Managing the international brand

       3.2.Branding Levels and Branding Strategies

There are four levels of branding decisions: (1)branding versus no brand strategy; (2)private brand versus manufacturer’s brand ; (3) single brand versus multiple brands and (4) global brands versus local brands. The next figure shows an outline of the decision-making process in  branding.

                            Generic (brandless) product

     

Branding Decisions                          Private Label

                                                                             Single brand   Multiple brand

                             Branded product                                     Single market

                                                    Manufacturer’s own brand

                                                                                                                                                                                                                                                                 

                                                                                                                                                           

                                                                                              Multiple market

                                                                               

                                                                                     Global b            Local   b      Figure 2 Levels Of Branding Decision

Branding versus No brand

Most products are branded, but that does not mean that every kind of product should be branded. Branding is not a cost-free measure due to the added costs associated with marking, labeling, packaging and legal procedures. These costs are especially relevant in the case of commodities (e.g. salt, cement , diamonds and other products). Commodities are unbranded or undifferentiated products which are sold by grade and not by brand. As such, there is no uniqueness, other than grade differential, that may be used to distinguish the offerings of one supplier with those of another. Probably branding is undesirable because brand promotion is ineffective in a practical sense and adds unnecessary expenses to operations costs. The value of a diamond, for example, is determined by the so- called the four C’s- cut, color, clarity and carat weight, and not by brand.

From a positive point of view, the no brand product allows flexibility in quality and quantity control, resulting in lower production costs along with lower marketing and legal costs.

The basic problem with the commodity or unbranded product is that its demand is strictly a function of price. The unbranded product is thus vulnerable to any price movement or price cutting.

Branding, when applied transforms a commodity into a product (Chiquita Bananas; Dole Pineapples). A product is a value-added commodity , the value added being given by the certain product attributes- physical, psychological or real or imaginary, as perceived by the consumers. Branding makes premium pricing possible  because of better identification, awareness, promotion, differentiation, consumer confidence and brand loyalty.

Although branding provides the manufacturer with some insulation from price competition, a firm must still find out whether it is worthwhile to brand the product. In general, the following prerequisites should be met:

Quality and quantity  consistency, not necessarily the best quality or the greatest  quantity.

As an example, Nike’s unique designs allowed the company to differentiate its brand from others and to become the top-rated brand among serious joggers.

Private Brand versus Manufacturer’s Brand

Branding used to promote sales or move products needs a further branding decision: whether the manufacturer should use its own brand or a distributor’s brand on its product. Distributors in the world of international business include trading companies , importers and retailers among others; their brands on products  made by US companies, as evidenced by Matsushita’s purchases of major appliances  from White.

Even though it may seem logical for a distributor to carry the manufacturer’s well-known brand, many distributors often insist on their own private brands for several reasons. First, a distributor may be able to create  a unique product by bundling or unbundling  product attributes and then adjusting  the price to reflect the proper value.

Carrefour, a French retail giant, sells some  3000 in-house products at prices  about 15 percent lower than national brands. Here in Romania, Carrefour started since 2004 introducing this kind of practice in its stores in Bucharest and Brasov.

In the UK, the retailer J. Sainsbury PLC has a private brand that is able to win 30 percent of the detergent market, moving it ahead of Unilever’s Persil and just behind Procter and Gamble’s Ariel which is the market leader. It is believed that private-label products now account for one third of supermarket sales in the United Kingdom and a quarter in France.

Distributors can convert fixed production costs into variable costs by buying products made by others.

Perhaps the most important reason for a distributors insistence on a private brand is due to brand loyalty, bargaining power and price. In spite of the lower prices paid by the distributor and ultimately by its customers, the distributor is still able to command a higher gross margin and than what a manufacturer’s brand usually offers. The lower price may also be attributed to the distributor’s refusal to pay for manufacturer’s variable  costs , but not all. If a firm has any problem with the supplier, it has the flexibility  of switching to another supplier to make the identical product , but maintaining brand loyalty and bargaining power without any adverse effect on sales.

There are a number of reasons why the strategy of private branding is not  necessarily bad for the manufacturer. First, the ease in gaining market entry and dealer’s acceptance may allow a larger market share overall while contributing to offset fixed costs.

