Local Vs Global Brands: Perceptions, Preferences And Impact On Market Competition

The Role of Information and Communication Technologies in Branding

Discuss about the Global Brand Architecture Position and Performance.

The advancements that have been seen in the information and communication based technologies have led to the decrease of distance between various countries. The flow of information has become much more advanced in nature and this has further enhanced the management of the global operations of the organizations. The branding of a product plays an important role when the organizations plan to enter a new market area. The brands of an organization are used as clues by the consumers to take purchase related decisions. The consumers have been shifting from local brands to the global ones in the recent times. The perceptions of the consumers have changed quite a lot about the quality related factors of the local and the global brands. The local brands are those which are manufactured within the country (Talay, Townsend & Yeniyurt, 2015). The link between the individual well-being and the national economy is established with the help of the local brands. The global brands on the other gain a lot from the presence that they have in the international markets. The global brands are thereby marketed with the same name in many countries. The quality of the products or the brands that is perceived in the minds of the consumers plays an important role in the preferences that they have regarding the purchase of products. A global brand can thereby be defined as those which are recognised and marketed in multiple markets or locations of the world. On the other hand, a local brand is considered to be one which can be obtained only within the specific national market and is available in that particular region only. The local brands are preferred by the customers of they are able to identify with the products and they are being used by the other consumers in the same community (Xie, Batra & Peng, 2015). On the other hand, the global brands are perceived by the consumers to be of higher quality as compared to the local ones as they have their markets in multiple locations and the customer base is also stronger. The global presence of the brands is another major factor that gives the global brands more priority in the minds of the consumers. The brands are considered to be of higher prestige and they are preferred over the various local brands. The perceived quality, prestige and status of the global brands are perceived to be much higher as compared to local brands. The global status of the is associated with the higher esteem, brand quality and the ability to enhance the image of the consumers. The consumers mainly consider the global brands as symbols of the cultural ideas and they use the brand to receive the global identity which they share with the other consumers in the world (Winit et al., 2014). The brands have further been able to attain the status of the global icons and this has helped in increasing the awareness of the brand among the employees. The local brands also enjoy high brand equity and they benefit from the awareness of the products among the brands. The local brands benefit from the image of good quality and trust of the consumers. The value of the products is linked with the low prices that the local brands offer to the consumers. The local brands are also considered to be much more traditional than the global products as they are linked with the local culture and the local tradition. The most important advantage that is gained by the local brands is the trust of the consumers. The local brands are however not flexible in the marketing related activities when they compete with the international players. The global brands are however becoming much more powerful in the market as compared to the local brands in the modern business environment. The perception of the consumers is the major factor that can help in detecting the value of the global or the local brands (Heinberg, Ozkaya & Taube, 2016). The increased consumption of the global brands is fuelled by similarity which the consumers display between their preferences and habits. The consumer perceives the global brands to be value-added, either with the help of better quality or by further enhancing the self-perception of the consumers. The exclusivity and the eccentricity that is provided by the global brands to the consumers are related to their increased sophistication. The world has become a global marketplace due to the globalisation related activities which has changed the preference from local to global brands (Heinberg, Ozkaya & Taube, 2016).

