AIB-SE (USA) 2005 Annual Meeting, Charleston, SC

MULTINATIONAL MARKETING TWENTY-FIRST CENTURY STRATEGIES FOR

POSITIONING MULTINATIONAL COMPANIES BRANDS IN THE GLOBAL
MARKETPLACE

Ann Langlois, Palm Beach Atlantic University

Ed Langlois, Palm Beach Atlantic University

Brands in today’s global marketplace are subject to increased competition and rapidly changing dynamics.
As competition continues to increase, the role of brands in relation to profits has never been greater. When
managed properly, market oriented measures such as awareness and esteem to sell products increase company
value. The birth of the European Union continues to impact U.S. global brands sales performance. The concept of
“think global, act local” has become the business phrase of the twentieth century and will continue into the twenty
first century. It is the mantra for brand positioning the global firm’s marketing mix.

Introduction
The purpose of this study is to examine the importance of brands in the global marketplace. The focus is on
where they are and where are they going in the future. Simply stated, “What is the value of branding in global
markets?” What motivates consumer purchases has become the question among many executives. Are brands
important to young adults, or are new technology and environmental factors the drivers?
Unethical behavior among corporate executives has created worldwide criticisms of company conduct. As a
result, the corporate environment in general has suffered. Consumers enraged by executives actions, have started to
actively seek out substitute products from competitors they feel practice more ethically sound ways of conducting
business.
Themes, according to Schmitt, Simonson and Marcus (1995), help to communicate positive brand positioning.
Themes in advertising serve as signs in communications associated with brand identity. For example, Chinese
advertising television themes tend to signify family values, tradition and technology (Cheng & Schweitzer, 1996).
American advertisement themes symbolize the importance of enjoyment, cost savings and individualism.
Branding policy requires building a foundation where equity and value are associated with the product name.
Multinational firms face many challenges in developing a branding policy. These issues include global branding
drivers, brand loyalty and the interaction of culture on branding.
Brands face many challenges in the international marketplace. A multinational firm’s brandings strategy must
compete directly with regional, national and global branding strategies (Douglas, Craig & Nijssen, 2001). Direct
competition adds a new layer to the company’s strategic plan to identify, attract and retain a new international
market.

Brand Structure
The globalization of markets has changed the way companies conduct business. Brand structure is continually
changing and shaped by the three drivers (Douglas et al., 2001). The three drivers for formulating a firm’s
international brand structure are: firm based products, the market, and market dynamic characteristics.
The movement of people, goods and organizations across national borders has necessitated companies to
integrate their marketing strategies across global markets. Today's consumers have a vast array of product choices.
An infinite number of private label and manufacturer brands from around the world are available to consumers from
the comfort of their home or office. Advertising agencies around the world landed 136 global or regional
assignments in1997 (DeMooij, 1997). This globalization of markets coupled with an influx of new competition has
resulted in companies expanding their geographic and advertising scope.
Opening borders to trade, investment and technology has created opportunities for competitors both
domestically and nationally to enter new markets (Govindarajan & Gupta, 1998). Companies can now easily reach
once thought impossible global markets with ease. A product offered by a company in Chile can now be purchased
by a consumer in China twenty-four hours a day, seven days a week with a relatively small extra cost to the supplier.
Technological advances combined with economic forces have shifted emphasis from developed countries to
developing countries (Mesdag, 2000). Media and technology have created a forum for assisting consumers’ buying

