Global Branding: Definition, Pros, Cons and Impressive Examples
Global branding is a dream for many companies. However, is it time for you? Consider its basics, pros, and cons to see if it fits your brand right now.
Building brands without borders like Apple, Coca-Cola, or Dell is a challenging experience. However, it does not mean that you, a small firm in the local town, cannot make it. The beauty of creating a high-quality brand identity lies in that everyone has a shot at reaching for the stars and turning their startup into a multinational conglomerate that everyone knows and loves.
Thanks to the Internet, Worldwide delivery, and numerous distribution channels and means of communication, every business can consider the entire World as their target market. The gaps are bridged in 2022; even the pandemic could not stop this mainstream. Therefore, if you dream of becoming as famous as Microsoft, it is time to fulfill it. Though do not rush things, there are still some obstacles to overcome.
Global branding is not the cheapest thing, nor is it a simple task. To achieve success in this mission, first and foremost, you need to find the best global branding agency that meets your requirements and fits your budget. Second, you need to be 100% sure that this is what you need at this particular stage in your company's lifecycle because not only an enormous devotion and commitment to the cause will be required from your side but also a thorough understanding of the potential needed for adaptation in international marketing.
For those who are unsure, we are going to clear things up. Let's dive a bit deeper into the definition of global branding, find out global branding advantages and disadvantages, and examine some excellent international branding examples.
Global Branding Definition
As globalization is becoming more and more tangible every day, and the World is becoming more and more connected, more and more companies are starting to consider global branding as a real thing and the next step to take. However, before doing this, it is crucial to understand the concept of world wide branding and the reasons to embark on this adventure?
What Is Global Branding?
Global brand marketing is a management of a brand in different countries with a consistent mission, personality, look and feel. This process involves planning and developing a global branding strategy, positioning, and advertising that ultimately turns a local brand into a global one.
Let's define global brand since it is the central pillar of global branding.
What Is a Global Brand?
The global brand is a company recognized across the World or the most significant part of it. It has a unified approach to global brand strategy to increase its strength and recognition in the markets as well as support its development in new regions.
Companies with global branding and positioning use a similar approach in presenting and promoting their products and services. While some stick to the standardized global branding strategy enforcing unified policy and actions from country to country, others adapt their brand identity, including packaging and even the product itself (for example, flavors), to the local market due to cultural differences and language nuances. Take the US-based Lay's potato chips company as a case in point. Not only is it sold under different names in different countries, but its flavor range also varies depending on the country's preferences.
As a rule, branding in international marketing may force changes in such spheres as:
- The message. Social trends, customs, and culture of the particular region may require adjustment of the slogan or catchphrase to help it better resonate with the crowd and evoke the needed gamut of emotions.
- The pricing policy. This is the first aspect of the strategy that changes to fit the market's economic potential.
- The product range. Some of the products and their aspects are altered to fit the customers' preferences and expectations.
- The business model. Due to differences in local regulations, tax structures, culture, and trends, companies may change the business model. This process is widely known as localization. Let's consider it a bit closer.
What Is Localization?
Localization is a crucial part of global branding adaptation. It is the act of adapting elements of your brand identity to the selected region. It aims to make the product and company (including its visual identity and personality) resonate with the target audience by incorporating elements of their specific culture in their communications to meet the market's preferences, expectations, and needs.
Localization is not just a fancy word for "translation." It is a full-scale adaptation that underlies global marketing initiatives and helps the company blend into the new environment. It considers social values, economy, technology, legislation, culture, customs, and even current trends within the particular region.
Why Is Localization Important?
Consider these stats:
- More than 40% of internet users buy only from websites in their native language.
- More than 60% of those who speak foreign languages fluently still prefer to buy products in their native language.
- Almost 50% of users fear they miss something important when the content is not in their native language, causing mistrust in the brand.
Localization is crucial to meet customers' demands. On top of that, it comes with a range of benefits. Let's consider how it can be helpful:
- It establishes transparent relationships with the customers.
- It inspires trust and loyalty.
- It levels up the company's credibility.
- It helps create products that resonate with the target market and, most importantly, evoke the necessary gamut of emotions.
On top of that, well-thought-out localization does such crucial things:
- It allows entering new markets more rapidly.
- It helps the company provide global users with unique and tailored local experiences.
- It ensures rapid and flexible deployment of products in the target region.
- It helps to overcome cultural barriers.
- It avoids misunderstandings that may lead to drastic outcomes. Just remember KFC's "finger leaking good" that in China was translated as "eat your fingers off" – not a good start, that's for sure.
- It eliminates unexpected issues.
- It increases engagement.
- It widens the target market.
- It opens new possibilities.
