Master MSc in Digital Media

Brand Building

Brand Building

Lecture 10:
Question & Answer

Vladimir Melnyk
25 November 2020
Schedule
1. What is “Brand”?
What is Branding?
 Short potted history of branding
• Ancient period: proto-brands (marks of origin)
• Pre-20th century
– Trademarks (legal protection of symbolic things)
– Literal authenticity
• Pre-1950s
– STP (Segmentation, Targeting, Positioning) by P&G
– Brand management system (brands instead of products)
• Post 1950s
– Symbols for Sale (advertisement)
– Denotive-conative(from names, which denoted category to names,
which connoted ideas)
• 1980s onward - understanding value & power of brands:
– Brand Equity
– Consumer approaches
– Cultural approaches
 Brand Definitions
American Marketing Association
(Latest)

“A brand is a customer experience represented by a

collection of images and ideas; often, it refers to a
symbol such as a name, logo, slogan, and design scheme.
Brand recognition and other reactions are created by the
accumulation of experiences with the specific product or
service, both directly relating to its use, and through the
influence of advertising, design, and media
commentary.”
 Shaping Brand Meaning

Firms Users

Brand Brand
Stories Stories
Shared
Brand Meaning
Brand Brand
Stories Stories

Popular
Influencers
Culture

Source: Adapted from Holt (2003, p.3)

 Good Brand Names:

No Bad
Foreign
Distinctive
Language
Meanings

Easy to
Suggest Suggest
Pronounce,
Product Product
Recognize,
Qualities Benefits
Remember
3. Brand Equity
 What is brand equity

Brand equity is the value added to the

functional product or service
by associating it with the brand name
(Aaker 1991)

9
 Brand Equity: 3 Approaches

1. Customer Based Brand Equity (CBBE)

2. Company (Financial) Brand Equity
3. Employer Brand Equity
 Customer-based Brand Equity (CBBE)

 Differential effect that brand knowledge has on

consumer response to the marketing of that
brand

 The more you know about the brand and the

more you like that, the more likely you are to
respond to its marketing in the ways intended
 CBBE Framework

Non-Product-Related
Brand
(e.g., Price, Packaging,
Recognition User and Usage Imagery)
Brand
Awareness
Brand Attributes
Attributes
Recall Product-Related
(e.g., color, size,
design features)
Brand
Knowledge
Types of
Brand Associations Benefits
Benefits Functional
Brand
Image Symbolic
Favorability,
Overall
Overall
Strength, and
Evaluation
Evaluation Experiential
Uniqueness of
(Attitude)
(Attitude)
Brand Association
Brand Mea
ning
 Keller: Brand Equity & Brand Awareness
Brand Becomes Commoditised!

TOP
OF MIND
ce AWARENESS • First Mentioned

BRAND RECALL
n
lie

• Unaided Recall
Sa
d
an

BRAND RECOGNITION
Br

• Aided Recall
•

Unaware
 Customer-Based Brand Equity (CBBE)
model
Building strong brand involves 4 steps:
1. Brand identity (who is it) - establishing brand awareness
2. Brand meaning – associations “what does it stand for”
3. Brand response - eliciting positive brand responses
4. Loyalty - forming sustainable brand relationships
Keller’s (2001) CBBE pyramids
 Company-based Brand Equity (CBBE)
 Differential effect of the brand on the balance sheet of
owner
 Brand equity is the asset value of a brand.
 It is based on net present value (NPV) of cash flows
associated with the brand:

NPV = Σ Casht[1/(1+k)]t
t = time period,
Casht = net cash flow for time period t
k = cost of capital (interest rate)
 Employer Brand
• The principle of brand equity…
• …turned internally toward employees
• Potential Employee
– Brand Awareness
– (Anticipated) Brand Associations
• Current Employee
– Brand Associations
– Your Brand – Employer = ????
• Increasing focus with HR to manage, monitor & improve
Employer Brand
 Benefits of Brand Equity
• Greater customer loyalty
• Less harmed by competitive actions
• Higher profit margins
• More inelastic buyer responses to price increases;
more elastic buyer responses to price decreases
• Increased efficiency and effectiveness of marketing
communications
• Higher possibility of successful brand extensions
 How to Build Strong Brand Images?