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decisions based on brand preference and loyalty. Mass media and programming plays a major role in the creation,
recognition and acceptance of branded symbols (Walker, 1996). According to Walker, MTV reached 239 million
viewers in 68 countries in 1996. MTV has positioned itself as the aficionado of the latest trends in fashion, music,
culture and social awareness for males and females age 13-24. A large part of their success is the ability to reach out
to viewers via television and multimedia. Through continuous audience feedback and interaction, MTV has been
able to adapt to the changing needs of its viewers worldwide, and offer a product that is unparalleled among its
target audience.
An important element of a multinational firm’s marketing mix is their branding policy. The evolution of
international markets has formed a strong link between identifying sound branding strategies and building an
effective brand that transcends national markets (Caller, 1996). Some authors have developed frameworks for
branding structure relative to a single national market (Laforet & Saunders, 1994; Olins, 1989). In previous works,
Olins (1989) identified three structures: monolithic, endorsed and branded. In the monolithic structure, a firm uses
one name and identity worldwide. Some examples include Kellogg and Shell. The endorsed structure allows a
corporate name to be used in association with a subsidiary or product brand. The third structure, which is common
to many corporate firms, is using a branded strategy. The strategy focus is on multiple product-level brands such as
P & G using the familiar names, Tide and Camay (Olins, 1989).
The global expansion of firms requires a closer identification of issues that influence brand structure. In
addition to the positioning, management must consider geographic scope, brand coordination and consistency of
brand positioning across multiple markets (Douglas et al., 2001).

Literature Review

Firm-Based Drivers
Brand structure evolves over time based on the firm’s growth and strategic acquisitions. Corporate identity in
conjunction with the diversity of the firm’s products and divisions influence the number of brands. According to
Bartlett & Ghoshal (1989), the administrative heritage is instrumental in understanding branding strategy. Firms
with decentralized organizations and country managers located in many international locations may have a number
of brands. The same product is sold under different names such as Unilever’s, Promise and Flora (Douglas et al.,
2001).
The second consideration in brand structure is the impact of international expansion. Firms who expand
internationally acquire local brands. These local brands in many situations have high recognition and recall. The
result is the international company retaining the brand. This situation normally occurs when there is little overlap
between the existing high positioned local brands and minor market penetration of the other brands. An example is
Best Foods, which was acquired by Unilever in 2001. They expanded internationally through acquisitions of Pfanni,
Telna and a sauce company in Chile. These companies are used as platforms to distribute Best Foods’ other brands
(Douglas et al., 2001).
Corporate identity influences brand structure. IBM and Apple according to Schmitt & Simenson (1997) place
considerable value on corporate identity. For example, Big Blue is associated with IBM. The association reflects the
company’s mission to provide reliable products and services, which are recognized internationally.
A separate issue affecting branding structure is the diversity of the products. Firms that share a core competency
in product lines often emphasize corporate brands. General Electric markets a wide range of products worldwide
and the brand name invokes confidence and reassurance. The firm is recognized worldwide for its engineering
competency and reliable products (Douglas & Craig, 1996).

Market Factors

Market factors influence the role of brand architecture. The scope of the target market, cultural affinity and the
competitive market structure affect the overall factors (Douglas et al., 2001). Global brands have a significant
impact when the marketer segments a relatively homogeneous group of purchasers with similar needs and interest
worldwide.
The strategies for segmenting markets vary by region and are developed by comparing similar interests and
purchasing patterns. Global brands can capitalize by implementing multiple branding structure strategies. Global
product brands combined with the promotion of local brands are an effective promotional strategy. An example,

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according to Erickson & Foust (2000) is in Turkey with Coca Cola introducing a pear flavored drink and in
Germany, a berry flavored version of Fanta.

Market Dynamics
The political and economic integration of global trade has stimulated the growth of international branding.
Government’s removal of tariffs and non-tariff barriers combined with the flow of information across borders has
become more favorable for marketing international brands. Main factors influencing these trends include the greater
harmonization of product regulations and the global market infrastructure (De Mooij, 1997). Strong regional media
support combined with recognition by manufacturers of brand image provides increased retail space for branding
(Barwise & Robertson, 1992). This strong retail branding position provides an effective negotiating tool for
manufacturers.
Consumer mobility has contributed greatly to the high recognition and acceptance of global branding. The
awareness and expectation of availability of international brands in multiple countries enhances a firm’s value and
reinforces the strength and reliability of the name (Steenkamp & Bartra, 1999). Increased exposure to branded
names with recognition recall factors has generated greater receptivity to foreign origin products creating an
international affiliation.