Local Brands vs Global Brands: Definitions and Perceptions

The pioneers are considered to be those who have entered a new market area and are trying to set up a new business. On the other hand, the late entrants are those who enter the same market by developing products which are similar to that of the pioneers and provide tough competition to them. The pioneers enjoy a huge advantage over the late entrants in the new market area where they wish to operate. The late entrants on the other hand can succeed in adopting the marketing strategies and the distinctive positioning. The pioneers in the various industries are quite powerful when they establish their position in the market. They can however become complacent within a particular period of time and are not in the position to cater to the needs that are changing and the demands that are shifting. The new entrants on the other hand can take advantage of the gaps that are present in the market which are related to the offerings of the aging pioneers (Halkias, Davvetas & Diamantopoulos, 2016). The pioneers have a distinctive presence in the market and they need to be in a position to react to the potential entrants and the barriers to the entry. The late entrants therefore have a thorough understanding of the defensive strategies and the understanding of entry that are available. The pioneers have an advantage in the market. The costs related to entry in the new markets is quite high. These costs include, product innovation which require high investment in the development and research as compared to the imitation of products. The necessary education that is required about the marketplace and the testing of various forces are related to high costs with respect to promotion and advertising. The second entrant however enjoys the fruits that are gained by the pioneers in the market. For example, the organizations like Hewlett Packard Company have generated huge revenues as pioneers in the market (Wang, Cavusoglu & Deng, 2016). The late entrants are able to gain a lower share in the market as compared to the pioneers and early followers. This theory holds true for the various categories of products and the industries like the consumer goods, industrial goods and the pharmaceuticals. The early entrants enjoy a higher share in the market as the consumers are risk averse in nature. The consumers are generally not ready to switch to a new product if the old products provide enough satisfaction. The products that are developed by the pioneers sometimes become the prototype for the products and they are compared to the later entrants in an unfavourable manner. The consumers are able to learn the attributes of early entrants. The knowledge translates into stronger beliefs and confidence of consumers also increases. The early are successful in gaining the best available position in the market (Guo et al., 2018). The pioneers enjoy higher returns on the investment and the launch of new products in the market is used as a barrier to the new entrants. The situation in the market is not always rosy for the pioneers and miserable for the late entrants. The pioneers tend to lose the share in the market in some geographic areas and some of the industries as well. This issue can take place due to some major reasons. The lack of customer service provided by the pioneers can be a major reason for the loss of market share (Wilkie, Johnson & White, 2015). The changes that have occurred in the technologies can affect the pioneers and provide opportunities for the late entrants. The latecomers in the market can also take advantage of the pricing related policies of the pioneers. The late entrants are able to overcome the market-share disadvantages of the pioneers. The later entrants are able to differentiate themselves from the pioneers in the market with the help of promotion and product based strategies (Deng & Wang, 2016). The cluttered markets are much more prone to the confusion of the consumers and ways by which they react. The late entrants can also discover ways that are creative in nature so that the product trial can be increased. The late entrants can apply the concept of market segmentation and focus on the target. They need to provide appropriate value to the consumers of the selected segment. The different markets are based on the application of the different strategies. The late entrants can succeed if they attack the markets that show high-growth and when the shift in the industry is significant (Partanen, 2017). The late entrants are also able to use the option of micro-segmenting of the customer base. The analysis thereby depicts that the pioneers do not have the advantage in the markets in all situations when they are compared to the late entrants.

Advantages and Disadvantages of Local and Global Brands

The country of origin of the products are mainly related to the area where the products or the brands belong. The place from where the products belong affect the choice of the consumers regarding the product that they wish to purchase. The ratings that are provided to the countries of origin of the brands are based on the performance of the countries in various other areas. The consumers align the products or brands with their country of origin and this is important to associate the national origins of the brands with their quality, safety related concerns, ethical conditions of working and sustainability related issues. The concept of country of origin is based on various tangible and the intangible factors as well (Wilcox, 2015). The raw materials and the ingredients that are used for the manufacture of the products and the various emotional contributions to the products are related to the place where the products are made. The strongest brands based on their country of origin combine all positive factors and the brands belonging to weak country of origin mainly depend on the marketing related efforts that are made by the countries. The stronger countries contribute a lot to the reputation that their brands have in the market. The strong brands on the other hand also contribute to the notion that people have about the country from they belong (Balabanis & Siamagka, 2017).