Second, there are no promotional expenses associated with private branding, thus making a strategy suitable for a unknown brand. Suzuki cars are sold in the USA under the GM Sprint brand name. Ricoh’s facsimile machines are sold under AT&T’s well-known name.

Third, a manufacturer may judge that the sales of its own product are going to suffer to a greater or lesser degree by various private brands. In that case, the manufacturer may as well be cannibalized by one of those private brands made by the manufacturer. There are also reasons why private branding is not good for the manufacturer. By using a private brand, the manufacturer’s product becomes  a commodity, at least to the distributor. To remain in business and retain sales to the distributor, the manufacturer must compete on the basis of price, since the distributor can always switch suppliers.

By not having its own identity, the manufacturer can be easily be bypassed. Furthermore, it loses control over how its products should be promoted- this fact may become crucial if the distributor does not do  a good job in promoting the product.

The manufacturer’s dilemma is best illustrated by Heinz’s experience in the United Kingdom, where consumer recognition for its brand is greater than in any other country in the world.

Whereas Campbell Soup and Nestle ’s  Crosse and Blackwell make some products under private labels, Heinz makes products only under its own brand because, as  the largest supplier of canned foods there , it has the most to lose . To preserve its long-term market leadership  at the expense of short-term earnings , Heinz has held down prices, introduced new products, launched big capital spending programs and increased advertising.

Heinz does make  private-label merchandise in the USA, where private brands account for 10 percent of US sales. Its logic is that the slow growth of US private labeling does not  pose a serious threat as it does in the United Kingdom. Clearly, the manufacturer has two basic alternatives- its brand or a private brand. Its choice depends in part on its bargaining power. If the distributor is prominent and the manufacturer itself is unknown and anxious to penetrate a market, then the latter may have to use the former’ s brand on the product. But if the manufacturer has superior strength, it can afford to put its own brand on the product and insist that the distributor accept that brand as part of the product.

Private branding and manufacturer’s branding is not necessarily an either/or proposition : a compromise may often be reached to ensure mutual coexistence. If desired, both options can be employed together. Michelin, for instance, is world renowned for its own brand, but most people do not realize that Michelin also produces tires for Sears and Venture.

The popularity of private brands varies from country to country . In the UK , the key factors that have contributed to the evolution of retail brands within British grocery retailing, are changing the basis and use of retail powering the distribution channel, centralization of the management activities, and appreciation of what constitutes retail image. British grocery retailers have successfully managed these factors. As a result, their retail brands are regarded by consumers as being as good as, if not better than the established manufactured brands. Some branding and manufacturing strategies illustrate the potential benefits and problems of private branding. By putting their brands on the products made by outside suppliers, the brand owners are able to take care of the gap in their product lines quickly and economically while solving their inventory problems.

However, this strategy will make product differentiation more difficult. Well informed customers may not find a good reason to pay extra for these brands.

Single Brands vs. Multiple Brands

When a single brand is marketed by the manufacturer, the brand is assured of receiving full attention for maximum impact. However, a company may choose to market several brands within a single market based on the assumption that the market is heterogeneous and thus it must be segmented. Consequently, a specific brand  is designed for a specific market segment.

The watch industry provides a good illustration for the practice of using multiple brands in a single market, for different market segments. Citizen, in its attempt to capture the new youth and multiple-watch owners’ market, traded down to include a new brand called Vega. Likewise, Hattori Seiko is well known for its Seiko brand , which is sold at the upper-medium price range in better stores; to appeal to a more affluent segment, the company traded up with the Lassale name.

Seiko strategy is to deliberately divorce names, once used together in the public mind, with the gold plated Lassale line and the karat-gold Jean Lassale line. Lassale watches have Seiko  mechanisms, but they are produced in the USA and the Western Europe and they are sold only through jewelers and department stores. Swatch Group Ltd. has more than 50% of the Swiss watch industry. Swatch owns a number of well-known brands that include Omega, Longines, Tissot and Calvin Klein.

Multiple brands are suitable when a company wants to trade either up or down because both moves have a tendency to hurt the company’s main business. If a company has a reputation for quality, trading down without creating a new brand will hurt the prestige of the existing brand. By the same assumption, if a company is known for its low-priced, mass-produced products, trading up without creating a new brand is hampered by the image of the existing products. Casio is perceived as a manufacturer of low-priced watches and calculators and its name affects its attempt to trade up to personal computers and electronic musical instruments.

