An American consumer drives his Korean-made Hyundai to a local store to buy chocolate from Swiss manufacturer Lindt & Sprüngli. In Guangzhou, an affluent Chinese shopper drives her BMW to Carrefour – the French-owned hypermart – to buy Coca-Cola.
The globalization of the marketplace – accelerated by rapidly falling transportation and communication costs – demonstrates the sway that global brands have with billions of consumers. And as the global middle class grows over the next few decades, brand preferences will influence trillions of dollars in purchases.
Marketing professor Jan-Benedict E.M. Steenkamp has studied what distinguishes successful and unsuccessful global brands on six continents. He drew on his 25 years of academic research and interviews with corporate executives around the world to write the new book “Global Brand Strategy: World-Wise Marketing in the Age of Branding.”
Steenkamp introduces the global brand value chain and explains how brand equity factors into shareholder value. Designed to help global marketing executives guide, launch or revitalize global brands, the book also provides real-world case studies of successful and unsuccessful global brand expansions.
“Many major American companies derive easily 50 percent or more of their sales growth from overseas markets,” Steenkamp says. “When I talk to senior managers at all types of companies, they do not see people rising to the top without them having shown themselves to be very effective brand stewards in the global arena.”
Why brands are important globally
Brands play three key roles for consumers, says Steenkamp.
Brands also are important for business-to-business (B2B) buyers, Steenkamp says.
Together, these factors allow brands to influence B2B purchases.
Developing strong global brands
Brand managers can’t approach the global marketplace the same way they do in the “local” market of a brand’s country of origin. Well-managed global brands have distinctive needs beyond those of a local brand.
Companies need to consider several factors. Among the most important:
These aren’t the only considerations for executives in charge of global brands. The opportunities and challenges of the digital age, the growing importance of firm-wide corporate social responsibility in managing global brands and the role of global brands in creating shareholder value are among the other issues that Steenkamp addresses in “Global Brand Strategy.”
Global brands can generate tremendous value for companies, so the allure of taking a strong local brand and expanding into other countries is understandable. But global brands are also more complex and challenging to manage, says Steenkamp, who provides a roadmap that all global brand executives need to consider.