- It increases customer satisfaction.
- It helps the brand grows faster.
Although localization offers a range of benefits, making it the most popular approach among brands, there is still an alternative. You can also use standardization to go global.
The global standardization strategy implies unified marketing campaigns and strategies and delivering the same message to create a consistent customer experience around the World. The most popular companies that adopt this approach are McDonald's, Starbucks, and KFC.
Its main advantage lies in practicality, established consistency, and low cost since you require fewer campaigns.
As for the main drawback, you may meet some problems with the local crowd caused by cultural differences and customs that may eventually negate all the efforts. For instance, even though McDonald’s has introduced some local flavors in Vietnam branches, it still did not win over the market due to its firm pricing policy.
Therefore, quite often, standardization and localization work side by side.
Reasons to Go Global
As we have already noted, global brand recognition is not the cheapest thing, nor is it a simple task. You need some strong reasons to develop and, most importantly, adopt global branding solutions. Let's examine some motivations to go for international branding:
- You have already successfully competed locally.
- You have overgrown the local market.
- You have rolled out the new product for the new region.
- You have a product that will fill the gap in the global market.
- You need a competitive advantage over others.
- You have the resources to expand your sphere of influence.
- You want to increase your customer base.
- You want to rake in more cash.
Advantages and Disadvantages of Global Branding
Whatever reasons you may have to start your global branding campaign, one cannot deny that the World does become flatter, making it a tiny place where everyone is connected through the Internet. This offers a golden opportunity for companies to widen their market even when they are just at the beginning of their lifecycle. However, before taking any steps in this direction, it is crucial to understand all the pros and cons of this move. So, what are the advantages and disadvantages?
What Are the Benefits of Global Branding?
Expanding your business on an international level and marketing it on a global scale brings numerous advantages, the most crucial of them are:
- It creates a substantial competitive advantage.
- It widens the target market.
- It increases customer awareness.
- It increases brand value.
- It provides stability.
- It generates high revenue.
- It offers savings.
- It opens new opportunities to grow.
Let's consider each one closely.
It Creates a Substantial Competitive Advantage
First and foremost, global branding provides its owners with a substantial competitive advantage over others. The idea behind this is that with international exposure, your products and services look more desirable than the competitor's ones.
Everyone wants to have a product acknowledged by a huge crowd - it is in human nature. Therefore, people are becoming more loyal and devoted to the company turning into fans and loyal customers.
On top of that, when you prove to everyone that you can compete with famous names in the big market, you improve your company's credibility and reputation. And as we all know, the latter is an influential factor in the decision-making process. The stronger your reputation is, the more chance you will have to persuade your potential clients to buy your products, even the new ones. Reputation goes a long way.
It Widens the Target Market Significantly
The second significant advantage of global branding is broadening a target market.
The more potential customers you can reach, the more chances you will generate leads. By widening the target audience, you increase your revenue and cash flow potential, escalating revenue and bringing more investment in marketing research and new product development.
On top of that, the more places your brand is recognized, the more potential customers may become loyal fans. Some of them may start word of mouth, which is the cheapest channel to acquire new clients; others may create a buzz in social media, giving your company free exposure. Widening the market opens up enormous opportunities for growth.
It Increases Customer Awareness
Global branding implies wide familiarization with the company's distinctive qualities, products, and image. That means it dramatically increases customer awareness of your brand, providing such benefits as:
- Reinforcing brand equity.
- Increasing customer loyalty, thereby generating warm leads and sales.
- Increasing the visibility and recognition of the brand.
- Keeping your brand on top of mind, making retention campaigns more effective.
On top of that, when customers are well-informed about the brand, even the new product may generate buzz and bring positive ROI, simply because your reputation and their previous experience with your company win them over.
It Increases Brand Value
Global branding increases brand value because, in people's minds, it turns into a big, serious player whom they can trust and whose products can become their invaluable assets.
The strong brand value, in its turn, provides lots of benefits. For instance, it creates an emotional connection between the company and clients, cements the relationships between these two parties, improves brand equity, and differentiates the company from the others. It also backs up wide recognition and sales potential.
Finally, it is easier to raise findings or find investors to give your startup a necessary boost to move forward.
It Offers Stability
While serving a local market, you may stay ignorant to the desires of the outer World; when it comes to global branding, living in a vacuum is impossible. Internalization of the company forces owners to follow the streams and trends to stay afloat.
The more attentive you are to the market's fluctuations, and the quicker you adapt to them, the more stable your company will become. This stability and consistency improve reputation and reinforce the relationships with the customers making the company look and feel reliable and trustworthy.