1. At the birth of a new brand, state the brand’s core

values or core identity.

2. Choose brand elements wisely.

• Name
• Logo and symbol
• Character
• Slogan
• Jingle
• Package
 How to Build Strong Brand Images?
3. Plan and execute a strong marketing strategy for the
brand.

4. Use consistent brand elements and value positions and

marketing strategy over time.

5. Monitor results and understand the brand’s position

on a value map relative to competitors.
 How to Build Strong Brand Images?
6. Conduct an audit of all your brands, new and old.
– Why have new brands succeeded? Failed?
– What changes need to be made as the brand goes through its life
cycle?
7. Make sure all brands in the company are consistent and
synergistic.
8. Leverage strong brands with brand extensions if core
brand values are reinforced.
9. Monitor brand strength over time. Measure awareness,
value position, brand loyalty, and brand associations.
 How to Signal Brand Images?

• The company is the brand

• A character is the brand
• The product is the brand
• A person is the brand (next lecture)
 Value Positioning from Product’s
Price, Quality or Performance
Product or service’s value to buyers depends on relative
“quality”, relative “performance” or relative “price”.

Relative Premium
Price Value
Standard
Value
Economy
Value
Relative Quality or Performance
 Value Proposition Strategy

Value proposition is
the full mix of
benefits upon which a
brand is positioned
 Value Proposition Example:

“Offer a very large selection of merchandise

at very low prices. Save shopping time.
Provide convenience by selling products 24/7
and by shipping to office or home addresses.”
3. Differentiation & Positioning
Customer-Driven Branding Strategy:
Creating Value for Target Customers
 Requirements for Effective Segmentation
To be useful, market segments must be:
• Measurable: The size, purchasing power, and profiles of the
segments can be measured.
• Accessible: The market segments can be effectively reached
and served.
• Substantial: The market segments are large or profitable
enough to serve.
• Actionable: Effective programs can be designed for attracting
and serving the segments.
• Differentiable: The segments are conceptually distinguishable
and respond differently to different marketing mix elements
and programs.
If men and women respond similarly to marketing efforts for soft drinks,
they do not constitute separate segments.
 Choosing the Right Competitive
Advantage
Difference to promote should be:
• Important: The difference delivers a highly valued benefit to target
buyers.
• Distinctive: Competitors do not offer the difference, or the
company can offer it in a more distinctive way.
• Superior: The difference is superior to other ways that customers
might obtain the same benefit.
• Communicable: The difference is communicable and visible to
buyers.
• Preemptive: Competitors cannot easily copy the difference.
• Affordable: Buyers can afford to pay for the difference.
• Profitable: The company can introduce the difference profitably.
 Choosing a Differentiation and
Positioning Strategy
• To find points of differentiation, marketers must
think through the customer’s entire experience
with the company’s product or service.
• Identifying a set of possible competitive
advantages to build a position by providing
superior value from:
Product differentiation
Service differentiation
Channel differentiation
People differentiation
Image differentiation
 Product Positioning

Positioning is the act of designing a company’s product and

product image to occupy a distinctive place in the target
market’s mind.
 Main focus: Creating customer value
• Targeting aims to identify customers for whom the
company will tailor its offering.
• An offering’s value proposition reflects all benefits
and costs of the offering to target customers.
• Positioning reflects the primary reason for choosing
the offering.
Costs Primar
Benefits
y
reason

Targeting Value proposition Positioning

 Establishing a frame of reference

Frame of Vitamin Water

reference:

Customer
Hydration Nutrients Energy Quench thirst
needs
Competitive
offerings Water Vitamins Red Bull Gatorade
 The perceptual map -

Perceptual map of the Burberry brand, relative to competitors

 Writing a positioning statement
• Goal
– Summarizes marketing strategy to guide tactical decisions
• Example
– Mountain Dew is the soft drink that gives young, active consumers more
energy than any other brand because
it has the highest level of caffeine
• Structure
– Target customers
Targeting
– Reference point
• Customer needs (non-comparative positioning)
• Another offering (comparative positioning)
Positioning
– Primary reason for choosing the offering
Noncomparative positioning statement:
Aquafina