Identification of Patterns for International Brand Structure

International companies vary in the framework and rules guiding the use of brands. There are three patterns
which are common structures. These are corporate, product and hybrid dominant architectures. Companies such as
Nike, Shell, Kellogg’s and Benetton offer a limited range of products with global acceptance. Many international
firms are using all three components of international branding to penetrate markets. Other companies have
implemented a product dominant focus where there are multiple national and/or local brands. Firms such as P & G
and Akzo Nobel have expanded internationally by leveraging power brands (Douglas et al., 2001).
The use of the corporate, product business and product variant branding strategies combined with the
geographic scope provides greater flexibility. Nestle, has 45 strategic products brands, which include Buitoni,
Carnation (worldwide), Kit Kat, Polo (corporate), Contadina and Stouffer (regional) along with 7000 local brands
(Parsons, 1996).
The effective use of corporate endorsements of brands combined with the brand extension across countries and
product businesses has allowed global marketers to reduce the number of brands. This strategy strengthens
individual brands. Rising media and promotional costs have resulted in global marketers identifying specific
corporate and product level branding strategies to achieve economies of scales
Corporate endorsement provides product reassurance, recognition and image. This endorsement paves the path
for developing a global identity and positions all the products under a corporate umbrella (Douglas et al., 2001).
Brand extension, at the other end of the spectrum in brand architectural design, builds high visibility and achieves
cost efficiencies. New products are increasingly launched under an existing brand name to capitalize on consumer
strength and recognition. Cadbury’s Milk Tray brand has been extended for deserts, with a market focus on
creaminess, found in the entire product line (Beck, 1999).

Global Brand Image Management

International and global marketing do not have a sharp dividing line. These two terms provide little clarity or
direction on specific marketing strategies. Global marketing which incorporates the strategic branding process is a
form of international marketing. The parody is international marketing in the purest form does not exist (Mesdag,
2000). Global marketers strive to standardize branding strategies among countries. The majority of brands operating
across national borders are either global or local. The best way to identify global branding is to use the term
“glocal” (Kapferer, 1992).
Brand image is a strategic component in brand management (Martin, 1995). Global brand management’s core
foundation is based on the extent firms customize or standardize their brand images.
The global brand management philosophy is embedded in the firm’s strategic position and marketing of their
products. In the athletic market, Nike and Reebok, strong competitors, have very different branding strategies
(Sloan, 1993; Fireman, 1991). The different branding strategies reflect their global brand image management style.

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Nike maintains a standardized fitness and performance image in all the markets it serves (Martin, 1995). This
fitness and performance image is the core element used to promote the brand image globally. Nike uses locally
known sports and athletes to endorse the products, unique communication, promotional messages and separate
pricing strategies across markets. Nike’s headquarters develops a global policy or theme, which in this case is high
performance fitness image, but the local managers have flexibility to implement programs consistent with the global
goal (Peebles, Ryan and Vernon, 1977; Walters, 1986).
Reebok, a major competitor of Nike, adapts and customizes their branding image on a regional and national
basis. The management team‘s philosophy is consumer tastes and preferences are different in markets across the
continent. The planet Reebok advertising theme is used globally. Images are different across markets. The focus in
the United States is to balance lifestyle and athletic image. Endorsers, color, and style in brand advertising are the
drivers in achieving product lifestyle images. In Western Europe, the brand image focus is on athletic performance
(Roth, 1995). The result is fewer style variations and a reliance on athletic advertising themes. Flexibility in the
brand image and marketing program is a key component in Reebok’s marketing strategy.
An important element of new product development of any product strategy is the modification of an existing
product and the development of new ones. These are two ways new products can be added (Vignali et al., 1999).
Externally, Kellogg’s has acquired various brand names. They include Salada Foods, Ltd, Fearn International Inc.,
Mrs. Smith’s Pies Co., Pure Packed Foods Inc., Kellogg-Figures Espana, SA, Northern Gold Brand, Bluhill-
American Foods Co. and McCamly Square Corp. and Foods, Inc.
Kellogg’s markets a range of convenience foods such as Nutri-grain bars and cereal snack bars. They also
developed small bowls of cereal attached to a portion of milk that can be mixed together to create a bowl of cereal
for people on the go.
Global strategic branding strategy at Kellogg’s focuses on two product lines, ready-to-eat cereals and grain
based convenience foods. Both products combine nutrition, taste and convenience to reach all demographic groups.
Their primary markets are located in North America and Europe. Kellogg’s is expanding the brand internationally
into China, Argentina, Thailand, South America and India.
Kellogg’s has two advantages in marketing their brands globally. Many of their brands have taste and texture
profiles that are widely accepted across cultural boundaries. For example, Kellogg’s Cornflakes brand is available
in all counties where they distribute products.
Kellogg’s global marketing expertise when combined with their expertise in grain and fruit technology allows
them to position brands that meet the unique preferences of selected high potential markets. Kellogg’s products,
with a chocolate coating, are manufactured using the same base ingredient.
For example, Cocoa Pops are manufactured using Rice Krispies as the base. The chocolate coating is altered to
meet the particular tastes of each country and region.

