Standardization versus Customization of a Global Brand

Executive Summary What must be understood is that the way in which a product is promoted in one country (i.e. the name of the product, its general appearance, and how a company chooses to appeal to consumers) is often engineered to appeal to the cultural and social predilections of that particular consumer population.Advertising We will write a custom report sample on Standardization versus Customization of a Global Brand specifically for you for only $16.05 $11/page Learn More However, not all consumers in the global market place have the same tastes when it comes to particular methods of marketing a product. It is based on this that this paper will explore standardization versus customization of a global brand in order to determine the effectiveness of either met Introduction Branding is an important aspect of selling products since it is the manner in which consumers differentiate one product from the rest in terms of what the brand represents such as quality, product longevity and popularity (Viswanathan and Dickson 2007, pp. 46-63). This can often be seen in various advertisements wherein a brand name product is often compared to Brand X (a metaphor for another company’s products) wherein the brand name product that is being promoted is shown to be superior in terms of quality and value. However, the promotion of a particular brand is not limited to a products home market; rather, companies tend to expand into other international markets in order to be more competitive against their rivals in the same industry. For example, international advertising initiatives such as those done by Unilever, Pepsi and Kraft Foods all attempt to target new markets within foreign countries due to flat growth in their main consumer markets (i.e. the U.S.) They do this by utilizing various local pop culture icons in print ads and television advertisements in order to create an association between such stars and the product the company want s to sell thus resulting in a far greater degree of sales and product patronage.Advertising Looking for report on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More In this case, this is a form of informative advertising wherein companies seek to create greater awareness for their products/services. The reason behind such actions was noted in the work of Chang (1995) where it was stated that companies often implement a form of product customization in order to make a product more appealing to a local culture (Chang 1995, pp. 5-10). As such, based on the work of Chang (1995) this necessitates the development of new brand promotion initiatives that appeal more to the target market in the country that the company is attempting to penetrate. The reason behind such attempts at developing an appeal that is more in line with the tastes of the local populace instead of relying on the traditional branding of the company is due the pr esence of already well-established brands within the targeted markets with similar products lines (Chae and Hill 2000, pp. 538-562). Attempting to penetrate such markets with a branding strategy that was utilized in a company’s home market where there is already an assortment of local brands that are popular with local consumers in the new target market could result in a relatively low product uptake which could result in significant financial losses for the company. One way of overcoming this was actually shown by Wal-Mart when it entered into the Chinese market. What the company did was bring in it’s own branding into China yet adjusted its product lineup to include local favorites that would be bought by consumers. On the other hand, while Wal-mart was successful in integrating itself into an international market, other companies were not so lucky with particular brands such as Pepsi initially suffering a setback in the Chinese market due to the way in which the phr ase â€Å"Come alive with Pepsi!† (a phrase used in a lot of its branding initiatives) was translated erroneously resulting in â€Å"Pepsi brings your ancestors back from the dead†.Advertising We will write a custom report sample on Standardization versus Customization of a Global Brand specifically for you for only $16.05 $11/page Learn More The last example of which showcases how branding can go wrong happened when Gerber attempted to market its products in South Africa. What must be understood is that literacy is often an issue in this part of the world resulting in canned products often bearing a photo of what is outside of it to tell people what is in the product. Thus, when marketed in South Africa sales of Gerber’s products plummeted since people though that the product contained processed babies. Taking such factors into consideration, it can be seen that it is often necessary to rebrand a product in order for it be successf ul in a local market given the potential for cultural misunderstandings to arise resulting in low product sales. However, this is not to say that adopting a standardized method of brand promotion is not effective. Companies such as Mc Donald’s, Toyota and Ford have implemented a pretty standardized brand strategy across different markets and have emerged as globally competitive companies with well-recognized brands. When