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2008:005

MASTER'S THESIS

Branding Strategies of MNCs


in International Markets

Hanna Hggqvist
Camilla Lundkvist

Lule University of Technology

D Master thesis
Business Administration
Department of Business Administration and Social Sciences
Division of Industrial marketing and e-commerce

2008:005 - ISSN: 1402-1552 - ISRN: LTU-DUPP--08/005--SE


Acknowledgement

Acknowledgement
This thesis was written for the program of International Business and Economics at the
Division of Industrial Marketing and e-Commerce at Lule University of Technology and was
completed in January, 2008. This thesis has been constructed during a limited period of time,
and these weeks have been instructive and fun, but also very intensive, and have demanded
hard work and commitment in order to make this thesis something to be proud of. We have
had the chance to develop our skills within the field of business and marketing and we hope
that this thesis will contribute to already existing research as well as ideas for further research.
There are several persons that have made this thesis possible.

We would first like to thank our supervisor, Manucher Farhang, Associate Professor at the
Division of Industrial Marketing and e-Commerce, Lule University of Technology, who has
guided us throughout the whole time and given us constructive feedback in order to improve
the thesis. Secondly, we would like to thank Andreas Wagner, Assistant Brand Manager, at
Procter & Gamble and Andrew Warner, Director of Brand Management at Sony Ericsson,
who have provided us with valuable information during the interviews. We would also like to
thank Ulrika Kbin, Assistant at Content Planning & Management, Sony Ericsson Mobile
Communications AB, and Katarina Willig at Procter & Gamble, for handling valuable
contacts.

Lule University of Technology, 2008

Camilla Lundkvist Hanna Hggqvist

___________________________ ___________________________
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Abstract

Abstract
In todays global marketplace, MNCs need to set up effective branding strategies in order to
be competitive. Depending on the structure of the company and the products offered, MNCs
can use different strategies. There are certain characteristics that will affect the type of
strategy chosen. In order to reach economies of scale and scope, many MNCs standardize
their branding- and marketing activities. However, MNCs are often required to adapt to local
preferences and cultures. The purpose of this thesis is to investigate the branding strategies of
MNCs in international markets. Two research questions were addressed: how can the
branding strategies of MNCs in international markets be described and how can the factors
determining MNCs choice of branding strategies in international markets be described. Two
qualitative case studies of well-known MNCs, Procter& Gamble and Sony Ericsson were
conducted; the first an example of a company with a product brand strategy and the latter one
with a corporate brand strategy. Our findings show that MNCs use either a product brand
strategy, or a corporate brand strategy. However, there may be mixtures of the two types, but
emphasis is typically on one of them. A product brand strategy is characteristically used when
a company offers multiple products within different business segments, and when there are
several different target groups. With a corporate brand strategy, the corporate name and the
brand are the same. There is typically a master brand which has the same name as the
corporation, and which may have additional sub-brands. It was found that the factors
determining the branding strategy in international markets are stakeholder interests, corporate
image and reputation, market complexity, as well as marketing costs.
Sammanfattning

Sammanfattning
P dagens globala marknad r multinationella fretag tvungna att skapa effektiva
varumrkesstrategier fr att kunna hlla sig konkurrenskraftiga. Beroende p fretagets
struktur och p de produkter som fretaget erbjuder, kan olika strategier anvndas. Vissa
knnetecken avgr vilken strategi som fretagen vljer att anvnda sig av. Fr att uppn
stordriftsfrdelar och samproduktionsekonomi vljer mnga multinationella fretag att
standardisera sina varumrkes- och marknadsaktiviteter. Dock r mnga fretag tvungna att
anpassa sina aktiviteter till lokala preferenser och kulturer. Syftet med denna uppsats r att
underska multinationella fretags varumrkesstrategier p internationella marknader. Tv
forskningsfrgor lades fram: hur kan multinationella fretags varumrkesstrategier beskrivas
samt hur kan faktorerna som avgr multinationella fretags varumrkesstrategier beskrivas.
Tv kvalitativa fallstudier utfrdes av vl knda multinationella fretag, Procter & Gamble
och Sony Ericsson; det frsta r ett exempel p ett fretag som anvnder sig av en produkt-
varumrkesstrategi, och det senare r ett fretag med en fretags-varumrkesstrategi. Vra
studier visar att multinationella fretag antingen anvnder sig av en produkt-
varumrkesstrategi eller en fretags-varumrkesstrategi. Men, det kan dock finnas
blandningar av de nmnda strategierna, men tonvikten ligger oftast p en av dem. En produkt-
varumrkesstrategi anvnds karakteristiskt nr ett fretag erbjuder ett stort antal produkter
inom olika affrssegment, och nr det finns flera olika mlgrupper. Nr en fretags-
varumrkesstrategi anvnds, r bde fretagsnamnet och varumrket lika. Det finns vanligtvis
ett dominerande varumrke som har samma namn som fretaget, och under detta varumrke
kan det finnas under-varumrken. Det framkom att de faktorer som avgr varumrkesstrategin
p internationella marknader r intressenter, fretagets image och rykte,
marknadskomplexitet, och marknadskostnader.
Table of Contents

Table of Contents
1 Introduction ........................................................................................................................ 1
1.1 Background ................................................................................................................ 1
1.2 Problem Discussion.................................................................................................... 5
1.3 Purpose ....................................................................................................................... 7
1.4 Thesis Outline ............................................................................................................ 7
2 Literature Review............................................................................................................... 8
2.1 Branding Strategies of MNCs in International Markets............................................. 8
2.1.1 Standardization versus Customization ............................................................. 15
2.1.2 Corporate Branding .......................................................................................... 16
2.1.3 Product Branding.............................................................................................. 19
2.1.4 Differences between Corporate Branding and Product Branding .................... 21
2.2 Factors Determining MNCs Choice of Branding Strategies in International Markets
...24
2.2.1 Stakeholder Interest.......................................................................................... 25
2.2.2 Corporate Image and Reputation...................................................................... 25
2.2.3 Market Complexity .......................................................................................... 27
2.2.4 Marketing Costs ............................................................................................... 28
2.2.5 Product Characteristics..................................................................................... 29
2.3 Conceptual Framework ............................................................................................ 30
2.3.1 Branding Strategies of MNCs in International Markets................................... 30
2.3.2 Factors Determining MNCs Choice of Branding Strategies........................... 31
3 Methodology .................................................................................................................... 34
3.1 Purpose of Research: Explore, Describe and Explain.............................................. 34
3.2 Research Approach: Qualitative Research ............................................................... 34
3.3 Research Strategy: Case Study................................................................................. 35
3.4 Data Collection Method: Interviews ........................................................................ 35
3.5 Sample Selection: Subjective and Convenience ...................................................... 35
3.6 Analysis of Data ....................................................................................................... 36
3.7 Quality Standards ..................................................................................................... 37
4 Data Presentation.............................................................................................................. 38
4.1 Case One: Procter & Gamble (P&G) ....................................................................... 38
4.1.1 Branding Strategy of Procter & Gamble in International Markets .................. 38
4.1.2 Factors Determining Procter & Gambles Choice of Branding Strategies in
International Markets ....................................................................................................... 40
4.2 Case Two: Sony Ericsson......................................................................................... 41
4.2.1 Branding Strategy of Sony Ericsson in International Markets......................... 42
4.2.2 Factors Determining Sony Ericssons Choice of Branding Strategies in
International Markets ....................................................................................................... 45
5 Data Analysis ................................................................................................................... 48
5.1 Within-Case Analysis............................................................................................... 48
5.1.1 Within-Case Analysis of Procter & Gamble (P&G) ........................................ 48
5.1.2 Within-Case Analysis of Sony Ericsson .......................................................... 54
5.2 Cross-Case Analysis................................................................................................. 60
5.2.1 Branding Strategies of MNCs in International Markets................................... 60
5.2.2 Factors Determining MNCs Choice of Branding Strategies in International
Markets............................................................................................................................. 62
6 Discussion, Findings, Conclusions and Implications....................................................... 67
6.1 Discussion: Reflections on Past Research................................................................ 67
Table of Contents
6.2 RQ 1: How can the branding strategies of MNCs in international markets be
described?............................................................................................................................. 68
6.3 RQ 2: How can the factors determining MNCs choice of branding strategies in
international markets be described? ..................................................................................... 70
6.4 Implications and Recommendations ........................................................................ 73
6.4.1 Implications for Theory.................................................................................... 73
6.4.2 Implications for Practitioners ........................................................................... 73
6.4.3 Implications for Future Research ..................................................................... 74
7 References ........................................................................................................................ 75

Appendices

APPENDIX A The Top 100 Global Brands in the World, 2007


APPENDIX B Interview Guide, English version
APPENDIX C Intervjuguide, Svensk version

List of Figures
Figure 1.1 Thesis Outline ........................................................................................................... 7
Figure 2.1 Four Brand Architectures........................................................................................ 13
Figure 2.2 Core-Value Framework linking a Corporate Brand to Product Brands.................. 13
Figure 2.3 Positioning Alternative Branding Strategies........................................................... 14
Figure 2.4 Factors Affecting Branding Strategy of Developed Country Firms in Emerging
Markets............................................................................................................................. 24
Figure 2.5 Conceptual Framework of Branding Strategies in International Markets .............. 31
Figure 2.6 Conceptual Framework of Factors Determining MNCs Choice of Branding
Strategies. ......................................................................................................................... 32
Figure 4.1 Sony Ericssons Brand Hierarchy........................................................................... 42

List of Tables
Table 2.1 Comparison between a Corporate and a Product Brand .......................................... 22
Table 2.2 Shared Roles of the Corporate and Product Brand .................................................. 23
Table 5.1 Within-Case Analysis of the Branding Strategies of Procter & Gamble in
International Markets ....................................................................................................... 50
Table 5.2 Within-Case Analysis of the Factors Determining the Choice of Branding Strategies
in International Markets for Procter & Gamble ............................................................... 53
Table 5.3 Within-Case Analysis of the Branding Strategies of Sony Ericsson in International
Markets............................................................................................................................. 56
Table 5.4 Within-Case Analysis of the Factors Determining the Choice of Branding Strategies
in International Markets for Sony Ericsson...................................................................... 59
Table 5.5 Cross-Case Analysis of Branding Strategies in International Markets .................... 60
Table 5.6 Cross-Case Analysis of Factors Determining MNCs Choice of Branding Strategies
in International Markets ................................................................................................... 63
Introduction

1 Introduction
Many firms have realized the potential of globalization and new markets in different locations
of the world. When expanding globally a global brand strategy has to be developed and when
entering international markets different strategies have to be considered. This chapter will
start with a brief background to the thesis topic and is followed by a problem discussion
which leads to the overall purpose and the research questions of the study.

1.1 Background
In todays global marketplace, MNCs need to set up effective branding strategies in order to
be competitive. Depending on the structure of the company and the products offered, MNCs
can use different strategies. There are certain characteristics that will affect the type of
strategy chosen. In order to reach economies of scale and scope, many MNCs standardize
their branding- and marketing activities. However, MNCs are often required to adapt to local
preferences and cultures. There has been a lot of research within the area of branding
strategies; however there is limited research on how MNCs choose which strategy to adapt in
different international markets and therefore this thesis will handle this issue.

Brands
A brand is defined as a name, term, sign, symbol, or design, or a combination of them,
intended to identify the goods or services of one seller or group of sellers and to differentiate
them from those of competitors (Kotler & Keller, 2006).

Ind (1997) proposes that a product is something that is made, in a factory; a brand is
something that is bought, by a customer. A product can be copied by a competitor; a brand is
unique. Branding has the purpose of separating a brand from other competitors and to
identify a product or a service and to build customer awareness (Kay, 2004). According to
Albaum, Duerr and Strandskov (2005) a brand is anything that identifies a sellers goods or
services and distinguishes them from others. A trademark is a part of the brand and is
protected by law (ibid).

Van Gelder (2003) states that when defining a brand; everything is carefully prepared and
planned in order to create value for the customers that will benefit the organization.

Functions of a Brand
When moving from the concept of a brand, there is a need to explain its functions. Kotler and
Pfoertsch (2007) discuss that branding is a very intangible concept and is often being
misunderstood as to forming an illusion that the product is better than it really is. The authors
state that, what brands actually do is that they facilitate the identification of products, services
and businesses, and differentiate them from competition. Similar findings are made by
Czinkota and Ronkainen (2004) and they state that branding has importance to customers,
because it simplifies the buying process in the way that it reduces complicated buying
decisions and provide emotional benefits, and offer a sense of community.

According to Hollensen (2007) the basic purposes of a brand is universal, and these are:

to distinguish a companys offering and differentiate one particular product from its
competitors
to create identification and brand awareness

1
Introduction

to guarantee a certain level of quality and satisfaction


to help with promotion of the product

Holensen (2007) further states that these purposes have the function of creating new sales
(take market shares from competitors) or to create a demand for repetitive sales (to get loyal
customers).

According to Kotler and Keller (2006) a brand can also give signals of a certain quality of the
product. Brand loyalty can create barriers of entry to other companies because the brand is
placed in the consumers minds and it can create competitive advantage and a willingness to
pay a higher price. It creates brand identity through its brand name, but also teaches the
customers what the product does and why the customer should choose that specific product
(ibid).

According to Yu Xie and Boggs (2006), branding means more than just naming a product;
brands are a result of market segmentation and product differentiation.

Importance of Branding
A brand has several functions as stated above. Furthermore, brands are important, and the
reasons for that will be discussed below. Kotler and Keller (2006) state that a brand is needed
because it identifies the product, and the responsibility of the product hence lies in the hands
of the makers or producers of the product. After a customer has been in contact with the brand
and the product through its marketing activities, the customer has created a perception of the
brand. After that, the brand can be identified by the customer (ibid).

The increasing growth of globalization has forced companies to consider the importance of
branding (Yu Xie & Boggs, 2006). Yin Wong and Merrilees (2007) state that branding has a
remarkable potential for international marketing. According to Kotler and Pfoertsch (2007)
brands are gradually more vital for companies in just about all industries since customers face
a great number of different suppliers. Hence, the need for companies to differentiate
themselves through branding is very important (ibid).

Czinkota and Ronkainen (2004) state that brands are important because they shape customer
decisions and, ultimately, create economic value. Brands are important in both consumer
and business-to-business situations, where a decision of purchase is needed. A strong brand
can create sufficient higher total returns to shareholders than a weak brand (ibid).

The Value of a Brand


Branding is important because of different reasons, and furthermore it generates value in
different ways. Czinkota and Ronkainen (2004) state that a strong brand allows the company
to take advantage of the brand awareness in other new markets as well, because the brand
might be known in countries where the brand has no physical activity.

Kotler and Keller (2006) mention that a strong brand creates higher profits which in turn
create higher value for the shareholders.

Motameni and Shahrokhi (1998) state that new brands in a global marketplace have a tiny
chance of competing against established brands, and creating a brand from scratch involves
enormous investments. The return on the investments spent on branding is converted into
brand awareness, image and loyalty and the concept summarising the value of the brand is

2
Introduction
referred to as brand equity (ibid). According to Keller (2007) different marketing programs
must be created to satisfy different market segments in building brand equity:

Differences in consumer behaviour have to be identified


The branding program has to be adjusted accordingly through the choice of brand
elements, the nature of the actual marketing program and activities, and the leveraging
if secondary associations.

International Branding
The concept of branding, its functions, the importance of branding, and its value have now
been discussed. When turning towards foreign countries there are certain factors to consider.
Bradley (2002) states that it is usually a process when brands are turning internationally; it
often develops from being a local brand and after a while, when the brand is known, move
into foreign markets. Palumbo and Herbig (2000) state that in todays global market, brands
compete not only with regional and national competitors, but also with international
competitors marketing strategies.

Yin Wong and Merrilees (2007) state that developing brands on an international basis
provides opportunities to exploit economies of scale, develop global markets and explore
various market segments. The authors further claim that international marketers need to
organize their marketing strategies to match the characteristics of diverse external
environments. Another opportunity with acting on international markets is that companies can
take advantage of their country-of-origin, and acquire other companies in order to enter a
market (Bradley, 2002).

Keller (2007) states that the reasons for going international are:

Perception of slow growth and increased competition in domestic markets


Belief in enhanced overseas growth and profit opportunities
Desire to reduce costs from economies of scale
Need to diversify risk
Recognition of global mobility of customers

Global Brand
When a brand has entered international markets, many companies recognize the benefits with
global brands. According to Kapferer (1997), a global brand has two functions; to
distinguish different products from each other, and to indicate a products origin.

Albaum et al. (2005) state that many companies adapt a global strategy. Global brands are
usually positioned and marketed similarly throughout the world; however, slight
modifications may occur (ibid). A global brand reflects the same set of values around the
world, and the key in global brand strategy is formed by those values or brand character forms
(Palumbo & Herbig, 2000). In order to succeed, global brands have to foresee cultural trends
and consumer values (ibid).

Van Gelder (2003) states that various markets have different internal and external factors that
influence societies around the world, a brand is perceived differently in different cultures and
countries. For a global brand it is needed to carefully consider the factors that influence
customers behaviors (ibid).

3
Introduction
The benefit of a global brand is according to Czinkota and Ronkainen (2004), higher
acceptance of products by consumers and intermediaries, and the drawbacks are loss of local
flavor.

Quelch (1999) states that industrial products and services, luxury products, and
pharmaceuticals are groups of products that are suited to be global brands. This is because
they are identical all over the world, and the marketing activities are also similar (ibid).
Quelch further states that global brands have gained popularity because of telecommunication
and youth. People are more and more mobile in their habits, and more people are traveling, or
moving to other countries, and the easiness of internet has boosted globalization. With these
opportunities, people learn what is going on around the world more than before. Furthermore,
global brands are more common in urban areas, than in rural areas (ibid).

Quelch (1999) states that what the ten strongest global brands have in common and what
distinguishes global brands is that they; are strong in home market, have geographical
balance in sales, addresses similar consumer needs worldwide, consistent positioning,
consumers who value the country-of-origin, product category focus, and they have the
corporate name that is the same as the brand name.

According to Bradley (2002) there are very few brands that are known all around the world,
and the products that are sold by these global companies are similar worldwide, they are also
positioned in the same way all around, and have the same product line worldwide.

Strategic Decision
When acting on international and global markets, the importance of a solid strategy emerges.
Strategy is according to Ind (1997) concerned with positioning a company so that it can
meet its long-term objectives.

Albaum et al. (2005) state that the first choices a company has to make is to select a good
brand, and to choose how many brands that should be included in the product line.
Furthermore, it has to be decided whether the brand should be a single/family brand, an
individual (local) brand, or multiple brands (ibid).

According to Bradley (2002), when developing an international brand strategy, the company
has to decide; which markets to act on (new or existing), new products or modifying existing
products, and also the accessibility of the products in the international market. Bradley
further states that companies can gain competitive advantage in international markets through
quality and performance. Furthermore, the companies have to sustain competitive advantage
in their branding strategy, and they make that achievement through; brand equity, financial
strength and international distribution (ibid).

A brand can gain popularity in other countries by creating popularity in one country (Bradley,
2002). Brands that stem from the same country are perceived similarly because of
stereotyping. By building the brand on the same brand values as in the domestic market a
brand can succeed internationally as well (ibid).

When dealing with the concept of global branding, several researchers have raised the
dilemma of whether to standardize or adapt to the local market (Alashban, Hayes, Zinkhan
and Balazs, 2001; Hsieh & Lindridge, 2005; Yu Xie & Boggs, 2006). According to Hsieh and
Lindridge (2005) the diversity of markets defend the view that a customization approach

4
Introduction
should be emphasized, but on the other hand a company can reach economies of scale by
approaching a standardization strategy. They further state that the balance between
standardization versus customization has to do with to what degree the existing brand image
is similarly or differently perceived across different nations. The same conclusion is made by
Bradley (2002) who discusses that when global companies use a standardization strategy, they
decrease unit costs. However, some authors, for example Hsieh and Lindridge (2005), have
argued that it is necessary to customize the marketing mix since there are very few markets
that are similar (ibid).

Cervino and Cubillo (2004) discuss that instead of assuming that different nations are totally
heterogeneous, or the other extreme that nations are totally homogeneous, a possible
assumption may be to find a middle ground and assume that nations are partly homogenous
and partly heterogeneous. Hence, there is a possibility that many MNCs use a hybrid strategy
where some parts of the branding strategy is adapted to the local market, whereas other parts
are standardised (ibid).

Palumbo and Herbig (2000) claim that standardization of both the product and brand are not
inevitably consistent: a regional brand may have local features or a highly standardized
brand may have local brand names. That means that the actual product may be standardized,
but the brand name may be adapted to the local market. Many researchers have highlighted
that firms should act global, think local in order to exploit the benefits of globalization, but
still adapt to the local market (ibid).

Quelch (1999) states that one pitfall of global branding is that companies standardize
everything, and assume that all marketing activities have to be standardized when managing a
global brand. Adaptation is costly, whether to adapt or standardize has to be chosen from how
much that is gained from the adaptation, if the overall profits exceeds the cost that stems from
the adaptation.

According to Czinkota and Ronkainen (2004) there are three choices of branding within
global, regional, and local dimensions that a global manager has to make. It can have solely
the corporate name, have family brands for a large range of products, or have specific product
names for each item in the product line. Similar findings are made by Kapferer (1997) who
states that some companies market their products under the same brand name as the company
name, while others have different brand names on different products. McDonald, de
Chernatony and Harris (2001) state that a company has to decide if the brand should be built
around its products or its corporate identity.

Branding is a broad area and consists of several dimensions. Along with globalization MNCs
face the challenge of creating a strong brand and create competitive advantages against
competitors, hence the importance of choosing the best suited branding strategy is vital for
global firms.

1.2 Problem Discussion


According to Yu Xie and Boggs (2006) several brands, corporate brands as well as product
brands, are competing in todays international markets. Corporate branding is defined as the
strategy in which brand and corporate name are the same, whereas product branding
builds separate brand identities for different products (ibid).

5
Introduction
Yu Xie and Boggs (2006) state that the function of a corporate brand is to simplify the
communication with governments, the financial sector, the labour market, and society in
general. The base of a corporate brand consists of organisational values, core values and
added values (ibid). The corporate identity, which is represented by the firms ethics, goals
and values, is a vital corporate asset and differentiates the firm from its competitors (Yu Xie
& Boggs, 2006). The advantage with a corporate brand is according to Yu Xie and Boggs
(2006) that it can increase the firms recognition and reputation to a larger extent than a
product brand can.

The advantage with product branding is that the corporate branding will be exposed to less
harm to its corporate image if one of its individual brands fails (Yu Xie & Boggs, 2006). A
product brand is also more flexible, and can be targeted towards different segments in
different markets. However, a product brand may be more expensive to market due to the fact
that different smaller segments are targeted (ibid).