Aquafina is the best hydration

(offering) (product category)

for thirsty, health-conscious consumers

(target customers)

because it is pure
(primary reason)
Comparative positioning statement: PŪR

PŪR source of drinking water

is a better
(offering) (product category)

than bottled water

(competitive offering)

for thirsty, money-conscious consumers

(target customers)

because it is cheaper
(primary reason)
 Brand Loyalty – Definition
• Brand loyalty is a deeply held commitment to rebuy or
repatronize a preferred product or service consistently
in the future.
• Brand loyalty causes repetitive same-brand purchasing,
despite situational influences and marketing efforts
having potential to cause switching behavior.
(Oliver, 1999)
Brand Loyalty – Factors
1. Sensory Marketing
 Sensory systems
• Vision – marketers rely heavily on visual elements in advertising, store
design and packaging.
Colours are rich in symbolic value and cultural meanings and can be
critical keys to sales.

• Smell – odours can stir the emotions or have a calming effect, they
can invoke memories or relieve stress.

• Sound – can affect people’s feelings and behaviours.

• Touch – tactile cues can have symbolic meaning.

• Taste – can contribute to our experiences of many products.

Introduction

• The process by which an

individual selects, organizes,
and interprets stimuli into a
meaningful and coherent
picture of the world

• Elements of Perception
– Sensation
– Absolute threshold
– Differential threshold
Sensory Information Processing
 Sensation
• Sensation is the immediate and direct response of the
sensory organs to stimuli
– A stimulus is any unit of input to any of the senses.
– Marketing stimuli:
• advertisements
• price promotions
• product change
• ….
 Thresholds
• Absolute threshold is the lowest level at which an
individual can experience a sensation.

• Differential Threshold (Just Noticeable Difference –

JND) - Minimal difference that can be detected
between two similar stimuli
– Between sizes of packages
– Between weights, design, prices etc. of products

45
 Weber’s law

• The JND between two stimuli

is not an absolute amount but
an amount relative to the
intensity of the first stimulus

• The stronger the initial

stimulus (e.g., size, weight,
price, design), the greater the
additional intensity needed for
the second stimulus to be
perceived as different.
 How Attention Works:
2 States of Attention

• Location State (Where?):

2 strategies in location state:
– Saliency Map (Treisman et al 1980, Wolfe et al 1994)
– Systematic Search (Monk 1984, Ponsoda et al 1995)

• Identification state (What?):

Gather more information of selected object:
e.g., reading, holding, etc.
 How consumers organize stimuli?
• Consumers organize incoming stimuli into a a meaningful unit
– What is most important aspect of an incoming stimulus?
– What is relevant and what is irrelevant information?

• Grouping/ Similarity principle:

– People group stimuli to form a unified impression or concept.
– Grouping helps memory and recall.
• Figure-ground Principle:
– One part of a stimulus will dominate (the figure) and other parts will
recede into the background (the ground)
• Closure Principle:
– People tend to perceive an incomplete picture as a complete and
meaningful whole

Gestalt Psychology: http://www.youtube.com/watch?v=nxpat5aalSw

1. Brand growth
Keller (2013). Criteria for Choosing Brand Elements
 Brand Extension

Using established brand name to launch a new/

modified product into the same (broad) market
category in which the brand operates.
Brand Extension - Example

“I know Stella Artois! They make a great beer of high quality!

Therefore their cider must be good!”
 Brand Stretching

• Using established brand name to launch of a

new product into a completely different and
unrelated category to enter unrelated market.
 Why extensions?
• Brand extensions are often:
• Necessary strategic move
(cash flow)
• Essential way to sustain a
brand’s growth
• Attract younger consumers
• Define/ Emphasize brand’s
position

Introduction of hard luxury (e.g., watches and jewellery)

and soft luxury (e.g., fashion and clothing) segments of the
luxury market possess a relevant business opportunity with
an overall market potential of > €300 billion
 Advantages Brand Extensions
• Quality indicator
– Customers associate the quality of the established brand name
with the new product. More likely to trust the new product.