analyzing such aspects, it is necessary to examine standardization versus customization of a global brand in order to determine which method of branding would be advantageous for a company looking to establish itself in other global markets.Advertising Looking for report on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Understanding Consumer Buying Behavior and Brand Development It is rather interesting to note that various theories of consumer decision-making processes always seem to assume that consumers pass through distinct stages/steps before, during and after the process of selecting a particular product to buy or service to utilize. What must be understood is that an average consumer is influenced by a myriad of different factors that affect the way in which they choose to patronize a particular product or service (Brierley 2012, pp. 225-233). This can range from various psychological reactions such as the way in which they think and feel about different products (i.e. brand perception) to the way in which the market environment they are currently present in affects the way in which they perceive a particular product or service (i.e. local culture, their family, local media influences, etc.) (Wagner et al. 2009, pp. 69-85). For example, the 2008 financial crisis and the subsequent financial recession the U.S. and Europe is currently experiencing have greatly affected the way in which consumers perceive particular products or services at the present (Wagner et al., 2009, pp. 69-85). Consumers these days have become more conservative in their spending habits resulting in the resurgence of popular brands such as Mc Donald’s who have great product offerings at incredibly low prices. What is interesting though, is how affordability and lower incomes affect consumer choice and thus brand development. The concept of rational behavior assumes that all consumers are rational individuals who try to use their earned income in order to derive the greatest amount of satisfaction/ utility. In other words, consumers try to get the most out of their income through rational buying behavior which results in a maximization of total utility from the products or services used (Rossiter Foxall 2008, pp. 123-141). In the case of this section of the paper, this comes in the form of c ustomers opting for affordable food in the form of Mc Donald’s due to limited amounts of money. (Shaw, Shiu, Clarke 2000, pp. 879-894). This rational behavior is based on the fact that consumers will act in an economically competent manner in that they will not spend too much money on irrational purchases or services (Calder Burnkrant 1977, pp. 29-38). As such, the concept of rational behavior assumes all consumers engage in rational buying behaviors which becomes the basis for any future analysis of consumer patronage towards a particular type of brand (Oshikawa 1969, pp. 44-49). This is one of reasons why the standardization of the Mc Donald’s brand across multiple countries and consumer segments has been so successful given the brand’s association with fast and affordable food for the masses. This is one the factors that companies should consider when developing their international branding strategies wherein they need to know what their brand represents an d how it is effectively interpreted by the local populace and the consumer segment that the company is attempting to target (Viswanathan and Dickson 2007, pp. 46-63). In the case of Mc Donald’s, it has always had a more â€Å"generalized† marketing strategy which focuses on targeting class C (i.e. low income) or class b (i.e. mid-income) consumers due to the product offerings it has. By focusing on serving everybody, the company does not need to worry as much on product distinction; rather, it focuses on promotion through affordability. Similar companies that are able to utilize a standardized branding strategy by virtue of their business model come in the form of companies such as Tide (the detergent company) or Microsoft (the software developer) (O’Donnell and Jeong 2000, pp. 19-33). Either of the companies that were mentioned are focused more on generalized methods of sale to all consumer classes and thus customization of a global brand is not necessary. Howe ver, there are cases where customization is necessary given different price points that a company wishes to enter. It is based on this that the next section will examine such aspects. One of the approaches to branding that should be considered by companies when approaching consumer relationships is to take into account business cycles and market slumps and adjust branding strategies accordingly. As explained by Professor Leonard Lodish of the Wharton School of Business â€Å"pricing is a critical element of successful marketing, in good times and in bad and many companies do not focus enough on getting their pricing right†. It is based on this and the cyclical cycle of business that companies should consider proper branding strategies when penetrating particular markets. This takes the form of taking into account the physical value of the product being sold as well as various non-tangible elements that consumers take into consideration before they will be willing to pay for a product. For example, the state of the housing market