When entering emerging markets, it has been argued that MNCs should adapt to the local
market in order to succeed, but the questions is whether the strategy should be corporate
branding or product branding (Yu Xie & Boggs, 2006). According to Urde (2003) there are
four brand architectures that firms may use:

1) Corporate branding
2) Product branding
3) Corporate-and-product (with dominant use of the corporate brand)
4) Product-and-corporate (with dominant use of product brands)

Some MNCs, for example IBM, may put emphasis on their corporate brand, whereas other
MNCs such as Procter & Gamble (P&G) put most emphasis on their product brands (Yu Xie
& Boggs, 2006). Other MNCs choose to set up their strategies by focusing on corporate- and
product branding simultaneously (ibid). Yu Xie and Boggs (2006) state that corporate
branding is on the firm-level, whereas the product branding is focused on the actual product
or service.

According to Hatch and Schultz (2003) many MNCs shift focus from product brands to
corporate brands as they move towards globalization. Yu Xie & Boggs (2006) claim that
firms which are successful in building a strong corporate brand is more competitive than firms
which rely simply on their product brands (ibid).

According to Quelch (1999), emerging markets are not homogeneous, and they vary in
economic development and financial stability; they even vary in the same geographical areas.
Yu Xie and Boggs (2006) state that there are several factors influencing a firms initial choice
of branding strategy (corporate versus product branding) when entering an emerging market.
These consist of: stakeholder interest, corporate image and reputation, market complexity,
marketing costs, and product characteristics. The authors further state that choosing branding
strategy is a very important concern for MNCs operating in an international context.
However, there is not a single branding strategy that will work for all organisations (ibid).

Several researchers have discussed branding strategies, especially corporate branding,


however there is limited research on how and why MNCs adopt specific strategies.
Furthermore, there is limited research on MNCs branding strategies in international markets.
These factors have motivated the present study.

6
Introduction

1.3 Purpose
Based on the discussion above, we will aim at gaining a deeper understanding on MNCs
choice of branding strategies; hence our purpose is to investigate the branding strategies of
MNCs in international markets. The purpose will be reached by addressing the following
research questions:

RQ 1: How can the branding strategies of MNCs in international markets be described?


RQ 2: How can the factors determining MNCs choice of branding strategies in international
markets be described?

1.4 Thesis Outline


This thesis consists of six chapters, which is shown in figure 1.1. The thesis starts by an
introduction of the thesis topic and a brief background is outlined followed by a problem
discussion which finally ends in the purpose and the research questions are presented. In
chapter two, literature review, relevant secondary literature concerning the research questions
are presented. In the end of chapter two, a conceptual framework is presented in order to
narrow the information down and this helps to get an overview over the main issues. In
chapter three, methodology, an explanation of the procedure and the method for collecting the
empirical data on the research questions is presented. Chapter four, data presentation, consists
of a presentation of the results collected from the empirical data collection in the case study.
In chapter five, data analysis, we will compare our empirical results from our research with
previous literature and theories regarding the thesis topic. These empirical results will be
compared against each other in a cross-case-analysis. In the last chapter, discussion, findings
and conclusions, our overall findings of the thesis topic are presented as well as our
conclusions where the research questions are answered and our purpose fulfilled.

Chapter 6
Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5
Discussion, Findings &
Introduction Literature review Methodology Data presentation Data analysis
Conclusions

Figure 1.1 Thesis Outline

7
Literature Review

2 Literature Review
In the previous chapter an introduction of the thesis topic as well as a brief background and a
problem discussion was provided. The research questions were also outlined. In this chapter
previous research on the thesis topic is presented. This chapter is divided into three sections;
in the first two sections, selected literature in connection with research question one and two
are reviewed. Finally, a conceptual framework regarding the thesis topic is provided.

2.1 Branding Strategies of MNCs in International Markets


In this section the literature collected is connected to branding strategies, product branding,
and corporate branding in international markets, as well as literature dealing with the strategy
of standardization versus adaptation. A lot of research has been done related to these topics,
and we have been selective in our choice of literature and picked out the most relevant
writings that are connected to our research topic in order to provide an extended view of
branding strategies in international markets. In the beginning of this section general branding
strategies are presented, followed by a discussion about standardization versus adaptation. In
the following two sections corporate branding and product branding are presented. Finally a
discussion about the differences between corporate- and product branding is provided.

The Concept of Branding


According to Albaum et al. (2005) a brand is anything that identifies a sellers goods or
services and distinguishes them from others. A trademark is a part of the brand and is
protected by law. It is common that companies have more than one trademark. The function
of the brand is to identify the owner of the brand. By this the consumer knows the origin of
the brand as well as the quality. Branding is important because otherwise it might be hard to
advertise the products (ibid).

Bradley (2002) states that it is common to confound a brand with a product. What
distinguishes a brand is:

Brands give the consumer a reference point, during the purchasing process and
afterwards.
A brand is a product or service that provides functional benefits and added values that
some consumers value sufficiently to buy.
Brand values arise from the experience gained from using them - familiarity,
reliability, risk reduction.
Brands provide information as a sophisticated form of value added - the form this
provision varies from market to market and time to time.
Successful brands are balanced between functional benefits and discriminating
benefits.

Branding Decisions
Albaum et al. (2005) state that the first choices that have to be made by companies are: to
select a good brand, and to choose how many brands that should be included in the product
line. Furthermore, there are different decisions that have to be made:

A single/family brand, this strategy indicates that all products under the same brand
name have the same quality, and also simplifies the advertising.
An individual (local) brand, which is a strategy that adapts to local preferences.

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Literature Review

Multiple brands, is a strategy to have the same product but within different segments
in one national market. This strategy differentiates products from its quality or
characteristics (ibid).

A strong brand has to a have long-term perspective; the company has to decide how the brand
should be perceived by customers and stockholders. In this way the company creates a brand
promise and a platform for the brand (DI:s varumrkesskola, 2007). Furthermore, the brand
has to be managed effectively and professionally in order to keep the brand alive and
interesting through innovations, and to fulfill customer needs (ibid).

Country-of-origin Effects
Countries can take advantage of their country-of-origin, and acquire other companies in order
to enter a market (Bradley, 2002). It is important to have a stable international distribution
system when acting in international markets in order to keep the costs low. However, a large
well organized distribution system can create barriers to entry. Especially in emerging
markets where incumbents can often deny access to international competitors (ibid).

Branding in the International Marketplace


Consumer product brands are mainly targeted towards the consumer markets and are hence
mostly known among the mass market (Bradley, 2002). It is usually a process when brands
are turning internationally, it often develops from being a local brand and after a while, when
the brand is known, move into foreign markets (ibid).

According to Bradley (2002), when developing an international brand strategy, the company
has to decide:

1. Which markets to act on (new or existing)


2. New products or modifying existing products
3. Accessibility of the products in the international market. Brands that are exclusive are
demanded because of their uniqueness. However, if they become too inaccessible, the
products can prevent brand growth. But in the other way, if the products can be
bought everywhere, they loose their uniqueness, and hence the demand is reduced.
Many companies use brand extensions or umbrella branding as a tool to control brand
accessibility, and many companies also control the whole distribution system (ibid).

Yin Wong and Merrilees (2007) state that the development of brands on an international basis
offers opportunities to exploit economies of scale, developing global markets and pursuing
multiple market segments. However, branding is not a guarantee for succeeding on the global
market (Palumbo & Herbig, 2000). A firm may be a great marketer in one country, but the
brand cannot literally be transferred to another country with the expectation of the brand
becoming a success (ibid).

According to Bradley (2002), companies gain competitive advantage in international markets


through quality and performance. By transferring customer goodwill, the customers recognize
and identify the brand with a certain image. Furthermore, the companies have to sustain
competitive advantage in their branding strategy, and according to Bradley, they make that
achievement through:

1. Brand equity
Differentiation that meet the customer needs

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Literature Review

Innovation - continuous and relevant


Effective marketing communication - cross-cultural
Focused product portfolio - balanced and relevant
2. Financial strength
Cash flow in domestic market
Dominant shares in large domestic markets
Unique challenge of international markets facing smaller countries
3. International distribution
Comprehensive distribution system; international networks

Bradley (2002) has identified two concepts that are essential in a sustainable success for
brands in international markets; brand popularity and country image. A brand can gain
popularity in other countries by creating popularity in one country. A brand achieves brand
popularity when it is accepted internationally through advertising but also word-of-mouth.
When the popularity is sustaining over a period of time, the brand can take advantage over
this because it boosts brand loyalty, brand image and brand equity, it also has a positive
relationship with performance in the long-run. Brands that stem from the same country are
perceived similarly because of stereotyping. By building the brand on the same brand values
as in the domestic market a brand can succeed internationally as well (ibid).

According to Yu Xie and Boggs (2006) branding strategy is a crucial issue for firms operating
in an international environment. The authors state that both several corporate- as well as
product brands are competing against each other in the global market. Hatch and Schultz
(2003) state that among the changes that firms make when they move toward globalization is
shifting focus from product brands to corporate brands. The authors further state that the
reason for shifting focus depends on the fact that it is difficult to keep the products
differentiated and markets become more complex as the firm is moving towards globalization.
Competition increases, hence firms need to position not only products but the whole
corporation (ibid).

Global Brands
Quelch (1999) states that global brands have gained popularity because of telecommunication
and youth. People are more and more mobile in their habits, and more people are traveling, or
moving to other countries, and the easiness of internet has also boosted globalization. With
these opportunities, people learn what is going on around the world more than before. It is
shown that global brands are more appealing to the younger segments. Furthermore, he states
that global brands are more common in urban areas, than in rural areas. Consumer behaviors
are more similar between large cities in different countries, than in a large city and an area in
the same country. However, this differs between products; food is for example more culture-
bound and heterogeneous than electronic equipments (ibid).

Bradley (2002) states that there are very few brands that are known all around the world, and
the sales of those global brands are minimum. The products that are sold by these global
companies are similar worldwide and they function as to serve the need of the customers
globally. Global brands are positioned in the same way all around the world and the
consumers take country-of-origin in consideration when buying a global brand. Most of the
global firms have the same product line all around the world; this is because it is difficult to
be too diversified when acting on a global scale (ibid).

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Literature Review
Albaum et al. (2005) state that many companies adapt a global strategy. When handling a
global brand, certain issues such as languages has to be taken into consideration, because a
brand may mean one thing in one country and may have a totally other meaning in another,
the brand may even be highly inappropriate. Global brands are usually positioned and
marketed the same throughout the world; however, slight modifications may occur (ibid).

Characteristics of Global Brands


Quelch (1999) lists the top ten global brands of 1997, these were:

1. Coca-Cola
2. Marlboro
3. IBM
4. McDonalds
5. Disney
6. Sony
7. Kodak
8. Intel
9. Gillette
10. Nike

Furthermore, Quelch (1999) states that what they all have in common except for their easiness
to pronounce and what distinguish a global brand is that they:

Are strong in home market; the cash flow gained in domestic markets give advantages
in global markets.
Have geographical balance in sales; the global brand is more or less known all around
the world.
Addresses similar consumer needs worldwide; the products are somewhat the same all
over the world, with some local adaptations in few areas.
Consistent positioning; the values are communicated the same all around the world,
and the products are positioned the same as well.
Consumers value the country-of-origin; country-of-origin is important for global
brands because all consumers around the world associate products with different
countries.
Product category focus; to focus simply on one product category.
Corporate name; the corporate name and the brand name are the same. However,
Quelch discusses that no brand could have the same name on provisions, so Unilever
and P&G could never use one single brand name (ibid).

When looking at the top ten global brands today, almost the same brands are stated as in
Quelchs (1999) research of the top ten brands of 1997. Businessweek (2007) lists the 100
strongest brands in the world, and the top ten are:

1. Coca-Cola
2. Microsoft
3. IBM
4. GE
5. Nokia
6. Toyota
7. Intel

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Literature Review
8. McDonald's
9. Disney
10. Mercedes-Benz

In all cases, except for one (Daimler Chryslers Mercedes-Benz), the corporate- and product
name are the same (see appendix A which lists the 100 strongest brands in the world). As
much as 80% of the brands listed among the strongest hundred brands in the world are
corporate brands and about 50% of the brands are from USA. Many of the brands that are
listed have about the same ranking as the year before and the value of the brands have not
changed much either from previous year with some exceptions.

Benefits of Global Branding


The benefits of global branding are that it gives the customers added value, it lower the costs,
provides cross-border learning, and give cultural benefits for companies (Quelch, 1999).

Brands Suited to be Global Brands


Quelch (1999) states that industrial products and services are suited to be global brands
because their customers are mainly multinationals and hence not culture bound. Luxury
products are another group that is suited to be global brands, this is because the customers are
often young and rich, and live in urban areas. These products are positioned to a niche group
and can spend more money on marketing activities. Pharmaceuticals are also suited to be
global because the formulas are consistent worldwide, although some adjustments are needed
to fulfill customer needs (ibid).

Branding as a Strategic Tool


Balmer (1995) states that there are different approaches to brand management:

Brand Dominance does not relate the corporate brand name and the product name
Equal Dominance links the product brand with the corporate name, for example,
British Broadcasting Corporation (BBC) has different names for different products;
BBC Radio 1, BBC World Service
Corporate Dominance uses the corporate name in all activities and on all products
(ibid).

Yin Wong and Merrilees (2007) claim that branding should be considered as an integrated
business approach and that branding goes beyond marketing communications. The authors
further state that the brand should be part of the firms total business strategy. A brand can be
used as a corporate strategic tool to improve a firms performance (ibid).

Brand Architectures
According to Urde (2003) it is important for a company to choose brand architecture because
this affects how the brand is used, the number of brands used, what type of brand etcetera.
Furthermore he states that core value and the choice of brand architecture are linked together.
According to Urde (2003) there are four types of brand architectures (shown in figure 2.1):

1. Corporate brands
2. Product brands
3. Corporate and product brands (with dominant use of the corporate brand), and
4. Product brands and corporate brands (with dominant use of product brands)

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Literature Review

I
n Shared Individual
d Core Values
i
v
i Corporate brand Product brands
d Volvo AEG, Husqvarna, Flymo
u
a
The Electrolux Group
l

Identity

S
h Corporate- and product Product- and corporate brand
a brand Nicorette
r SAS Pharmacia Corporation
e Eurobonus
d

Figure 2.1 Four Brand Architectures


Source: Urde (2003, p 1029)

Urde (2003) discusses that in the corporate brand box all the products share the core values
of the corporate brand, but the brand is individual. Different from the corporate brand, the
product brands core values are individual for each product and have its own identity.

Furthermore Urde (2003) states that a corporate brand and a product brand can have different
roles but still be linked together, shown in figure 2.2.

Corporate brand Product


Product brand
Corporate Brand Core Product Brand brand
building provides Values building provides
building
credibility added value
provides

Figure 2.2 Core-Value Framework linking a Corporate Brand to Product Brands


Source: Adapted from Urde (2003, p 1029)

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Literature Review
Categorizing the Brand
McDonald et al. (2001) state that there are different ways of categorizing a brand. First, a
company can use company as brand name where the corporate name and the product name
are the same, and second, a company can use individual brand name where the products have
individual brand names and are not related with the corporate name.

Ind (1997) suggests that within corporate branding, there are monolithic corporate brands, i.e.
all products are branded with the corporate name. The advantage with this strategy is that
every time someone sees the specific brand, the corporate image is reinforced. However, this
can also be a disadvantage, if the brand is put in unpleasant attention, then the corporate
image will be damaged. Furthermore, Ind mentions endorsed corporate brands, which is
when companies mix their branding strategies. Some parts of the organization might be linked
together, while other can be kept separately or the link might not be obvious (ibid).

Strategy Approaches
Kapferer (1997) presents a model for branding strategies shown in figure 2.3. This model
shows different forms of strategy approaches that a company can undertake. The more
differentiated a product is, the more the strategy is aimed towards a product brand, and the
more the brand functions as an indicator of origin, the more the strategy is aimed at a
corporate brand strategy.

Brand Function:
Indicator of Origin

Corporate
umbrella brand

Corporate
endorsing brand

Corporate
source brand
Umbrella brand

Endorsing brand

Source brand

Range brand
Line brand
Generic brand
Product brand

Brand Function:
Product Differentiation

Figure 2.3 Positioning Alternative Branding Strategies


Source: Adapted from Kapferer (1997, p 189)

At one extreme, product brand strategy can be found. This is according to Kapferer (1997)
where one individual product has a specific name and a specific positioning; every new
product gets its own brand name and positioning. At the other extreme the corporate umbrella
brand strategy can be found, this means that a company has different products that share the

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Literature Review
same brand name (ibid). Between these, there are other strategies that functions differently.
The companies might have a mix strategy of a corporate and product brands.

Yu Xie and Boggs (2006) state that some MNCs, for example IBM, almost entirely focus on
their corporate brand, whereas other MNCs, such as P&G, focus their strategy on their
product brands. Another option is to focus the strategy on corporate branding and product
branding simultaneously (ibid).

2.1.1 Standardization versus Customization


Bradley (2002) discusses whether companies should adapt a niche strategy or a global
strategy. It is argued that firms should have a standardized strategy to international markets
since the companies can take advantage of higher sales when the product image is consistent
over global markets. The costs can also be reduced because of economies of scale, moving to
a low-cost location, and have one standardized marketing plan globally. He further states that
when global companies use a standardization strategy, they decrease unit costs, which drive
non-global companies out of the market. However, some have argued that it is necessary to
customize the marketing mix since there are very few markets that are similar. Although
customer needs and preferences have become more and more homogeneous, there is still a
great diversity when it comes to this aspect and many global companies exploit national
differences and adapt their products to local tastes and preferences. However, preferences
vary a lot between different markets, the high-technology markets are highly standardized
while provisions are not standardized (ibid).

There are different views upon the aspect of whether to standardize or adapt the brand name
and some studies supporting brand name standardization and others claiming that brand
names should be adapted due to different cultural factors (Yin Wong & Merrilees, 2007). Yin
Wong and Merrilees further claim that market structure factors such as competitive, buyer and
distribution intensity force international marketers to adapt their brand names. The statement
think global, act local seems to be favoured many times within international marketing
(ibid).

Albaum et al. (2005) state that companies can reduce costs by using a standardized strategy.
However, by using a strategy based on local preferences, the company can get advantages of:

customer needs
distribution and promotion methods to be used
competitive market structure
economies of scale in production and distribution
legal constraints
operational structures

Palumbo and Herbig (2000) state that standardization of both the product and brand does not
necessarily have to be consistent; a regional brand may have local features or a standardized
brand may have local brand names. One example, according to Palumbo and Herbig (2000) is
Unilever which sells the same product - a cleaning liquid - in several countries, but the
product name is adapted to the local market. They further claim that brand names are typically
very difficult to standardize on a global basis (ibid).

Arnold and Quelch (1998) state that some companies such as Unilever have created a demand
by developing products that suits local preferences in emerging markets.

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Literature Review
According to Palumbo and Herbig (2000) many MNCs have tried to follow the
standardization strategies created by successful global brands such as Coca-Cola, Nike and
McDonalds due to the benefit with economies of scale. However, there are very few
successful global brands that are fully standardized (ibid).

Hsieh and Lindridge (2005) argue that a standardization strategy may not be suited due to the
fact that nations are different. However, a customization strategy may overlook the factors
that are homogenous across nations which may result in diseconomies of scale (ibid).

Alashban et al. (2001) mention that global corporations benefit from a standardization
strategy due to large-scale production instead of dividing the world into a large number of
customized markets. However, brands may increase revenue by adapting to the needs of each
specific segment (ibid).

According to Keller (2008) some companies choose to customize to local preferences,


whereas others execute a more centralized branding strategy, and more and more companies
are adapting a hybrid strategy. Furthermore Keller states that because of new technology,
firms have the ability to customize and tailor products to local preferences and the need for
standardization is decreasing (ibid).

Quelch (1999) states that one pitfall of global branding is that companies standardize
everything, and assume that all marketing activities have to be standardized when managing a
global brand. There has to be a balance on what to standardize and what to adapt to local
preferences. Adaptation is costly, whether to adapt or standardize has to be chosen from how
much that is gained from the adaptation, if the overall profits exceeds the cost that stems from
the adaptation. Furthermore, Quelch states that it is easier to standardize in the beginning of
the product launch (ibid).

2.1.2 Corporate Branding


Corporate Branding Defined
According to Yu Xie and Boggs (2006) corporate branding is defined as the strategy in
which brand and corporate name are the same. They further state that corporate brand
simplifies communications with government, the financial sector, the labor market and
society. Some examples of corporate brands are according to Yu Xie & Boggs are IBM,
Nike, Virgin and Sony. The base for corporate branding consists of organizational values,
core values and added values (ibid).

According to Ind (1997) a corporate brand is not just a logo, a name and a visual presentation;
it is also the values that define it. A corporate brand can be defined by three areas;
intangibility, complexity, and responsibility. What distinguishes the corporation is its
complexity; it is larger, more diverse and has several audiences that it must interact with
than a brand. It is important to effectively communicate the values of the core brand and build
relationships with the stakeholders and meet their needs (ibid).

Characteristics of a Corporate Brand


Corporate branding is characterized by the way a company communicates its identity (Kay,
2004). A corporate brand is according to Knox and Bickerton (2000) the visual, verbal and
behavioural expression of an organizations unique business model. According to Balmer
(2001) corporate brands differentiate the organization from its competitors and aim to be loyal
towards the stakeholders.

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Literature Review
Balmer (2001) outlines five characteristics of corporate brands:

Cultural. Corporate brands have cultural roots that stem from the sub-cultures that are
contained within the corporate brands. The personnel have responsibility since they
are the key stakeholder group since they communicate the organizations values by
everything they say or do.
Intricate. Corporate brands are intricate because they are multidimensional and multi-
disciplinary, have a range of stakeholders, both internal and external, they also have
controlled or uncontrolled communications through for example, word-of-mouth.
Tangible. Corporate brands encompass tangible elements such as business-scope,
geographical coverage, performance-related issues, profit margins, pay scales,
recruitment etc.
Ethereal. The stakeholders of the corporate brand are subjective and emotional when
judging the brand; this can be for example, country-of-origin or the type of industry.
Commitment. The total organizational commitment is very essential and the CEO and
the board-level is the prerequisite for corporate branding. Commitment is hence the
core and the cornerstone in corporate brand management.

Yu Xie and Boggs (2006) state that corporate branding consist of two very essential core
concepts, namely corporate identity and corporate associations. Corporate identity is defined
as the characteristics or associations that strategists in an organization want to implant in
the minds of their internal and external constituencies and corporate associations is defined
as the beliefs and feelings that an individual has for an organization (Yu Xie & Boggs,
2006).

Different Types of Corporate Brands


Kapferer (1997) proposes the umbrella strategy which means that a company has different
products that share the same brand name. For example, Yamaha, that sells both motor bikes
and guitars, and all the products are branded with the Yamaha brand. Even though the
products have different communication tools, they still have the same umbrella brand. The
advantage with this strategy is that the company can take advantage of economies of scale on
an international level. This simplifies the entering on different markets since the brand is well
known and it also reduces the costs. Kapferer further states that this strategy is useful where
the products need little marketing investments. The drawback of this strategy is that if one
product under the umbrella brand is damaged, the whole brand is affected (ibid).

