International Marketing : International Marketing Professor Isabelle Schuiling UCL - IAG 2002/2003


Branding strategies: Branding strategies Choice of a brand name Co-branding Brand extension


Choice of international brand names: Choice of international brand names Different possibilities: An arbitrary or invented brand name (Lexus) A recognizable English or foreign word that is unrelated to the product (Dash) An English or foreign word that suggest some characteristics of the product (Mr Clean) A device, number or some other elements (3M company)


Choice of a brand name: Choice of a brand name Think internationally Integrate time length (ex: Europe assistance, mondial assistance) Be simple, easy memorable Not descriptive, not linked to the product category


Slide5: Adaptation of the brand name - Global name changes Ex: Whirlpool - Philips Treets - M&M Raider - Twix Viakal - Antikal Mr Proper- Mr Propre BBL - ING


Slide6: Mistakes of launch names Ex : General Motors - Nova Rexona in Portugal Kitkat in Belgium Marie-Thumas and Talpe in Italy Historical brand name problems Ex: Unilever and its softener business: Robijn, Mimosin, Cocolino. P&G with Dash and Ariel in Europe


Co-branding: Co-branding Create an alliance with another brand to increase the rate of success rate Ex: Philips and Nivea - Philishave Cool Skin Ex: Philips and Douwe Egberts - Senseo Ex: Danone and Motta (Unilever) pour « Yolka » Ex: Häagen Dazs with Bailey’s Ex: Twingo/Kenso


Slide8: Reasons of co-branding Broaden the consumer target Rapid access to new markets Reinforce brand loyalty Leverage the technological advantages of each partners Leverage both brand awareness Share the cost of R&D and brand launch


Slide9: Example: Philips and Nivea Philishave Cool Skin and Nivea for men Philips: Worldwide leader for electric razors Nivéa: European leader in cosmetics Advantages: Leverage the expertise of both brands Attract new users Enter new distribution channels


Slide10: Reinforce the brand image Benefit from the communication of both brands Share the development and launch costs Defend against private labels


Slide11: Limits Long lead times to develop and finalise the partnership Risk of cannibalisation of a product from one of the partner (ex: Yolka) Awareness of both brands are not at the same level and risk of brand dilution of one of the brand of one of the partners Difficulties to evaluate and share the financial benefits


Slide12: Types of co-branding Strategic alliances Ex: Swatch and Mercedes Ex: Douwe Egberts and Senseo Ex: Nespresso (Nestlé) and Krupps - Tactical alliances Ex: Procter and Gamble and Fisher Price


Slide13: Strategic alliances Share costs and innovation risks Long term association Large investments Tactical alliances Short term alliances that cover more the communication than the product strategy Relatively low investments from the partners Weak integration of the partners


Slide14: Exemple: Nestlé and Coca-Cola They reinforced their association created in 1991 that led them to create “Nestea” The “Beverage Partners Worldwide” firm was created to market drinks based on teas etc The objective was to exploit the know-how of Nestlé in that type of product and the commercial network of Coca-Cola


Slide15: Example: Danone and Johnson and Johnson Danone and Johnson and Johnson have announced an alliance to create the cosmetic brand “Evian Affinity” in 2001 The objective was to leverage the Evian brand name. This brand is sold via retailers in order not to compete against the two brands of J&J Roc et Neutrogena, sold via pharmacists


Brands extension: Brands extension « Brands have become the barrier to entry but they are also the means to entry »


Slide17: - Reasons of this development Very high costs for the launch of new products Very high costs of advertising Defense of the long term development of a brand Leverage of the brand equity Need for some mono-products


Slide18: - Types of extension Line extension Launch of new product under the same name and the same product category Nescafé: with or without cafeine Brand extension Launch of new products under the same name but in other product categories Bic : perfume, razors, lighters


Slide19: - Advantages Use of the awareness Economies in advertising Risks Association to the mother brand if failure Risk of confusion if the positioning is not clear - Line extension


- Brand extension : - Brand extension Advantages Use of the awareness Risks Brand image might not fit the new product Dilution of brand image if failure


- Specificities of brand extensions: - Specificities of brand extensions Extension to the low end of the market Mercedes (Mercedes A) Extension to the high end of the market Ex: Volkswagen (Phaeton) Extension to both sides Ex: Texas Instruments (versus Bowmar (low price) and HP (premium price)) Ex: Accor Group (Formule 1, Ibis, Novotel, Sofitel)


Example : Mercedes class A : extension to the low end: Example : Mercedes class A : extension to the low end Extension to lower segments Strategic repositioning resulting from the competitive pressure and some brand evolution *J.N. Kapferer 1998


Slide23: Reasons Premium segment becomes too limited Brand image is getting old The gap between the Mercedes and other competitors is getting smaller Quality, safety, comfort Revenues of the distributors are declining


Slide24: Merceded strategies Be present in all segments Provide a premium brand in each segment Rejuvenate the brand users (high loyalty rate of 70%) 2 key concerns Remain a top luxury brand Increase volume while loosing the brand identity


Slide25: Difficulties of this brand extension: Learn new type of development Master the front wheel drive Stability of monospace vehicles New organisation of the distributors to attract new users New type of advertising to get a new identity


Slide26: 2 risks to apprehend The class A would not be perceived as an innovation The brand must evolve without changing too radically


- Success of a brand extension: - Success of a brand extension The extension should the same brand concept The know-how of the company should not be overstreched