3.5: 12 Business: Global Brand & Strategic Alliances

businesses as a global brand

• a global brand refers to a brand that is marketed and recognised consistently across multiple countries

• it uses a standardised marketing mix, meaning the same branding, messaging and strategies are applied worldwide rather than adapted for each local market

• features:

  • consistent brand imaging and messaging across global markets

  • centralised control of marketing strategies

  • standardised logos, colours and packaging

• purpose:

  • create worldwide recognition and trust

  • reduce marketing complexity

  • ensure consumers receive the same brand experience globally

benefits to a business of having a global brand

• brand recognition

  • stronger brand awareness and recognition - consistency makes it easier for consumers to recognise the brand anywhere in the world, building trust, loyalty and repeat purchasing behaviour

• cost efficiency

  • one marketing strategy reduces manufacturing, distribution, marketing and administrative costs due to economies of scale

• low risk

  • proven strategies can be applied across markets instead of developing new ones

• simplified management

  • easier coordination and control - one team, one global message, only language translations or minor adjustments needed

• stronger differentiation

  • a global brand stands out against local competitors, helping to build long-term loyalty, strengthens brand’s positioning and values

standardisation vs adaptation

• standardisation

  • using one global marketing approach

  • enhances brand recognition, reduces costs

• adaptation

  • adjusting elements of the marketing mix (price, product, promotion, place) to suit local market preferences

  • increases cultural relevance and customer connection

• businesses often use a combination (glocalisation) - maintaining brand identity while adapting parts of the marketing mix to local markets

• elements of the marketing mix which standardisation/adaptation can be applied to:

  • corporate slogan

  • product name

  • product features

  • positioning

  • (process)

  • (people)

approaches to strategy adaptation (from least to most effort)

1. use domestic strategies internationally with minimal language translation

2. adapt based on regional generalisations

3. adapt based on national market research (from governments, trade publications etc)

4. conduct original, detailed market research and adapt strategy for each target market

applying standardisation or adaptation to marketing mix elements: positioning

• positioning refers to how a brand is perceived in the minds of consumers relative to competitors

• some cultures associate certain products with individual achievement and status (eg. owning a luxury item = success)

• other cultures value collective achievement and community

• businesses must align their brand’s message with the cultural values of their target market

• eg. in individualistic cultures marketing may focus on personal success (eg. “you’ve earned it”) while in collectivist cultures it may focus on family/community benefit

applying standardisation or adaptation to marketing mix elements: product features

• product features refers to the physical and functional characteristics of a product, including design, packaging and materials

• product features often need to be adapted for cultural preferences, climate, legal standards or consumer needs

• key considerations:

  • colour - symbolism varies globally (eg. white = purity in some countries, mourning in others)

  • climate - product may need modifications (eg. heat-resistant materials, packaging durability)

  • taste and lifestyle - flavours, sizes and designs differ across cultures

  • legal requirements - safety, labelling and standards (eg. electrical voltage, driving side, ingredient restrictions)

  • cultural differences in design, usage and expectations

  • consumer tastes shaped by local preferences

• adapting features increases acceptance and success in new markets

• failure to consider cultural/environmental differences can result in product rejection or loss of brand reputation

applying standardisation or adaptation to marketing mix elements: product name & corporate slogan

• product name & corporate slogan refer to the brand’s name and tagline used to identify and promote the product

• businesses must decide whether to standardise or adapt these across markets

• standardisation supports global brand recognition (eg. same logo and colour scheme)

• adaptation may be needed due to:

  • language translation issues

  • cultural meaning or unintended offensive interpretations

  • legal restrictions if a brand name is already registered in another country

  • slogans should be memorable, easy to translate and culturally appropriate

• considerations for adapting:

  • conduct market research to identify suitable wording and tone

  • test how consumers interpret slogans, product names and brand imagery

  • adapt where necessary to avoid brand damage or confusion

applying standardisation or adaptation to marketing mix elements: process

• processes refer to the systems and technology that deliver the product to the customer, including online platforms, communication and distribution

• businesses must adapt to the infrastructure level of the target market:

  • internet availability and speed

  • local distribution channels

  • government restrictions (eg. online censorship or e-commerce limitations)

• standardisation of process may be efficient in technologically advanced regions, while adaptation is required in developing markets

applying standardisation or adaptation to marketing mix elements: people

• process refers to the employees who represent the brand and deliver customer service

