Global Branding Strategy

Managers are gradually recognizing that brands are among their firm's most valuable assets. Strong global brands allow companies to increase their international revenues and growth. Global branding also helps to improve margins by driving down unit costs through economies of scale associated by winnowing agencies, ad copies, and marketing messages.

Brands also simplify decisions for consumers, who are busier, more cynical, and face a wider array of choices in an increasingly cluttered world. By maintaining a consistent brand image they reduce consumer confusion and reinforce the message in a cluttered market.

Brands can also help to mobilize and generate resources. Firms use strong brands to attract and retain talent. Obtaining external equity and debt financing becomes easier with enhanced visibility and credibility. Brands help to quickly roll out new products and protect innovations from imitation. Emphasizing a brand during market entry solidifies a firm's market position. Brands buffer firms during recessions and propel them forward when recessions end. For all these reasons, brands are intangible assets that increase the market value of firms.

Clarifying Global Branding

A brand is a collection of perceptions that may be positive or negative about a name or symbol of a product/service. It goes beyond short-lived product features to include emotional benefits and associations. At their heart, brands create trust with stakeholders.

A misconception is that global branding seeks to pursue an identical name, product, and marketing message worldwide. This practice is uncommon and often counterproductive. Most brands are not global in this sense. Procter & Gamble has over 89 brands, but only a handful are promoted identically worldwide. Its well-known laundry detergent is sold in some countries as Tide and in others as Ariel. A global branding strategy is a cross-national process to improve and harmonize a brand. The goal of a global brand strategy is to develop strong brands in all countries through a continuous improvement process using organization structure, processes, and culture to allocate brand-building resources, to create synergies, and to coordinate and leverage multiple country brand strategies.

Brands are becoming more valuable. In a globalizing world, brands can protect firms from international competition. The marketplace is confusing and cluttered with the entry of more players and the introduction of products with short lives. There is a shift, especially in industrialized countries, from manufacturing products to providing services, which are harder to evaluate and compare. Buyers lead busier lives and have less time to discern among products and sellers. So there is a need for the decision shortcuts and simplification provided by trusted brands.

The lowering of trade barriers and freer information flows make it easier for brands to cross borders and be exploited internationally. The economic center of gravity is shifting from low-growth industrialized countries to rapidly growing emerging countries. While consolidation is often emphasized in industrialized countries, enthusiasm is the theme in growing parts of the world. In industrialized countries, brands may exploit loyalty among aging consumers, while in emerging countries they may reach out to their large population of younger consumers that is climbing the economic ladder.

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