiritual side.