• Lower perceived risk

– If new food product carries Heinz brand, it is likely that customers
will buy it

• Quicker customer awareness and willingness to trial or

sample the product

• Lower promotional launch costs (particularly advertising)

 Possible Harm for Brand Equity
• But… brand extensions and brand stretching may “exploit” the
brand and produce a loss of brand meaning.
• Brand extensions into inappropriate product categories may
damage brand image.
• Example Tide for dry cleaners: franchisees may not do it
properly and as such damage the brand
• If something goes wrong with one part of the brand, it is
contagious and affects all its products.
Requirements for successful Extension

• Logical fit/ congruence between existing brand’s

meaning and extension
• Leverage for competitive advantage
• Opportunity to enhance the brand
 Co-branding
Co-branding, also called dual branding or brand
bundling, refers to the combining of two
or more well-known brands into a joint market
offering or marketed together in some fashion.
Result is: a single product or service is associated with
more than one brand name.

Philips & Douwe LU & Côte d'Or Gillette & Duracell

Egberts
2. Brand personality
Off- and Online
 Brand personality – Building
• Brand Personality, like human personality, is both distinctive
and enduring
– Not a single personality is the same
– Both are built over a period of time
– Sustainable, because difficult to copy personality

• Outcome of all the consumer’s experiences with the brand

• In consumer’s mind, these impressions merge to form an

overall concept of how to perceive and what to expect from
brand
 Goal of brand personality
• Building long-term relationship with consumers, by creating
unique, distinct brand
– Brand personality can differentiate brands even when brands are
similar in product attributes
– Sustainable way of differentiation (difficult to copy)

• Ultimate goal: creating brand equity

 Balance Theory

Sentiment relation
P Other person
Attitude (+ / -)

O Unit relation
Attitude (+ / -)
Observer
User relation
Attitude (+ / -) X Object
 Self-expressive function of brand
• Consumers’ self-concepts are reflections of their attitudes
towards themselves.
• Whether these attitudes are positive or negative, they will
help guide many purchase decisions;
• Products can be used to bolster self-esteem or to ‘reward’
the self. Usual appeals:
• Acceptance & Belonging
• Approval & Recognition
• Embarrassment & Rejection
• Respect & Status
 Self-image congruence Cesar Dog Food

• Self-image congruence
models suggest that products
will be chosen when their
attributes match some aspect
of the self.

Honda: “It Must Be Love”

http://www.youtube.com/watch?v=N2N-u
1xTnsw
 Symbolic self-completion
• Symbolic self-completion
theory predicts that people
who have an incomplete self-
definition tend to complete this
identity by acquiring and
displaying symbols associated
with it.

http://www.youtube.com/watch?v=owGykVbfgUE
 Brand personality – Dimensions

Aaker 1997, Aaker 2001

 Brand personality – Spanish Dimensions

Aaker 2001
1. Research idea and proposal

Process and steps

 Descriptive vs. Causal
research
Conclusive Research
Design

Causal
Descriptive Research
Research

Association Cause and Effect

X and Y Vary X is a Cause

Together of Y
 70
3 criteria to discover
cause and effect relationship
1. Relationship between X and Y
Theory

2. Time order: The cause must precede the

effect
First X, than Y

3. Elimination of other possible causal factors

Marketing effects are caused by multiple variables
 Variables
• What are you variables?
– Independent variables (effect OF WHAT): factors that cause the effect and
manipulated. Those variables in whose effects the researcher is interested and
(e.g., mood, task given)
– Dependent variables (effect ON WHAT): response variables, those factors you
measure (e.g., attitudes, intentions, responses)
• Types of variables:
– Categorical/ nominal: represent whole units. E.g., sex, nationality, presence
(yes/no), choice (yes/no).
– Continuous: those you can range as lower-higher: age, income, favorability of
attitudes, number of items chosen
 Types of Independent Variable (IV)
manipulation
1. Presence vs. absence

2. Amount of a variable

3. Type of a variable
 Attitudes

• Attitude:
– A lasting, general evaluation of people (including
oneself), objects, advertisements, or issues.
– A predisposition to evaluate an object or product
positively or negatively.