There are four recognized branding strategies. The following three kinds of branding strategies are  created in order to be suitable  for multiple brands.

Corporate umbrella branding is used by firms such as Heinz, Kellogg’s and Cadbury’s. The corporate name is used as the lead name for all their products, for example Kellogg’s Healthwise, Kellogg’s Frosties, Kellogg’s Corn Flakes.

Family umbrella names are used to cover a range of products in a variety of markets. For example Marks and Spencer use their St. Michael brand for clothing, food and household goods.

Range branding is used for a range of products with a particular link in a specific market such as Lean Cuisine for low-calorie foods.

The second category represents another type of  branding strategy  and it is the individual brand name strategy. Individual brand names are used with individual products in a particular market, with different weights, colors, flavors and pack sizes. Procter & Gamble and Unilever use individual brand names such as Daz, Ariel and Omo, using no reference to the corporate name.

Local Brands vs. Global Brands

When the manufacturer decides to put its own name on the product, the problem does not end there if the manufacturer is an international marketer. The possibility of having to modify the trademark cannot be dismissed. The international marketer must then consider whether to use only one brand name worldwide, or different brands for different markets or countries.

A single worldwide brand is also known as an universal or global brand. A Euro-brand is a slight modification of this approach, since it is a single product, for a single market, with an emphasis on the search for intermarket similarities rather than differences.

For a brand to be global or worldwide it must, by definition, have a commonly understood set of characteristics and benefits in all of the markets where it is promoted. Coca Cola is a global brand in the sense that it has been successful in maintaining similar perceptions across countries and cultures. However, most other brands do not enjoy this kind of consistency, making debatable whether a global brand is a practical solution.

A worldwide brand has several advantages. First, it tends to be associated with status and prestige.

Second, it achieves maximum market impact overall, while reducing advertising costs because only one brand is promoted. Bata Ltd., a Canadian marketer and shoe retailer in ninety-three countries, Romania including, found out in its research that its consumers generally believed Bata to be a local brand. The company decided after that study, to become the official sponsor of World Cup soccer in order to enhance Bata’s international stature. For Bata and others it is easier to achieve worldwide exposure for one brand than it is for multiple local brands.

Third, a worldwide brand provides a convenient identification and international travelers can easily recognize the product. There would be no sense in creating multiple brands for such international products as American Express credit card, Shell gasoline, Time magazine and so on.

Finally, a worldwide brand is a good approach when a product has a good reputation or is known for quality. In such cases, a company would be wise to extend the brand name to other products in the product line

Global Consumer Culture Positioning (GCCP) is a tool that  suggests one pathway through which a brand may be perceived by consumers as “global”.

GCCP is an instrument that associates a brand with a widely understood and recognized set of symbols which constitute an emerging global consumer culture.

ACNielsen’ s Global Mega Brand Franchises report uses a number of criteria to identify mega brands. A mega brand must be available in at least fifteen out of fifty countries that account for 95% of the global economic output. It must be marketed under the same name in at least three different product categories in three or more regions. Based on these criteria, the mega brands are dominated by the highly extendable personal care and cosmetics manufacturers and by food and drinks manufacturers. The queen of mega brands is Nivea, a brand owned  by the German consumer products group Beiersdorf. This skin-care brand is a huge success and the brand has been extended to at least nineteen product categories-shampoos, after-shave, wrinkle lotion and bath foam. In contrast, Coca Cola does not have this power of extendability.

The use of multiple brands is a very common practice. In the case of Unilever, its fabric softener is sold in ten European countries under seven names. Due to decentralization, the multinational firm allows country managers to choose names, packages and formulas that will appeal to local tastes. More recently, the company, while keeping local brand names, has been gradually standardizing  packaging and product formulas.

There are several reasons for using local brands. First, developing countries resent international brands because the brand’s goodwill is created by an advertising budget that is much greater that research and development costs , resulting in no benefit derived from research and development for local economies. In addition, local consumers are forced to pay higher prices for advertising, not helping the development  of local competitive capacity. Such resentment may explain why India’s ministries, responding to domestic soft drink producers‘ pressures, rejected Pepsi’s 35% Pepsi-owned joint venture.