in the U.S. is at an all-time low; however, there are still individuals who are in need of homes. In such cases, developers need to take into account the physical cost of the home itself and factor in the current housing slump before creating a price range for a particular apartment or home. It is based on this that it can be said that the greater the amount of non-tangible assets that are taken into consideration by the customer before making a purchase the greater the need for companies to fix prices in accordance with what is necessary to sell the product itself. This principle can be seen at work in the case of Whirpool and its branding strategy wherein it focused on a branding strategy that utilized a high-end brand (Bauknecht), a mass-market brand (Whirlpool) and a value brand (Ignis). By positioning itself in different points in the market with a branding strategy that enabled it to encompass different types of consumers, this enabled the company to develop a better pan-European positioning in terms of being able to penetrate multiple markets under different branding methods. This method of brand customization is in part due to the company’s desire to be able to appeal to multiple consumer segments through brands that are more inclined towards their end of the consumer market. For example, the brand â€Å"Whirlpool† is often associated as a mass-market type of product. However, it is not known as a high-end brand nor is associated as being a value brand that customers at the lower end of the consumer spectrum can afford. While the company could have implemented a standardized branding strategy in this case and sold different types of products for the upper and lower end of the consumer spectrum, the brand association of Whirlpool as a mass-market product would go against it. This would result in consumers in the upper end of the income spectrum assuming that the quality of the product is too low for their needs while those in the lower end of the consumer spectrum would assume that the product is too expensive for them to afford. By diversifying the company’s brand in Europe through the high end Bauknecht and the low end Ignis, this enabled the company to better capture the European market without attempting to overextend the Whirlpool brand name into multiple consumer spectrums which would cause confusion regarding the type of products the company makes (Ronkainen 1996, pp. 56-63). For example, if the company attempted to develop products for the upper end of the consumer spectrum those at the lower end would think that the brand is far too expensive for them despite the availability of affordable choices while the reverse can also occur wherein appealing to the lower end of the consumer spectrum might result in the alienation of those in the upper market segment. Rossiter Foxall (2008) explains that one of the best ways for a company to fail when it com es to penetrating new markets is to try to overextend the brand into multiple frontiers. This can cause not only a significant issue in consumer perceptions regarding the brand itself but could also cause logistical issues for the various stores attempting to sell different product price iterations of the same brand. The most effective solution as advocated by Rossiter Foxall (2008) is employed brand customization instead of standardization wherein a company has a brand embody a particular type of product that would suit a particular segment of the population. By doing so, this enables a company to reach multiple classes of consumers and be better suited to adapt to a new consumer environment as compared to sticking with a standardized method of branding. Conclusion Based on what has been presented, it can be seen that when it comes to standardization versus customization of a global brand, it all depends on the type of product that is being sold and how a company chooses to target its desired customers. A generalized consumer strategy as seen in the case of Mc Donald’s and Microsoft often follows a standardized strategy while attempting to focus on particular consumer segments would need a more customized branding initiative to become more effective especially in cases where targeting different types of consumer segments are involved as seen in the case of Whirlpool. Reference List Brierley, H 2012, ‘Why Loyalty Programs Alienate Great Customers’, Harvard Business Review, vol. 90, no. 7/8, p. 38 Calder, B, Burnkrant, R 1977, ‘Interpersonal Influence on Consumer Behavior: An Attribution Theory Approach’, Journal Of Consumer Research, vol. 4, no. 1, pp. 29-38 Chae, M and Hill, J 2000,’Determinants and benefits of global strategic marketing planning formality’, International Marketing Review, vol. 17, no. 6, pp. 538-562. Chang, T 1995,’Formulating adaptive marketing strategies in a global industry’, International Marketing Review, vol. 12, no. 6, pp. 5-10 Ronkainen, I 1996, ‘Implementing global marketing strategy An interview with Whirlpool Corporation’, International Marketing Review, vol. 13, no. 3, 1, pp. 56-63. O’Donnell, S and Jeong, I 2000, Marketing standardization within global industries: An empirical study of performance implications’, International Marketing Review, vol. 17, no. 1, pp. 19-33. 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