The World’s 10 Most Valuable Brands according to Business Week’s August 2, 2004
RANK BRAND 2004 BRAND 2003 BRAND PER CENT CHANGE
VALUE VALUE
(Billions) (Billions)
1 Coca-Cola $67,394 $70,543 -4%
2 Microsoft 61,372 65,174 -6%
3 IBM 53,791 51,767 4%
4 General Electric 44,111 42,440 4%
5 Intel 33,499 31,112 8%
6 Disney 27,113 28,036 -3%
7 McDonald’s 25,001 24,699 1%
8 Nokia 24,041 29,440 -18%
9 Toyota 22,673 20,784 9%
10 Marlboro 22,128 22,183 0%
Data: Interbrand Corp., J.P. Morgan Chase & Co., Citigroup, Morgan Stanley, Business Week, August 2, 2004

The rankings are based on a detailed analysis of how much each product’s sales are driven by the brand name
and weighted for other factors such as market leadership, stability and the ability to cross national borders. U.S.
brands claimed the eight top spots. Apple with a 24% increase recorded the largest percent gain in brand value. The
biggest looser was Kodak with a 33% loss in brand value compared to 2003. American brands continue too

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dominate because they are created and nurtured in the world’s largest and most competitive environment. Prior to
being introduced into the global market, issues of quality, consistency and logistics have been identified.
American marketers have addressed strategies to integrate their products into local cultures by hiring local
managers and adapting the product and promotional activities to different target groups. Appealing to shared values
has helped marketers overcome some of the anti-American sentiment. For example, Nike’s “Just do it” message of
individual choice emotional appeal has proven just as powerful in regions of Western Europe and Asia.
Jeffery Immelt, General Electric Chairman and CEO noted: “We are a global company (so) we want to present
a global face to our customers.” The result is pushing for more diversity through the ranks and integrating foreign
talent into management positions. GE brand value increased 2% this year to $42.3 billion.
Another area enjoying increased attention is brand owners wanting to be perceived as responsible community
citizens. U.S. companies are getting the message that any type of bad publicity anywhere in the world can erode
brand value.