It Generates High Revenue
The average converting rate fluctuates between 2.5 and 5.5%, according to stats. The math is simple, to generate more cash, you need more leads, ipso facto broader market. Therefore, widening your target audience and turning prospects into brand evangelists ensures high revenue potential.
On top of that, by reinforcing the brand's perception and increasing brand awareness, you influence the decision-making process that may easily double the average conversion rate.
It Offers Savings
Taking into account universal customer needs and insights, global branding inspires companies to find one-size-fits-all solutions reducing costs on creating different products or developing numerous campaigns, thereby achieving better ROI.
It ensures savings when it comes to advertising since, as a rule, advertisement campaigns stay consistent from region to region.
Digital marketing also becomes more cost-effective because companies create similar emails and landing page layouts.
Last but not least, with a strong brand identity and global perception of your company, you may save money on onboarding and training. You can lure more talented folks, thereby having fewer but more professional staff under the roof.
It Levels Up Product and Company
Global branding may cause significant transformation in products and services to meet the universal customer needs. It leads to improved customer experience, better ergonomic designs, and elimination of things with low ROI forcing you to focus on products or services with more considerable potential.
It also pushes companies to meet global standards, improving products and all critical aspects of relationships between clients and brands.
It Opens Up New Opportunities to Grow
Exploring new markets and getting acquainted with current demands and expectations opens up new opportunities to improve your brand and product as well as find new ways to grow. You may easily find regions where your product will be in-demand, quickly occupying a niche for yourself.
On top of that, diving into new cultures and trends gives a colossal inspiration and boost to update your existing portfolio with new products and services or take old products to a new level by upgrading them or introducing new features.
What Are the Drawbacks of Global Branding?
We could not help but mention the drawbacks of global branding because they need to be minimized to enjoy the benefits. Let's consider the most critical ones.
Globalizing the brand is a costly thing. Even though you can embrace some DIY approaches like starting a Facebook ad campaign or generating buzz on Twitter, nevertheless when it comes to establishing your company worldwide and making your business official in other regions and countries, you cannot do without a team of professionals who know a thing or two about this stuff.
Considering your goals, brand values, product portfolio, target audience, and financial potential, it will develop a reliable strategy for your company. Therefore, be ready to spend a wealth of resources on researching, analyzing, planning, and developing strategies to define the best option for you. These acts incur some considerable expenses along the way that, unfortunately might not pay off in some cases.
It Is a Long Process
As a rule, brand globalization is not a one-time thing. It is a long, ever-evolving process that may take years and years of intense work. During these years, you need to show the whole devotion to the cause since, like it or not but you will face various challenges that might considerably prolong your path to success.
Each country has its laws and regulations. You cannot ignore them since violation of laws leads to drastic consequences that bring monetary loss and tarnished reputation. And the latter takes lots of time, effort, and resources to be completely healed.
It should also be noted that some brands may face the resistance provided by the local legislation to protect the local market.
Although legal issues, as a rule, are successfully addressed nevertheless, they still cause lots of problems and slow down the globalization process cardinally.
As we have already pointed out, localization lies above simple translation. It is an adaptation. To help your product blend into the new market, it should not just speak the native language, but it also needs to resonate with the local crowd, understand local customs, and make the most out of the current trends.
Localization can be tricky, timely, and costly. Sometimes it even requires reconsideration of some important moments of the strategy and campaign.
Chances are, your product is not the first in the new market. Going worldwide means facing new competition that may have already carved a niche for themselves. This causes in-depth research and analysis of the market and competitors to find ways to overcome this obstacle.
The local economy dictates rules making brands change their pricing policies. Consider Steam, a video game digital distribution service. Prices between Eastern Europe and North America drastically vary there because Valve's policy forces companies to sell their products cheaper in some regions to meet the local economy. Therefore, you need to be ready to reduce your price in some areas to meet the local budget.
To Sum Up
The harsh truth is, there are thousands of stories of failures than successes when it comes to international brand marketing. The deal is, companies constantly overestimate their capabilities because they are seduced by a wealth of benefits that international branding offers. However, everything is not that simple and rosy.
This step requires serious and detailed consideration, meticulous planning, thorough market research, total devotion, and commitment. Remember, with great power comes great responsibilities. To enjoy those advantages, all the risks need to be taken into account as well as all the disadvantages need to be addressed or at least minimized.
Also, it should be noted that your company has to be ready to face some unexpected events like pandemics that almost destroyed the Travel industry in 2020 or political strife and events like Brexit that forced many brands in 2016 to reconsider their global strategies.
Types of Global Branding Strategies
Before moving into global branding examples, let's consider the most popular and time-tested strategies:
- Solo branding. The approach implies that each product has its brand name. It is used to target specific market segments and consumer groups. The food industry is famous for adopting this strategy.