• 2 types of attitudes in Marketing:

– Attitude toward objects (e.g. products, brands)
– Attitudes toward actions/behaviors
 Katz’s Attitude Functions
• Utilitarian function
– attitude helps to decide whether a product provides
positive/negative outcomes (pleasure and pain)
• Value-expressive function
– attitude helps to decide whether a product expresses about
the consumer’s self-concept and values
• Ego-defensive function
– attitude helps to decide whether a product protects the
consumer from external/internal threats
• Knowledge function
– attitudes formed as the result of a need for order, structure
or meaning.
 Three Ways to Influence
Attitudes

1. Attitude-based (directly)
– classical conditioning 1

2 Beliefs
2. Belief-based
– persuasion Attitude

3
3. Evaluation-based Evaluations
– information, prime
Models of Classical Conditioning
Pavlov’s dog
 Brands and Ethics

• Macro factors • Micro factors

– Postmodernity has resulted in – Brands actively taking ethical
brand becoming significant stances
‘institutions’ – Consumers shopping their values
– Economic development and – Brand leveraging consumer culture
increased emphasis on values – Role of brands in self
– Brand equity and the potential authentication
value at stake – Brands define social space
– Brands impact on resource use
– Brands can provoke or heal social
tensions
 Corporate (Social)
Responsibility (CSR)
“CSR is a concept whereby companies integrate social
and environmental concerns in their business
operations and in their interactions with stakeholders
on a voluntary basis.” (European Commission)

Based on triple bottom line World Business Council for Sustainable Development (1999)

Internal Employee rights, health and safety at work

Corporate
Corporate Responsibility

Social Responsibility External Local communities, suppliers, consumers, human rights

Corporate Internal Managing natural resources, environmental impact of products

Environmental
Responsibility External Global environmental concerns

Corporate
Financial Responsibility
Carroll Pyramid (1979)
Arguments For and Against CSR
 CSR Tactics
• Grants to local groups (e.g., increasing literacy in the
community)
• Equipment (donating used or new equipment for projects,
raffle prizes, sponsorship)
• Free training (e.g., computer skills to unemployed)
• Projects (e.g., maintaining local parks, wildlife projects etc.
by providing manpower or money)
• Use of facilities (e.g., renting out canteen or sports hall)
 SCR: Cause-Marketing (CM)

Marketing activities that are characterized by an offer

from the firm to contribute a specified amount to a
designated philanthropic cause while customers
engage in revenue-providing exchanges
(Varadarajan & Menon, 1988)
1. Marketing Strategy
 Definition Marketing Strategy

A statement of how a brand or product line will achieve

its objectives.
The strategy provides decisions and direction regarding
variables such as the segmentation of the market,
identification of the target market, positioning,
marketing mix elements, and expenditures.
A marketing strategy is usually an integral part of a
business strategy that provides broad direction to all
functions.
(AMA – American Marketing Association)
Ansoff’s Matrix of Growth Strategies
Increasing Brand Allegiance/Loyalty

• Sustaining and deepening the allegiance of an

established brand involves:
– Maintaining the initial place in the minds of
consumers (the brand position)
– Keeping the brand up-to-date and relevant
(usually by upgrades and improvements)
– Fending off intruding brands from competitors and
private labels.
 Loyalty Programs
• Brand loyalty is not simply a customer’s commitment
to a brand. The brand has to assume responsibility
for creating products and experiences that will
sustain customer satisfaction.
• Customer Relationship Management (CRM). CRM is
the main way of maintaining and increasing loyalty.
CRM involves the creation of special benefits for
preferred customers.
• Examples include frequent-flier programs, store
membership cards, dedicated personal service, brand
communities and customer clubs.
– Harley Davidson’s Bikers groups.
– Hello Kitty fan club.
Loyalty Programs – Reinforcement Schedule

• A set of rules by which appropriate

reinforcements are given for a behaviour.
– Fixed ratio reinforcement
– Variable ratio reinforcement.