Van Gelder (2003) states that corporate-, umbrella- and banner brands are master brands and
drive consumers purchase decisions and transfer brand value to new product or service
sub-brands. These brands provide a structure and a brand value that is supposed to infuse
trust among the customers and this is in general hard to accomplish with individual brands
(ibid).

Ind (1997) suggests that within corporate branding, there are monolithic corporate brands, i.e.
all products are branded with the corporate name. Ind further states that a monolithic structure
should be suited when:

An emphasis on organic growth


A need to emphasise the points of commonality within an organization
The need to communicate globally

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Literature Review

A tightly defined identity built around closely related businesses or a clearly defined
idea
The potential for economies of communication
The parent brand has a strong reputation

Managing the Corporate Brand


Balmer (2001) states that a corporate brand and its relationships can be explained as A
corporate brand involves, in most instances, the conscious decision by senior management to
distill, and make known, the attributes of the organizations identity in the form of a clearly
defined branding proposition. This proposition underpins organizational efforts to
communicate, differentiate, and enhance the brand vis--vis stakeholders groups and
networks. As such, a corporate brand proposition requires total corporate commitment from
all levels of personnel. It particularly requires CEO, and senior management fealty as well as
financial support. Furthermore Balmer states that there are three virtues that should help
managing the corporate brand. A corporate brand should:

Communicate clearly the promises of the corporate brand


Differentiate the corporate brand from its competitors
Enhance the esteem and loyalty of the organization that is given by the customers and
stakeholders

Stakeholders
Hatch and Schultz (2001) outline three key aspects of corporate branding: vision (managers),
culture (employees) and image (stakeholders). They further state that these three have to be
aligned in order to have a strong corporate brand. The vision which is put up by the managers
of the company has to be clearly communicated to the stakeholders, the stakeholders also
have to be defined, and the expectations of those have to be outlined. The culture is how the
values, behaviors, and attitudes of the company reflect the employees behaviors and how
they act. This has to do with if the company acts accordingly with its values, if the vision
inspires all its subcultures i.e. if the values are adapted in all units, and if the vision and
culture are different from the companys competitors. Image is how the brand is perceived by
the outside world, including all stakeholders. This has to do with the associations of the brand,
how the stakeholders and employees are interacted and if the employees care about how the
image is perceived by the stakeholders (ibid).

According to Ind (1997) the corporate brand is the image that the stakeholders get of the
corporation that includes the communication and behavior and the values of the company hold
the stakeholders and the corporate brand together. McDonald et al. (2001) state that corporate
branding focuses on the brands positioning and is consistent with its activities and it also
facilitate the understanding of the organizations activities and communicates a clearer
message to the customers. Knox and Bickerton (2000) state that corporate branding strives to
create differentiation and preference for a product or service in the mind of the customer
which relates with product marketing.

Urde (2003) states that the corporate brand might have a role of building relationships with
the government, the financial sector, and the rest of the society; by that infuse credibility
towards the corporate brand.

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Motives for Creating a Corporate Brand
Yu Xie and Boggs (2006) argue that the motive for creating a corporate brand is to
differentiate the firm from its competitors. They further state that the corporate identity,
represented by the firms ethics, goals and values, works as an important corporate asset to
differentiate the firm from its competitors. Due to the fact that products are rapidly imitated,
the corporate values and images appear as important in differentiation strategies (ibid).

The benefits of a corporate brand is according to Balmer (2001) increased public profile,
customer attractiveness, product support, visual recognition, investor confidence,
encapsulating organizational values, and staff motivation.

There are advantages to link the brand name with its corporate name (McDonald et al. 2001).
This tend to create trust and confident in the brand within its consumers. Furthermore they
state that this strategy creates other advantages as well such as economies of scale. However
McDonald et al. state that the benefits of this strategy might be exaggerated when entering
new markets. This is because this strategy often inhibits the companys ability to enter a new
market because the products do not fit in with the existing customer base (ibid).

Hatch and Schultz (2003) state that a strong corporate brand has a major impact in creating a
positive consumer attitude towards new products and services. They further state that
corporate branding is important in the selling process corporate branding brings to
marketing the ability to use the vision and culture of the company explicitly as part of its
unique selling proposition.

It has been argued that corporate branding involves the total corporate communication mix,
and needs integration of both internal as well as external communication (Hatch & Schultz,
2003).

Balmer (1995) states that in order to achieve a successful corporate brand management
depends upon; having a clear corporate mission and philosophy; understanding the
companys corporate personality and corporate identity; and having accurate information
regarding perceptions held of the organization by its stakeholders.

Companies that undertake a corporate brand need to have strong linkage between the products
and services and the corporate name (Kay, 2004). Some companies that have corporate brands
connect the products to a social corporate mission, and the companys values and identity is
reflected in the brand (ibid).

Bradley (2002) states that Japanese companies use corporate brands to a larger extent rather
than product brands. The Japanese companies have specialized in products like electronics
and motorcars. However, Japanese companies have now started to brand Japanese food,
cosmetics, and clothing which are available in western markets as well (ibid).

2.1.3 Product Branding


Product Branding Defined
Product branding is defined as the strategy of building separate brand identities for different
products (Yu Xie & Boggs, 2006). According to Hatch and Schultz (2003), product brands are
short term and live in the present. The ambition of product brands is to attract customers and
boost sales (ibid). Examples of product brands include Sprite and Mr Pibb under the Coca-

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Literature Review
Cola Corporation, Lux and Dove from Unilever and Toyota and Lexus from Toyota (Yu Xie
& Boggs, 2006).

A product brand strategy is according to Kapferer (1997) where one individual product has a
specific name and a specific positioning; every new product gets its own brand name and
positioning. Thus, a product brand strategy has a strategy of product differentiation. This
strategy is undertaken by for example, P&G. The product is at focus and the only way to
extend the product is by a renewal of the product, and to improve the product in order to adapt
to customer needs. This can be for example an improvement in packaging. By using multiple
brands the same company can have different sorts of for example shampoos with different
brands and positioning that targets different consumers. In that way the company can achieve
a greater market share. When adapting a product brand strategy, mostly the name of the
company is not visible for the public (ibid).

Characteristics of a Product Brand


A characteristic of a product brand, stated by Yu Xie and Boggs (2006), is that it is flexible
which allows firms to position themselves against different segments in different markets.
However, there might be very high marketing costs when a product brand is targeted towards
different small segments through different brands (ibid).

Different Types of Product Branding


Van Gelder (2003) states that product and service brands are not master brands, but function
individually from the corporate brand. The product/service brand and the corporate brand are
positioned separately in the minds of the customers. This strategy might be suited if there is a
need for a distance between the corporate brand and the product/ service brand. The corporate
brand might be weakly developed or that might be very different from the product/ service
brand (ibid).

Ind (1997) suggests that a more branded structure should be suited when:

The emphasis is on acquisitive growth


The organisations strength is in its brands
There is a need to segment audiences
There is a wide diversity of businesses within the corporate portfolio

According to Knox and Bickerton (2000) as with corporate branding, product branding also
strives to create differentiation and preference for a product or service in the mind of the
customer. They further state that product branding is characterized by added value to the core
functionality of a product or service and this differentiate the product or service from other
brands (ibid).

Yu Xie and Boggs (2006) discuss that customers perception of a brand typically comes from
its advertising, distribution, and communicated image.

When targeting new markets McDonald et al. (2001) suggest that product specific brands
should be used. This strategy is also appropriate for new products and services as well, since
the customers then expect something new and fresh, and do not relate the product with
previous products and values. Furthermore they suggest that the benefit with an individual
brand name is that if one product should fail, it would not affect the rest of the products or the
company name.

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Literature Review
The same conclusions are drawn by Kapferer (1997), who states that the advantage of a
product brand strategy is that a failure of one brand does not affect another brand, or the
company name, that is because every brand is individual. However, this can also be seen in a
reversed way; that the individual brand does not benefit from another brands success. The
disadvantages of a product brand strategy is the economic issues, since a new product launch
is also a new brand launch, more costs are put into the process (ibid).

Urde (2003) states that the product brand might have the role of fulfilling expectations and
added value to the customers by flexibility and both are linked together with the core values.

2.1.4 Differences between Corporate Branding and Product Branding


Firms that are successful in building a corporate brand are also more competitive than firms
relying solely on product branding (Yu Xie & Boggs, 2006). However, corporate branding is
more complex than product branding since it requires simultaneous interaction of strategic
vision, organizational culture and images (ibid).

According to Hatch and Schultz (2003) the main difference between product branding and
corporate branding is that focus is shifted from the product to the corporation. Corporate
branding has a much wider perspective than product branding and as stated by Hatch and
Schultz the broader scope of the corporate brand pushes brand thinking considerably
beyond the product and its relationship to the consumer or customer (ibid).

Other differences between product branding and corporate branding identified by Hatch and
Schultz (2003) are:

The product brand is managed by the middle manager, whereas the corporate brand is
managed by the CEO.
The product brand attracts attention from customers, whereas the corporate brand
attracts attention from several stakeholders.
The product brand is delivered by the marketing function of the firm, whereas the
corporate brand is delivered by the whole company.
The product brand has a short life cycle, whereas the corporate brand has a long life
cycle.
Product brands are more functional, whereas corporate brands have a strategic
importance to the company.

Balmer (2001) states that there are differences between a corporate brand and a product brand
which is shown in table 2.1.

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Literature Review
Table 2.1 Comparison between a Corporate and a Product Brand

Factors Product Brands Corporate Brands

Management Middle Manager CEO

Responsibility Middle Manager All Personnel

Cognate Discipline(s) Marketing Strategy/ Multi-Disciplinary

Communications Mix Marketing Communications Total Corporate Communications

Focus Mainly Customer Multiple Internal and External


Stakeholder Groups and Networks

Values Mainly Contrived Those of founder(s)


+ mix of corporate
+ other sub-cultures
Source: Adapted from Balmer (2001, p 2)

When it comes to corporate brands, all personnel within the company have responsibility for
the brand and the management is run by the CEO (Balmer, 2001). The corporate brand has a
range of stakeholders, both internal and external, and the corporate brands need to fulfill their
expectations, in difference from product brands that are more customer focused. The
corporate brands have multiple channels of communication to get the brand known, but focus
is on total corporate communication rather than marketing communications. Corporate brands
are also multi-disciplinary instead of a doctorate of marketing. Finally, the values of corporate
brands are held by the personnel and the organizations sub-cultures (ibid).

Yu Xie and Boggs (2006) state that a corporate brand differs from a product brand in its
strategic focus and implementation which include corporate strategy, corporate
communications and corporate culture. They further state that generally, corporate branding
has a much more strategic focus than product branding. The focus of product branding is on
the customer and the focus of corporate branding is on the stakeholders (ibid).

Product branding as well as corporate branding attempt to create added value to the product or
service, however, corporate branding is yet more complex since the corporate brand strategy
has to be at the organizational level and not at the individual product or service (Knox &
Bickerton, 2000). Knox and Bickerton (2000) further discuss that different from the product
brand the corporate brand does not only consider customers, but all stakeholders, hence when
managing a corporate brand, interaction with the stakeholders is very important.

According to Ind (1997) corporate brands are different from product brands in the way that
they are focusing on different audiences. While product brands are focusing on consumers
and the corporate brands are focusing on all the stakeholders. However, a corporate brand
should not only focus on one of these, because focusing solely on the shareholders would lead
to an obsession on profits and solely focusing on the consumers will lead to an obsession with
market shares. Hence, Ind suggests that there should be a balance between these in order to
have a complete corporate brand (ibid).

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Literature Review
Kay (2004) states that a strong corporate brand is different from building a strong product
brand since the corporate brand targets different segments. P&G has a large portfolio of
products, but the corporate name is unknown among its customers. Corporate brand
communications are directed towards the shareholders, employees and other stakeholders, and
a corporate brand have little impact on its customers and have little influence over demand for
products and services (ibid).

Kapferer (1997) states that when companies are selling in different markets at the same time,
an issue of whether to choose between a product brand strategy or a corporate brand strategy
should be used. When deciding this, a case-by-case analysis is often used; this is shown in
table 2.2.

Table 2.2 Shared Roles of the Corporate and Product Brand

Targets Product Brand Corporate Brand

1. Customers +++++ +

2. Trade associations ++++ +

3. Employees +++ ++

4. Suppliers +++ +++

5. Press +++ +++

6. Issues groups ++ ++++

7. Local community ++ ++++

8. Academia ++ ++++

9. Regulatory authorities + ++++

10. Government commission + ++++

11. Financial markets + +++++

12. Stockholders + +++++


Source: Adapted from Kapferer (1997, p 223)
+ = level of importance

The table shows which strategy that focuses on which target groups. For example, a product
brands main target group is the customers (number 1), different from a corporate brand
whose main target is the stockholders (number 12). From number 2 (trade associations) and
up to and including number 12 (stockholders), list all the stakeholders.

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Literature Review

2.2 Factors Determining MNCs Choice of Branding Strategies in


International Markets
In this section the most relevant literature dealing with the factors affecting firms choice of
branding strategies will be presented. There has been limited research on what factors that
determine the choice of branding strategies in emerging markets. Therefore, the main factors
that will we will concentrate on is taken from Yu Xies and Boggs (2006) frame of reference
(figure 2.4), but these factors have been supplemented with additional literature found from
other researchers.

Branding Strategies in Emerging Markets


Yu Xie and Boggs (2006) state that MNCs should adapt to the local markets in emerging
markets in order to succeed. The MNCs can choose between using a product branding
strategy or a corporate branding strategy (ibid).

Kapferer (1997) suggests that choosing an appropriate branding strategy should be determined
from three factors; the product or service, consumer behavior and the firms competitive
position. He further suggests that if the purpose is to personalize the product, a product brand
strategy should be chosen, and if the purpose is to indicate the manufacturer, a corporate
branding strategy should be chosen (ibid).

According to Yu Xie and Boggs (2006), the development of brand strategy in an emerging
market should be based on an understanding of its economic, technological, socio-cultural,
and competitive conditions. All those factors mentioned may have a significant impact on the
firms operations and performance (ibid). Other factors that may influence the MNCs initial
branding strategy when entering an emerging market are according to Yu Xie and Boggs
(2006): stakeholder interest, corporate image and reputation, market complexity, marketing
costs, and product characteristics (figure 2.4). Each of those factors will be described one by
one.

Stakeholder Interests
Firm
Characteristics
Age
Size
Corporate Image and Experience
Reputation

Choice of Branding
Market Complexity Strategy
Corporate Brand
Product Brand
Marketing Costs

Product
Characteristics

Figure 2.4 Factors Affecting Branding Strategy of Developed Country Firms in Emerging Markets
Source: Adapted from Yu Xie and Boggs (2006)

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Literature Review

2.2.1 Stakeholder Interest


As stated by Hatch and Schultz (2003), the image of the corporate brand is formed by the
firms stakeholders including employees, customers, investors, suppliers, partners, regulators,
and local communities. As mentioned previously, the focus of product branding is on the
customer and the focus of corporate branding is on the stakeholders (Yu Xie & Boggs, 2006).

According to Hatch and Schultz (2003) the firms visibility, recognition and reputation can be
increased more by the corporate brand than the actual product brand. The image of the
corporate brand is formed by the firms stakeholders including employees, customers,
investors, suppliers, partners, regulators, and local communities. Hatch and Schultz further
state that corporate branding is successful when the values of the corporation are attracted by
the stakeholders. An advantage with a strong corporate brand is that the company may attract
investors, and potential employees (Yu Xie & Boggs, 2006). A corporate brand can better
increase the firms visibility, recognition and reputation to a greater extent than a product
brand can (ibid).

According to Dagens Industri (DI:s Varumrkesskola, 2007) a strong brand affects the
quotation positively, and result is a strong market position which leads to the ability to charge
a higher price, which in turn leads to an increasing profit. Furthermore it has been discussed
that a company can increase its authority by having good relationships with the stakeholders:
customers, investors, government, and etcetera. A strong brand is also appealing to
collaborators, which makes the brand even stronger (ibid).

Yu Xie and Boggs (2006) state that it is rather difficult for an MNC entering an emerging
market if it does not have a good relationship with the host government, since the most
considerable difference between emerging economies and developed economies is the
variations in regulations, rules and policies.

Another important aspect when entering an emerging market is to create a partnership


between manufacturers and dealers (Yu Xie & Boggs, 2006). Yu Xie and Boggs (2006) argue
that it is very important to set up an efficient sales and distribution system, hence different
organizations have to be integrated in order to reach efficiency. They further state the most
optimal strategy is to use a corporate branding strategy under such conditions (ibid).

Harris and de Chernatony (2001) state that what distinguishes a corporate brand is its focus on
the organization. Furthermore they state that the employees play a great role when creating a
perception of the corporate brand in the mind of the consumers and the rest of the
stakeholders. The employees values have to be interrelated with the values of the company
(ibid).

Arnold and Quelch (1998) state that within emerging markets, national and local government
have a great impact on country specific issues. Hence it is important to have established
relationships with government when entering an emerging market. This can influence to what
extent a company can get benefits such as licences or permits, or joint ventures. They discuss
that companies with longer experience in the market have an advantage (ibid).

2.2.2 Corporate Image and Reputation


Yu Xie and Boggs (2006) define corporate image as the sum of impressions and
expectations of an organization built up in the minds of its stakeholders and the public. The
authors discuss that a strong corporate image is the most useful way of product differentiation.

25
Literature Review
They further mention that branding has to be managed in order to create alignment between
the internal culture and the external image of the firm.

Abratt (1989) states that firms should make a rigorous effort to manage their corporate images
and the corporate image should be managed in order to maintain public trust. He further states
that the image is not what the company believes it to be, but the feelings and beliefs about
the company that exist in the minds of the audiences and which arises from experience and
observation.

Knox and Bickerton (2000) propose that the brand is developed from corporate image, to
corporate personality, to corporate identity, to corporate reputation, to finally corporate
branding. The process starts by a focus of the customer to a wider perspective and aims at the
employees further towards an understanding of the importance of the perceptions from people
other than customers and employees. Focus is more and more put on all the stakeholders.
Hence the corporate reputation is very important in order to satisfy the needs of the
stakeholders (ibid).

Corporate names can be applied to products and services since they carry a message about the
brand, however the corporate name can be damaged if it is violated by negative press, and
problems can occur if the corporate vision and the stakeholders vision are not the same (Kay,
2004). Ind (1997) states that global corporate brands have to have a consistent naming
approach and communicate the same brand globally. Otherwise costumers might be confused
about the organization structure (ibid). Urde (2003) states that a corporate brand needs to have
a brand personality that is inline with the core values of the company. The corporate brands
mission is to get the customers to identify with the brand and its values; hence this creates
trust (ibid).

Balmer (1995) states that the benefit of corporate branding is its consistency and it provides
added value to products and services; contributes to a companys financial margins; affords
protection from competitors and attracts top-notch personnel and is seen as having a
financial worth. If the company has a good reputation it can benefit from that, and the
strength of the company is visible to investors, the city and the government (ibid).

Yu Xie and Boggs (2006) discuss that customers perception of a product brand typically
comes from the communicated image and advertising, whereas the corporate image is derived
from the customers interaction with the firms employees, physical presence and overall
marketing efforts.

According to Yu Xie and Boggs (2006), MNCs have to create positive customer perceptions.
However, that is much more complicated in emerging markets due to heterogeneity in the
market structure (ibid).

According to Roth (1992) it is very important for firms to develop and manage a brand image.
He further argues that in order to reach market success, it is vital with a clearly defined brand
image. If a brand is well-communicated, the consumers will more easily be able to identify
the needs associated with the brand and hence differentiate the brand from its competitors
(ibid). Roth (1992) stated that an effective brand image helps build and maintain brand equity.

Brand equity is defined as a set of brand assets and liabilities linked to a brand, its name
and symbol, that add to or subtract from the value provided by a product or service to a firm

26
Literature Review
and/or to that firms customers (Aaker, 1991, p.15). According to Aaker (1991, p. 16) brand
equity is based on five categories of assets and liabilities: brand loyalty, name awareness,
perceived quality, brand associations in addition to perceived quality, and other proprietary
brand assets such as patents, trademarks, channel relationships, etcetera. If the brand name
would change, some or all of the assets and liabilities could be affected (ibid).

According to Yu Xie and Boggs (2006) there are different benefits for firms to use product
branding instead of corporate branding. One example is that a firm using a product-brand
strategy instead of a corporate branding strategy may experience less harm to its corporate
image if one of the individual brands fails (ibid).

2.2.3 Market Complexity


Yu Xie and Boggs (2006) state that branding strategies become difficult to set due to complex
international environments. There are some barriers that MNCs have to face according to Yu
Xie and Boggs (2006):

On a macro environment
o Consumer characteristics and behaviours
o The legislative infrastructure
o Existing competition
On the task environment
o Inter-institutional relationships
o Behavioural norms and channel structures
On the organizational environment
o Cost structures and operational flexibility
o Management styles and cultures

Alashban et al. (2001) propose five environmental factors that may influence brand-name
standardization/adaptation strategy: religion may affect certain items in society which may be
perceived as taboo; language, translation blunders may occur; education, the degree of
illiteracy within a society has to be considered; technology, technological differences across
nations may affect marketing; and the economy, standardization is more practical in markets
that are economically comparable.

Yu Xie and Boggs (2006) state that economic growth and liberalization generate great new
opportunities for MNCs, but there are structural uncertainties created due to market transition
and transformation.

According Yin Wong and Merrilees (2007) a firm has to adapt to its environment which may
consist of a combination of physical, social, cultural and technological factors. The authors
further argue that the cultural aspect is a structural influence which will have an impact on a
firms marketing strategy. Culture is the main reason why domestic brands are modified to fit
into a foreign market (ibid).

Roth (1992) defines three international market characteristics that may impact the importance
of brand image strategy:

1. Level of economic development


Consumer demand and attitudes towards goods and companies offering them are
affected by a countrys stage of economic growth. Different markets have different

27
Literature Review
economic and social conditions; hence it is vital for firms to consider a countrys
overall economic development when developing international marketing strategies.
2. Degree of cultural context
How consumers interpret a message is affected by their culture. Cultural context is
defined as the degree of information consumers infer from implicit, contextual cues
those which are non-verbal and non-written.
3. The extent of competition within a product category
Product positioning, as a means of brand differentiation, has become a vital marketing
tool when managers strive to differentiate their brand from competitors. Positioning
can be developed by offering something different from the competitors or by doing
everything better than the competitors.

According to Yu Xie and Boggs (2006), emerging markets constitute a vital factor in the
future growth of the world economy. An emerging market is defined as a country that has
experienced a relatively rapid pace of economic development, and has initiated economic
liberalization and a market economy (ibid).