Second, when the manufacturer is unable to ensure uniform product quality across countries, it should consider local brands. Third, when an existing brand is difficult to pronounce, a new brand may be desirable. Sometimes, consumers avoid buying a certain brand when it is difficult to pronounce, because they want to avoid the embarrassment of a wrong pronunciation.

Then, a local brand is more easily understood and more meaningful for local consumers. By considering foreign tastes and preferences, a company achieves a better marketing impact. Grey, an international advertising agency, worked with Playtex to create different appropriate names for Playtex’s brassieres in different languages. The result was Wow in England and Traumbugel ( dream of wire) in Germany. Translation may also make a brand more meaningful. This approach is sometimes mistaken for a single-brand approach when in fact a new brand is created. Close up ( toothpaste) was translated as Klai-Chid ( literally meaning “ very close”) in Thailand; the translation retained the meaning and the logo of the brand as well as the package design.

Fifth, a local brand can avoid a negative connotation. Pepsi introduced a non-cola under the Patio name in America but under the Mirinda elsewhere due to the unpleasant connotation of patio in Spanish.

        Sixth, some MNCs acquire local brands for quick market penetration in order to save time, not to mention money, which otherwise would be needed to build the recognition for a new, unknown brand in local markets. Renault would have been foolish to abandon the AMC                        (American Motors)  name after a costly acquisition. Thus Renault 9, for example, became AMC Alliance in the USA. Chrysler subsequently bought AMC from Renault, one reason being AMCs coveted Jeep trademark.

        Seventh, multiple brands may have to be used, not by designed but by necessity, due to legal complications. One problem is the restrictions placed on the usage of certain words. Diet Coke in countries that restrict the use of the word diet  becomes Coke Light. Antitrust problems can also dictate this strategy. Gillette, after acquiring Braun A.G, a German firm, had to sign a consent decree not to use the name in the US market until 1985. The decree forced Braun to create the Eltron brand, which had little success.

        The eight and perhaps most compelling reason for creating new local brands is because local firms may have already used the names that multinational firms have been using elsewhere. In such a case, to buy the right to use the name from a local business can prove expensive. Unilever markets Sure antiperspirant in the United Kingdom but had to test market the product under the Trust name in the USA, where Sure is Procter Gamble’s deodorant trademark.

        In an interesting case, Anheuser-Busch bought the American rights to the Budweiser name and recipe from the brewer of Budweiser in Czechoslovakia; Budejovicky Budvar Narodni Podnik, the Czech brewer, holds the rights in Europe. Operating from the town of Ceske Budejovice, known as Budweis before World War I, this brewer claims exclusive rights to the Budweiser name in the United Kingdom, France and several European countries. Courts have ruled that both companies have the right to sell in the United Kingdom, but Anheuser-Busch has to use the Busch name in France and the corporate name in other parts of Europe.

        Ninth, a local brand may have to be introduced due to price control. This problem is especially acute in countries with inflationary pressures. Price control is also one reason for the growth of the so-called gray marketers, as the phenomenon contributes to price variations among countries for the same product. Thus, instead of buying a locally produced product or one from an authorized distributor/importer, a local retailer can buy exactly the same brand from wholesalers in countries where prices are significantly lower. A manufacturer will have a hard time prohibiting importation of gray market goods, especially in EU countries where products are supposed to be able to move freely. Parallel trading can be minimized by having different national brands rather than only a worldwide brand.

        As mentioned above, a brand standardization is a common strategy. Companies tend to brand globally but advertise locally. Interestingly, although the McDonald’s logo is one of the most recognizable in the world, McDonald’s has changed its advertising logo for Quebec, perhaps the only market in the world which receives this special treatment, The most well-known logo in Quebec is J’M. This is a play on “ j’aime” which means “ I love” in French.

        The strategy of using a worldwide brand is thus not superior ( or inferior) to using multiple local brands, Each strategy has its merits and serves its own useful functions, This is where managerial judgment comes in. Unilever, for example, considers consumer responses to a particular brand mix. It uses an international brand for such products as detergents and personal products because common factors among countries outweigh any differences. Food products, however, are another story. Food markets are much more complex due to the variations in needs and responses to different products. The southern half of Europe uses mainly oil for cooking rather than margarine, white fats, or butter. The French more than the Dutch consider butter to be an appropriate  cooking medium. German home makers, when compared to British home makers, are more interested in health and diet products. Soup is lightweight precursor to the main dish in Great Britain but can almost be a meal by itself in Germany. Under such circumstances of preferential variations, the potential for local brands is greatly enhanced.