Conditions, Affecting Customization and Standardization Image Strategies

Various market conditions are been determined as important prerequisites for determining brand image
strategies (Jain, 1989). Jain (1989) identified five factors that influence customization strategies. These five factors
were target market, market position, and nature of the product, marketing environment, and organizational factors.
The environmental aspects such as economics, social and cultural factors are signals firms should use in determining
the best branding strategy (Onkvisit & Shaw, 1987). Cultural differences are indicators that consumers in different
markets have unique needs, resulting in a tailored brand image. Hofstede (1984) typology of cultural characteristics
is applied frequently in international marketing settings.
Levi’s Dockers, which project social class status and affiliation, will have more appeal in the culture with a
greater emphasis on strong power distance. Another example is Molson’s Ice Beer, which projects innovative
processing and great taste. This branding image may be unsuccessful in cultures with high degrees of uncertainty
avoidance and risk adverse consumers (Roth, 1995). Jain (1989) argued that cultural factors were excellent ground
for segmenting global markets.
Cultural factors represent consumers’ attitudes, behavior, and lifestyle. These needs are identified through
purchases of goods and services. According to Belk (1996), cultures transform global meanings into unique local
affiliations. Said another way, each country may attach a different meaning to a brand resulting in consumers
perceiving various brand beliefs (Cheng & Schweitzer, 1996). Firms may benefit from seeking similar segments
across markets. This approach to identifying a target market with distinct characteristics is a strategy employed by
many U.S. firms.
These firms once used a single national strategy but are now establishing regional marketing programs
(Mckenna, 1992). The use of regional socioeconomic factors can be useful in identify similar purchasing patterns.
This may provide an opportunity for brand image standardization.
Product usage based on consumption habits and conditions are important indicators of the feasibility of
standardizing marketing programs. Wallendorf & Arnould (1998) attest the strong linkage to economics, consumer
needs, and brand images. Countries with differing levels of GDP per capita should consider customizing brand
image unless the product can be positioned as functional and low cost (Roth, 1995).
The meaning consumers associate with the product (Friedmann, 1986) should determine standardization. New
market strategies for the introduction of established brands are influenced by the cultural and socioeconomic
conditions. If conditions in the new market mirror those in markets currently served, a decision to standardize
branding image may generate favorable brand performance.
If research determines significant national and intermarket variables, different consideration for customization
may need consideration. This will require customizing the marketing mix. The advertising campaigns that illustrate
the brand’s features, benefits and uses are customized to project the desired image.

Recommendations
Brand Image Positioning: Strategies to Strengthen Brands
World culture is emerging from the increasing interconnect local cultures (Appadurai, 1990). There are three
strategies, which affect positioning brand image. These are global consumer culture positioning (GCCP), local
consumer culture positioning (LCCP, and foreign consumer culture positioning (FCCP).

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Brands using GCCP strategies include Sony (My First Sony) as appropriate for people around the world.
Benetton‘s slogan is representative of GCCP by emphasizing the unity of humankind under the slogan “the United
Colors of Benetton.” LCCP branding such as Budweiser is associated with small town American culture.
In FCCP, brand is associated with a specific foreign culture. An example of FCCP is Singapore Airline’s use of
the Singapore Girl in global media advertising (Alden, Steenkamp, & Batra, 1999). A similar example of FCCP is
Gucci in the United States positioned as a prestigious Italian product.
There are three central components of consumer culture positioning in brand images. These are language,
aesthetic styles, and story themes. According to Sherry & Camargo (1987), English symbolizes social mobility and
modernization when used on packaging for Japanese products. The use of English in print advertisements around
the world suggests cosmopolitan style (Ray, Ryder, & Scott, 1994). Brand managers can communicate GCCP by
using English words in communication media.
Alternatively, brand managers can communicate a LCCP or FCCP by employing written words, which reflect
the local or foreign culture. An example is Volkswagen, which used the slogan “ Fahrvergnugen” in U.S.
advertisements (Alden et al., 1999).
Certain aesthetic signs are recognized as part of global consumer culture. The use of spokespersons’
characteristics is used to reinforce a GCCP, LCCP and FCCP brand imaging (Mehta & Belk, 1991). Examples
include Michael Jordan for Nike as a GCCP strategy and a German engineer spokesperson for Audi in a U.S.
television advertisement. Brand logos are tied to specific cultures in terms of appearance, cultural tradition and
familiarity (Grunert, 1996). AT &T (abstract globe), Nike (swoosh) and Mercedes –Benz (star) are a few brand
positioning strategies.
Story themes are symbolic of global consumer culture. The use of story themes implies ownership of the brand
may signify that the consumer is a member of the transnational commerce culture (Hannerz, 1990). A young
professional businessperson who is on the rise uses a Toshiba laptop whether in New York, New Delhi or Paris.
Strategic brand managers must identify country, consumer segment, and product category that favor the use of
GCCP, FCCP or LCCP. The marketing manager of a beer brand employing GCCP in national markets might
analyze competitive advertising in a newly targeted country and conclude none of the brands in that market use
FCCP. It is also possible that GCCP will work better than LCCP in markets characterized by lower level of
economic development. Tangible and thematic signs, which connote enhanced status from GCCP brand ownership,
may achieve greater meaning transfer in developing countries.