• businesses must decide whether to use existing (home-country) staff, local employees or a blend of both

• local staff bring cultural insight and understanding of customer needs while existing staff maintain company standards and brand consistency

• training programs are often implemented to merge both perspectives effectively

considerations for global marketing decisions

• when deciding whether to standardise or adapt, global businesses must evaluate:

  • cultural factors:

    • language, values, consumer behaviour, religion, symbolism, lifestyle differences

  • economic factors:

    • income levels, purchasing power, economic stability

  • legal and political factors:

    • advertising regulations, intellectual property laws, trade restrictions

  • technological infrastructure:

    • internet access, online payment systems, logistics capacity

  • resources and costs:

    • adapting campaigns requires more investment in market research and localisation

feasibility of expanding into a foreign market

• before entering a new market, a business must assess feasibility - whether expansion is practical , profitable and sustainable

• factors that determine feasibility:

  • level of demand by consumers

  • consumption patterns

  • competitor activity

level of demand by consumers

• demand refers to the quantity of a product that consumers are willing and able to purchase at a given price

• high demand indicated a potentially profitable market

• businesses must estimate potential sales volume and market share before committing resources

• influenced by economic indicators such as:

  • employment and income levels

  • GDP growth

  • inflation and interest rates

  • exchange rate stability

  • trade relationships and consumer confidence

• impact on feasibility:

  • strong demand = higher likelihood of success and return on investment

  • weak demand = high risk of failure due to low sales

  • businesses must align their pricing and marketing strategies to the economic capacity of the target consumers

consumption patterns

• consumption patterns refers to the spending habits and purchasing behaviours of households in a market - what they buy, how often and how they buy

• influenced by:

  • income levels

    • higher income = more spending on luxury/non-essential goods

  • culture and social norms

    • traditions, values and beliefs influence product acceptance

  • technology access

    • growth in e-commerce or m-commerce changes how consumers buy

  • political and ethical considerations

    • shifts in preferences (eg. sustainability, cruelty-free products)

• impact on feasibility:

  • a product must match the consumption habits, lifestyles and cultural values of the target market

  • businesses should analyse:

    • purchase frequency (how often the product is bought)

    • spending capacity (what % of income consumers spend on that category)

    • preferences (eg. local materials, sustainable production)

  • misalignment between product offering and consumption behaviour can make expansion unfeasible

• considerations for implementation:

  • adapt marketing messages to cultural expectations

  • ensure accessibility through online platforms and appropriate payment systems

  • consider seasonal or climate-related influences on buying behaviour

competitor activity

• competitor activity refers to the presence, strategies and market influence of existing businesses offering similar or substitute products

• businesses assess competitors to understand market saturation and barriers to entry

• research includes:

  • primary data - field observations, interviews, direct research

  • secondary data - market reports, government publications, competitor websites

  • anecdotal data - insights from customers, suppliers or industry networks

• factors supporting market entry

  • few or weak competitors

  • unsatisfied customers or unserved market niches

  • poor quality or overprices local products

  • lack of innovation or choice

• factors making entry difficult

  • dominant, well-established competitors

  • strong customer loyalty and brand attachment

  • high market entry costs and strict regulations

  • well-developed supplier and retailer networks supporting incumbents (existing businesses)

• impact on feasibility:

  • businesses must determine whether they can differentiate their offering or achieve competitive advantage

  • if competition is too intense, entry may be unprofitable unless the business introduces unique value

global strategic alliances

• a global strategic alliance is a formal agreement between two or more businesses from different countries to collaborate and share resources, knowledge and risks to achieve mutually beneficial goals such as market expansion, efficiency and innovation

• purpose/rationale:

  • global alliances allow businesses to:

    • enter new international markets more easily

    • share costs, risks and expertise

    • access local knowledge, technologies and resources

    • strengthen global competitiveness and innovation

• types of global alliances:

  • outsourcing

  • acquisition

  • mergers

  • joint ventures

  • franchising 

outsourcing

• outsourcing involved contracting external or third-party organisations (often overseas) to perform specific business activities that were previously handled internally, such as manufacturing, customer service, IT or administration

• features

  • contractual relationship with another company (vendor)

  • may involve offshore outsourcing to take advantage of lower wages or production costs