Yu Xie and Boggs (2006) provide three reasons to why firms seek to enter emerging markets:

1. To gain new customers and boost sales.


2. Saturation of developed markets forces MNCs to exploit new markets in emerging
economies.
3. Market size and market growth offer huge potential for marketing success.

Yin Wong and Merrilees (2007) argue that the main implication of emerging global markets
is that a firms marketing strategy has to match the characteristics of diverse external
environments. According to Arnold and Quelch (1998), there is a limited marketing
infrastructure in emerging markets; hence distribution channels and media channels are
scarce.

According to Quelch (1999), emerging markets are not homogeneous, and they vary in
economic development and financial stability. They even vary in the same geographical areas.
Furthermore, he states that global companies have to be selective where they allocate their
resources, but there are a lot of opportunities to gain market shares and acquire local brands
(ibid).

2.2.4 Marketing Costs


According to Yu Xie and Boggs (2006) creating a brand is very costly and it is very expensive
to sustain an existing brand. They further state that there might be high marketing costs when
targeting different brands at separate small segments. The authors argue that corporate
branding is efficient in communicating market and product information. A way of reducing
the marketing costs may be to create an integrated marketing communication programme
rather than promoting different product brands (ibid).

Aaker (2008) suggests that when adapting a standardized strategy, economies of scale are
often created. This can be on for example the marketing process, where brand name,
positioning, and advertising issues are handled the same all around the world (ibid).

28
Literature Review
Kapferer (1997) states that the disadvantages of a product brand strategy is the economic
issues, since a new product launch is also a new brand launch, more costs are put into the
process.

Hatch and Schultz (2001) state that companies can reduce costs by adapting a corporate brand
strategy, since they can exploit the economies of scale in advertising and marketing. This
strategy is suited in markets where the product life cycle is declining and hence the costs
would be high to continually creating new product brands (ibid).

Knox and Bickerton (2000) discuss that the actions made by the organization affect the brand
on a product level to a high degree. This also affects the brands economic value in a short
term perspective. They further state that where corporate- and product brand are the same, the
higher success of the brand.

2.2.5 Product Characteristics


Yu Xie and Boggs (2006) state that consumer products are typically more culturally sensitive
than industrial products, especially in emerging markets. According to Yu Xie and Boggs
(2006) there are some differences between consumer products and industrial products:

Industrial products target concentrated markets, whereas consumer products are mass
marketed.
Industrial products enjoy long-term, stable relationships, whereas consumer products
have a short-term perspective.
There are relatively fewer buyers for industrial products than for consumer products.
Industrial products typically reach buyers through short channels, whereas long
channels are normal for consumer products.
There is greater emphasis on personal selling for industrial products than for
consumer products.

Yu Xie and Boggs (2006) claim that new entrants in emerging markets are more likely to use
corporate branding for industrial products rather than consumer products due to the fact that
consumer products are more culturally sensitive.

McDonalds et al. (2001) state that corporate brands dominate within the financial sector.
Furthermore they discuss that when targeting new markets, product branding should be suited.
Product branding should also be used when entering markets with new products, since a new
approach is expected from the customers. They also mean that product branding should be
used for service brands in different situations (ibid).

McDonald et al. (2001) state that an advantage with product branding is that it allows the
company to be more flexible and to use marketing activities that appeal to different groups of
people. However, this also has disadvantages since this strategy increases the marketing costs
(ibid).

Arnold and Quelch (1998) state that MNCs have to adapt their products or service offerings in
emerging markets. The product range should also be narrow and target the major cities in
countries. Additionally, the products should be established in other markets, hence the change
that the customers have been aware of the brand in other countries from travelling is larger
(ibid).

29
Literature Review

2.3 Conceptual Framework


According to Miles and Huberman (1994) a conceptual framework explains, either
graphically or in narrative form, the main things to be studied the key factors, constructs or
variables and the presumed relationships among them. In line with Miles and Huberman, a
conceptual framework will be formed which will help us to collect data relevant to our
research questions. Below, the two sections that belong to each research question will be
explained, as well as the theory which goes into our conceptual framework and the motives
for the selection.

2.3.1 Branding Strategies of MNCs in International Markets


As stated by Urde (2003), there are four brand architectures available to firms; corporate
brands, product brands, corporate- and product brand (with dominant use of the corporate
brand), and product- and corporate brands (with dominant use of product brands). After
reviewing different branding strategies and theories related to these, we found that there are a
lot of different branding strategies that are mixtures of both corporate- and product brand
strategies that MNCs can adopt. However, we will base the conceptual framework on the
brand architectures mentioned by Urde because these summarizes and identifies the strategies
existing for MNCs in a noncomplex way. Another important strategy connected to MNCs
operating in international markets is standardization versus adaptation (Bradley, 2002; Yin
Wong & Merrilees, 2007; Alashban et al., 2001; Hsieh & Lindridge, 2005; Palumbo &
Herbig, 2001; Yu Xie & Boggs, 2006; Keller, 2007; Quelch, 1999). There have been a lot of
research in this area; therefore we believe that this area is an interesting issue to investigate,
since MNCs choose either standardization- or an adaptation strategy, or a mixture of these.

We choose to rely on previous research from the below mentioned authors because these are
most relevant for our area of research.

Regarding corporate branding such features include:

Strategy
Corporate brands are strategic (Hatch & Schultz, 2003; Yu Xie & Boggs, 2006)
Brand architectures (Urde, 2003)

Management of the Brand


Corporate branding is managed by CEO (Hatch & Schultz, 2003; Balmer, 2001)
Delivered by the whole company (Hatch & Schultz, 2003)

Stakeholder Focus
Focus is on stakeholders (Hatch & Schultz, 2003; Balmer, 2001; Knox & Bickerton,
2000; Ind, 1997; Kay 2004; Kapferer, 1997).

Standardization versus Adaptation


Standardization versus adaptation (Bradley, 2002; Yin Wong & Merrilees, 2007;
Alashban et al., 2001; Hsieh & Lindridge, 2005; Palumbo & Herbig, 2001; Yu Xie &
Boggs, 2006; Keller, 2007; Quelch, 1999)

30
Literature Review
Regarding product branding such features include:

Strategy
Product brands are more functional (Hatch & Schultz, 2003)
Brand architectures (Urde, 2003)

Management of the Brand


Product branding is managed by the middle manager (Hatch & Schultz, 2003; Balmer,
2001)
The product brand is delivered by the marketing function (Hatch & Schultz, 2003)

Stakeholder Focus
Focus is on customers (Hatch & Schultz, 2003; Balmer, 2001)

Standardization versus Adaptation


Standardization versus adaptation (Bradley, 2002; Yin Wong & Merrilees, 2007;
Alashban et al., 2001; Hsieh & Lindridge, 2005; Palumbo & Herbig, 2001; Yu Xie &
Boggs, 2006; Keller, 2007; Quelch, 1999)

We have summarized the mentioned strategies and key factors connected to branding
strategies within international markets in figure 2.5.

Corporate Product
Branding Branding
Standardization
versus
Adaptation

Product- and corporate


Corporate- and product
brands (with dominant use
brand (with dominant use of
of product brands)
the corporate brand)
Managed by middle
Managed by CEO
manager
Focus on stakeholders
Focus on customers
Delivered by whole
Delivered by marketing
company
function
Strategic
Functional

Figure 2.5 Conceptual Framework of Branding Strategies in International Markets

2.3.2 Factors Determining MNCs Choice of Branding Strategies


According to Yu Xie and Boggs (2006) there are certain factors influencing a firms choice of
branding strategy. In the conceptual framework we will concentrate on the following factors:
stakeholder interests, corporate image and reputation, marketing complexity and marketing
costs which are based on Yu Xies and Boggs model presented in the literature review
(Figure 2.4) on the factors affecting branding strategy of developed country firms in emerging
markets. Yu Xie and Boggs have proposed this model, however, they have not tested it
empirically. Although Yu Xie and Boggs model handles the factors affecting branding
strategies in emerging markets, we believe that this model can be applied on international
markets as well. Therefore, we find their model relevant for our research and thus we wanted
to test this model empirically. Furthermore, we find that our research will be a contribution to
their research.

31
Literature Review
However, to reach our purpose we have chosen to modify their figure. We have chosen to
concentrate on four main factors instead of five which are presented in the original figure,
since we believe that these four are most important for our research purpose. We have also
chosen not to concentrate on firm characteristics, since we believe that this factor is not
relevant for our research purpose. Additionally, we have chosen to add the strategy of
standardization and adaptation. Since a lot of research has been done related to this concept, it
seems like this is an important issue to consider for MNCs in international markets.
Therefore, we find this relevant for our research topic as well. With this modification, we
believe that our figure is sufficient in order to research our purpose. Based on the mentioned
key factors we have created a conceptual framework which is summarized in figure 2.6.

Stakeholder
Interest

Corporate
Image and Choice of Branding
Reputation Strategy
Corporate Branding
Product Branding
Corporate- and
Market product brand (with
Complexity dominant use of the
corporate brand)
Product- and
corporate brands
(with dominant use of
Marketing product brands)
Costs

Standardization
versus
Adaptation

Figure 2.6 Conceptual Framework of Factors Determining MNCs Choice of Branding Strategies.

Except for Yu Xie and Boggs (2006), other authors have reflected on the importance of these
factors. Each of the mentioned factors will be further broken down into smaller parts
explained as:

Stakeholder Interests
o Employees, customers, investors, suppliers, partners, regulators (Hatch &
Schultz, 2003)
o Relationship with host government country (Yu Xie & Boggs, 2006; Arnold &
Quelch, 1998)
o Partnership between manufacturers and dealers (Yu Xie & Boggs, 2006)

Corporate Image and Reputation


o Expectations of stakeholders (Knox & Bickerton, 2000; Yu Xie & Boggs,
2006; Ind, 1997; Kay 2004)
o Brand personality inline with core values of the company (Urde, 2003)

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Literature Review
o Characteristics of a corporate brand: consistency, added value to products and
services, a good reputation attracts investors (Balmer, 1995)
o Characteristics of a product brand: less harm to the firm if one of the individual
brands fail, flexible, high marketing costs (Yu Xie & Boggs, 2006; Kapferer,
1997)

Market Complexity
o Consumer characteristics (Yu Xie & Boggs, 2006)
o Competition (Yu Xie & Boggs, 2006; Roth, 1992)
o Cultural aspect (Yin Wong & Merrilees, 2007; Roth, 1992;
o Environmental factors (Yin Wong & Merrilees, 2007)

Marketing Costs
o High costs related to targeting different segments (Yu Xie & Boggs, 2006)
o Economies of scale (Aaker, 2008; Hatch and Schultz, 2001)

33
Methodology

3 Methodology
In this chapter, the methodology used for this research is outlined and discussed. The purpose
is to get an overview over the research and see how the secondary data can be compared with
the primary data, and also how they can be compared with each other. This chapter starts
with the research purpose, followed by the research approach, the research strategy, data
collection method, sample selection, data analysis and finally a discussion about quality
standards.

3.1 Purpose of Research: Explore, Describe and Explain


According to Eriksson and Wiedersheim-Paul (2006) the purpose of a research is to state what
is to be achieved by the research and how the results can be used. According to Yin (2003)
there are three stages when designing research; exploratory, descriptive and explanatory
stage.

Exploratory
Yin (2003) states that if the research questions are based on what questions, the
research has an exploratory research purpose. Exploratory research can also be
undertaken if there are little or no prior research in the area, and can then be used to
explore why there is interests in further research at all (Wilson, 2003).
Descriptive
Descriptive research purpose is according to Wilson (2003) information that is
gathered through descriptive research and answers questions of who, what, where, how
and when. Furthermore he discusses that this information answers questions of
different situations, and are appropriate when the research focus on descriptions of
characteristics. Yin (2003) states that descriptive research should describe the
situation. Furthermore Eriksson and Wiedersheim-Paul (2006) state that researchers
could choose to describe; situations, events and actions.
Explanatory
Explanatory research answers questions of how and why (Yin, 2003). Eriksson
and Wiedersheim-Paul (2006) state that explaining means to analyze cause-effect
relationships. Wilson (2003) discusses that causal research examine the relationships
with two variables.

Due to the above differentiation, our research may be classified as a descriptive research
purpose, since the purpose is to investigate and describe the branding strategies of MNCs in
international markets and what factors determine choice of branding strategy. To the extent
that the present study may shed light on branding in international markets, scarcely
investigated, our research may be considered as partially exploratory. An explanatory
research purpose is also used since we begin to explain cause-effect relationships of what
factors determining the choice of certain actions when conclusions are drawn.

3.2 Research Approach: Qualitative Research


According to Denscombe (2000) a qualitative research approach is suitable when human
activities or when behavioral patterns will be investigated. Furthermore he discusses that a
qualitative research approach is distinguished due to the researchers own interpretations and
analyzing. Qualitative research leans towards an unstructured small scale carefully selected
individuals approach with a purpose to gather non-quantifiable information that provides
insight into a behavior, motivations and attitudes (Wilson, 2003).

34
Methodology
Based on this information, a qualitative research approach was used, since the empirical data
was collected on a small scale level and since the purpose of this research was to gain a
deeper understanding of actions in certain situations. The ambitions of this research was to
gain an in-depth view of this situation, hence qualitative research was most suited.

3.3 Research Strategy: Case Study


Case studies are appropriate for small scale researches that handle few units in a narrow
perspective and where an in-depth study is going to be conducted (Denscombe, 2000). He
further explains that a case study focuses on relations and processes to get a perspective of
how these are linked together, the research is also conducted in a natural environment without
control over situations, and it also provides the researcher with the opportunity to have
different sources and methods. Yin (2003, p. 13) states that a case study is an empirical
inquiry that investigated a contemporary phenomenon within its real-life context, especially
when the boundaries between phenomenon and context are not clearly evident. He further
states that a case study answers questions that have a character of how and why. A
multiple-case study is suited when two or more entities are studied and compared, and the
benefit of this is that it increases validity (Yin, 2003). Yin (1994) argues that within multiple-
case studies there are holistic multiple-case design which is suited when the global nature of
an organization is examined.

Since our researchs aim was an in-depth understanding of a certain situation, and since the
research questions had the characters of how, a case study was suitable. Since we
performed a multiple-case study, multiple cases and single units of analysis were used.

3.4 Data Collection Method: Interviews


One source of evidence that Yin (2003) discusses was used in this thesis; interviews.
According to Denscombe (2000) an interview is a guided conversation between two or more
people. Furthermore, he states that a semi-conducted interview is an interview where the
researchers have conducted the interview questions prior to the interview. However, the
respondent can speak freely and expand the answers to have a dialogue with the researchers
(ibid). According to Jakobsen (1993), there are two kinds of interviews; face-to-face
interviews and telephone interviews.

In order to gather valuable information, we conducted two interviews. As a method, we used


telephone interviews due to geographical distance. We conducted the interview questions
prior to the interview, and the interview guide was sent to the respondents in advance. The
respondents were given room for reflections and explanations and the respondents were also
able to ask questions during the interview. Additionally, supplementary information from both
companies homepages were added to the cases.

3.5 Sample Selection: Subjective and Convenience


A subjective sample selection is according to Denscombe (2000) when a decided sample is
chosen when the researcher has knowledge about what is going to be investigated, and the
researcher chooses that sample because of the belief that these persons will provide the most
valuable information.

According Blaxter, Hughes and Tight (2001), a convenient sample selection is when the most
convenient sample is selected.

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Methodology
In order to collect valuable information for the empirical data we chose to undertake a
subjective- and a convenient sample selection. We thought that it would be interesting to look
into one company that used a product brand strategy, and another that used a corporate brand
strategy. When deciding which companies to choose we had different reasons for choosing
the companies provided for this research.

In our literature review, many authors have mentioned Procter & Gamble when talking about
product branding. P&G is furthermore a global company and considered to be a solid,
respected, and a trustworthy company and therefore we believed that this company would be
interesting to look into, and to further investigate. The authors had also access to P&G
because of personal contacts, and therefore this company was chosen. Regarding the other
company chosen for this research, Sony Ericsson, we assumed that the company used a
corporate strategy. Furthermore, Sony Ericsson is also a company that is highly respected and
trustworthy and as with P&G we had access to this company because of personal contacts and
due to convenience, this company was chosen.

3.6 Analysis of Data


Yin (2003) addresses three types of analytical strategies; relying on theoretical propositions,
thinking about rival explanations, and developing a case description. Relying on theoretical
propositions is the strategy where secondary data is compared with primary data (Yin, 2003).
This was also the analytical strategy that was used in this thesis. We chose to approach this
strategy since we conducted a multiple-case study and compared our findings with previous
theories in a within-case analysis.

Miles and Huberman (1994) clarify data analysis as consisting of three components, namely
data reduction, data display and conclusion drawing/verification. They explain each
component as follows:

Data reduction is the process of selecting, focusing, simplifying, abstracting, and


transforming the data that appear in written-up field notes or transcriptions (Miles
& Huberman, 1994, p. 10). They further state that data reduction actually begins
before the gathering of the information when the researcher decides which conceptual
framework, which research questions to be used and so on.
Data display is an organized, compressed assembly of information that permits
conclusion drawing and action (Miles & Huberman, 1994, p. 10). They state that the
data display simplifies the decision of either analyzing the data further or to take
action. The authors further claim that a good data display is needed for a valid
qualitative analysis.
Conclusion drawing and verification is according to the authors the stage when the
researcher starts to see what the collected data means. They further state that the
conclusions that begin to appear relatively early in the process should be held lightly
until the data collection is over.

We attempted to follow the three stages of data analysis accordingly. Already in the stage of
collecting relevant data for our research questions, we selected the literature carefully in order
to simplify the answering of our research questions. The conceptualized literature was
displayed in figures to provide a comprehensive overview. The empirical data was then
compared to the existing literature in a within-case analysis followed by a cross-case analysis
in order to compare the two cases, finally conclusion drawings and verifications were made.

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Methodology

3.7 Quality Standards


Denscombe (2000) mentions three types of quality standards that are relevant for a qualitative
research; reliability and validity.

The criteria of reliability are discussed by Denscombe (2000) as if the research instruments
are neutral, and if someone else would perform the same research they would get the same
result. In this research interviews were conducted with different people within each
organization. Since interviews handle human beings, and the interrelationships between the
interviewers and the interviewees, the same result might not be found if someone else would
have performed the research.

Our research was made with only two companies within different industries, which might
have decreased reliability. Our findings were therefore based on two case studies, which
makes it worth noting that no generalizations can be made due to the limited number of cases.
However, the chosen companies are well established with years of experience within our
selected field of study. If there would have been more companies within the same industry,
and also companies using the same strategy, this might have increased reliability. However,
we believe that these companies could provide us with valuable information since the
companies are two global companies and have a trustworthy image. Therefore, we assume
that their type of branding strategies may be transferable to other MNCs branding strategies
and hence increase reliability.

Furthermore, we only interviewed one person within each company; this might have
decreased reliability negatively. However, we contacted the companies and we were referred
to the right person that could answer our questions and therefore we consider the interviewees
to be representative for this research and they were the persons that provided us with the most
valuable information. In this manner we aimed to increase reliability.

To further increase reliability the interview guide was sent in advance so that the interviewees
would have time to prepare the answers. We attempted to ask non-leading questions, and the
interviewees were able to ask questions when there were questions that were indistinct or
unclear. Furthermore, we analyzed the data collected during the interview immediately after
the interview. Therefore we limited the risk of missing or forgetting important data, which
increases validity.

Validity is according to Denscombe (2000) the criteria of measuring what is supposed to be


measured. During the interview we used a tape-recorder which we informed the interviewee
in advance about. We tape-recorded the whole interview to ensure that we got all information,
by that we were able to double check the answers which increased validity.

The interviewees were persons who could provide us with the correct information and who
were representative for this research. None of them were Swedish speaking. One of the
respondents had English as his native language. The other interviewee had German as his first
language. Therefore the interviews were performed in English. We believe that this might
have decreased validity. However, both the interviewees and the researchers spoke English
fluently, and since the interviews were performed in English there might have been a risk of
loosing information due to language misunderstandings. But, in this way the risk of
translating errors is nonexistent, which in turn increases validity.

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Data Presentation

4 Data Presentation
In this chapter, data collected from interviews with Procter & Gamble and Sony Ericsson is
presented. The chapter starts by a presentation of the first case, followed by the second case.
Both cases start by brief background information of the companies.

4.1 Case One: Procter & Gamble (P&G)


Company Background
According to P&Gs webpage, the company consists of over 138,000 employees working in
over 80 countries worldwide. P&G is a public company and is listed on the New York Stock
Exchange (NYSE). Additionally, the company is on the Fortune 500 list. The CEO is A.G.
Lafley. P&G started as a small, family-owned soap and candle company in 1837, and has
grown to be a global company providing products and services in different areas. The
headquarter is based in Cincinnati, Ohio. P&G has nearly 300 brands in different areas. The
company has one of the largest and strongest portfolios of brands, for example Pampers, Tide,
Ariel, Always, Pantene, Bounty, Folgers, Pringles, Charmin, Downy, lams, Crest, Actonel
and Olay.

The companys operations are listed into three global business units (GBU), with each GBU
divided into different Business Segments:

Beauty
o Beauty Segment
o Grooming Segment
Household Care
o Baby Care and Family Care Segment
o Fabric Care and Home Care Segment
Health & Well-Being
o Health Care
o Snacks, Coffee and Pet Care

Our respondent at P&G was Andreas Wagner who works as assistant brand manager, shopper
marketing, in Schwalbach am Taunus, Germany. When presenting our empirical findings, we
will refer to the respondent Andreas Wagner.

4.1.1 Branding Strategy of Procter & Gamble in International Markets


Product Branding Strategy
P&G focuses merely on product branding and uses a global strategy. There is no real home
market since P&G is global company, but it is originally an American company. P&G as a
corporation is more publicly known in USA and Great Britain than in other countries. But the
actual corporate brand, P&G, is never marketed; instead focus is on the different product
brands. P&G has around 300 brands in total worldwide. However, the number of brands may
change monthly and sometimes even weekly. The brands that are not successful are sold. For
example, many of the family care brands have previously been sold, but instead P&G has
acquired the global brands Wella and Gillette.

The reason for using a product branding strategy is because P&G has many different kinds of
products: baby care, health care, pet food, coffee, etcetera. When there are diverse kinds of
products it is better to focus on product branding rather than corporate branding. The focus

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Data Presentation
will stay on product branding. However, P&G sometimes uses an umbrella strategy where one
product brand is extended to several additional products such as Ariel with different
products/sub brands under the Ariel brand.

Traditionally, the brands strengths have been driven by innovation to be best in class.
Today, the focus lies more on commercial innovation. Hence product innovation is losing
importance for brand management. For P&G people and managerial resources are important.
Additionally, it is important with first-mover advantage. In order to build a competitive
advantage, P&G has traditionally been very focused on innovation. However, focus has
shifted to be more driven by marketing knowledge.