        When creating local brand names in the multilingual international market, companies have three translation methods to consider : phonetic ( i.e. by sound ), semantic ( i.e. by meaning), and phonosemantic ( i.e. by sound and meaning). The effectiveness of translation depends on the emphasis of the original English name and the translation method used previously for brand names within the same category. When the phonetic naming method is used, brand name evaluations are more favorable for names that emphasize an English word than for those names that emphasize a Chinese word.

Arguments against globalization

Those who oppose global branding base their arguments on fundamental marketing principles: it is the job of marketing people to be sensitive to their customers and consumers, and only they – in the local country- really understand them.

Markets are actually different

 Market shows different preferences, and even if some of this is due to past government action, it is an additional argument for treating each local market as unique. Pasta is seen as old-fashioned in Italy, but rather trendy in many other countries. The biscuit market shows quite different patterns in different countries.  

Local markets have different histories and structures

The development of particular product markets will have different histories in every country. They may be converging- usually because of the actions of the major multinationals- but their current situation may still vary widely. The brand share of even a leading global brand will vary across countries. There may, for example, be a very strong local competitor with an entrenched position. In such circumstances, goes the argument, a standardized strategy makes no sense.

Brands designed internationally are the lowest common denominator.

If a company tries to take all these differences into account, it will end up with a compromise- something bland that offends no one but delights no one either. This seems a convincing argument, but it is not clear how many companies actually work that way. There must be some sensible compromise between taking all national preferences into account and ignoring them completely.

Culture-bound and culture free

Products are said to be the culture-bound if their use is intricately tied up with some aspect of the country’s culture. Examples of products that are free of such associations are consumer electronics: we use a VCR in the same way regardless of our nationality and background.

Food, on the other hand, is thought to be intimately bound up with local culture, and indeed at first sight local markets for good products do vary hugely.

Figure 3 Types of Brands

Source:

Randall, G. (2000), Branding. A Practical Guide to Planning your Strategy, Kogan Page Ltd., p. 127.

If the culture variable is combined with the availability of economies of scale, as in figure 1, we see that food has low economies of scale and is culture-bound; it is however difficult to establish global food brands. VCRs, however, do enjoy economies of scale and are culture-free, so global brands are feasible.

        Yet, we must look at the evidence of Coca-Cola and McDonald’s, both global brands. How it has gone in a particular case will need to be determined by analysis. What is more difficult is to predict the dynamics of change: how quickly will convergence happen, and what effect will the activities of global brand marketers have.

Country of origin

We have been talking of global brands as if they were stateless. Perhaps some are, but for others their country of origin is significant.

For example, many famous global brands- Coke, McDonald’s’ Levi’s, Marlboro- could only be American. Their “American-ness’ is an essential part of their appeal, and consumers are buying into a small piece of the American way of life. Likewise, luxury brands from France, both haute couture and drinks such as cognac and champagne, have a unique cachet that comes from their origin. Italian fashion brands such as Gucci would be less powerful if they came from England. German cars and industrial engineering products gain an additional value from their origin, as do Japanese consumers products such as electronics and cameras.

Some brands seem local, if they are known to b international. Many people in Britain will have thought of Ford, Vauxhall or Hoover as British, thought they are all American in origin or by takeover. This, say some, is the real challenge in the future for aspiring global brands; to have the authority of internationally acceptable brands while appearing local enough to be “ what we want here”.

Arguments for a Global Strategy

Going global is always going to be expensive and difficult, but seems a prize worth aiming for;the reasons are various.

For many service firms whose clients are international- advertising agencies, accountants, consultants- a global network is becoming a necessity. Any firm that wants to serve the biggest clients has been forced to set up local offices around the world, or to develop alliances with other firms to provide global reach.

Competition

The fact that competitors are going global is undoubtedly a challenge.  A firm may have to compete on a global scale, either to defend its domestic market against global competitors with scale advantages or to take advantage of new opportunities in new markets before competitors establish themselves.

Profit opportunities

If successful brands cannot be transferred rapidly to as many markets as possible, profit opportunities are foregone. Procter and Gamble found that, without central control, some successful brands were not introduced into major European markets for up to 12 years after their initial launch. The first mover advantage may also be lost, leaving the firm playing catch-up in too many important countries.

