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"Tomorrow I will not remember the words, but I will remember the names." - from his novel Ojos de Perro Azul, the famed Colombian author Gabriel García Marquéz Yoshi Tanaka, Denise Murray, Divya Mishra 3/12/01 Where Are We Headed? Branding Global marketing Advertising in Developing Countries Brand Equity Brand Equity & Advertising Brand Dilution Conclusion Branding The right name provides distinction. In business, the right name also supports a brand image and enhances competitive advantage – critical attributes in highly aggressive industries. Example: On November 25, 1998, telecommunications giant Telefonica de España, S.A. announced the birth of a new corporate identity based on the consolidation of all of its operating companies worldwide under one brand, one name: Telefonica. Strong Brands Brands earn deeper shares than retailers do World’s top 10 brands’ by estimated market share*1 Microsoft 80% Campbell’s 60% Gilette 53% Coke 50% Cascade 46% Tide 43% Duracell 43% Listerine 42% Huggies 41% Kellog’s 35% Necessity of Branding In the retail industry, generating a sale from a new customer is five or six times more costly than generating a sale from an existing customer.*2 Global Marketing Going global Changes have opened new markets Developing countries (i.e. China, Argentina) Advertising in Developing Countries Advertising & promotional expenditures The importance of advertising Builds brand image Builds brand position Creates brand equity Brand Equity What is brand equity? What erodes brand equity? How do you decrease brand equity? Brand Equity & Advertising Developed vs. developing countries Where does the opportunity lie? Decreased advertising = decreased brand equity in developing countries Brand dilution China: Brand Dilution Branding Fight in Argentina The food and consumer goods industries are hot for solidifying brand names. The winners will probably be those that already exist or are global operators. M&A by international conglomerates Internet by brick-and-mortar local giants M&A Branding by Conglomerates Advantage: Utilizing the developed country-backed brand Disadvantage: Hit hard by the local recession, unrest, etc Example: Telefonica and Nestle Strategy: Long-term investment JV with local big names M&A Fight for Brand Nestle’s fight with Unilever in Argentina Nestle: $150M investment to M&A for pet-food, JV for mineral water $400M sales increase Unilever: Close of ice-cream operation $170M investment to M&A for condiments, soups, etc a large portion would go towards publicity and marketing Internet Branding by Local Giants Advantages: Utilizing physical stores and relationships with value chain Disadvantages: Lack of e-skills and channel conflict Example: Musimundo.com and Americanas.com Strategy: Internet branding and expanding to neighboring countries Internet pure-plays investing into brick-and-mortar Internet Fight for Brand Musimundo’s fight in Internet Acquisition of Zona247 Pan-regional ventures surge Pureplay in books, CDs, videos, toys, etc Musimundo’s Multinational fight in brick-and-mortar big names surge: Wal-Mart, Expansion to Chile and Brazil Argentina Branding Recap Current two mainstreams M&A by international conglomerates Internet by brick-and-mortar local giants New strategy will be necessary Intellectual property issues being discussed in the government Retail licensing and franchising is emerging So What? Things to Consider Economic Environment Cultural Environment Demographic Environment Political/legal Environment Sources 1. 2. Brett Revy, “Specialty in Retail,” PaineWebber, March 31, 1999 Belch & Belch, Introduction to Advertising and Promotion Management, 5th Ed. McGraw-Hill, Irwin 2001.