To sustain competitive advantage P&G makes huge investments. There is a huge R&D
infrastructure, as well as marketing functions. In some cases P&G acquires other companies
with strong global brands in order to sustain competitive advantage. Two recently acquired
strong global brands are Wella and Gillette. Hence, P&G focuses only on acquiring truly
global brands, or brands that have the potential of becoming global. P&G would never acquire
a small local supplier just to open the market.

P&G focuses on traditional advertising such as TV-advertising etcetera. P&G does not want
to change its type of branding and marketing strategy. The company wants to create global
brands. When the company has a new product idea, it has to be considered how that specific
product can be taken into other markets. Hence, there has to be consensus for a whole
continent. That is the reason why P&G prefers to bring in successful brands from one country
to another, instead of developing new products.

When developing a strategy for specifically emerging markets, P&G takes the best ideas from
other markets and sends the best people to the new markets. P&G opened up China and
Russia by sending 10 of the best people. After a few years time, the number of employees had
risen to 200 people. P&Gs main reason for going international is to boost sales and reach
economies of scale and scope. It also has to do with international communication. P&G
simply tries to find out what works internationally.

Management of the Brand


The product brand is undoubtedly the most important. The whole organization focuses on
product branding except for some special functions which may deal with the corporate brand.
Since P&G focuses on product management it is the marketing organisation which manages
the product brands. The PR department is the ones who make some kind of corporate
branding for P&G.

There is a Global Business Unit (GBU) which is responsible for the strategic development of
the brand. P&G also has regional GBUs on each continent, as well as Market Development
Organisation (MDO) in each region. When it comes to managing the brand image, the GBU
and MDO have the main responsibility. Both entry level position management, middle level
management, as well as senior level management are responsible. The more important a brand
is; the higher level of management responsibility. When delivering the product brand, most of
the work is made by the MDO at the entry level management. Generally, marketing is mainly
managed by entry level management and middle level management.

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Data Presentation
Focus on Stakeholders
For P&G all stakeholders are important, and the most important stakeholders are the
customers. It is vital for the company to understand and please the customers. Other important
stakeholders include employees (since it is a very strong focus on personal development
within P&G), local governments, shareholders, and investors. P&G has a commitment to
invest in about 20 billion dollar in sustainable products and grow 5-6% per year; hence the
investors are important to consider. P&G has a long-term focus measured in both financial
success, as well as sustainability. When it comes to brand-building a long-term focus means
up to 20 years, and when it comes to investors it means at least 5 years.

Standardization versus Adaptation


P&G tries to position all the brands similarly in all markets. However, some brands may have
a stronger position in some markets, and a weaker position in others. There are some markets
such as South America where some special brands, for example shampoo, is positioned
differently because of different income structures. P&G tries to standardize as much as
possible, and the aim is that the product should work throughout at least one continent. Hence,
there are many different languages on the packages. The same type of product branding
strategy is used all over the world.

P&G sees what works in one market and takes it to another market, and tries to do it the same
way. A lot of research is made before entering a new market in order to find out if the brands
have to be adapted. Research is made in order to get to know the customers, the culture and
the country. Adaptation is made only if it is necessary, so in some cases there might be
adaptations made to each local market when needed. The color green for example cannot be
used in the Near East due to cultural reasons.

4.1.2 Factors Determining Procter & Gambles Choice of Branding


Strategies in International Markets
Stakeholder Interest
The employees personal development and career path are reasons to work abroad. P&G has
the philosophy of bringing the best people and ideas in one country to another. The consumers
are very important, and P&G always tries to find out their needs. Normally, thorough research
is made before launching a new product in a new market. Usually, P&G always knows what
will work in one market before the launching. The marketing strategy is hence very analytical
and built upon consensus and it is not very flexible. Numbers, research as well as finding the
right target group is therefore important.

When choosing branding strategies for emerging markets, culture and non-governmental
organizations (NGOs) are important factors to consider. There are many emerging markets
where the democratic structure is not as developed as in America or Europe; therefore the
local governments and NGOs are important when considering these markets. P&G also has to
find out if the goals of the local governments and NGOs fit with the corporate culture of
P&G. The local governments are important since there are many laws that have to be taken
into consideration. An example is Saudi Arabia, where women are not allowed to shop in the
same stores as men. Therefore there might be stores with just male products and other stores
with just female products.

Corporate Image and Reputation


Corporate image and reputation is not so important for P&G since very few people actually
know P&G. The consumers know the product brands, but not the corporate brand. The focus

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Data Presentation
is more about defining the competitive advantage of each product and finding the right target
group.

The advantage with product branding is if there is a problem with one of the brands P&G can
just drop it or sell it. It does not affect the other product brands if one of them fails. For
example, if there is bad publicity about one brand, it will not affect all the other brands. The
advantage with corporate branding on the other hand is that a strong corporate brand might
help to hold all the other brands together, and it might cause a positive effect if new products
are introduced. However, for P&G it is more advantageous to use product branding since
there are around 300 brands all together, and it is quite difficult to forecast what will happen
next.

Investors are important for the corporate image and reputation. Simply everything that
happens with the company that may affect the stock exchange is important to consider. Also
corporate social responsibility is important, since that affects the corporate image and
reputation. P&G has a strong corporate culture with certain principles, mission statements,
etcetera which are important. The employees are important, since they are the ones spreading
the good word about the company. P&G only hires newly graduated employees, and most of
the employees who start working for P&G usually stay very long. That means that P&G is a
strong community and takes good care of its people.

Market Complexity
The risks with spreading the brands worldwide are the different countries and different
cultural backgrounds. The brands are driven by an American perspective. In many of the
emerging markets, the people are looking for a western kind of lifestyle which makes it easier
for P&G to launch the products. On the other hand, in countries where the people may be
hostile to America, it may be harder to launch the products. When entering a new market legal
constitutions and culture is very important when it comes to branding. Competition is another
factor also taken into consideration.

Marketing Costs
P&Gs motive for internationalizing the brands is economies of scale and scope. What is
successful in one country is simply brought to another. Each single brand does not necessarily
exist in all markets; for example in Germany there are around 150 brands in total. The cost
advantage with P&Gs type of branding strategy, i.e. product branding, is as mentioned
previously economies of scale and scope. This is proved to be best for P&G. The cost
disadvantage is that it requires huge investments for all the 300 brands. The total investment
is up to 18% of the total profit.

4.2 Case Two: Sony Ericsson


Company Background
Sony Ericsson is a joint venture which is owned equally by Sony Corporation and
Telefonaktiebolaget LM Ericsson. Sony Ericsson was established in October 2001 and its
mission is to be the most attractive and innovative global brand in the mobile handset
industry. The reason for this joint venture is to combine the individual expertise of both
companies and ever since, their individual production of mobile phones has stopped and Sony
Ericsson handles all this production. Sony Ericsson has approximately 8,000 employees
around the world. Sony Ericssons product portfolio consists of mobile phones, mobile music
devices, wireless systems, wireless voice devices, hi-tech accessories, and wireless data
devices. The company is a global provider of mobile multimedia devices and this includes

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Data Presentation
phones and PC cards, it also provides products that handle the latest technology in 2nd and 3rd
generation.

The total revenue of the company (2006) is 10,959 million. According to the Sony Ericsson
website, the company is a world leader in design and innovation. Sony Ericsson is the lead
brand, but it also has three sub-brands. The company has cooperation with partners such as
Sony BMG. Global management and headquarter is based in London (England), R&D in
Sweden, UK, France, Netherlands, India, Japan, China, and the US. The President of Sony
Ericsson Mobile Communications is Hideki Komiyama, and Corporate Executive Vice-
President and Head of Sales is Anders Runevad.

Our respondent at Sony Ericsson was Andrew Warner who works as the Director of Brand
Management in London, United Kingdom. When presenting our empirical findings, we will
refer to the respondent Andrew Warner.

4.2.1 Branding Strategy of Sony Ericsson in International Markets


Corporate- and Product Brand Strategy (with dominant use of the corporate brand)
Sony Ericsson implements a corporate brand strategy, where the Sony Ericsson is the main
brand; hence the company uses a master brand strategy where the Sony Ericsson brand
appears on every single product. The brand is organized in the way that Sony Ericsson is the
lead brand which is delivered worldwide. Under the lead master brand there are three
category brands:

Cybershot
Walkman
PlayNow

The brand hierarchy is shown in figure 4.1.

PlayNow

Figure 4.1 Sony Ericssons Brand Hierarchy

The products fall under different sub-brand depending on whether it is a music phone or a
camera phone. The company offers music phones under Walkman, and camera phones under
Cybershot. Walkman is delivered with Sony cooperation. PlayNow is an application and a
download service, where tunes and images can be downloaded. Sony Ericsson is because of
its structure a mix of both a corporate and a product brand. The different products also have
names, but this is not considered to be brands; but only a name of a product, e.g. K800. The
reason for this is that the products are sold during a very short period of time, so Sony

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Data Presentation
Ericsson invests in the category brand instead. These brands are consistent all over the world
so the concept is used worldwide.

Sony Ericsson does not consider any market to be the home market; this is because of the
ambition to be a global brand. Although Sony is from Japan and Ericsson is from Sweden,
and the company employs and has more people employed in Sweden than anywhere else in
the world, the company still considers it to be an international global brand. Sony Ericsson
has its headquarters in UK, but presence in all regions of the world so no nationality is
dominating. In this way the company differentiates itself from its competitors.

When it comes to motives for internationalization, Sony Ericsson develops a brand structure
that will work all around the world. The motives are:

Efficiency
Consistency
Management

The motive is to have the same values all over the world and to have consistency in the brand
message that is used. The company therefore produce products that can be shipped all over
the world and hence benefit from economies of scale. The brand is therefore manageable and
the control is kept by the company. However the company has some local adaptations, but
have the same company values worldwide.

Japan is an important market and has a different market structure. First of all because Sony is
a part of the parent market, but also because Japan is highly innovative when it comes to
innovative technology of the mobile phones. Sony Ericsson can by that learn from Japan and
build its expertise. After that, when the technology becomes relevant; the company can apply
the technology on the rest of the markets worldwide.

One of Sony Ericssons strategies, which stems from Sony, is to create markets rather than
following it. The company creates a demand at the operators, and provide examples that the
company believes can be valuable for the customers. The company does not want to dilute the
brand and make it available to everybody, but Sony Ericsson has to keep the control over the
brand.

Sony Ericsson draws its major strengths mainly from innovation. Innovation is a part of the
DNA of both Sony and Ericsson, where both companies have a long history of innovation,
and to create new ideas. This concept is brought into Sony Ericssons values so that the
companies integrate with each other. Sometimes they take first mover advantages but other
times they might not be the first on the market, but simply striving to create a way of doing
things better and in other ways compared to competitors, also think of things that is more
relevant to the consumers. However, financial strength is important as well since the company
consider themselves to be one of the top five brands in the world, which means that Sony
Ericsson has financial strength.

In terms of international distribution the company has a global footprint where Sony Ericsson
operates in two mobile phone technologies; 2nd and 3rd generation. In most markets Sony
Ericsson can serve the customers since the technology used in the country is matched with the
technology used for the mobile phones, but in some markets there are operators that approach
other technologies than Sony Ericssons; in those markets the company cannot serve the

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Data Presentation
customers because they do not have phones that match that technology. Managerial resources
are important but these are quite similar to other global manufactures.

In order to take advantage of economies of scale, produce volume and to achieve low unit
prices in a competitive market companies have to appear as a global brand. However it is
possible to be a local brand and still have economies of scale. But in order to have a brand
that has market shares globally and to be one of the top three or four players, there has to be
decided to be either a niche brand or a global player. Sony Ericsson started as a global brand
and since the company is a joint venture of Sony and Ericsson, which are two well known
global brands it was natural to be a global brand immediately. It has always been a company
vision to be the most attractive global brand.

Sony Ericsson builds competitive advantage in many different ways, and the company has to
manage all things in the marketing mix. The company has to manage relationships and think
through how close the company is to consumers and a way to be relevant brand to consumers.
The company also has to anticipate trends that emerge in different markets and at the same
time stay very close to the customers in the B2B market, like the operators and the retailers.
Since the operators and retailers deliver the Sony Ericsson brand, it is important that the
retailers and operators understand the Sony Ericssons business so that the company can
deliver a portfolio that is most relevant. For Sony Ericsson it is important to think through
how the company can deliver customized offerings and better understand the business but also
the competitors in order to compete in a competitive environment. Sony Ericssons strategy is
to be ahead of consumers, so the company can satisfy customer needs. Sony Ericsson has to
keep up with innovation, but also understand how the company can deliver the products and
services most effectively.

Management of the Brand


Sony Ericsson has a brand manager for each team. The company has a creative design centre
in Lund that develops the software and implements it but also designs the phone and develops
the technology. The design centre has a set of rules of how to design the phone which they
have to stick to. The company has a central brand manager team, a design centre team and in
each region Sony Ericsson has one local person. On a local level the company has local
expertise; for example in China there are counterfeits and security issues where Sony Ericsson
has local people that handle these issues and manage those at a local level.

The overall responsibility of the brand is managed by the manager at the central team, and the
whole company basically delivers the brand. The brand management team sets the values and
communicates these values as well as the guidelines. However, the marketing teams all over
the world are responsible for the marketing worldwide in terms of how the brand is conveyed
and communicated. There are three persons that have the responsibility of the brand and also
deliver the brand; the head of the product business group, the head of the creative design
group, and the head of brand management group.

The product business group is the ones who make the phones, the creative design group
designs the phone and the software inside the phone, and the brand management creates the
brand guidelines, the brand positioning and communicates that to all other regions worldwide.
Therefore these teams are responsible for each area. Furthermore, the customer service group
is important to the delivery of the experience of the brand as well as the retailers who play an
important role in delivering and communicating the brand. Sony Ericsson educates the
retailers in how the brand should be communicated.

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Data Presentation
Focus on Stakeholders
All stakeholders are important for Sony Ericsson, but the customers are the most important
stakeholder. The customers include network operators, retailers, and consumers. Furthermore,
Sony Ericsson has an employer brand program, where the company decides how the brand
should be delivered to potential and current employees. It is important that all employees
understand the Sony Ericsson brand values and are able to communicate those to the
customers. The employees are important because they are the ones who maintain the brand.
Sony Ericsson focuses on long-term relationships with the stakeholders, especially with the
larger customers.

Standardization versus Adaptation


Sony Ericsson has a consistent strategy worldwide, and has no specific strategy in emerging
markets. Although the brand positioning, and the core values are the same all around the
world, the company segments markets in order to make the products more relevant to
customers and adapts when needed. In those cases, the company varies the market mix and
the product mix in those markets and hence the portfolio, the pricing strategy, the channel
strategy can be different. In an emerging market such as India, the company might deliver
products with for example flashlight or an FM radio alarm because that is relevant in that
market. Furthermore Sony Ericsson might use a local celebrity or a local music artist or use
Hindi to deliver the products.

Sony Ericsson adapts to local preferences and adapt to local markets and markets structures
when it come to local pricing and channel structures. There is not a one-size-fits-all
solution that fits all emerging markets i.e. there are different strategies in emerging markets.
The company therefore tailors the approach to different markets, but the core brand values are
exactly the same in every market in the world. The way the company expresses the brand
might be localized. Furthermore, Sony Ericsson has a brand identity system where the
company is allowed to use the local language or a local reference, or the company could use
an international language and a global reference. Sony Ericsson sometimes acquires other
companies in emerging markets, but as a rule of thumb it is not required.

4.2.2 Factors Determining Sony Ericssons Choice of Branding


Strategies in International Markets
Stakeholder Interests
The factors that determine the branding strategy is both internal i.e. everyone within the
organization and also external i.e. how Sony Ericsson differentiates itself towards
competitors. The company has a long strategic planning and all stakeholders within the
organization determine the choice of branding strategy. The most important stakeholders are
the consumers. The stakeholders expectations are not the same all around the world. In a
market such as Latin America, there is a young population where people demand music
technology in their mobile phones. The company has to have a clear message and defined
ways of communicating that message to the consumers. Therefore, Sony Ericsson has a
commercial focus where the company differentiates itself through for example colors, i.e. the
company uses optimistic colors instead of black.

Each market is different, and each specific market and demands are considered. Sony
Ericsson chooses the branding strategy case-by case. In India for example, focus is put on the
customers because they want to have reliable products and warranties. In China, the focus is
to maintain relationships with the government. The employees are also important stakeholders
since they maintain the brand. Sony Ericsson has therefore an employer brand program, where

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Data Presentation
the company decides how the brand should be delivered to potential and current employees. It
is important that all employees understand the Sony Ericsson brand values and are able to
communicate those to the customers.

Corporate Image and Reputation


Sony Ericsson has a core brand positioning which is used all over the world; therefore the
brand is positioned similarly globally. The brand Sony Ericsson is consistent with the delivery
of the companys core values worldwide and there is a red thread throughout the company.
Sony Ericsson sometimes cooperates with artists, uses local promotions, uses local artists and
brand spokespersons. However, the company still communicates a clear and consistent
message throughout the company worldwide.

The advantages with the strategy used by Sony Ericsson are that the company has a national
benefit and can therefore take advantage of its country-of-origin. When a corporate branding
strategy is used, people know the core values of the company when they are exposed to the
brand; hence this reflects how people perceive the product. The other benefit is the advantage
of a central research and development group. The disadvantages with this type of strategy are
first of all that Sony Ericsson is a long name that can be difficult to pronounce, especially in
countries where English is not the first language. Competition is a risk in certain markets, in
China for example, where local manufacturers can be cheaper. Another disadvantage or risk is
the fact that the company is a joint venture, and hence people might confound the company
with Sony. The company therefore has to build an understanding of the brand Sony Ericsson.

The corporate brand Sony Ericsson plays a significant role since the brand delivers certain
perceptions and certain values. The value of the brand is that it provides a reassurance of that
the brand delivers a certain expected quality. The category brands differentiate the products
from others since they deliver a message to the consumers so that they know that type of
product they are buying; these category brands signal a certain expertise of a particular area.
Walkman for example, strives to produce high quality products with high multimedia design
and people are aware of that it is a music phone.

Market Complexity
Sony Ericssons brand strategy varies between different markets. For example, in Africa it can
be useful with flashlights and navigation systems and GPS, other technological factors might
be important in other markets. However, since Sony Ericsson has global picture, the company
looks at markets that are similar and applies the same strategy in those markets. Pricing
factors might be different in other markets, where the price is significant for the customers.
Consumer characteristics and cultural aspects are other aspects that may differ between
countries. Sometimes it can be a status symbol with a mobile phone, where in other markets it
is the average commodity.

Sony Ericsson is stronger in some markets than others, and therefore the company acts
slightly differently depending on the market. In areas where Sony Ericsson is not that strong
and where the brand is less established, the company has another approach than markets
which is the opposite. Sony Ericsson is facing numbers of challenges. One of them is the
market structure where there are three different markets which they operate in:

High market shares and low penetration of mobile phones


Low market shares and high penetration of mobile phones
High market share and high penetration of mobile phones

46
Data Presentation
In markets with high market shares and low penetration, the company builds on what is
already established and leverages the value of the brand, in these markets Sony Ericsson
strives to grow continuously and target new customers. In the markets where the company has
low market share and high penetration of mobile phones it is a question of growing the
awareness and building the understanding of the Sony Ericsson brand. In the markets that
have high market share and high penetration of mobile phones, the company can maximize
the profit and value and charge high prices.

In markets where the brand is known, there is less of a challenge, and there are less activities
regarding the communicating the Sony Ericsson brand, but in markets where the brand is
unknown, the company works more with building the understanding of the brand.

Other challenges are the operator and retail driven markets. In the markets which is operator
driven, most of the phones are bought from the network operators and then sold to consumers.
The main customers are therefore the operators, and therefore most of the communication is
with and through the operators. But the company has still a relationship with the consumers
since they are driving the operators stocks.

There are markets that are retail driven such as India and China where the company targets
consumers directly. In these markets the aim is to build awareness and create a brand
understanding. In this case, there are direct relationships with the consumers.

There are other markets that are driven by both operators and retailers. In these cases the
company has to think through how to deliver the brand message to the consumers through the
retailers and to be inline with the values of the Sony Ericsson brand. The customers may get
the products from a retailer but also from an operator. It is important to have a consistency in
the way the brand is communicated through all those channels.

Marketing Costs
There are cost advantages with a corporate brand strategy; economies of scale and scope.
Since the company has the same brand image all around the world the company does not have
to repack the products in different markets, but Sony Ericsson ships the commodities
worldwide. There are also R&D efficiencies since the company has the same brand image
around the world. The cost disadvantage is the up-front cost, because Sony Ericsson has to
localize the products in some regions. There are also high R&D costs before a market is
established, because the company has to spend much money on R&D before the global
product is launched. After the global product is launched, Sony Ericsson can develop a
product that is suited for a global market, and therefore implement it all over the world.

47
Data Analysis

5 Data Analysis
In the previous chapter, data was presented in the form of two case studies. In this chapter, an
analysis of the collected data will be performed. The collected data from both cases will then
be compared to the conceptualized framework in a within-case analysis. This will be done
case by case. Finally, the analyzed data from the within cases will be compared with each
other, in the form of a cross-case analysis.

5.1 Within-Case Analysis


In this part the selected data from both cases presented in chapter four, P&G and Sony
Ericsson, will be compared to the conceptualized framework presented in chapter two. This is
discussed in a within-case analysis. According to Miles & Huberman (1994), three
components are used to clarify data analysis, namely data reduction, data display and
conclusion drawing/verification. In this section, data is reduced and the data is displayed in a
table in order to simplify the data. In the end of this chapter, we will strive to discover
patterns and conclusions will start appearing.

5.1.1 Within-Case Analysis of Procter & Gamble (P&G)

Branding Strategies of MNCs in International Markets

Strategy at P&G: Product Branding


As stated by Urde (2003) there are four brand architectures available to firms: corporate
brands, product brands, corporate- and product brands and product- and corporate brands.
Yu Xie and Boggs (2006) defined product branding as building separate brand identities for
different products. P&G has a clear product brand strategy, since each individual brand has its
own identity. The brand portfolio consists of around 300 brands within many different areas,
and that is the reason why product branding suits P&G. When there are several diverse kinds
of products, P&G finds it better to focus on product branding rather than corporate branding.
However, sometimes P&G uses a strategy where one product brand, such as Ariel, is extended
to different sub brand.

Hatch and Schultz (2003) discuss that a corporate brand has a more strategic approach to the
company, whereas product brands are more functional. Since P&G has several diverse
products targeting different segments, the strategy has a functional approach; hence this
corresponds with the theory.

Van Gelder (2003) states that the product brand and the corporate brand are positioned
differently in the minds of the customers when using a product branding strategy. He suggests
that this strategy is suitable when there is a need for a distance between the corporate brand
and the product brand/s. This corresponds with P&Gs strategy, since few people actually
know the corporate brand P&G, and the company focuses on each individual product brand.