- Hallmark branding. Unlike the previous one, this approach does not use sub-trends. It tags only the corporate brand and uses the same brand name for all services and branches. Banks all around the World prefer this strategy.
- Family branding. This approach requires the company to focus on the parent company brand name to associate the corporate name with all its branches. This transfers the qualities and reputation of the leading brand into its products or units. Apple and other representatives of the tech industry are aficionados of this approach.
- Extension branding. Companies with pre-established brand identities widely use this approach. They extend the same branding (thereby transferring their reputation and overall image) to other products, widening their scope of expertise. For instance, Ferrari has extended its company from exotic sports cars to theme parks.
Successful Global Branding Strategies with Examples
There are many famous global brand examples. However, we will consider the best, covering all significant niches and market sectors.
Although McDonald's has failed in Vietnam, it does not mean it is not one of the brightest representatives of global branding. It occupies the leading position in internalization, with yearly revenue of $21.076 billion.
Sitting pretty in the fast-food industry, it serves over 70 million customers daily through more than 38,000 restaurants in over 120 countries. Its worldwide expansion started in 1967 in Richmond, British Columbia, Canada, and it is still on.
The company is famous for its standardization marketing strategy. All the restaurants look the same regardless of region. However, they smartly combine standardization with localization by introducing flavors and tastes that are native to the country in order to adapt to the local market.
According to recent studies, Apple considers the most significant information technology company by revenue. Last year it earned a staggering $274.5 billion, ten times more than McDonald's. However, its geographical coverage is much smaller: it has just 516 stores across 25 countries worldwide.
Nevertheless, this does not stop it from being one of the most popular companies in the World, whose brand is associated with sophistication, perfection, elegance, and minimalism.
When it comes to global brand strategy, the company also relies on standardization; however, like McDonald's, they do it with cultural awareness. Of course, they do not change their products or packaging. Nevertheless, their flagman stores are made in a way to meet customers' preferences and expectations.
The biggest online marketplace for arranging or offering to lodge, Airbnb is another global brand example to consider. It is a total success with listings in over 190 countries and 34,000 cities worldwide. However, its worldwide expansions have not been smooth all the time.
Even though the platform took the Web by storm ten years ago, meeting the market's growing demands, nevertheless, it had some tremendous obstacles. For instance, it still has trouble finding its footing with German officialdom because the authorities have taken an aggressive stance towards the platform.
Though, those legal issues did not stop it from generating more than $3 billion last year and connecting hosts and travelers even during the pandemic. As for the marketing strategy, the team is a big fan of localization, making services accessible around the Globe with the help of proper translation and adaptation to customers' tastes.
Netflix, a streaming giant, operates in 190 countries around five continents.
Launched in 1997, it was just a local library of films and television series available through distribution deals in the US. Its global expansion started in 2010 when the company opened its branch in Canada. It took the company six years to expand its sphere of influence. Nowadays, it has over 214 million subscribers worldwide. So what is its secret?
The secret lies in a well-thought-out global brand strategy developed by Gibson Biddle, VP of Product Management. He has introduced three simple and powerful tools for brand globalization: the unique Positioning Model, the Branding Pyramid, and Concept Summary. Stemming this strategy from his ability to delight customers in margin-enhancing ways, he was managed to turn a simple startup into a World's top international company.
Microsoft tops the list of the most valuable global brands in 2020 with a total value of 165 billion, occupying good third place. Although it did not have such a bright start as Tesla that was managed to increase its capitalization by 769% in just one year (it took the company a decade to become an international company) nevertheless, it is undoubtedly a story of a successful global brand whose products are widely-recognized and used across five continents.
The Microsoft marketing strategy makes the most out of traditional tools. The team uses demographic and behavioral segmentation strategies and a mix of differentiated and undifferentiated targeting strategies to nail marketing's 4Ps (product, place, price, and promotion) in each region.
To understand the very global branding definition, it is essential to dive into its main aspects like the meaning of the worldwide brand, localization, standardization, and traditional internalization strategies, as well as mull over its advantages and disadvantages that give insights on how companies can benefit from going global and what consequences they may suffer in case of failure.
Big brands teach us that earning your slice of the global pie is a true challenge. Even the vast, well-established, and renowned names, like McDonald's, are prone to failures since many nuances need to be taken into account and obstacles overcome in time.
The critical takeaway is not to grow faster than your popularity, determine the best time in the company's lifecycle to take the step forward, prepare to give all your efforts and resources, make total commitment and devotion, and last but not least, find a reliable, professional brand agency that will do all the heavy lifting by providing a solid foundation and carving out your path to success.