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Brand extension success factors
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1. GLOBAL BRANDS AND GLOBALISATION
“Globalization refers to an interdependent world economy in which people in one part of the world interact with people in another part as buyers, sellers, or intermediaries” (Keegan & Green, 2015). If we apply this definition to the Global Brands can be understood in different ways. First of all, a homogenous taste amongst the consumers all over the world is emerging. The global brands are being favoured because of that, products now have the same characteristics in all the markets, fact that is also contributing to create a ‘worldwide image’ of the brand (Schulling and Lambin 2003). A clear example is the ‘Samsonite’ luggage brand, with a clear positioning all over the world, it sells travel products
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Addressing this concept to the LEGO company, as we will describe later, they were able to come up with a strategy related to this concept, they started to open new centres mainly in Europe, in order to get closer to the customers and save costs in different areas like transport and distribution (Oliver et al. 2007).
Finally, according to Schulling and Lambin (2003) there are two ways on which the companies can become global. The first case are the companies that started as ‘local brands’ and due to the success they became ‘global’. And the second one, the brands launched in a specific market environment.
We can relate the first case to Zara the fashion company that started in the North of Spain and due to the success it expanded globally and now is one of the most famous fashion brands in the world, and the same as LEGO starting as a small business in Denmark and becoming one of the most popular toy companies in the world.
The second case, the case of some brands of the Procter and Gamble
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(1994) as ‘the variety of goods under a brand that can satisfy the consumer’s desires that belong to different segments’. The different types of Coca-Cola (Diet, Zero, Life, …) are an example of Line Extensions.
2.2.1 Advantages and Disadvantages
The main advantages of the extensions can be analysed from two different perspectives. First of all, according to Jaulent S. et al. (2007), the extensions evolve less cost. Moreover, it creates a clear awareness amongst the consumers as they can associate it with the main brand and hence, an increase reliability as a result of the previous knowledge of the brand.
Secondly, in terms of costs, are considerable less. Creating a new brand with their own name, logo and so on and the consequent advertising is clearly much more expensive.
And finally, it leads the opportunity to have a wider market coverage and therefore cover new
-Store brand name enables product to be accepted and adopted more easily by consumers because of brand recognition
On the other hand it has made it much more competitive for viewers attention. Creating a unique brand, utilizing all the tools available and being consistent can offer a good return.
The LEGO Company is a purpose driven company. In United States of America many people want to buy a lot of LEGO products but they buy very less compared to Germany. Therefore there are potential growth opportunities in United States of America.
We propose a branding strategy which takes into account the brands capabilities and competencies, strategies of competition brands and the outlook of consumers experience in their respective societies. As an international brand there is the challenge of staying connected with local customers. We will overcome this by adapting marketing strategy to local needs using a variance of standardized marketing mix and an adapted marketing mix.
A quick research of the AliExpress export website shown a list of 50 companies producing interlocking brick toy with probably 25 companies were doing toy similar LEGO type. Those manufacturers based in Chenghai that is core producer for world reputation toy company like Mattel and Hasbro as well. According the huge demands of valuable box sets produced by LEGO, especially some product line featured licensing animation like Marvel and DC comics super hero. Due to the related movies were keep released in these 5 years, it brings the big noise from market which customers are fascinating with those super hero box sets and it could be higher return investment tools than investment in gold. Therefore, many illegal businessmen of brand like Decool and Coko were targeting this specified customer needs and proceeded mass production regarding this reason. However, infringing patent products were sold in much cheaper price than LEGO and Mega Bloks offer, but they can gain the higher profit also. According this finding, we could see this pattern have been copied by many other China manufacturers. It further leads the vicious circle of plagiaristic toy issue in toy industry even same case happened in other industry like luxury
In conclusion, it can be said that global marketing has been emerged very rapidly in recent years. It has provided various opportunities for the companies to expand their business to the other regions of the word. However, there remain certain environmental issues that need to be considered before entering in to the desired region. These issues can be resolved with designing the strong global marketing plans and strategies, the data for which can be gathered through conducting global market research. Despite numerous issues, one can easily say that globalisation has reduced the global reach of the organizations as well as customers. It would not be wrong to conclude that
The fast food industry’s giant- McDonald’s has become the best-know fast food brand in the world. It employs advertising, sale promotion, public relations and sport sponsorship to promote McDonald’s as a global image (Vignali, 2001). In communication context, the maxim “brand globally, advertise locally” (Sandler & Shani, 1993) is McDonald’s promotio...
Global brand is another term marketer’s use. Global brand is the name of the product that has worldwide recognition. It also has been referred to brands where at least 20 percent of the product is sold outside the region and the home country. Marketers have to make sure that there is nothing offensive in terms of the name or packaging in the different cu...
...brands reap significant benefits for the companies that own them. The time, money and effort that go into creating and marketing a reputable brand should be respected and appreciated by consumers and organizations alike.
...the company has chosen a standardized promotion strategy by copying concept from one single source. With this strategy the company has saved costs and reinforced brand equity. However, while promoting the company takes into account the customers culture, and also the country’s technology. In order to adapt the target market Coca-Cola may choose the differentiate some color combinations used in promotional material and they may adopt more interactive websites or less interactive websites according to the technology of country.
Saran and Gupta (2012) states that there are two types of perceptions which are country image and brand image. Perception mainly lies upon how consumers respond to a certain product depending on what image they see. Also, according to (Klein et. al, 2012), COO build their perception in the market by ways of changing the names of the brand to a name that sounds like it came from a country that is well-known for a certain product. Moreover, according to (Ghauri et. al, 2010), country of origin plays a vital role in international marketing because it affects the perception of consumers. Multinational companies tend to hide the products it originated from due to the fact that most products are manufactured
“Linked to a brand, its name is the symbol that adds to or subtract from the value provided by a product or service.” (Aeler, 1991) Like country of origin, brand equity is also one of the reasons why some people want to have a well-known brands in the whole world. Sometimes it is not all about the price anymore because in today’s generation brand is more important than
Globalization is the connection of different parts of the world. Globalization results in the expansion of international, cultural, economic, and political activities. As people, ideas, knowledge, and goods move easily around the globe, the experiences of people around the world become more similar. (“Definition of Globalization“, n.d., ¶ 1)
“Global advertising gained success when it was perceived to be semantically equivalent to multi-cultural consumers.” (Domzal and Kernan, 1993) The global advertising became a tendency for famous brands, for example, McDonald’s, Sony, or Apple. These brands expand the markets to the world and create original and acceptable advertisements. It is tough for small brands that are known only in the local area to create international advertisements. These brands can rely on the events. For instance, sports events are the representative of global interests and the sponsors of the sports events and the brands tend to create global advertisements. Even though the well-known brands do not have any global advertisements, they can also be a sponsor or advertise ...
The definition of globalization is, “Globalization is the connection of different parts of the world. Globalization results in the expansion of international cultural, economic, and political activities. As people, ideas, knowledge, and goods move more easily around the globe, the experiences of people around the world become more