P&G has a global strategy, and the brands are global. Bradley (2002) states that it is usually a
process when brands are turning internationally; it often develops from being a local brand
and gradually as the brand is becoming more known it moves into foreign markets. This
corresponds with the case of P&G which started as a local soap and candle company and has
grown steadily since then.

48
Data Analysis
Management of the Brand
According to Hatch and Schultz (2003) and Balmer (2001), the product brand is typically
managed by the middle manager, whereas the corporate brand is managed by the CEO. In the
case of P&G, the whole organization is about product branding since that is the core of P&Gs
business. There are some special functions of the organization which may deal with the
corporate brand. It is the marketing function within P&G which manages the product brands
and marketing within P&G is mainly managed by entry level management and middle level
management, whereas the senior level management has a more strategic approach. Hence, our
empirical findings somehow correspond with the theory. Within P&G, already the entry-level
management has responsibility for the product brand as well as the middle-level management,
whereas the theory states that it is the middle-level manager only.

The global business unit (GBU) at P&G is responsible for the strategic development of the
brands. Additionally, there are regional GBUs, as well as a market development organization
(MDO) in each region. Hatch and Schultz (2003) state that the product brand is delivered by
the marketing function of the firm. At P&G it is the entry level management within the MDO
which is responsible for delivering the brands. Assuming that the MDO is similar to the
marketing function; the empirical findings correspond with the theory.

Focus on Stakeholders
Balmer (2001) as well as and Hatch and Schultz (2002) state that the corporate brand attracts
attention from multiple internal and external stakeholder groups and networks, whereas the
product brand attracts attention from mainly the customers. At P&G the customers are the
most important stakeholder, since they are the ones buying the actual products. P&G finds it
vital to understand and please the customers. However, there are other stakeholders who also
are important including the employees, local governments and investors. As stated in the
theory, it is obvious that product branding is connected with the customers at P&G, whereas
the other stakeholders mentioned are connected to the corporate brand.

Standardization versus Adaptation


Bradley (2002) discusses that firms should have a standardized strategy to international
markets since the companies can take advantage of higher sales when the product image is
consistent over global markets. He further discusses that the costs can be decreased because of
economies of scale and by having a standardized marketing plan globally. However, there
may be a need for customizations since very few markets are totally similar, and many firms
adapt their products to local tastes and preferences (ibid). The same conclusion is stated by
Hsieh and Lindridge (2005) when they argue that a standardization strategy may not be suited
due to national differences. P&G tries to standardize as much as possible and uses the same
type of product branding strategy all over the world. That is the reason why there are several
different languages on the product packages; so instead of adapting to each market, the
products are fully standardized. However, the intention is to standardize, but sometimes it is
needed to adapt to the local markets. But, P&Gs aim is that the product should work at least
throughout a whole continent.

Albaum et al. (2005) discuss that companies can reduce costs by using a standardization
strategy, however by adapting to local preferences companies can get advantage of customer
needs, distribution and promotion methods, competitive market structure, as well as
economies of scale in production and distribution. The reason why P&G uses a
standardization strategy is economies of scale and scope. The company sees what works in
one market and simply tries to do it the same way in another market. Before launching a

49
Data Analysis
product on a new market, there is a lot of research made by P&G in order to find out if and
how the products have to be adapted. The purpose of the research is to get to know the
customers, the culture and the country. There might be certain customer preferences, for
example colors, that need to be taken into consideration before launching a product.

Arnold and Quelch (1998) state that some companies have created a demand by developing
products that suit local preferences in emerging markets. Although P&G tries to position all
the brands similarly in all markets, the company still adapts when it is needed. South America
is one example of a market where some special brands, for example shampoo, is positioned
differently due to different income structures.

In order to simplify the data presented in the within-case analysis above, the main points are
summarized in table 5.1. P&G uses a product brand strategy, therefore the empirical data will
be compared with the theories dealing with product brand strategies.

Table 5.1 Within-Case Analysis of the Branding Strategies of Procter & Gamble in International Markets

Theory Procter & Gamble Correlation

Strategy: product branding


- Brand architecture (Urde, 2003) Product Brand +

- Functional (Hatch & Schultz, 2003) Functional +

Management of the product brand


- Managed by middle manager (Hatch Entry-level management & +/-
& Schultz, 2003; Balmer, 2001) middle management

- Delivered by marketing function Market Development +


(Hatch & Schultz, 2003) Organization (entry-level
management)

Stakeholder focus: product branding


- Customers (Hatch & Schultz, 2003; Mainly customers +
Balmer, 2001)

Standardization versus adaptation Standardization with local +


(Alashban et al., 2001; Hsieh & Lindridge, adaptations
2005; Palumbo & Herbig, 2001; Yu Xie
Boggs, 2006)

Codes:
+ Data coincide with theory
- Data do not coincide with theory
+/- Data somewhat coincide with theory

Factors Determining the Choice of Branding Strategies in International Markets

Stakeholder Interest
Hatch and Schultz (2003) mention that the firms visibility, recognition and reputation is
affected by the firms stakeholders including employees, customers, investors, suppliers,
partners, regulators and local communities. Yu Xie and Boggs (2006), state that the focus of
product branding is on the customers, whereas the focus of corporate branding is on the
stakeholders. They further discuss that it is rather difficult for an MNC entering an emerging

50
Data Analysis
market if it does not have a good relationship with the host government, since the most
considerable difference between emerging markets and developed economies is the variations
in regulations, rules and policies. Additionally, Yu Xie and Boggs stated that it is important to
create a partnership between manufacturers and dealers when entering an emerging market.
P&G confirms that local governments play a vital part when entering an emerging market due
to the fact that there might be markets where the democratic structure is not as developed as in
America or Europe. P&G always tries to find out if the goals of the local governments will fit
with the corporate culture within P&G. The local governments are also important because of
laws and regulations. In for example Saudi Arabia women are not allowed to be in the same
room as men; hence there are stores with only female products and other stores with only
male products, and that will affect the distribution of the products. However, P&G did not
leave any information regarding partnership between manufacturers and dealers, therefore it
cannot be stated whether that corresponds with the empirical findings.

The consumers are the most important stakeholder, and P&G always tries to find out what
they want by making thorough research before entering a market. P&G is listed on the stock
exchange, and therefore the investors are important to consider. Other important stakeholders
for P&G which are not mentioned in the theory are non-governmental organizations (NGOs).

According to Harris and Chernatony (2001) the employees play a great role when creating a
perception of the corporate brand in the mind of the consumers and the rest of the
stakeholders; the employees values have to be interrelated with the values of the company.
At P&G the employees are very important, and much focus is put on the employees personal
development. Sending employees abroad is sometimes included in the employees career
path. P&G has the philosophy of bringing the best people and ideas in one country to another.

Corporate Image and Reputation


According to Yu Xie and Boggs (2006) a strong corporate image is the most useful way of
product differentiation. They further state that customers perception of a product brand
typically comes from the communicated image and advertising, whereas the corporate image
is derived from the customers interaction with the firms employees, physical presence and
overall marketing efforts. For P&G corporate image is not so important since very few
people, i.e. the consumers, actually know P&G. The consumers know the product brands, but
not the corporate brand. For P&G it is more about defining the competitive advantage of each
product and finding the right target group.

Urde (2003) states that a corporate brand needs to have a brand personality that is inline with
the core values of the company. Since P&G focuses solely on its product brands and not the
corporate brand, this does not correspond with the theory.

The benefit of using a product brand strategy according to Yu Xie and Boggs is that the
company may experience less harm to its corporate image if one of the individual brands fails.
This corresponds with P&Gs view, since P&G states that the advantage with product
branding is that if one of all the 300 brands fails it will simply be dropped or sold. It does not
affect all the other brands if one of them fails.

Balmer (1995) states that the benefit with corporate branding is its consistency and that it
brings added value to products and services; if the company has a good reputation it can
benefit from that and the strength of the company is visible to investors, the city and the
government. It is confirmed by P&G that the advantage with a strong corporate brand might

51
Data Analysis
help to hold all the other brands together, and it might cause a positive effect if new products
are introduced. However, P&G will continuously focus merely on product branding because
that is proved to be the best strategy when having such a large brand portfolio. P&G states
however, that investors are important for the corporate image and reputation since the
company is listed on the stock exchange. Everything that happens with the company might
have an impact on the stock. Additionally, P&G finds it important with corporate social
responsibility, since that will affect the corporate image and reputation. Additionally, the
employees are important for P&G since they are the ones spreading positive views about the
company and hence will affect the reputation.

Market Complexity
According to Yu Xie and Boggs (2006) complex international environments affect branding
strategies for MNCs. Barriers on the macro environment that MNCs have to face may include
diverse consumer characteristics and behaviors, the legislative infrastructure and competition.
Yin Wong and Merrilees (2007) state that the environmental factors that the firm has to adapt
to may consist of a combination of physical, social, cultural and technological factors. The
cultural aspect is a structural influence which may have an impact on a firms marketing
strategy, and culture is also the main reason why domestic brands are modified to fit into a
foreign market (ibid).

The theory corresponds well with the empirical findings. P&G confirms that different cultural
backgrounds are the risks with spreading the brands worldwide. Therefore, it is very
important to consider the culture when entering a new market. Other important factors are
legal constitutions and competition which also corresponds well with the literature. Consumer
characteristics is also very important for P&G, since all consumers have different preferences
depending on the cultural background.

Marketing Costs
Yu Xie and Boggs (2006) state that it is very costly to create a brand and expensive to sustain
an existing brand. Additionally there might be high marketing costs when targeting different
brands at separate small segments. According to Aaker (2008) economies of scale is often
created when using a standardized strategy. Hatch and Schultz (2001) suggest that companies
can reduce costs by adapting a corporate brand strategy, since the company then can reach
economies of scale in advertising and marketing. P&G states that the reason for
internationalizing a brand is economies of scale and scope; what is successful in one country
is simply brought to another. By using such a standardization strategy, efficiency is created.
The cost disadvantage, according to P&G, is that it requires huge investments for all the 300
brands, and it is therefore expensive to target different segments.

In order to simplify the data presented in the within-case analysis above, the main points are
summarized in table 5.2.

52
Data Analysis
Table 5.2 Within-Case Analysis of the Factors Determining the Choice of Branding Strategies in
International Markets for Procter & Gamble

Theory Empirical Data

Stakeholder interests
- Employees, customers, investors, suppliers, +
partners, regulators (Hatch & Schultz, 2003)

- Relationship with host government country +


(Yu Xie Bogg, 2006)

- Partnership between manufacturers and N/A


dealers (Yu Xie & Boggs, 2006)
Corporate image and reputation
- Expectations of stakeholders (Knox & +
Bickerton, 2000; Yu Xie & Boggs, 2006; Ind,
1997)

- Brand personality inline with core values of -


the company (Urde, 2003)

- Characteristics of a product brand: +


less harm to the firm if one of the individual
brands fail, flexible, high marketing costs
(Yu Xie & Boggs, 2006; Kapferer, 1997)
Market complexity
- Consumer characteristics (Yu Xie & Boggs, +
2006)

- Competition (Yu Xie & Boggs, 2006; Roth, +


1992)

- Cultural aspect (Yin Wong & Merrilees, +


2007)
+
- Environmental factors (Yin Wong &
Merrilees, 2007)
Marketing costs
- High costs related to targeting different +
segments (Yu Xie & Boggs, 2006)
+
- Economies of scale (Aaker, 2008; Hatch
and Schultz, 2001)
Codes:
+ Data coincide with theory
- Data do not coincide with theory
+/- Data somewhat coincide with theory
N/A Not available

53
Data Analysis

5.1.2 Within-Case Analysis of Sony Ericsson

Branding Strategies of MNCs in International Markets

Strategy at Sony Ericsson: Corporate- and Product Brand Strategy (with dominant use of
the corporate brand)
Regarding research question one, the theory that is brought up in the conceptual framework is
from Urde (2003). He states that there are four brand architectures available to firms;
corporate brands, product brands, corporate- and product brand (with dominant use of the
corporate brand), and product- and corporate brands (with dominant use of product brands).
Van Gelder (2003) has discussed the concept of master brand, which are supposed to drive
consumers purchase decisions and transfer brand value to new product or service sub-
brands. The company in case two, Sony Ericsson, has implemented a corporate- and product
brand strategy with the dominate use of the corporate brand. The Sony Ericsson brand is the
master brand and under that master brand there are three category brands or sub-brands. The
sub-brands have the function of putting added value to the product and making the product
easier to recognize as well as to categorizing them into different qualities and features in order
to maximize customer satisfaction.

Hatch and Schultz (2003) state that corporate brands have a more strategic importance to the
company. Similarly, Yu Xie and Boggs (2006) discuss that corporate brands have a strategic
focus which include corporate strategy, corporate communications and corporate culture. The
theory is supported in this case where Sony Ericsson has a strategic approach where the
values of the company are important and consistent throughout the whole company. These
values are set by the management team and are communicated to the rest of the company and
the employees need to communicate these values to the customers. The long-term approach is
also constant throughout the company. This relates with the theory since Hatch and Schultz
(2003) discuss that the corporate brand has a long life cycle.

Management of the Brand


According to Hatch and Schultz (2003), and Balmer (2001), corporate brands are managed by
the CEO of the company. The corporate brand is furthermore delivered by the whole
company, and it also has multiple channels of communication and this is through total
corporate communication instead of through marketing communication. This somewhat
coincides with the empirical research where Sony Ericsson is managed by the senior manager,
so that the main responsibility is on the senior manager of each of the division.

The brand management team sets the values of the company and communicates these, but the
managers of each of the three divisions have equal responsibility for the brand. The theory
therefore differs from the empirical finding where the theory indicates that the overall
responsibility of the brand is on the CEO of the company. But the theory coincide with the
empirical findings in the way that the brand is delivered by the whole company in the way
that everyone within the organization is supposed to know the core values of the company and
deliver those to the public, and the employees have an important role in creating the
perceptions and maintaining the brand.

Focus on Stakeholders
Hatch and Schultz (2003), Balmer (2001), Knox and Bickerton (2000), as well as Ind (1997)
and Kapferer (1997) state that the focus of the corporate brand is not only on the customers,

54
Data Analysis
but on all the stakeholders both internal and external and the corporate brands need to fulfil
these stakeholders expectations. Ind (1997) further states that there should be a balanced
focus on consumers and shareholders in order to have a complete brand. This is in accordance
with the empirical findings where the respondent company states that all stakeholders are
important. However, the company further states that the customers are the most important
stakeholder. The customers include network operators, retailers and consumers.

Furthermore the employees are highly important since they maintain the brand and spread the
good word about the company. The relationship with the stakeholders is long-term focused.
Kay (2004) further states that corporate brand communication is directed towards all
stakeholders and that the corporate brand has little impact on customers and also little demand
for products and services. This does not coincide with our empirical findings since the
respondent company states that the most important stakeholder are the customers.

Standardization versus Adaptation


Several authors have discussed the concept of standardization and customization (Bradley,
2002; Yin Wong & Merrilees, 2007; Alashban et al., 2001; Hsieh & Lindridge, 2005;
Palumbo & Herbig, 2001; Yu Xie & Boggs, 2006; Keller, 2008; Quelch, 1999). Bradely
(2002) discusses that it is suited for a global company to have a standardized strategy in
international markets, hence the companies can benefit from economies of scale and scope,
and the unit costs can therefore be decreased. Similar findings are also made by Alashban et
al. (2001) where they discuss that a standardization strategy provide companies with the
ability to benefit from a large-scale production, but by adapting the needs of each segment can
also increase revenue.

In the empirical findings, Sony Ericsson has a standardization strategy where the strategy is
consistent worldwide. Because of this the company can benefit from economies of scale and
scope. However, the company adapts to local preferences when needed. This is in accordance
with the theory where Bradley (2002) discusses that it is necessary to adapt the marketing mix
because of the heterogenic markets worldwide. He further states that although markets are
becoming more and more homogenous, there are a still a great diversity and people in
different markets have different preferences (ibid).

Palumbo and Herbig (2000) also state that it is difficult to standardize a global brand name,
and they discuss that the product can sometimes be the same but the brand name is different
or vice versa. This relates with the empirical findings since Sony Ericsson can have the same
product name, but the features of the product might be localized. Keller (2008) mentions that
some companies have a central strategy, whereas other companies have chosen to adapt the
strategy to local preferences, and other use a mix of those strategies.

Quelch (1999) states that some companies believe that since they are global brands, they have
to standardize everything. This is not the case, and Quelch (1999) further states that it has to
be a balance with what to standardize and what to adapt to local preferences. This is in
accordance with the company, since it tailors the approach to different market and varies the
marketing- and product mix in markets that need adaptation in order to make the products
more relevant to the customers.

In order to simplify the data presented in the within-case analysis above, the main points are
summarized in table 5.3.

55
Data Analysis
Table 5.3 Within-Case Analysis of the Branding Strategies of Sony Ericsson in International Markets

Theory Sony Ericsson Correlation

Strategy: corporate branding


- Brand architecture (Urde, 2003) Corporate- and product +
brand (with dominant use of
the corporate brand)

- Strategic (Hatch & Schultz, 2003) Strategic +


Management of the corporate brand
- Management by CEO (Hatch & Senior management -
Schultz, 2003; Balmer, 2001)

- Delivered by the whole company Whole company +


(Hatch & Schultz, 2003)
Stakeholder focus: corporate branding
- All stakeholders (Hatch & Schultz, Mainly customers +/-
2003; Balmer, 2001)
Standardization versus adaptation (Alashban Standardization with local +
et al., 2001; Hsieh & Lindridge, 2005; adaptations
Palumbo & Herbig, 2001; Yu Xie Boggs,
2006)
Codes:
+ Data coincide with theory
- Data do not coincide with theory
+/- Data somewhat coincide with theory

Factors Determining MNCs Choice of Branding Strategies in International


Markets

Stakeholder Interests
Hatch and Schultz (2003) state that all the stakeholders of the company (employees,
customers, investors, suppliers, partners, and regulators) affect the corporate brand image and
the values of the corporation attract stakeholders.

This relates with the empirical findings where Sony Ericsson states that all stakeholders
determine the branding strategy in international markets, and this is both internal (everyone
within the organization) and also external (how Sony Ericsson differentiates itself to
competitors). However, the customers are the ones that have the major influence of which
strategy to adapt. The customers can be not only consumers, but also retailers and operators.
The adaptation is needed because each market is different depending on preferences, in one
country there might be young customers who value a developed music technology, and
therefore Sony Ericsson has to fulfil those customer needs. Because of this Sony Ericsson
develops each strategy case-by-case.

In certain markets it might be of high importance to have and maintain a close relationship
with the government. This relates with the theory since Yu Xie and Boggs (2006) as well as
Arnold and Quelch (1998) state that it is important for an MNC to have a good relationship
with host government when entering an emerging market since the variations of rules and
regulations and polices are different in emerging markets. Arnold and Quelch (1998) also
state that this can influence to what extent a company can get licences etcetera. However,
Sony Ericsson does not have a specific strategy in specifically emerging markets, but
evaluates each market independently of the market structure.

56
Data Analysis
Furthermore, Harris and de Chernatony (2001) state that the employees are important to
consider since they create a perception of the brand in the consumers minds, and it is
important that the company values coincide with the employee values. This also coincides
with the empirical findings since Sony Ericsson states that it is important for the employees to
understand the company brand values and the employees are the ones that maintain the brand.

Yu Xie and Boggs (2006) state that it is important to have partnerships with manufacturers
and dealers in emerging markets. This does not coincide with theory since Sony Ericsson has
the same strategy in all international markets and no specific strategy in emerging markets.
The company has no partnerships with manufacturers or dealers in these markets.

Corporate Image and Reputation


The corporate image is very important to companies and to their way of communicating with
stakeholders (Knox & Bickerton, 2000). Yu Xie and Boggs (2006) further mention that in
order to have a strong corporate image, there is a need to manage the brand inline with
internal and external factors. Kay (2004) further states that the corporate- and stakeholders
vision has to be the same in order to create a strong corporate brand. Ind (1997) has similar
findings where the company has to have a consistent branding strategy to avoid confusing
customers and stakeholders. Urde (2003) also states that the brand personality needs to be
inline with the core values of the company.

The findings from the empirical research coincide with the theory since Sony Ericsson has the
same brand positioning and branding strategy worldwide, and deliver the same core values.
Although the approach can be different depending on the location, the core values and brand
message is always consistent. The reason for this approach is that it provides a reassurance of
that the brand delivers certain expected features. The stakeholders expectations are always
considered since the company adapts some features of the brand to markets that need
adaptation.

Balmer (1995) states that the advantage with a corporate brand is its consistency and that it
creates added value to products and services, and a good corporate reputation can create
benefits to the company since it attracts investors. This relates with the empirical findings
since Sony Ericsson discusses the advantage with a corporate brand and the importance with a
consistency in the brand and the core values of the company. By being exposed to the brand
the customers knows the values, qualities and the features of the brand and the corporate
brand gives certain signals of the brand. A good reputation is reflected in how people perceive
the brand and the product. Regarding the investors importance for the corporate brand, this
does not coincide with the empirical findings since the company is not listed on any stock
exchange and does not have to take those into consideration.

Market Complexity
Roth (1992) states that brand positioning is needed to differentiate the brand from the
competitors by offering something different than the competitors. Although Sony Ericsson
has a global and a standardized strategy, the company adapts to local preferences to some
extent. The company seeks to fulfil customer needs depending on the location. The company
also considers Japan to be an important market, since it is the parent market, but also highly
technologically innovative. Therefore Sony Ericsson often learns from Japan and applies the
relevant strategy learned from Japan to other markets. Other ways of handling competitors is
to create markets, and not follow markets. The company creates a demand with the customers
and serve products that fulfil customers needs.

57
Data Analysis
The consumer characteristics are always considered since the company strives to deliver
products that are most relevant to the consumers. The company also tries to understand and to
be ahead of the consumers and to keep up with innovation and deliver products inline with
customer needs. Culture is another dimension that is different depending on where in the
world you are. Hence, Sony Ericsson also considers the culture when deciding strategies in
international markets and this is adapted to some extent as well to local preferences. The
culture aspect does coincide with the theory where Roth (1992) discusses the role of culture
where different interpretations are made depending on the culture. Similar findings were made
by Yin Wong and Merrilees (2007) where they discuss that the culture influences the choice
of a companys marketing strategy, and further discuss that culture is the main reason for
firms to modify their brands to suit the diverse foreign market.

Yin Wong and Merrilees (2007) state that environmental factors have to be taken into
consideration and adaptations are needed in an international market. Sony Ericsson takes this
into consideration, and therefore the empirical findings are supported in the theory. The
company considers the international marketplace to be heterogeneous, and Sony Ericsson is
stronger in different markets than others. Therefore the company has to act differently
depending on certain factors. For example, in markets with high market shares and low
penetration of mobile phones, the company needs to grow continuously. Hence, the actions
have to be in accordance with the strength and the awareness of the brand. Sony Ericsson also
has to consider environmental factors such as if the markets are retail driven or operator
driven and will then put the forces on the most suited action.