Establishment of Brand Image Loyalty

In today’s global environment, brand equity migrates from local and regional status to global statue (Kotler
Marketing Group 2002). Regional brands may enjoy temporary higher market share, however, in many situations
the brands are purchased by MNEs and used to leverage global brands being introduced into regional markets.
Brand equity is built by using the brand’s positioning statements and promotional activities. It is not dependent
on its source of production or the source of company ownership. Marketing’s main goals have targeted increasing
sales by attracting a new stream of customers. Marketing is now shifting to customer retention. Companies who
improve their customer retention programs by a mere 5 percent can expect to gain profits in the range of 20 percent
at a minimum(McDonald, 1994). Customer loyalty programs are designed to turn one-time buyers into brand loyal
customers.
Consumers tend to use perceptions of brands to evaluate new products (Aaker, 1996). This is especially true
when consumers decide to try a new product which fall may fall under a family brand. Successful extensions of a
recognized brand can reduce costs of introduction and minimize risk failure (Palumbo & Herbig, 2000). Not all
products create brand loyalty. Foods such as paper towels, toilet paper and frozen foods usually are purchased based
on price comparisons. Foods, which produce strong brand loyalty, include mayonnaise, soft drinks and bar soap.
A global brand is perceived to reflect the same set of values worldwide (Chevron, 1995). Brand loyalty has
greater implications in certain industries. Beer drinkers when asked why they drink a certain brand of beer always
respond the primary reason is taste. Blind tests have shown beer drinkers have a different reaction the second time.
This indicates that beer consumers’ purchases are based on the image of the product versus the product itself.
(American Demographics, 1994).
The international marketplace magnifies brand loyalty problems. Brands compete with regional and national
brands combined with international marketing strategies. Brands with global image derive additional staying power
from consumer attributions of enhanced self-worth and status. Consumers often purchase certain brands to

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reinforce membership in global segments. This could include teenagers, business and government (Alden et al.,
1999).
Brand loyalty in some ways is advantageous to U.S. firms. The U.S. is one big melting pot. Marketers need to
be cautious in designing brand loyalty strategies geared to the assumption that the U.S. is a melting pot. Marketers
must look at the various subgroups and consumption patterns.
European brand loyalty is different. When consumers find a brand they like, they usually stay with it. In a
study done by Marketing (1995), 61 percent of consumers surveyed tended to stay with the same brand. Brand
loyalty, in the United Kingdom, is created through promotional couponing. According to Walker (1996), NCH
Promotions in the U.K. grew approximately 5 percent due to retail funded coupons.
According to the Financial Times (2004), a survey on global brands published in by Harvard Review in 2004
involved 3,300 consumers in 41 countries. The results revealed that although many respondents say they are against
American products, when it comes to purchasing decisions, anti-American sentiment had a negligible impact.
The three factors that mattered most to survey respondents were brand quality (the idea that if a brand is
glamorous, it must be good), by consuming a global brand the consumer is part of a like-minded global community
and the extent of the brand owner’s commitment to social responsibility.
If a global brand is invented today and could choose anywhere is the world as its country of origin, would the
choice be the U.S.? For a technological product, probably yes. For a consumer product with greater emotional
appeal, probably not.
Many large U.S. brand owners might be wondering at what point their country of origin has become a liability.
The Japanese worship brand names. Once a designer’s name or brand logo is introduced, success is usually
immediate. Status and/or prestige affiliation affects the buying decision. The Japanese do not rush out and buy just
any brand. Their first step is to buy catalogs filled with photographs of accepted brand products. This relates to the
cultural inclination of consulting a reference work to guarantee prestige.
There are different reasons for brand loyalty in Japan and age groups determine these reasons. The older
Japanese relied heavily on brand names since goods after World War II were scarce and few opportunities existed.
They opted for safety in name.
Young Japanese consumers tend to prefer brands and develop brand loyalty based on fashion perceptions.
Consumers ultimately decide on brand loyalty by associating a product with quality, safety, reliability and image
(Nishikawa, 1990).
Successful multicultural advertisers have secured brand loyalty by tailoring the brand’s image to reflect
individual cultures. Brand loyalty varies across cultures. Chinese consumers tend to be more brands loyal and use
reference groups as association with brand purchases.
Hispanics rely more on familiar stores and are more price and promotion conscious. Lower income levels and
large family size are factors that affect Hispanic’s propensity to value brands based on price (Saegert, Hoover, &
Hilger, 1985).

