Global Branding – Distinctions and Imperatives

Tung-lung Steven Chang
Fifth SGBED Research Symposium
Nanjing, China
11-12 December 2015

Outline
Jaguar and Zulily
Global Branding: Imperatives and
Distinctions
Global Branding in China

Ford’s Acquisitions -- Jaguar & LR
 Acquiring Jaguar at $2.5 billion in 1989, Ford
hoped to turn Jaguar into a high-volume brand
that could compete with BMW and Mercedes-
Benz.
 Made huge investments in manufacturing
technology to increase quality and reliability of
Jaguar via its platform policy.
 Ford bought Land Rover for $2.7 billion with
similar intention in 2000.

 Ford introduced Jaguar X-
Type (Mondeo engine) sedan
in 2001 to lure younger
buyers. It was sold poorly due
to its conservative styling.
 Land Rover placed last in J.D.
Power’s 2007 rankings of
initial quality and
dependability.
Ford’s Branding Results for JLR
Sales Trajectory in US
Jaguar
Land Rover
Facts – The feeling of exclusivity was eroded. JLR
prestige and emotional attachment declined.

If Branding Can Be Done Right
Jaguar and Land Rover were sold in 2008 to Tata with
some doubts.
 Jaguar brand alone saw sales surge 42% globally in
2013, with Canadian sales up a stunning 96%.
 JLR overall sales were up 19% to 425,006 in 2013,
and 462,209 in 2014, est. 500,000 in 2015.
Lesson –
Tata Group has preserved and build on the heritage
and competitiveness of JLR brands, while keeping their
identities intact.

Zulily’s Branding in e-Retailing
 IPO at $22 in Nov. 2013.
 Offered some promise of differentiation by selling
clothing from lesser-known brands.
 Peak at $73.50 on 28 Feb. 2014.
 In its eagerness to keep growing, Zulily began to add
more established brands.
 This led to greater churn as shoppers looking for big
labels could easily buy them elsewhere, including on
Amazon.

Zulily’s Branding Lesson –
Co-exist with the Giant
 Zulily’s trajectory shows the risk of losing branding
focus in e-commerce.
 QVC Group ( of Liberty Interactive) proposed to
acquire ZU for $18.75 a share on 18 Aug. 2015. The
deal was completed at $2.4B on Oct. 1, 2015.
Lesson –
Being an e-commerce company in the U.S. has
increasingly come to mean one thing: figuring out
how to coexist with Amazon.

Global Branding:
Distinctions and Imperatives

Research on International Branding
Source: Adapted from Whitelock & Fastoso (IMR 2007)

Global Branding Imperatives
 Brand name: Standardization vs. Adaptation
 Brand architecture: e.g., Douglas, et al. (JIM
2001); Townsend, et al. (JIBS 2009)
 Brand positioning: e.g., Wong & Merrilees
(IMR 2007)
 Brand portfolios: e.g., Schuiling & Kapferer
(JIM 2004)
 Brand execution: e.g., Aaker & Joachimsthaler
(HBR 1999)

 Differentiation vs. Identity
 Competing via “comparative differentiation”: Coca-cola as
“the real thing”; while Pepsi as “young people’s drink”
 Competing via “superlative identity”: Chanel as “a Dream of
Identity”1; while Christian Lacroix as “the image of bright
sunshine with the culture of Mediterranean”
 Perfection vs. Authenticity
 Competing via “utilitarian function”: Seiko and Lexus as
“functional excellence”
 Competing via “hedonistic symbol”: Hermes and Ferrari as
“symbolic status”
Brand Distinctions

Building Global brand leadership
 Stimulate the sharing of insights and best practices
across countries
 Support a common global brand-planning process
 Assign managerial responsibility for brands to
create cross-country synergies and to fight local bias
 Execute brilliant brand-building strategies
“Managers who stampede blindly toward creating a
global brand without considering whether such a move
fits well with their company or their markets risk falling
over a cliff.” -- Aaker & Joachimsthaler

Marketing the Brand Heritage –
Chinese consumers appreciate and make buying
decisions based on the rich cultural heritage
associated with the brand.
Gieves & Hawkes, for instance, is viewed in
China as high class and high quality due to its
history of being the ceremonial uniforms supplier
of the British Royal family, British Army, and Royal
Navy.
Consumer Tastes for Brand Heritage

Play down China Luxury Risk
 Despite the risk of economic slowdown in China,
Hermès expects demand for its pricey handbags
and fashion to remain resilient and grow 8% this
year.
 Hermès reported strong sales/profit growth for
the first-half of 2015. Global sales [Net profit]
rose 22% [17%] to €2.3B [€483M, up from
€413M in 2014].

Strategic Shift in Global Expansion
Shifting from Scale to Productivity –
Some global luxury retailers are scaling down
their store expansion and focus on revamping and
upgrading existing stores in China due to slower
growth in the luxury sector, including Louis
Vuitton, PPR Group’s Gucci, Burberry and
Richemont.

Chinese Consumers’ Brand Interactions
 Chinese consumers are becoming more technology
savvy and are increasingly using social media to find
and interact with brands, and post comments on
their products.
 Consumers in China are more actively engaged with
social media: 57% of Chinese shoppers followed the
brands on social media, while the global figure was
38% (PwC).

Global Branding Endeavors
Define benefits and experiences that make brands
relevant, distinctive, and credible to customers, and
develop strategies to differentiate brands through
superior positioning relative to competitors.
Strengthen brand and market position (reposition)
through streamlined marketing communications.
Use digital marketing and social media effectively to
meet business goals via deep media data and
analytics.

Digital Marketing in China – J & J
Social media marketing–
In 2013, 15% of its ad spend was digital; it will be over
40% in 2015. (ahead of China's general internet ad
spending share)
Real-time marketing (FIFA 2014)
Digital marketing for Captive Audience (China 2015)
Digital storytelling of philanthropic campaigns
(China 2015)

Gloria Struck
Live Your Dreams!

Global Branding – Distinctions and Imperatives

More Related Content

What's hot (19)

Viewers also liked (19)

Similar to Global Branding – Distinctions and Imperatives (20)

Recently uploaded (20)

Global Branding – Distinctions and Imperatives

Editor's Notes