Another important environmental factor to consider when deciding branding strategy is the
technological factors. The products are adapted to local preferences and Sony Ericsson seeks
to fulfil customer needs. In some parts of the world people might demand a highly developed
music technology, and other markets might demand a highly developed GPS system. It might
be considered as a status symbol in some countries to have a mobile phone, where in others it
is an average commodity.

Marketing Costs
Yu Xie and Boggs (2006) state that the marketing costs can be decreased by adapting a
corporate strategy since it has a unified branding strategy. Aaker (2008) also states that a
corporate brand can benefit from economies of scale by a standardized strategy. This stems
from the fact that the marketing process is handled the same all around the world. Hatch and
Schultz (2001) further state that companies benefit from economies of scale in advertising and
marketing since it is standardized. Sony Ericsson benefits from economies of scale and scope
since it has the same brand image and strategy all around the world. The company does not
have to repack the products, but simply ships the products as they are to different locations.

However, since there are different demands in different parts of the world, Sony Ericsson has
high up-front costs because the company has to adapt in some markets and localize the
products. This somewhat coincides with theory, however, the company has an overall
standardized strategy and targets the same segments most frequently. The company has also
high R&D costs before a market is established, because the market has to be thoroughly
researched before the entering. After that the R&D costs are low since it can be implemented
all over the world. Sony Ericsson also has a standardized marketing strategy, so there are no
high costs related to that.

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Data Analysis
In order to simplify the data presented in the within-case analysis above, the main points are
summarized in table 5.4.

Table 5.4 Within-Case Analysis of the Factors Determining the Choice of Branding Strategies in
International Markets for Sony Ericsson

Theory Empirical Data

Stakeholder interests
- Employees, customers, investors, suppliers,
partners, regulators (Hatch & Schultz, 2003) +

- Relationship with host government country


(Yu Xie & Boggs, 2006; Arnold & Quelch, +
1998)

- Partnership between manufacturers and -


dealers (Yu Xie & Boggs, 2006)
Corporate image and reputation
- Expectations of stakeholders (Knox &
Bickerton, 2000; Yu Xie & Boggs, 2006; Ind, +
1997; Kay 2004)

- Brand personality inline with core values of +


the company (Urde, 2003)

- Characteristics of a corporate brand:


consistency, added value to products and +/-
services, a good reputation attracts investors
(Balmer, 1995)
Market complexity
- Consumer characteristics (Yu Xie & Boggs, +
2006)

- Competition (Yu Xie & Boggs, 2006; Roth, +


1992)

- Cultural aspect (Yin Wong & Merrilees, +


2007; Roth, 1992)

- Environmental factors (Yin Wong & +


Merrilees, 2007)
Marketing costs
- High costs related to targeting different +/-
segments (Yu Xie & Boggs, 2006)

- Economies of scale (Aaker, 2008; Hatch +


and Schultz, 2001)
Codes:
+ Data coincide with theory
- Data do not coincide with theory
+/- Data somewhat coincide with theory

59
Data Analysis

5.2 Cross-Case Analysis


Miles and Huberman (1994) state that a cross-case analysis is when multiple cases are
compared with each other. This will provide an understanding and an explanation of different
situations (ibid). In this section a comparison of the two cases will be made. Similarities as
well as differences are outlined and overall patterns are also discovered.

5.2.1 Branding Strategies of MNCs in International Markets


In table 5.5 the data presented in the within-case analyses are compared to each other.
Similarities and differences between the two companies type of branding strategies are
provided in the discussion that follows.

Table 5.5 Cross-Case Analysis of Branding Strategies in International Markets

Factors Procter & Gamble Sony Ericsson

Strategy
- Brand architecture Product branding Corporate- and product
brand (with dominant use
of the corporate brand)

- Approach Functional Strategic

Management of the brand


- Management by Entry-level management & Senior management
middle management

- Delivered by Market development Whole company


organization

Stakeholder focus Mainly customers Mainly customers

Standardization versus adaptation Standardization with local Standardization with local


adaptations adaptations

Strategy
P&G and Sony Ericsson are two MNCs targeting consumers. However, the companies act in
different areas and offer different kinds of products. When looking at the two companies type
of strategies, it is obvious that their strategies differ. P&G has a typical product branding
strategy whereas Sony Ericsson has a corporate- and product branding strategy with a
dominant use of the corporate brand. P&G has around 300 different brands worldwide;
therefore the best suited strategy is to use a pure product brand strategy since each individual
brand has its own identity.

Sony Ericsson on the other hand, has one lead master brand which is the corporate brand Sony
Ericsson and three category brands; Cybershot, Walkman, and PlayNow. Sony Ericssons lead
master brand is delivered worldwide. The different types of mobile phones are not considered
to be brands; they are considered to be just names of products, e.g. K800. The reason for not
defining the products as brands is due to very short product life cycles. Therefore Sony
Ericsson invests in the category brands instead. In the case of P&G, there are huge
investments in each of the 300 brands in order to sustain a competitive advantage.

60
Data Analysis
Since P&G has several diverse kinds of products, it has a more functional approach. Each
brand is positioned differently and towards different segments in different markets. Sony
Ericsson on the other hand, has a more strategic approach, and values of the company are
important and consistent throughout the whole company. Additionally, Sony Ericsson has a
long-term approach for the corporate brand.

Both P&G and Sony Ericsson are global companies with global strategies. None of the
companies considers themselves to have an actual home market; instead both companies
prefer to see themselves as truly global.

Management of the Brand


Since P&G is focused on product branding and Sony Ericsson is focused on corporate
branding, there are some differences in the management of the brands. In the case of P&G, the
whole company is about product branding. However, it is the marketing function within P&G
which manages the product brands and specifically it is the entry level management and
middle level management who mainly manage the marketing. It is the market development
organization (MDO) within P&G which delivers the brands.

In the case of Sony Ericsson the corporate brand is managed by the senior manager of each
division. The brand is however delivered by the whole company since everyone within the
organization is supposed to know the core values of the company and deliver those to the
public.

Focus on Stakeholders
When it comes to drawing attention from stakeholders, both P&G and Sony Ericsson state
that the most important stakeholders are the customers. One common denominator for both
companies is that they are both consumer driven; therefore the customers are very valuable
for the companies. In the case of P&G it is vital to understand and please the customers.
However, there are other important stakeholders such as employees, local governments and
investors.

In the case of Sony Ericsson the customers are the most important stakeholders, however
generally all stakeholders are important. The customers for Sony Ericsson include operators,
retailers and consumers. As in the case with P&G, the employees are also very important for
Sony Ericsson.

Standardization versus Adaptation


Both P&G and Sony Ericsson are global companies acting on multiple international markets.
For that reason, both companies strive for using a standardized strategy. In the case of P&G,
the aim is to try to standardize as much as possible and to use the same type of branding
strategy all over the world. However, even if the intend is to standardize as much as possible,
it is sometimes needed to adapt to the local markets. P&Gs aim is that the product should
work at least throughout a whole continent. The reason for P&G to use a standardization
strategy is to reach economies of scale and scope. Before launching a product on a new
market there is careful research made in order to find out the preferences of the customers and
so on. When the preferences differ, there are adaptations made before launching the product.

Sony Ericsson uses a standardization strategy as well, and the strategy is consistent
throughout the world. The reason for using a standardization strategy is the same as stated by
P&G; economies of scale and scope. However, Sony Ericsson also finds it important to adapt

61
Data Analysis
to local preferences when it is needed. One characteristic of Sony Ericssons strategy is that
the product name is always the same worldwide, but the features of the product might be
localised.

5.2.2 Factors Determining MNCs Choice of Branding Strategies in


International Markets
Table 5.6 will provide a cross-case analysis of the factors determining the choice of branding
strategy in international markets. The two companies are compared and similarities as well as
differences are provided in the discussion that follows. One factor in the table that is
presented differently from the conceptual framework and the within-case analysis is
Corporate image and reputation. This table includes both characteristics of corporate
brand and characteristics of product brand and also sub-headings in order to simplify and
specify each characteristic. By this, the brands characteristics can be compared to each other
and the factors are more specific.

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Data Analysis

Table 5.6 Cross-Case Analysis of Factors Determining MNCs Choice of Branding Strategies in
International Markets

Factors Procter & Gamble Sony Ericsson

Stakeholder interests
- Employees, customers, investors, Important Important
suppliers, partners, regulators

- Relationship with host government Important Important


country

- Partnership between manufacturers and N/A Not important


dealers
Corporate image and reputation
- Expectations of stakeholders Important Important

- Brand personality inline with core Not important Important


values of the company

- Characteristics of corporate brand


Consistency Somewhat important Important

Added value to products Not important Important


and services

A good reputation attracts Important Not important


investors
- Characteristics of product brand
Less harm to the firm if
one of the individual Important Somewhat important
brands fail

Flexible Important Somewhat important

High marketing costs Important Not important


Market complexity
- Consumer characteristics Important Important

- Competition Important Important

- Cultural aspect Important Important

- Environmental factors Important Important


Marketing costs
- High costs related to targeting different Important Somewhat important
segments
- Economies of scale Important Important

Stakeholder Interests
The first variable discussed in this section is stakeholder interests. The stakeholders are
important for both companies, and it is important to have good relations with them. Since
P&G is a public company that is listed on the New York Stock Exchange (NYSE) it is
important to take the investors in consideration because this affects the quotation. However,
since P&G uses a product brand strategy the corporate brand has less connection with the
products since they are individual with individual brands. Sony Ericsson is a private company
which is owned by Sony Corporation and Ericsson, so the company is not a stock corporation

63
Data Analysis
and there are no stock investors. However, the sales and profits for Sony Ericsson are directly
related to the products, and the reputation of the corporate brand affects the perception of the
products since the products carry the corporate brand. It is important for Sony Ericsson to
have a solid and trustworthy brand image since it affects its profit and revenue.

The customers are very important for both of the companies since they need to have a good
relationship with these in order to increase sales. But the relationships are different between
the companies. Since P&G uses a product brand strategy the customers have no relation with
the P&G corporate brand, but with the individual products and it is important to know the
customers needs and demands. For Sony Ericsson the customers are most important because
their perception of the brand determine the sales and hence the life of the whole company.
The customer demands differ depending on preferences and the values of that international
market, so adaptations might be needed in order to fulfil customer needs and demands.
Different from P&G, Sony Ericssons customers do not only include consumers, but also
retailers and operators. However, none of the companies has direct relations with the end-
consumers since they sell to retailers and suppliers.

The employees are important for both companies since they create the perception of the
brand. For P&G as well as for Sony Ericsson it is important that the company values are
interrelated with the employee values so that the employees deliver a message that is in
accordance with the core values of the company.

The government relationships are an important factor for both P&G and Sony Ericsson. This
depends on the major differences regarding rules and regulations in international markets.
Companies acting on a global scale need to have satisfactory relationships with the
government in order to maintain the business in that market.

There is no information whether P&G has partnerships with manufacturers; however, the
company sometimes acquire already existing global brands such as Wella and Gillette. Sony
Ericsson has no partnerships with other manufacturers, but the company sometimes
cooperates with operators in order to sort out customer demands.

Corporate Image and Reputation


For P&G the corporate reputation is not that important since the corporate name is not visible
on the products. Different from P&G, the corporate image and reputation is a highly
important factor when determining strategy in international markets for Sony Ericsson. Since
Sony Ericsson has its corporate name on all its products, it is important to deliver a message
that is inline with the core values of the company. If one product fails, it will affect the whole
brand and its sales.

However, the expectations of stakeholders are important for both companies. For P&G
stakeholder expectations are important first of all since the company is listed on the NYSE,
but also since customer expectations create customer demands. For Sony Ericsson it is
important since the corporate brand expresses certain messages to the stakeholders and the
company has to take those into consideration when acting in different international markets.

For P&G the brand personality does not have to be inline with the core values of the company
since the company has different sorts of brands that suit different target groups. Hence, it is
not important to have consistency throughout the company. For Sony Ericsson it is highly
important that the brand personality is inline with the core values of the company, since the

64
Data Analysis
company strives to have a consistent brand image throughout the whole company. The
company has the same brand positioning and branding strategy worldwide and the core values
are reflected throughout the company. Although, there are local adaptations in different
markets, the core values and the brand message are always consistent.

Since P&G has different individual products with individual brands it cannot give added value
to products and services. Sony Ericsson on the other hand, is a corporate brand and the brand
is visible on all products, and hence it can give added value to its products and services and
provide an assurance of that the brand delivers certain features, such as quality.

Since P&G is listed on the NYSE, it is important to have a good reputation, and a good
reputation makes the stock more attractive and might increase the stock price. This is not
important for Sony Ericsson since it is a private company.

The benefit with a product brand such as P&G is that there is less harm if one individual
product fails, because this product can easily be taken out of the market. Sony Ericsson has to
take into consideration that the category brands can be damages if one of them fails, and can
therefore be forced to take them out of the market. However, since the corporate brand is
visible on every single product, the brand can still be damaged on a corporate level. Because
of this P&G is more flexible than Sony Ericsson.

Because of the fact that P&G has many different products, the marketing costs are therefore
higher since the company needs to put marketing actions on every single product. This is
therefore an important factor for a product brand acting on an international market. Sony
Ericsson can market its product on a corporate level and therefore lower the costs.

Market Complexity
For both companies market complexity is an important factor when determining the choice of
strategy in international markets. Since P&G and Sony Ericsson act on a global scale, it is
important to have a strategy that can be adapted worldwide. Although both companies use a
standardized strategy, they adapt different dimensions of the marketing mix in order to
maximize customer value. Different factors have to be taken into consideration such as
consumer characteristics, because this varies around the world and customers have different
preferences depending on culture and/or values.

Competition is another factor to consider since there might be other companies that are
cheaper or have more market shares. Other environmental factors to take into consideration
are the technological factors that are very important for especially Sony Ericsson. The
company has to live up to its reputation of highly innovative products, and the customers
might demand different kinds of products or different technologies depending on where in the
world the company operates. Legal constitutions are another important factor to consider for
both of the companies.

Marketing Costs
For P&G, the marketing costs are very important to consider when deciding strategy in
international markets. Since P&G uses a product brand strategy, the company has to invest in
all individual brands and there are high costs related to this and also when acting in different
diverse markets. However, P&G uses a standardized strategy, and therefore, the company can
benefit from that. For Sony Ericsson, there are not as high costs related to this since the
company has a standardized strategy and markets the products on a corporate level. However,

65
Data Analysis
the company adapts to local preferences and targets different segments worldwide; therefore
there are high costs related to this.

Both of the companies can benefit from economies of scale and scope since they have a
standardized strategy, so this is an important factor when acting in international markets. Both
companies can take advantages of the success in one market, and apply this strategy in other
markets. Sony Ericsson can benefit from the standardized strategy and the marketing costs are
therefore lower, since the marketing functions are central. The company can because of its
standardized strategy ship the products worldwide without repackaging, and can by that
decrease the costs.

66
Discussion, Findings, Conclusions and Implications

6 Discussion, Findings, Conclusions and Implications


In the previous chapter, an analysis of the collected data was done. In this chapter, the
overall findings and conclusions are presented and the research questions that were outlined
in the first chapter are answered. Conclusions are drawn from our findings and by this the
research purpose which is to investigate the branding strategies of MNCs in international
markets, is then reached.

6.1 Discussion: Reflections on Past Research


The purpose of this thesis was to investigate the branding strategies of MNCs in international
markets. To reach the purpose two research questions were stated: How can the branding
strategies of MNCs in international markets be described? and How can the factors
determining MNCs choice of branding strategies in international markets be described?.

Two MNCs; namely Procter & Gamble and Sony Ericsson, were chosen for testing the theory
empirically. Both companies are global companies with global brands acting in several
international markets. Both companies are also consumer driven, producing and marketing
consumer goods. However, the companies fall into different industries; P&G within the
beauty, household care and health- and well being industry and Sony Ericsson within the
telecommunication industry producing and selling mobile phones for different segments.
Since the companies act in different industries, they are not fully comparable. Additionally,
P&G focuses mainly on product branding whereas Sony Ericsson focuses mainly on corporate
branding. The different focuses have helped us to gain a deeper understanding of when, and in
which cases, product branding- as well as corporate branding strategy is suitable.

Our findings indicate that MNCs have different strategies depending on their company
structure, i.e. whether the company implements a product brand strategy or a corporate brand
strategy. However, MNCs acting globally have many factors that are similar regardless of
structure. MNCs use a standardized strategy in international markets and adapt to some extent
to specific local markets. MNCs thus have no strategy for emerging markets in general; rather
they tailor their strategies to individual emerging markets.

According to Hatch and Schultz (2003) many MNCs shift focus from product brands to
corporate brands as they move towards globalization. This was not the case in our study since
P&G has always used a product brand strategy and has no intentions of changing strategy.
Furthermore, Sony Ericsson uses a corporate brand strategy and has always had that strategy,
and did not start with a product brand strategy as theory indicates. Therefore our findings
differ from theory.

Bradley (2002) states that it is usually a process when brands are turning internationally, it
often develops from being a local brand and after a while, when the brand is known, move
into foreign markets. This somewhat coincide with our research since P&G started as a local
brand, and after a certain period of time, developed into a global brand. However, Sony
Ericsson started as a global brand and did not go through that process.

Hatch and Schultz (2003) discuss that the corporate brand has a long life cycle and a product
brand has a short life cycle. P&G has a long-term approach measured in both financial
success, as well as sustainability. Sony Ericsson has also a long-term approach where the
strategy is constant throughout the company. Therefore, theory does not coincide with the
empirical findings.

67
Discussion, Findings, Conclusions and Implications
The strongest global brands in the world were presented in our literature review. The question
still remains if there is a connection with the strategy used, i.e. if corporate brands are more
successful than product brands or vice versa. This is an interesting question that might have
been interesting to further discuss and to have included in our conceptual framework.
However, this question demands a thorough investigation and because of limited time, this
was not included.

In retrospect, there are some issues that we did not include in our conceptual framework that
could perhaps have been interesting to further investigate. As these are worth mentioning, we
will discuss them below.

Our research indicated that MNCs using a product brand strategy differs from MNCs using a
corporate brand strategy. P&G is a publicly owned company, whereas Sony Ericsson is a
privately owned company. However, the outcome of the research might have been different if
the respondent companies had been using a corporate brand strategy at the same time as being
a public owned company and vice versa. Therefore this might have been interesting to include
in our conceptual framework. For a public owned MNC, everything that happens with the
company might have an impact on the stock. Therefore, Corporate Social Responsibility
(CSR) is an issue worth mentioning, since that will affect the corporate image and reputation.
We have not discussed the concept of CSR in our thesis and this would have been interesting
to include since it affects the perception of the company.

Our research showed that innovation is important for MNCs acting globally. However,
emphasis seems to be put more on commercial innovation; i.e. brand management, when it
comes to companies focusing on product brand strategy. Regarding companies using a
corporate brand strategy, the emphasis seems to be more on technological and product
innovation. That does not necessarily go hand-in-hand with being first on the market; but
instead to be best in class. However, sometimes companies can benefit from first-mover-
advantage.

Another issue that was mentioned is the country-of-origin effect and how companies can take
advantage of its country-of-origin. This question was raised in the literature review, but might
have been interesting to look more into and included in our conceptual framework.

We have discussed the importance of stakeholders such as employees, local governments and
investors in our research; however non-governmental organizations (NGOs) are also
important since it also affect the perception of the company. This is especially important for
MNCs that are public owned since this affects the stock price and hence investors.

6.2 RQ 1: How can the branding strategies of MNCs in international


markets be described?
During our research concerning MNCs branding strategies in international markets, it has
been clarified that companies focus either mainly on a product branding strategy or mainly on
a corporate branding strategy. However, there may be mixtures of the two types, but in most
cases there will be a dominant use of one of the mentioned strategies.

Product branding is suited when a company offers multiple products that are targeted towards
different segments. In that way, each product brand can have its own brand identity.
Additionally, different products belonging to the same product category can be targeted
towards different segments in order to increase sales. Although product branding is being

68
Discussion, Findings, Conclusions and Implications
used, it is still possible to create brand extensions under one of the individual brands. In this
way, companies might be able to increase sales by taking advantage of an already existing
strong brand.

The advantage with using a product brand strategy is that the corporate brand will most
probably not be affected if one of the individual product brands fails or is put under the
pressure created by bad publicity. Companies using a product brand strategy rely heavily on
each individual brand. Since each product brand has its own brand identity, large investments
are required in order to create and sustain a strong brand. Due to the above mentioned factors,
a product brand is therefore more functional than a corporate brand.

Corporate branding is used when the corporate name and the brand is the same. The strategy
is suited when a company offers several products which go under the corporate name. With
this strategy companies may use the corporate brand as the master brand, and under the
master there may be sub-brands. With this strategy companies invest in the master brand and
the sub brands rather than in the different products. This strategy has a strategic approach,
and the values of the company affect the brand. The advantage with this type of strategy is
that each product offered can benefit from the corporate brand. However, that also makes it
more complicated since it is very important for the company to have a good reputation as well
as having a strong and stable corporate brand. If there is bad publicity for the company, that
will affect the products negatively.

There are some differences between product branding and corporate branding regarding brand
management. When it comes to product branding, it is mainly the marketing function which
manages the product brand, whereas management of the corporate brand is on a higher level
i.e. the senior manager. In addition, the corporate brand is delivered by the whole
organization, whereas the product brand is delivered by the marketing function.

For MNCs, regardless of the strategy being a product brand or a corporate brand strategy, the
customers are the most important stakeholders. However, there are naturally other important
stakeholders such as employees, local governments and investors.

Regarding the dilemma of whether to standardize or adapt the branding strategy, our research
clearly indicated that MNCs prefer to standardize as much as possible regardless of the
company using a product brand strategy or a corporate brand strategy. When acting on
different markets, companies standardize in order to reach economies of scale and scope.
Efficiency is a lead word for MNCs; including efficiency in production, distribution and
marketing. However, it seems like it is not possible for MNCs to use a standardization
strategy exclusively due to heterogeneous markets. MNCs acting on the global marketplace
need to adapt to local preferences and different income structures in order to succeed.

Based on our findings, the following conclusions can be made:


MNCs acting on international markets use a product brand strategy, a corporate
brand strategy or a mixture of the two.
A product brand strategy is suited when a company offers multiple products that are
targeted towards different segments.
A corporate brand strategy is suited when a company offers several products which
go under the corporate name.
With a product brand strategy the corporate brand is not affected if one of the
individual brands fails or received negative publicity.