McDonald’s Global Branding Image Strategies

The concept of “think global, act local” has become a business phrase of the twentieth century and will
continue into the twenty first century (Levitt, 1983). McDonald’s has used this mantra in building its marketing
mix. Globally, McDonald’s is positioned as a star brand. They have achieved brand recognition by translating a
successful product globally. McDonald’s has concentrated on standardizing the brand name but localizing the
advertising campaign.
East Asia‘s market focus is on the young generation, specifically children and teenagers. The strategy is to
invest heavily in television advertising. In China, brand positioning through advertising is different. Newspapers
and popular magazines are more successful in marketing the global image. Chinese commercials appear only
between program segments, reducing viewing time. In China, McDonald has paired the company’s male mascot,
Ronald with a female companion known as Aunt McDonald.
This reinforces the importance McDonald’s has placed in building a successful brand image by understanding
the culture. McDonald’s marketing team was cognizant that Aunt McDonald would not work in other cultures.
McDonald’s promote its brand image differently in Hong Kong with a greater emphasis on promoting the company
as a local institution with environmental awareness. The branding image reflects not only the product but also as the
champion of environmental awareness and public welfare.
Global associations with the Olympic Games and World Cup enhance the brand name. These are the two
biggest events on the global calendar. Brad Ball, a senior vice-president at McDonald USA, views the Olympic

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Games as an opportunity to reinforce the company’s reputation as a true global brand (Vignali, 2001). Similarly,
McDonald’s recognizes the association of national advertising in building brand loyalty. McDonald’s has strong
links with the National Basketball Association and NASCAR racing. These sports are within the United States
national borders and not recognized globally.