Strategically, these are all very real pressures. Firms risk being left behind, caught in a cycle of increasing threats and decreasing opportunities, facing only decline. But going global is also risky. How do they know they will succeed?

Sustainable competitive advantage

The firm must be absolutely clear that the brand has some differentiating advantage over the competition it is likely to meet in all its markets. Making this judgment demands a high degree of objectivity, and the commitment to maintain the advantage against imitation and attack.

Economies of scale

The production cost function is not always linear, that is, cost do not necessarily fall steadily at the same rate as volume increases. There are likely to be steps, where costs rise steeply in the short term as production is raised to a new level. It must be clear that when the planned- or desired- level of international sales is reached, costs will be at a level that allows the company to compete with rivals.

As it was noted above, the segment does not have to be the same size everywhere, but it must be big enough to support the brand in enough markets.

Going from a multi-country to a global operation is impossible without radical changes in the organization, often consistent ones.

The First Steps

 There is of course no magic formula for developing a global brand, but evidence suggests that some approaches offer better chances of success than others do. There will always be counterexamples of successful brands that have followed different rules- and unfortunately failures that have apparently done everything

Develop the brand strategy in one place

The total shape of the strategy – essence, values, identity, point of difference, positioning, target segments, mix- must be developed. The drivers may be technological or market led, but the total brand must be taught through. This needs to be done with a concrete set of consumers in mind, and it seems to work best if it is done in one specific place. This does not mean that consumers in the global market place should be ignored; they must be kept in mind, but the lowest-common-denominator danger must be avoided.

Exactly where this should be will depend on the market. Frequently it is the company’s home market, where it ought to have most knowledge and understanding. In a global, multiproduct firm, that may not apply to all product fields, and there are two other criteria. The first is the location of the expertise: some country teams are better than others in certain product fields, and it makes sense to use that to advantage.

• Check against all important target markets

The brand strategy must be checked for major negatives in the markets that will account for the majority of sales. The brand essence is the key; as we have seen, minor variations in the physical product need not detract from a consistent brand proposition. The only absolute barriers are those that cannot realistically be overcome in an acceptable time-scale, for example:

• Consumer taste that is likely to resist short-term change

Entrenched local opposition that will fight back strongly against the most determined attack

• Government regulation that cannot be altered
• Lack of existing suitable distribution channels
• Check elements of the marketing mix for major markets

All elements of the marketing mix should be checked, again in the major markets, against the need for unavoidable adaptations. Only the brand essence and expression are fundamental, though the advertising strategy- which should state how the brand essence is to be communicated to the target audience- is intimately bound up with that. Truly global brands such as Gillette Sensor have a global advertising platform- The best a man can get. On the argument rehearsed above, if one best strategy has been developed, adaptations should be accepted only on the most compelling evidence.

• Choose a suitable name

The name is central to many brands, but it is becoming ever more difficult to find suitable global names. If an ideal brand name is four letters long, then there are very few words left that are suitable, that is, that are:

1. Pronounceable in all languages
2. Have no negative connotations in any language
3. Are memorable
4. Are at least not inconsistent with the brand essence

There are many examples of names that turn out to have unfortunate meanings in some other languages: the most printable is the Vauxhall/ Opel Nova, which means “does not go” in Spanish.

The days when George Eastman could invent “ Kodak”- a short, memorable, meaningless name- and take it all over the world, may be over. Words or even phrases that can be translated may be a better bet, though it is probably also worth trying an existing name even if at first sight it causes problems. Dove soap was launched in many countries, but the company was aware that the world in Italian means “where”- which seemed hardly appropriate. But local managers felt that this was not a barrier, and turned out not to be.

• Select countries for launch and roll-out

Either way, the cumulative effect should be greater than totally separate brand spending.

For example, Unilever is using the “ Elida Institute” as an umbrella for hair care brands and the “ Pond Institute” for skin care.” From the Elida Institute”, like “ From Laboratories Garnier” is a tag line in each brand advertisement that will gradually establish the pillar brand and its values- which can then be spread to other new sub-brands as they are launched.

The other gain from such an exercise is clarifying the exact function and objective of each brand. Some, for example, may be destined to be global brands, other regional or local. Some will be aimed at the number on or two spot, some at niches, some perhaps as fighting brands- low cost, low price, positioned against the own label. Such clarity will help reduce unnecessary and wasteful overlap and should sharpen the focus of each brand.