– Fixed interval reinforcement

– Variable interval reinforcement
 Reinforcement schedules – Ratio (amount)
Ratio reinforcement schedules

• Fixed-ratio reinforcement
– reward after a fixed number of "correct"
behaviors
– emphasize repeated performance of
behavior

• Variable-ratio reinforcement
– reward after a variable number of
"correct" behaviors
– this schedule tends to build the
strongest associations
Reinforcement schedules – Interval (period)

Interval reinforcement schedules

• Fixed-interval reinforcement
– wait a given period of time and
then reward first behavior
– people learn timing of schedule

• Variable-interval reinforcement
– wait a variable period of time and
then reward behavior
– leads to a more steady
performance of behavior
 Reasons for Loyalty defection
• Variety seeking.
• The brand is not available at the point of purchase.
• The purchase is for a special occasion.
• Social influence.
• Need for uniqueness.
• Thus, even though brand loyalty is the aim of a CRM
strategy, it does not necessarily lead to a 100%
share of the customer spending.
 Definitions in the ATAR Model
• Buying Unit:
– Person, department, buying center.
• Aware:
– Buying unit has heard about the new product and some attribute that
differentiates it.
• Trial:
– Purchase/consumption of the new product.
• Available:
– If a buying unit wants to try the new product, effort to find it will be
successful.
• Repeat:
– Purchase/consumption of the new product at least once more.

Note: Aware, trial, available, and repeat are all expressed as

percentages.
 PizzaCone Application of ATAR Model

2 million Consumers age 17-39 in Madrid area

x 30% Percent aware after one year
x 20% Percent of "aware" consumers who try
x 10% Percent product availability at stores
x 50% Percent triers who buy again
x 10 Units a typical trier buys per year
x €1.10 Unit price (€3.00) less unit cost (€1.90)
= €66,000 Total Profits

Note: Use the ATAR model for frequently purchased products.

 Product Strategies – Upgrading
• Upgraded products. The most common way of maintaining
the initial “buzz” used to establish the brand is to introduce
product innovations:
– Improvements – but “new and improved” should be meaningful.
– New versions – Windows 10.
– New models – the entirely new BlackBerry.
– New features – Slow motion video-cam.
• The brand excitement aroused by product innovation can be
further heightened by tactical moves:
– Pre-announcement (when the new iPhone will be released?)
– Limited quantities (Scarcity appeals).
– Customer-generated innovations (the new VW Beetle’s design).
Versioning - Reaching New Customers
• Line extension leads to adaptation to different user
requirements, which is why it draws in new customers.
• For example, Bayer’s successful One-a-Day vitamins have
grown from simple multi-vitamins to versions for males
and females, to versions for women’s prenatal, women’s
skin support, women’s petites (smaller tablets), and so
on.
• “Versioning” has become a popular term for this
proliferation of the same branded product for a variety of
uses and users.
• The same pattern can be observed in many product
categories – shampoos, breakfast cereal, teas and so on.
The brand is re-vitalized by a stream of new product line
options.
 Basic Strategic Decisions in Marketing
• Efficiency vs. Effectiveness
• Lead vs. Follow
• Attack vs. Defend
• Push vs. Pull
• Skim vs. Penetrate
• Differentiate vs. Low cost
• Mass market vs. Niche
• Stability vs. Growth vs. Harvest/divest
4. Context Effects
 Context effects
• Consumer’s choice is influenced by the composition of
the choice set.
Real product positions (in terms of attributes) unchanged,
BUT
Perceived positions change.
• Main context effects:
1. Substitution effect (Tversky 1972, Huber & Puto 1983)
2. Attraction effect (Huber et al. 1982; Huber & Puto 1983)
3. Compromise effect (Simonson 1989)
4. Range effect (Parducci 1965)
5. Categorization effect (Pan and Lehmann 1993)
6. Frequency effect (Pan and Lehmann 1993)
 1. Substitution effect - Example
• Item hurts alternatives that are similar to that item
more than dissimilar items (Tversky 1972)

50% 50%

VW Golf VW Beetle

VW Golf Plus
 1. Similarity Effect
• Item hurts alternatives that are similar to that item
more than dissimilar items (Tversky 1972)