Global Challenges
The U.S.’s image in the international marketplace is tarnished. Microsoft and Disney are just two examples of
companies facing complaints concerning American cultural imperialism. Many Europeans have fierce anti-
American sentiment due to U.S. participation in the Iraqi conflict. It is not easy to be a U.S. based multinational
company relying on branded products for growth in the Euro countries.
In a survey conducted one week after the November 2, 2004, which polled 8,000 Europeans, 1,600 of the 8,000
participants said they would avoid buying products most closely associated with the U.S. The results confirm
suspicions by the advertising industry that U.S Foreign Policy is unpopular and impacting the image of iconic
American brands.
Global Market Institute (GMI), an independent research firm based in Seattle, Washington, conducted a recent
survey of 1,000 people in the Group 8 countries. The survey found the most negative reaction was aimed at U. S.
based companies, such as American Express, AOL, American Airlines, Marlboro, McDonald’s, Budweiser, Barbie
Doll and Chevron/Texaco.
Other U.S. companies such as Kleenex, Kodak, Visa and Heinz were identified as less closely with parent
company being a U.S. based organization. Microsoft suffered less impact because consumers felt they had few
alternatives. Likewise, the survey respondents indicated that the drop in third quarter sales in 2004 by McDonald’s,
Coca-Cola and Marlboro in Germany and France were thought to result from other factors such as the weak
economy in those countries.
Mitchell Eggers, GMI’s chief pollster said: “The data illustrates that a less favorable view of the U.S. affects
the image of products closely associated with American brands. When allies view American policy as arrogant and
self-interested, we damage our reputation for being powerful, innovative and most importantly, fair. Kevin Roberts,
chief executive a Saatchi and Saatchi Advertising expressed public concern that U.S. policy could hurt U.S. brands
in foreign markets. He stated that he expected Europe and Asia consumers’ as growing resistant to having “brand
America rammed down their throats.
Claude Singer, Senior Vice President of branding at Siegel & Gale recently said, “People still love Americans.
They just don’t like our policies and our government.” A new group of American businesspersons has come
forward to show the best side of American business. Business for Diplomatic Action (BDA), headed by chair Keith
Reinhard, purpose is to help fight anti-American sentiment by teaching business people to be more responsive and
sensitive to local needs. The strategy is not to portray America’s strengths, but to encourage U.S. companies to act
as ambassadors for American brands. Some detractors point this strategy has failed. This new effort focuses on
action, not a glossy ad campaign. This change will not happen overnight. It requires a concentrated effort with a
focus on the U.S. brand’s strengths.
Other advertising executives are asking whether the brands that are suffering in international markets might
have problems that go beyond politics. Ed Keon, chief investment strategist at Prudential Equity Group, warned on
November 22, 2004 that he has not seen any proof that politics is the culprit and if true may partially explain why so
many consumer staples’ companies had disappointing results. It may also mean the dollar has to fall further against
the Euro to induce Europeans to overcome their prejudices.
The Harvard Business Review September 2004 publication reported that according to its global brands survey
involving 3,300 consumer in 41 countries, respondents said they are against American made products; but when it
comes to making a purchasing decision, anti-American sentiment is negligible.
The collapse of the Russian empire and the tearing down of the Berlin Wall opened new opportunities for U.S.
corporations resulting in a proliferation of products into newly opened markets. American made branded products,
denied to these markets for a long period, were welcomed with open arms and profits soared.
A recent study by NOP World, a global market research company, conducted a study involving with 30,000
participants outside the United States on American brand usage. The study’s results found that the total number of
consumers worldwide who use American brands has fallen to 27% from 30% over the past 12 months; a trend NOP
manager Tom Miller called a “warning sign for brands.”

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Conclusions
The U.S. stands for racial tolerance, freedom and democracy. Recent Anti-American sentiment based
primarily on America intervention into Iraq may be an aberration and be short-lived, and not affect seriously brand
equity. Brand image is a key factor behind consumer and business–to- business purchases. Brands shape consumer
decisions. In a study conducted by Court, Freeling, Liether, and Parsons (1996), brand recognition was responsible
for 18 percent of purchase decisions. This study revealed a brand-loyal segment of individuals with whom brand
was the major influencing factor in purchases. Strong brands can command premium pricing and in some cases up
to a 19 percent additional charge (Advertising Age, 1999). Research according to Court et al., (1996) emphasizes a
clear connection between brand strength and corporate performance.
Brands are a major benefit to consumers and provide simplification of buying decisions. In specific industry
segments, branding is critical in the consumer decision process. Technology is an industry which is symbolized by
constant change at an increased pace. Intel is known for its dependence on strategic name branding. The slogan
“Intel Inside” increased the company’s awareness from 22 % to 80 % within two years of introduction (Morris,
1996).
There are many controversies on how to achieve successful branding of products and services including the
continuing debate over global or standardizing. Do brands have the power to reflect cultural and social norms?
How strong is the consumers’ demand for authenticity when promoting brands? Do companies need to recognize
and better nurture relationships with their stakeholders?
Branding is an additional opportunity for corporations to articulate their mission statement by focusing on there
core competencies to differentiate them from the competition. Recent unethical practices, resulting in some
companies being indicted by federal and state law enforcement agencies are placing greater emphasis and
promotion on their corporate mission statement to prove they are they are not just “talking the talk,” but are
“walking the talk”
Many companies have learned to use the power of the Internet to introduce new concepts. The standard
strategy for introducing new brands is television, magazines, radio and newspaper advertising. To capture market
share, new brand offerings needs to create excitement for their target audience. The message must be distinctive,
cohesive and create value to the prospective buyer. The promotional materials should be consistent with the ad
message and reflect the value of the brand. Market power rests in the hands of companies who develop the best
strategies to gain global awareness by leveraging the value of their brand.

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