International and global brands have been in existence for a very long time in one form or the other 4. The common approach that firms which sought to “go global” did is to extend their domestic marketing strategies to international market. In other words they pursued the standardized approach of branding. As firms expand their international activities, their standardized approach to branding led to international and eventually to what is now called global branding. A brand is “anything that identifies a seller´s goods or services and distinguishes them from the others”. By this definition trademark could be said to be part of branding since it can be used to identify and differentiate a company´s product from others. Branding, is very important since it may be very difficult for a product to be advertised without it. A brand as consisting of: a concept/promise/benefit, proprietary signs, name, trademarks, symbols, logo, products and services. By extension, global branding therefore, involves extending all three aspects of a brand across the world. While this is not possible for many products, some products are more amenable to global branding. For example, products aimed at luxury and youth segments seem ideally suited for global brands.
Also, in markets such as telecom, airlines and hotels, where there is heavy consumer mobility, global branding is more feasible. Global or transnational companies must keep looking for global branding opportunities. Global brands can generate a competitive advantage that is difficult for local brands to match. Global brands can be supported by global advertising campaigns with a global positioning, leading to substantial economies of scale in marketing. However, in situations where market conditions are heterogeneous, there may be no option but to acquire or develop local brands.
Nonetheless, in line with the branding concept for local markets, global branding scholars advocate that the development of brands on a global level offers opportunities for capitalizing on economies of scale, developing global markets and pursuing multiple market segments. This benefit from an economic perspective reiterates the significance of branding, not only in domestic market, but also at the global level. Other benefits of global branding include the fact that it gives the customers added value. It provides cross border learning, it generates more cultural benefits for a company and also leads to lower cost. As a result of the immense benefits associated with the adoption of a global brand, most contemporary multinational companies are now adopting global brands. This is therefore justified that many companies adapt a global brand as a marketing strategy.
In dealing with global brands it is prudent that the culture and language of the people are taking into consideration. This is because a brand may have a particular meaning in one country but may have an entire different meaning in another country and in some cases the brand may be out rightly inappropriate in other country. Global brands are in most cases positioned and sold the same around the world. Nonetheless, minor modifications may occur.
Corporate branding: Corporate branding is a marketing strategy in which the brand and corporate name are the same. Examples of corporate brand include among others Nike, IBM, Sony, and Virgin. Corporate branding may not be limited to a specific mark or name ostensibly because branding can incorporate multiple touchpoints. These touchpoints include logo, customer service, treatment and training of employees, packaging, advertising and the quality of products and services. This therefore, means that any means by which the general public comes into contact with a specific brand constitutes a touchpoint that can affect perceptions of the corporate brand.
However, a corporate brand is not just a logo, name and a visual presentation; it is also the values that define it. By this, a corporate can be defined to include intangibility, complexity and responsibility. Furthermore, what makes a company unique and therefore helps to build a brand is its complexity; “it is larger, more diverse and has several audiences that it must interact with” than a brand. For this reason it is essential to effectively communicate the values of the core brand and build relationships with the stakeholders and meet their needs.
Essentially, a corporate brand basically involves the process of communicating the values and identity of a company to the world. A corporate brand is characterized by the way an organization communicates it identity. Corporate brand is the sending of cues or communicating to the world to create a favorable reputation.
Corporate branding is underpinned by processes linking strategic vision, organizational culture and corporate images 6 and must therefore be aligned in order to create a strong corporate brand. These three elements form the foundation of corporate branding and are defined 6 as follows: First strategic vision is the central idea behind the company that embodies and expresses top management’s aspiration for what the company will achieve in the future. Second organizational culture is the internal values, beliefs and basic assumptions that embody the heritage of the company and communicate its meanings to its members. Culture manifests itself in the ways employees all through the ranks feel about the company they are working for. Lastly, corporate images are views of the organization developed by its stakeholders; the outside world’s overall impression of the company including the views of customers, shareholders, the media, the general public, and so on.
Reasons for creating corporate brand: Corporate brand is largely been used by most multi-national companies when it comes to global branding. For example most Asian countries particularly the Japanese companies to a large extent prefer to use corporate brand rather than product branding. The reason(s) for this phenomenon is not far-fetched.
The basic and general reason for creating a corporate brand is to make it unique and different from is competitors 7. It was further stated by Yu Xie 7 that a corporate identity in the form of ethics, goals, and values are all important corporate asset that can differentiate a company from its competitors.