The knowledge related to the country of origin is however not quite transparent in the global business environment. The major reason being that the global organizationa have their operations in multiple locations and the products are manufactures based on raw materials that are sourced from various regions or countries. This makes it tough for the consumers to decide the actual country of origin for the products. The supply chains of the organizations are integrated in such a manner which enables them to use raw materials from different regions of the world. The notions of the consumers related to the origins of various products have changed in the global business environment. The definition of country of origin has also changed in the 21^st century (Lu et al., 2016). The country of origin in this case can be the country where the product was manufactured or where the company has its headquarters. The products that are manufactured by assembling the parts from various countries are not related to any particular country of origin. The expansion of the country has led to the brands selling their products with identical brand names in various countries of the world. The country of origin however still affects the perceptions of the consumers related to the brands. The origin of the brands affects its sales globally like the other factors like, performance, quality of products, prestige and reliability can affect the consumer purchase decisions. The image of the country and the perceptions affect the ways by which the consumers evaluate the risk, likelihood and the other variables that are related to the purchase of the products. The familiarity that the consumers have with the products belonging to the particular country also affect the decisions that are taken by them (Kipnis & Broderick, 2017). The perceptions are further related to the process of manufacturing and the technological abilities of the countries. The country of origin related biases have been detected in the developed and the developing countries as well. The products that are manufactured in the less developed countries are considered to be riskier by the consumers as compared to those which are manufactured in the developed countries. The consumers who belong to the developed countries considered their local products to be much more reliable as compared to the products that are manufactured in the other countries. The product categories in which country of origin is given high importance are high-fashion clothes, perfumes, cars, wines, software and consumer electronics. The products belonging to these categories tend to adopt quality related standard from the country in which they manufactured. The examples that are related to country of origin related stereotypes are, Japanese goods are considered to more favourable in all countries (Aichner, Forza & Trentin, 2017). The goods that are manufactured in Canada are considered to imitable in nature and are compared to the American goods. The discussion therefore depicts that the effects of country of origin or COO has decreased to a large extent after the globalisation of the various organizations. However, the country to which the brands belong still affect the perception of the consumers and their purchase related decisions.

Pioneers vs Late Entrants: Competition Strategies in a New Market Area

The international marketers need to face many challenges when they plan to expand the operations of the organizations in various other countries. Global village is getting smaller day by day and this has further compelled the marketers to consider the differences between the markets, countries, economies and the behaviour of consumers. The international trade is able to expose the marketers to many challenges that are unique in nature. The differences in cultures of the various countries has however been a major challenge that has been faced by the international marketers. The marketers thereby need to have adequate amount of knowledge about the areas where the cultural differences occur in the country (Deresky, 2017). This can help in formulating ways by which they are able to adapt to the approach and the marketing materials in the country. The marketing efforts need to be planned based on the issues that can occur due to the diversity in culture of the different countries. The marketing strategies and campaigns need to be developed in such a manner so that the company is successful in creating values for the consumers and ensure the success of the brand.

The cultural dimensions of the countries can also be analysed with the help of the model that has been developed by Dr. Geert Hofstede based on the cultural dimensions of the countries. The six dimensions that are a part of this model are, power distance, which is related to the ways by which the people of the country responds to power. Individualism, which is mainly related to the care that the citizens of the country take of each other. Masculinity is another dimension which is based on whether the culture believes in the male or female equality (Christodoulides, Cadogan & Veloutsou, 2015). Pragmatism is related to the tradition of the country and indulgence is based on the extent up to which the people are able to control the desires. The international marketers can use these dimensions in an effective manner to understand the differences between the cultures of the two different countries. The marketers need to conduct extensive research about the area or country where they are planning to expand the operations.

The support team that will be built for addressing the needs of the consumers also needs to effective in nature so that the organization is able to understand the needs of the consumers. The messages related to marketing need to be built in such a manner so that it is clear and concise for the consumers of the different countries. The media through which the company wishes to promote its products will also be based on the cultural dimensions of the country and the ways by which the people behave (Cleveland et al., 2016). The entire world is made up of smaller markets and the economic conditions of the different countries also vary from each other. The brands need to make changes in their styles of business and offerings when they plan to enter a new market area. The cultural barriers that are present between the countries need to be understood deeply by the consumers. These barriers can further affect the performance of the business in the different countries. For example, IKEA is a successful organization in its origin country and various other similar market areas. However, the company had to make significant changes in the products that it offered and the business style before entering the US market. These changes were made to increase the cultural appeal of the brand (Verbeke & Asmussen, 2016). The purchase related decisions of the consumers are also based on the culture that they belong to. The preferences of the consumers are affected by the culture that is followed in the country. The marketing strategy which works successfully in Dubai may not work in the same manner in America. The needs of the consumers are based on the cultural differences of the countries. The marketers therefore need to formulate their strategies accordingly so that they are able to cater to the different needs of the consumers in different countries based on their cultures. For example, the advertisements of the global brand Cadbury will be different in the countries which belong to Asia as compared to the American countries. The contents of the advertisements vary according to the culture that is followed in the different countries (Peltoniemi, 2015). The brands and the marketers try different combinations which can fit the cultures of the country where they are advertising the products.

The Concept of Country of Origin for Brands

References

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