30% 45%

VW Golf VW Beetle
25%

VW Golf Plus
 2. Attraction effect
• New item can increase the favourable perceptions of
similar, but superior, items (Huber et al. 1982)

• Asymmetric Dominance (aka. Decoy) effect

– People are attracted to products that are clearly better
than some other option in their choice set (a “decoy”)
regardless of other options.
 3. Compromise effect
• Items gain market share when they become the
compromise or middle option in the choice set
(Simonson 1989)
 4. Range effect
• Range - difference in attribute values between the two extreme options

• Range effect - the perceived difference between two stimulus values is

smaller when they are evaluated in the context of a wide than a narrow
range (Parducci 1965)
 Quality range
Quality range
after
before
 5. Categorization effect
• Categorization effect: if a new brand is positioned close to an existing
brand, the existing brand should be perceived as more similar to the
new entrant and less similar to other existing brands in the set (Pan and
Lehmann 1993)
 5. Categorization effect
Marketing implication
• Add item from different category, which enhances similarity
between focal item and a competitor
 6. Frequency effect
• The difference between two stimuli on a perceptual
dimension increases when the frequency (i.e., the
number of stimuli between that pair on that
dimension) increases

A C D E F B

Perceived difference between A and B increases

Culture
 When Culture is important in Marketing
Culture (macro-): Subculture (micro):
• Global marketing: • Advertisement:
– Cross-cultural advertisement – Decisions on reference
– Using country-of origin effects group(s)
– Decisions on adaptation or – Social advertisement
standardization of:
• Symbolic characteristics (color, • Segmentation
packaging, …) • Influencing diffusion of
• Physical characteristics (design,
form, color, functions) new products
• Direct culture “sales” • Predicting choice and
preferences (e.g., Ariely &
Levav 2000)
Glocalization
 Glocalization

• The fusion of globalization and localization

• Built on assumptions of think global, act local
– i.e., global brand is desired but must be meaningful for costumers of other
locations
• Can include adaptations in
– Language
– Look and feel
– Product
– Service delivery
– Ethical position
– Cultural strategy
Consumers make inferences based on a
brand’s country-of-origin.
This ad for Barilla pasta shows pictures
of Parma, Italy, and of delicious looking
Italian pasta.
Barilla wants consumers to infer that
since the Barilla brand is Italian, it must
produce great tasting pasta.
Country Stereotypes - Marketing Implication
Foreign Branding - strategy of spelling or pronouncing a
brand name in a foreign language (Leclerc et al. 1994, p. 263)
French beer with Water from US
tequila

German chocolate
of August Storck
KG company
Ice-cream from
US
Brand of the Italian
Ferrero company
 Two Dimensions of Cross-Cultural Variation-
Inglehart and Welzel (2000)
(1) SECULAR-RATIONAL (about ideals of the COMMUNITY)
• Weak - one approaches the mythical ideal of a sacred
community,
• Strong - one approaches the rational ideal of a secular
community.

(2) SELF-EXPRESSION (about ideals of the INDIVIDUAL)

• Weak - one approaches the conformist ideal of a restrained
individual,
• Strong - one approaches the ideal of an expressive individual.

Scores for countries are upgraded every 5 years and are freely downloadable from:
http://www.worldvaluessurvey.org
 Brand positioning
Unique selling proposition, suggesting why the
target segment should choose your product (Ries &
Trout 2001, Kotler& Keller 2009)
 Hofstede’s Dimensions of
Cultural Variability
• Power Distance
– the extent to which less powerful members of a society
accept that power in institutions and organizations is
distributed unequally
• Uncertainty Avoidance
– the degree to which the members of a society feel
uncomfortable with uncertainty and ambiguity
• Masculinity (vs. Femininity)
– a preference for achievement, heroism, and material
success as opposed to a preference for relationships,
modesty, caring for the weak, and the quality of life
 Hofstede’s Dimensions of
Cultural Variability

• Individualism/Collectivism
– a preference for individual welfare vs. group
welfare

• Long-term orientation
– the extend to which society exhibits a pragmatic
future oriented perspectives