Furthermore, in order for a company to achieve a successful corporate brand management, it will depend among others upon; “having a clear corporate mission and philosophy; understanding the company´s corporate personality and corporate identity; and having accurate information regarding perceptions held of the organizations by its stakeholders” 8.
Product branding: It is how a product interacts with its consumer audience through design, logo, and messaging. Alternatively, product branding is the strategy of building separate brands identities for different products 7. Yu and Xie 7 by stating that product brand is where one individual product has a specific name and a specific positioning; every new product gets its own brand name and positioning. By this, it means therefore, that product branding strategy has a strategy of product differentiation, thereby making the product unique and different from other products, which could be in the form of product packaging, quality and so on. An example of a corporation that adopts product branding strategy is P & G. It is therefore, difficult to settle on one product branding definition because branding triggers an emotional connection in consumers. If done well, product branding can be maintained and produce a solid, well-connected connection throughout the life of the product. However, the main challenge here lies in the new media, licensing and social media, where the “message” might be communicated via the audience and not the expert branding professionals. Examples of product branding according to Yu Xie and Boggs include 7 Sprite under the Coca Cola Corporation, Lux and Dove which are products of Unilever among others.
One of the major reasons why some firms adopt product brand strategy stems from the fact it is very flexible and therefore allows firms to position themselves against different segments in different market. However, the marketing cost may be very high when a product brand is targeted towards different small segments through different brands 7. Also with product brand strategy, a failure of one brand will not affect another brand or the name of the company simply because every brand is individually different.
Standardization and adaptation: Most of the literature in this stream concentrates on the issues of brand standardization or adaptation in the global markets. There are two main school of thoughts in the literature of standardization or adaptation of marketing strategy. Those who support standardization suggest that, world markets are becoming homogeneous due to the rapid advancement in transportation and communication technologies. Homogenization of consumer tastes provides firms with opportunities to achieve cost savings by means of economies of scales in production, marketing and other activities through standardization. This approach emphasizes the financial benefits through standardization. Contrary to standardization, proponents of adaptation argue that world markets are not getting homogeneous, as there are differences in physical environment, legal requirements, cultures, economic development, and infrastructure among national markets.
It is argued that firms desire, total standardization of their marketing activities. Consequently, it is preferable for firms to take into consideration the specific conditions of each market, such as cultural differences and marketing infrastructures, by localizing or adapting their marketing programs. The main concern of this approach is the impact of the external environment of the host country on the international marketing strategy. The debate between these two schools of thoughts is continuous and no solution has been identified. However, the cliche of “think global, act local” has been widely accepted as a better approach due to cultural differences and differences in regional government regulations. It is prudent for modern global companies to use the two (i.e., Standardization and adaptation) concepts in global branding and not to solely concentrate on one.
Investigating how the global companies have achieved international branding we have deduced certain inferences. First, global companies have different and varied branding strategies depending on their company structure. This could either be whether the company implements a product brand strategy or a corporate brand strategy. However, global companies normally have many factors that are similar regardless of their structure. As a result the scope of the study was confined to Sony Eriksson which serve as a representative of global companies. Sony Eriksson uses standardized strategies in international markets and also to some extent customize or adapt to specific local markets. Most global companies shift focus from product brands to corporate brands as they move towards globalization. However, Sony Ericsson uses a corporate brand strategy and has always had that strategy, and did not start with a product brand strategy as theory indicates. Hence, it was revealed that, the researcher´s findings differ from theory.
Second, it was stated by Bradley 14, that more often than not a brand develops from being a local brand and after a while, when the brand is known, move into international markets. However, this research points to the fact that, Sony Ericsson started as a global brand and did not go through the process from local to global brand.
Corporate brand has a long life cycle and a product brand has a short life cycle. Sony Ericsson has a long-term approach where the strategy is constant throughout the company. Therefore, the theory does not coincide with the empirical findings.
Fourth, this research showed that innovation is essential for global companies. However, emphasis seems to be placed more on commercial innovation; i.e., brand management, when it comes to companies focusing on product brand strategy. With regards to companies using a corporate brand strategy, as in the case of Sony Eriksson, the emphasis seems to be more on technological and product innovation. That does not necessarily go hand-in-hand with being first on the market; but instead to be best in class. However, sometimes companies can benefit from first-mover- advantage.