69
Discussion, Findings, Conclusions and Implications

The corporate brand may be affected negatively if one of the products fails when a
company uses a corporate brand strategy.
With a corporate brand strategy, all products will benefit from a strong corporate
brand.
The products will not benefit from a strong corporate brand if a product brand
strategy is used.
The product brand is managed by the marketing function.
The corporate brand is managed by the senior manager.
Customers are the most important stakeholders for all MNCs, regardless of whether a
product brand strategy or a corporate brand strategy is used.
A standardization strategy with some adaptations in local markets is preferred for all
MNCs, regardless of whether a product brand strategy or a corporate brand strategy is
used.

6.3 RQ 2: How can the factors determining MNCs choice of


branding strategies in international markets be described?
The factors that determine MNCs choice of branding strategies in international markets are
stakeholder interests, corporate image and reputation, market complexity, and marketing
costs. An explanation of how these factors influence the type of strategy chosen is further
explained below.

Stakeholder Interests
The stakeholder interests are an important factor for MNCs when deciding what type of
strategy to use in international markets. The strategy somewhat depends on the structure of
the company, whether the company uses a corporate- or product brand strategy, however, this
also depends on if the company is a public company or a private company. A company that
uses a corporate brand strategy that is privately owned, take all stakeholders into
consideration when determining what type of strategy to use in international markets.
However, the most important stakeholder is the customers. The same occurs for a public
owned company using a product brand strategy. Hence, all stakeholders are important to all
MNCs independent on the type of structure of the company, but the customers are most
important because they determine the sales and hence the profit. It is important to consider
customer needs and demands and to have a good relationship with these.

Employees are important for MNCs since they deliver the corporate message to the public and
hence create a reputation of the company. Governmental relationships are also important for
MNCs acting on international markets since it is important to know different country specific
rules and regulations. For a global corporation acting in an international marketplace,
partnerships between manufacturers and dealers do not seem to be an important factor
determining the strategy to use in international markets. This might have to do with the fact
that global companies seem to have a structure and well organized ways of handling sales and
distribution channels, and these global companies have their own internal channels of
distribution. It is not common for large MNCs to have partnerships at all on an international
level and if the global companies are solid; they do not need to cooperate with others to enter
different markets. Instead MNCs occasionally seem to have the strategy to acquire other
companies; however, these acquisitions are only made of other solid global companies.

70
Discussion, Findings, Conclusions and Implications
Corporate Image and Reputation
The importance of corporate image and reputation differs between a company using corporate
brand or a product brand strategy. For a company using a corporate brand strategy it is very
important to have a good corporate image and to have a good reputation since it affects the
perception of the brand since it is shown on all products available. Hence, it also affects the
whole brand and the sales. For a company using a product brand strategy it is not as important
since every individual product has its own name, and if one brand is damaged, it can easily be
taken out of sales, or be sold. However, if the product brand is a public owned company, this
might be important since the company then has to take the shareholders and the stock price
into consideration and a good reputation therefore attracts investors.

The stakeholders expectations are important to consider for all MNCs acting in international
markets. Since the customers are important to consider for all MNCs, their expectations have
to be taken into consideration since it affects the sales of the products. For a company using a
corporate brand strategy, the stakeholders expectations are important since the perception of
the brand creates an expectation that the brand will deliver expected qualifications such as
quality or other features. The same goes for a company using a product brand strategy, but on
an individual level. The stakeholders have expectations that the specific product brand will
deliver what they expect the brand to deliver.

It is important for an MNC using a corporate brand strategy to have a brand personality that is
inline with the core values of the company. An MNC using a corporate brand strategy needs
to deliver a consistent brand message throughout the company and to avoid confusion with
the customers. A corporate brand provide added value of the product since it delivers certain
messages about the brand and the customer can expect to buy what is expected. On the other
hand, for companies using a product brand strategy it is not important to have a brand
personality that is inline with the core values of the company since the individual products
carry their own brand personalities. It is therefore not important for an MNC using a product
brand strategy to have consistency throughout the company. However, a product brand is
more flexible and can exclude certain brands more easily than a corporate brand, and there is
hence less harm. Since there is no connection with the individual product brands and the
corporate brand, the corporate brand stays solid independently on the success or failure of the
product brand.

Since the products need to be marketed on an individual product level, there are high
marketing costs that the MNC using a product brand strategy needs to deal with. An MNC
using a corporate brand strategy has a central marketing function, and therefore less
marketing costs.

Market Complexity
For all MNCs regardless of the type of branding strategy i.e. product branding or corporate
branding, market complexity is a significant factor to consider when acting on a global scale.
It is important for MNCs acting globally to have a strategy that can be implemented
worldwide. MNCs have a standardized strategy that is somewhat adapted to local preferences,
and since the customers are central, consumer characteristics need to be researched in order to
maximize the value for the customers and consumers.

In international markets it is important to consider competitors. Local competitors can have


competitive advantages since they are familiar with the local preferences. There might be

71
Discussion, Findings, Conclusions and Implications
competitors that have competitive advantages with a lower price, or might have larger market
shares.

The environmental factors are very important since they reflect customer preferences.
Cultural values determine the choice of strategy in international markets since this influences
the decision of choosing a standardized or an adaptation strategy. Other important
environmental factors can be technological factors for companies in the industry business,
since the companies have to keep up with innovations and take different technological
infrastructure into consideration.

Marketing Costs
Another important factor to consider for MNCs in international markets is marketing costs.
An MNC using a product brand strategy has higher marketing costs due to the fact that every
product brand needs to be marketed on an individual level. Therefore the MNC using a
product brand strategy acts in different segments and there are higher costs related to targeting
these segments. An MNC using a corporate brand strategy does not need to consider these
high costs in the same way, but can benefit from the lower costs related to a central
marketing.

Since MNCs that act worldwide implement a standardized strategy with some adaptations,
they can benefit from economies of scale and scope. MNCs put a lot of money into R&D in
order to map the markets and investigate target-groups and customer needs. After that MNCs
can benefit from their standardized strategy and implement that on other international
markets. However, some markets are more diverse than others, and these need to be further
investigated and in those markets it can be necessary to adapt to local preferences. In these
cases, there are higher marketing costs. However, in order to maximize utility, this might be a
necessary evil and in the end, MNCs creates competitive advantages.

Based on our findings, the following conclusions can be made:


The factors determining the choice of strategy used by MNCs in international market
differ between product brands and corporate brands.
Stakeholders is an important factor for MNCs when determining what strategy to use
in international markets.
The most important stakeholder for MNCs in international markets is the customers.
Corporate image and reputation is a very important factor for MNCs using a corporate
brand strategy in international markets.
Corporate image and reputation is not important for MNCs using a product brand
strategy in international markets since the products are sold on an individual level.
Corporate image and reputation is to some extent important for an MNC using a
product brand strategy that is public owned.
Stakeholders expectations is an important factor to consider for an MNCs acting in
international markets.
It is important for a corporate brand to have a brand personality that is inline with the
core values of the company.
A corporate brand provides added value to the product since it delivers certain
messages about qualities etcetera.
For an MNC using a product brand strategy it is not important to have a brand
personality that is inline with the core values of the company since the individual
products carry its own brand personality.

72
Discussion, Findings, Conclusions and Implications

It is not important for an MNC using a product brand strategy to have consistency
throughout the company, and therefore a product brand is more flexible and can
exclude failure brands.
Market complexity is an important factor to consider for MNCs in international
markets.
MNCs implement a standardized strategy with some local adaptations to some
markets.
Consumer characteristics, competitors and environmental factors are important to
consider for MNCs that act in international markets.
There are high marketing costs for an MNC using a product brand strategy since it
needs to market every product individually.
An MNC using a corporate brand strategy has a central marketing function, and low
marketing costs.
MNCs strive to benefit from economies of scale through standardization when acting
in international markets.

6.4 Implications and Recommendations


Based on the conclusions above, in this section implications will be discussed for theory, for
practitioners and for future research.

6.4.1 Implications for Theory


The purpose of this study was to investigate the branding strategies of MNCs in international
markets. We made our study primarily by describing the strategies used by MNC, as well as
describing the factors determining the type of strategy used. The research was made through
investigating this issue from previous research made by other researchers but also by
collecting empirical data from MNCs in a global marketplace. We based out study on Yu Xie
and Boggs (2006) model, but we chose to modify it in order to suit our purpose.

We added some factors into that model such as standardization versus adaptation, but also
deleted some such as product characteristics and firm characteristics since we found them
irrelevant for our research. The research coincided with the theory on several points, but it
differed on others. We found out that there were no specific to emerging markets. Instead
MNCs seem to use a general strategy; either a product brand strategy or a corporate brand
strategy and primarily standardize the branding strategy. However, MNCs seem to adapt the
strategy to each individual market due to heterogeneous characteristics.

6.4.2 Implications for Practitioners


In this section, implications for practitioners is outlined which can be seen as
recommendations for managers working with these issues. These implications are based on
our collected data and findings.

A product brand strategy should be used by an MNC when multiple products are offered, and
when these are targeted towards different segments. With this strategy the corporate brand is
not affected if one of the individual brands fails. However, the corporate brand will not
benefit from a strong product brand either. A corporate brand strategy should be used for
MNCs when several products are offered under the corporate name. With this strategy, the
company can benefit from success in other products, but also be damaged if the brand is put
in an inconvenient situation.

73
Discussion, Findings, Conclusions and Implications
Markets are diverse and customer preferences in different countries also differ. For an MNC
operating to local preferences globally, it is prudent to have an overall standardized strategy,
but to adapt to local preferences. By this the company will benefit from economies of scale
and scope at the same time as local preferences is considered and this will maximize the value
for the customers.

It is important for MNCs to take all stakeholders into consideration, since these are the ones
determining the future business of the company and are in a position to control success or
failure. Therefore stakeholders expectations need to be thoroughly investigated and these
have to be fulfilled to some extent.

Corporate image and reputation is important for MNCs in international markets since it
determines the perception of the company. This is especially important for a company using a
corporate brand strategy since the individual products carry the corporate name. Therefore it
is important to have a consistent strategy and make sure that the corporate values are inline
with the message that is sent out to the public. However, this depends on the ownership of the
company, because for a public owned company, corporate image and reputation is highly
important since it determines the companys stock price.

6.4.3 Implications for Future Research


Throughout this thesis, we have been trying to investigate branding strategies used by MNCs
in international markets, and the factors determining which strategies to be used. The
emphasis has been on product brand strategy versus corporate brand strategy. We have held
our discussion related to the above mentioned strategies on a somehow general level, and
more research could be made within some specific areas. Therefore, we recommend the
following areas to be further researched:

The importance of innovation (product innovation and/or commercial innovation) for


MNCs related to product brand strategy as well as corporate brand strategy.
Research on a private owned MNC using a product brand strategy.
Research on a public owned MNC using a corporate brand strategy.
The country-of-origin effect, and how that affect MNCs strategies.
If a strong successful brand is connected to the type of strategy used.

74
References

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04, at 14.00 PM.

77
APPENDIX A

APPENDIX A

The Top 100 Global Brands in the World, 2007


Ranking 2007

Ranking 2006

Change

Brand

Value of Brand, 1,000 Million USD, 2007

Value of Brand, 1,000 Million USD, 2006

Change from Previous Year (%)

Owner

Country of Origin
1 1 0 Coca-Cola 65,324 67 -3 Coca-Cola USA
2 2 0 Microsoft 58,709 56,926 3 Microsoft USA
3 3 0 IBM 57,091 56,201 2 IBM USA
4 4 0 GE 51,569 48,907 5 GE USA
5 6 1 Nokia 33,696 30,131 12 Nokia FIN
6 7 1 Toyota 32,07 27,941 15 Toyota JAP
7 5 -2 Intel 30,954 32,319 -4 Intel USA
8 9 1 McDonald's 29,398 27,501 7 McDonald's USA
9 8 -1 Disney 29,21 27,848 5 Walt Disney USA
10 10 0 Mercedes-Benz 23,568 21,795 8 Daimler Chrysler GER
11 11 0 Citi 23,443 21,458 9 Citigroup USA
12 13 1 Hewlett-Packard 22,197 20,458 9 Hewlett-Packard USA
13 15 2 BMW 21,612 19,617 10 BMW GER
14 12 -2 Marlboro 21,283 21,35 0 Altria USA
15 14 -1 American Express 20,827 19,641 6 American Express USA
16 16 0 Gillette 20,415 19,579 4 Procter & Gamble USA
17 17 0 Louis Vuitton 20,321 17,606 15 Louis Vuitton Mot Hennessy FR
18 18 0 Cisco 19,099 17,532 9 Cisco USA
19 19 0 Honda 17,998 17,049 6 Honda Motor JAP
20 24 4 Google 17,837 12,376 44 Google USA
21 20 -1 Samsung 16,853 16,169 4 Samsung KOR
22 21 -1 Merrill Lynch 14,343 13,001 10 Merrill Lynch USA
23 28 5 HSBC 13,563 11,622 17 HSBC Holdings GB
24 23 -1 Nescaf 12,95 12,507 4 Nestl SWI
25 26 1 Sony 12,907 11,695 10 Sony JAP
26 22 -4 Pepsi Co 12,888 12,69 2 Pepsi Co USA
27 29 2 Oracle 12,448 11,459 9 Oracle USA
28 32 4 UPS 12,013 10,712 12 United Parcel Service USA
29 31 2 Nike 12,004 10,897 10 Nike USA
30 27 -3 Budweiser 11,652 11,662 0 Anheuser-Busch USA
31 25 -6 Dell 11,554 12,256 -6 Dell Inc. USA
32 33 1 JP Morgan 11,433 10,205 12 JP Morgan Chase USA
APPENDIX A
33 39 6 Apple 11,037 9,13 21 Apple USA
34 34 0 SAP 10,85 10,007 8 SAP GER
35 37 2 Goldman Sachs 10,663 9,64 11 Goldman Sachs USA
36 35 -1 Canon 10,581 9,968 6 Canon JAP
37 36 -1 Morgan Stanley 10,34 9,762 6 Morgan Stanley USA
38 41 3 IKEA 10,087 8,763 15 IKEA SWE
39 42 3 UBS 9,838 8,734 13 UBS AG SWI
40 40 0 Kellogg's 9,341 8,776 6 Kellogg Company USA
41 30 -11 Ford 8,982 11,056 -19 Ford Motor USA
42 48 6 Philips 7,741 6,73 15 Koninklijke Phillips Electronics NL
43 44 1 Siemens 7,737 7,828 -1 Siemens GER
44 51 7 Nintendo 7,73 6,559 18 Nintendo JAP
45 45 0 Harley-Davidson 7,718 7,739 0 Harley-Davidson USA
46 46 0 Gucci 7,697 7,158 8 Gucci Group IT
47 NR NA AIG 7,49 NA NA American International Group USA
48 47 -1 Ebay 7,456 6,755 10 EBAY USA
49 NR NA AXA 7,327 NA NA AXA FRA
50 49 -1 Accenture 7,296 6,728 8 Accenture BER
51 53 2 L'Oral 7,045 6,392 10 L'Oral FRA
52 50 -2 MTV 6,907 6,627 4 Viacom USA
53 54 1 Heinz 6,544 6,223 5 Heinz USA
54 56 2 Volkswagen 6,511 6,032 8 Volkswagen GER
55 55 0 Yahoo! 6,067 6,056 0 Yahoo USA
56 57 1 Xerox 6,05 5,918 2 Xerox USA
57 58 1 Colgate 6,025 5,633 7 Colgate-Palmolive USA
58 61 3 Chanel 5,83 5,156 13 Chanel FRA
59 59 0 Wrigleys 5,777 5,449 6 Wm. Wrigley Jr. USA
60 60 0 KFC 5,682 5,35 6 Yum Brands USA
61 52 -9 Gap 5,481 6,416 -15 The Gap USA
62 65 3 Amazon.com 5,411 4,707 15 Amazon.com USA
63 63 0 Nestl 5,314 4,932 8 Nestl SWI
64 73 9 Zara 5,165 4,235 22 Inditex SP
65 62 -3 Avon 5,103 5,04 1 Avon Products USA
66 68 2 Caterpillar 5,059 4,58 10 Caterpillar USA
67 67 0 Danone 5,019 4,638 8 Groupe Danone FRA
68 74 6 Audi 4,866 4,165 17 Volkswagen GER
69 71 2 Adidas 4,767 4,29 11 Adidas GER
70 64 -6 Kleenex 4,6 4,842 -5 Kimberly-Clark USA
71 72 1 Rolex 4,589 4,237 8 Rolex SWI
72 75 3 Hyundai 4,453 4,078 9 Hyundai Motor KOR
73 81 8 Herms 4,255 3,854 10 Herms International FRA
74 66 -8 Pizza Hut 4,254 4,694 -9 Yum Brands USA
75 80 5 Porsche 4,235 3,927 8 Porsche GER
76 78 2 Reuters 4,197 3,961 6 Reuters Group GB
77 69 -8 Motorola 4,149 4,569 -9 Motorola USA
78 77 -1 Panasonic 4,135 3,977 4 Matsushita Electric Industrial JAP
79 82 3 Tiffany 4,003 3,819 5 Tiffany USA
80 NR NA Allianz 3,957 NA NA Allianz GER
81 85 4 ING 3,88 3,474 12 ING Groep NL
82 70 -12 Kodak 3,874 4,406 -12 Eastman Kodak USA
83 86 3 Cartier 3,852 3,36 15 Cartier FR
APPENDIX A
84 76 -8 BP 3,794 4,01 -5 BP plc BG
85 87 2 Mot & Chandon 3,739 3,257 15 Louis Vuitton Mot Hennessy FRA
86 79 -7 Kraft 3,732 3,943 -5 Kraft Foods USA
87 83 -4 Hennessy 3,638 3,576 2 Louis Vuitton Mot Hennessy FR
88 91 3 Starbucks 3,631 3,099 17 Starbucks USA
89 84 -5 Duracell 3,605 3,576 1 Procter & Gamble USA
90 88 -2 Johnson & Johnson 3,445 3,193 8 Johnson & Johnson USA
91 93 2 Smirnoff 3,379 3,032 11 Diageo GB
92 92 0 Lexus 3,354 3,07 9 Toyota Motor JAP
93 89 -4 Shell 3,331 3,173 5 Royal Dutch Shell GB
94 96 2 Prada 3,287 2,874 14 Prada IT
95 98 3 Burberry 3,221 2,783 16 Burberry GB
96 99 3 Nivea 3,116 2,692 16 Beiersdorf GER
97 94 -3 LG 3,1 3,01 3 LG KOR
98 90 -8 Nissan 3,072 3,108 -1 Nissan Motor JAP
99 NR NA Polo RL 3,046 NA NA Polo Palph Lauren USA
100 NR NA Hertz 3,026 NA NA Hertz Global Holdings USA
APPENDIX B

APPENDIX B

Interview Guide, English version


1) How many brands does your company have in total?

2) Are the brands positioned similarly in all markets?

3) What are the challenges spreading your brands worldwide?

4) What were the motives for internationalizing your brands?

5) What does your brands draw its strengths from:


a. Financial strengths?
b. Innovation?
c. International distribution?
d. Managerial resources?

6) What is the background to the brand developing into a global brand?

7) How does the company build competitive advantage at home and abroad?

8) How does the company sustain competitive advantage?

9) What type of branding strategies does the company use for international markets?

10) Does the company focus on corporate branding, product branding, or a mix of both?

11) Who manages the brand/s?


a. Corporate brand
b. Product brand
c. Both brands/hybrid strategy

12) What role does the corporate- and/or product brand play?

13) What interested party is most important?


a. All stakeholders?
b. Specific stakeholders? Who?

14) Who has the main responsibility for the brand image?
a. Middle manager
b. All personnel

15) Who delivers the corporate brand and/or the product brand?

16) Does the company focus on long-term relationships with the stakeholders, or is the
focus short-term, i.e. launching the product? How?

17) Does the company standardize or adapt the branding strategy to different markets?
APPENDIX B
a. How?

18) Is there any specific strategy in emerging markets?

19) What factors determine the choice of branding strategy?

20) Which stakeholders are important when choosing branding strategy in emerging
markets?

21) What factors are taken into consideration when creating the corporate image and
reputation?
a. Expectations of stakeholders?
b. Brand personality; is there a red thread? Connection to the core values of the
company?

22) What are the advantages and disadvantages with a corporate brand and/or a product
brand?

23) What market factors are important to consider in emerging market?

24) What are the cost advantages/disadvantages with your branding strategy?
APPENDIX C

APPENDIX C

Intervjuguide, Svensk version


1) Hur mnga varumrken finns det totalt inom fretaget?

2) r varumrkena positionerade p samma stt p alla marknader?

3) Vilka r utmaningarna med att sprida era varumrken globalt?

4) Vilka motiv fanns fr att gra varumrkena internationella?

5) Varifrn samlar era varumrken sina styrkor ifrn?


a. Finansiella styrkor?
b. Innovation?
c. Internationell distribution?
d. Chefs-tillgngar?

6) Vad r bakgrunden till att varumrket/varumrkena har utvecklats till ett globalt
varumrke?

7) Hur bygger fretaget upp en konkurrensfrdel p hemmamarknaden och utomlands?

8) Hur bibehller fretaget en konkurrensfrdel?

9) Vilka typer av varumrkesstrategier anvnder fretaget fr internationella marknader?

10) Fokuserar fretaget p fretags-varumrkesstrategi, produkt-varumrkesstrategi , eller


en blandning av bda?

11) Vem ansvarar fr varumrket/varumrkena?


a. Fretags-varumrket
b. Produkt-varumrket
c. Bda varumrkena/blandstrategi

12) Vilken roll spelar fretags- och/eller produktvarumrket?

13) Vilka intressenter r viktigast?


a. Alla intressenter
b. Specifika intressenter? Vilka?

14) Vem har huvudansvaret fr varumrkets image?


a. Mellanchef
b. Alla anstllda p fretaget

15) Vem levererar fretags-varumrket och/eller produkt-varumrket?

16) Fokuserar fretaget p en lngsiktig relation med intressenterna, eller r fokus mer
koncentrerat kortsiktigt, dvs. p att lansera produkten? Hur?
APPENDIX C
17) Standardiserar eller anpassar fretaget sin varumrkesstrategi till olika marknader?
a. Hur?

18) Finns det ngon speciell strategi fr just tillvxtmarknader?

19) Vilka faktorer avgr valet av varumrkesstrategi?

20) Vilka intressenter r viktiga i valet av varumrkesstrategi i tillvxtmarknader?

21) Vilka faktorer r viktiga nr fretagets image och rykte skapas?

a. Frvntningar frn intressenter?


b. Varumrkets personlighet; finns det ngon s kallad. rd trd? Finns ngon
koppling till fretagets krnvrderingar?

22) Vilka frdelar respektive nackdelar finns det med ett fretags-varumrke och/eller
produkt-varumrke?

23) Vilka marknadsfaktorer r viktiga nr man gr in i en tillvxtmarknad?

24) Vilka kost-frdelar respektive nackdelar finns med fretaget varumrkesstrategi?