  • commonly used in manufacturing, logistics, IT and customer service

• rationale

  • businesses outsource to reduce costs, improve efficiency and focus on core functions while leveraging external expertise and technology

• benefits

  • cost reduction - lower labour and production costs, particularly in developing countries

  • focus on core activities - frees management to focus on strategic functions

  • access to specialist expertise - external providers may have superior skills and technology

  • improved efficiency - specialists often operate with higher productivity and quality

  • flexibility - easier to scale up or down as needed

• disadvantages

  • job loss in the home country

  • loss of control over production quality or timelines

  • communication issues due to time zones or language barriers

  • security risks involving data and intellectual property

acquisitions

• an acquisition occurs when one company purchases a controlling interest (majority of shares) in another, taking ownership of its assets, operations and market presence

• rationale

  • acquisitions are used to expand market share, enter new markets, access new technologies and achieve economies of scale quickly

• benefits

  • rapid market expansion - immediate access to new markets and customer bases

  • increased market share and competitiveness

  • access to new resources - skilled staff, intellectual property, technology

  • economies of scale - reduced costs through combined operations

  • diversification - speeds risk across different products or marks

  • prevents competitor acquisition - defensive strategy to maintain market posiiton

• disadvantages

  • cultural clashes between organisation

  • integration challenges and potential staff redundancies

  • high purchase cost and risk of overvaluation

  • regulatory issues in some marks

merger

• a merger is when two companies combine to form a new, single entity

• unlike an acquisition, both businesses usually agree to merge as equals, pooling their assets, staff and operations

• types

  • horizontal merger - two firms in the same industry (eg. competitors)

  • vertical merger - two firms at different stages of production (eg. manufacture and supplier)

  • conglomerate mergers - two unrelated firms seeking diversification

• rationale

  • mergers are pursued to achieve greater efficiency, reduce costs and strengthen industry position through combined expertise and resources

• benefits

  • economies of scale - reduced costs through combined production and distribution

  • increased market share and reduced competition

  • access to new technology, capital and skills

  • diversification - spreads financial risk across industries or product lines

  • enhanced shareholder value through synergy and growth

• disadvantages

  • integration difficulties (management, systems, culture)

  • loss of brand identity for one or both firms

  • redundancies and employee resistance

  • regulatory challenges in some markets (eg. anti-competition laws)

joint ventures

• a joint venture is a partnership between two or more businesses that form a new, separate entity to undertake a specific project or business activity

• profits, losses and control are shared according to agreed terms

• features

  • new, legally separate business entity

  • shared resources (capital, staff, technology, intellectual property)

  • usually short- to medium-term projects

  • common in international expansion when partnering with a local firm

• rationale

  • joint ventures are often formed to combine complementary strengths, such as local market knowledge, technology or capital, while sharing risk and const

• benefits

  • shared investment and risk - costs and risks are divided between partners

  • local market expertise - partner provides cultural and legal understanding

  • access to new technology or distribution channels

  • enhanced credibility - local partner can improve brand acceptance

  • faster market entry - bypasses local trade and regulatory barriers

• disadvantages

  • cultural and management clashes between partners

  • potential conflicts over control and profit sharing

  • difficulty aligning goals or communication issues

  • confidentiality risks in sharing technology or intellectual property

  • short-term nature may limit long-term strategy

franchising

• franchising is a business model where one party (the franchisor) grants another (the franchisee) the right to operate under its brand name and sell its products or services in return for fees and royalties

• features

  • franchisee uses franchisor’s brand, products, systems and marketing

  • the franchisor provides training, operational manuals and quality control standards

  • franchisee pays an initial fee and ongoing royalties

• rationale

  • franchising enables rapid business expansion into new markets with lower financial risk, as franchisees provide capital and manage local operations

• benefits to franchisor

  • rapid global expansion with minimal investment

  • reduced financial risk - franchisees fund local operations

  • increased brand visibility and global presence

  • steady revenue through fees and royalties

  • economies of scale in supply chains and advertising

• benefits to franchisee

  • established brand and business model reduce startup risk

  • training and support from franchisor

  • access to proven supply chains and marketing campaigns

• disadvantages

  • difficult to maintain consistent quality across global franchises

  • cultural and legal barriers in international markets

  • conflict between franchisor and franchisee over standards or fees

  • reduced control for the franchisee over operations