        

   3.3Brand consolidation

 Frequently, it is either by accident or lack of coordination that multiple local brands result. Despite the advantages offered by the multiple-brand strategy, it may be desirable to consolidate multiple brands under one brand when the number of labels reaches the point of being cumbersome or confusing. National Bank Americard used to issue cards around the world twenty-two names before consolidating them all under the Visa umbrella. Unilever markets a vast array of beauty, home-care, and food products under numerous names. Some of the its well-known brands include: ice cream ( Breyer’s Good Humor), soap ( Dove, Caress, Lever 2000, Lifebuoy), hair care ( Suave, Thermasilk), oral care ( Close-Up, Pepsodent, Aim), fragrances ( Calvin Klein, Elizabeth Arden, Elizabeth Taylor ), and personal care ( Vaseline, Q-tips, Pond’s). However, this portfolio of 1600 brands, although well recognized, has proven to be unmanageable. So,Unilever has decided to focus mainly on some 400 brands while eliminating up to 75 percent of its products.

        Another way of consolidating the brand franchise is simply to drop weak brands. Assuagh-SSIH weeded out all but its most prominent watch brands. Its Eterna brand, for example, was never marketed in the USA, and that brand was eventually sold to another company.

        Brand consolidation on a global scale is a strategy that has been debated. As in the case of Scott Paper Co, the company felt that the Scott name, just like Coca-Cola, should command respect all over the world. In addition, global branding  would allow Scott to use common advertising messages internationally saving costs. So the company has been phasing out local brand names in its eighty national markets. Even Andrex, a top selling toiler tissue in England, will suffer the same fate, thus diluting or destroying the goodwill that has been earned.

When a marketer wants to change brands or consolidate them under one brand in order to unify all marketing efforts, the process is complex and extremely costly on an international scale. Although a unified brand across frontiers provides cost savings by eliminating duplication of design and artwork, production, distribution, communications, and other related issues, such a change is fraught with pitfalls and, if not well planned and executed, can cause more problems that it solves, Nestle uses a gradual, evolutionary process in preparing its European brands fir 1992. Its package-design unification involves having the Nestle name appear along with the local brand. The Nestle name will be gradually enlarged over a period of four or five years until it replaces the local brand names entirely.

        Another kind of problem presents when a brand is well known but the corporate name is not, complicating communication for the company, In this situation, it is probably easier to change the corporate name to fit the better-known brand name, a strategy used by Sony, Aprica, Olympus and Amoco.

        Nissan’s name change, in comparison, was risky because it followed an opposite route. Nissan’s half-hearted entry into the US market led to the use of the Datsun name to avoid embarrassment in case the effort failed. However, the company was also unhappy that the proud corporate name was not as widely recognized as its Datsun brand, which enjoyed an 85 percent recognition rate in the USA ( compared to 10 to 15 percent for Nissan). The company decide to institute a worldwide brand by phasing out Datsun and phasing in Nissan. Some critics questioned the move because the change cost Nissan $ 150 million. Furthermore, years of good-will gained from the Datsun name would be lost. To minimize this problem, both Nissan and Datsun names appeared together at first. Its initial TV commercials and print advertisements emphasized that Datsun was a product of Nissan.

        It is debatable whether the corporate name and the product’s name should even be he same. When the name is the same, a brand that performs poorly or gains notoriety through bad publicity hurts the corporate image as well, since the images of the corporation and the product are so intertwined. Firestone is a prime example of how a brand could damage the same corporate name due the accidents caused by its tires. The strategy is even riskier for fashion products because fashion comes and goes. Using the same name, however, is a relatively safe strategy and should work well if a firm has good quality control and the reputation of its nonfashion products has withstood the test of time.  

        Brand consolidation is never an easy process, especially when well-known brands have to be replaced. Because of BP’s acquisition of Amoco, BP Amoco has rebranded Amoco gas station to erase the Amoco name from all 9000 stations in the USA. The decades-old Amoco torch has been replaced by a new, lower-case BP logo and go eighteen-point green and yellow sun. The remodeling of all 19.000 BP stations worldwide is expected to cost up to $4.5 billion over four years. The 1725 recently acquired Arco stations are keeping the Arco name.

 

 

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