{"id":176,"date":"2015-07-30T00:49:26","date_gmt":"2015-07-30T00:49:26","guid":{"rendered":"https:\/\/courses.candelalearning.com\/intlbusx1xmaster\/?post_type=chapter&p=176"},"modified":"2017-01-09T19:12:18","modified_gmt":"2017-01-09T19:12:18","slug":"critical-decision-points-in-global-marketing","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/cerritos-internationalbusiness\/chapter\/critical-decision-points-in-global-marketing\/","title":{"raw":"Reading: Critical Decision Points in Global Marketing","rendered":"Reading: Critical Decision Points in Global Marketing"},"content":{"raw":"
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Learning Objectives<\/h3>\r\n
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  1. Understand the advantages and disadvantages of global branding.<\/li>\r\n\t
  2. Know the trade-offs of centralized versus decentralized marketing decision making.<\/li>\r\n\t
  3. Identify the special challenges of branding decisions in emerging markets.<\/li>\r\n<\/ol>\r\n<\/div>\r\n
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    Global Branding<\/h2>\r\nA global brand<\/span><\/span> is the brand name of a product that has worldwide recognition. Indeed, the world does become flatter to the extent a brand is recognized, accepted, and trusted across borders. Some of the most-recognized brands in the world include Coca-Cola, IBM, Microsoft, GE, Nokia, McDonald\u2019s, Google, Toyota, Intel, and Disney.[footnote]\u201cBest Global Brands Report 2010,\u201d Interbrand, accessed October 22, 2010, http:\/\/issuu.com\/interbrand\/docs\/bgb_report_us_version?mode=a_p<\/a>.[\/footnote]<\/span>\r\n\r\nCompanies invest a lot in building their brand recognition and reputation because a brand name signals trust. \u201cTrust is what drives profit margin and share price,\u201d says Larry Light, CEO of Arcature brand consultancy and a veteran of McDonald\u2019s and BBDO Worldwide and Bates Worldwide advertising agencies. \u201cIt is what consumers are looking for and what they share with one another.\u201d[footnote]David Kiley and Burt Helm, \u201cThe Great Trust Offensive,\u201d BusinessWeek<\/em>, September 17, 2009, accessed November 4, 2010, http:\/\/www.businessweek.com\/magazine\/content\/09_39\/b4148038492933.htm<\/a>.[\/footnote]<\/span>\r\n\r\nThe advantages of creating a global brand are economies of scale in production and packaging, which lower marketing costs while leveraging power and scope. The disadvantages, however, are that consumer needs differ across countries, as do legal and competitive environments. So while global branding, and consumer acceptance of such, is a flattener, significant country differences remain even when a firm has a strong global brand. Companies may decide to follow a global-brand strategy but also make adjustments to their communications strategy and marketing mix locally based on local needs.\r\n\r\nThe decision companies face is whether they should market one single brand around the world or multiple brands. Coca-Cola uses the Coke name on its cola products around the world but markets its water under the Dasani brand. Nestl\u00e9 uses a local branding strategy for its 7,000 brands but also promotes the Nestl\u00e9 corporate brand globally.\r\n
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    Acer\u2019s Multiple-Brand Strategy<\/h2>\r\nPC maker Acer sells its personal computers under four different brands. Using a multibrand strategy is a good choice when a country has a strong, positive association with a particular brand. For example, when Taiwan-based Acer bought US PC-maker Gateway, Acer kept the Gateway brand to use in the United States for midtier PCs. In Europe, however, Acer uses the Packard Bell brand. Acer also has two other brands, which are segmented by price. Acer\u2019s eMachines brand is for the lower-end consumer who is most focused on price, whereas the Acer brand is reserved for the highest-quality products aimed at technophiles. This multibrand strategy also helps Acer\u2019s distribution. As Acer\u2019s chief marketing officer, Gianpiero Morbello, says, \u201cIt\u2019s difficult to get a retailer to place 50 percent of his space with one brand. It\u2019s easier to split that same space with three brands.\u201d[footnote]Bruce Einhorn and Tim Culpan, \u201cWith Dell in the Dust, Acer Chases HP,\u201d BusinessWeek<\/em>, March 8, 2010, 58\u201359.[\/footnote]<\/span>\r\n\r\n<\/div>\r\n<\/div>\r\n
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    Global Brand Web Strategy<\/h2>\r\nCompanies that are promoting their global brands successfully on the web include Google, Philips, Skype, Ericsson, Hewlett-Packard, and Cisco Systems. These companies are mindful of the cultural and language differences across countries. They have created websites in local languages and are using images and content specific to each country. At the same time, however, each country website has the same look and feel of the main corporate website to preserve the overall brand.[footnote]Chanin Ballance, \u201cSpeaking Their Language: How to Localize Your Message for Global Customers,\u201d Marketing Profs<\/em>, March 24, 2009, accessed November 4, 2010, http:\/\/www.marketingprofs.com\/9\/speaking-their-language-localize-message-global-customers-ballance.asp<\/a>.[\/footnote]<\/span>\r\n\r\n<\/div>\r\n
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    Planning a Brand Strategy for Emerging Markets<\/h2>\r\nEntering an emerging market with a developed-country brand poses an extra challenge. As noted in the section\u00a0\"Fundamentals of Global Marketing,\" income levels in emerging markets are lower, so companies tend to price their products as inexpensively as possible. This low-cost strategy may have consequences for the company\u2019s brand, however. For example, if a company introduces its brand as a \u201cpremium\u201d product despite having a lower price, how will it introduce and differentiate its true \u201cpremium\u201d brand later as consumers\u2019 incomes rise?\r\n\r\n<\/div>\r\n
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    Branding Issues: How Low Can You Go?<\/h2>\r\nMany emerging markets call for lower-cost goods. But how low can a company go on quality and performance without damaging the company\u2019s brand? The challenge is to balance maintaining a global reputation for quality while serving local markets at lower cost points.\r\n\r\nOne way to resolve the challenge is to offer the product at quality levels that are the best in that country even though they would be somewhat below developed-country standards. This is the tactic Walmart has successfully used in Mexico. Walmart\u2019s flooring, lighting, and air conditioning make its Mexican stores better than any other local stores even if they might seem Spartan to US consumers.\r\n\r\n<\/div>\r\n
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    Centralized versus Decentralized Marketing Decisions<\/h2>\r\nWho has the authority to make marketing decisions? In a centralized-marketing organizational structure<\/span><\/span>, the home-country headquarters retains decision-making power. In a decentralized-marketing organizational structure<\/span><\/span>, the regions are able to make decisions without headquarters\u2019 approval. The advantage of the centralized structure is speed, consistency, and economies of scale that can save costs (such as through global-marketing campaigns). The disadvantages are that the marketing isn\u2019t tied to local knowledge and doesn\u2019t reflect local tastes, so sales aren\u2019t optimized to appeal to regional differences.\r\n
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    Key Takeaways<\/h3>\r\n