Welcome to the segment International Branding. In this segment we will learn what's International Branding, how to approach it, and how to analyze the benefits and costs? So let's get started. So what is International Branding? Or simply put, it's branding across borders. If you're branding something in the US and also in Canada, maybe it's a no brainer since Canada and US are so much alike. But if you're moving from the US to the UK maybe the story isn't as simple. And it really relates to the fundamental concept of Noon Nopi which we've learned about so much in this international marketing course. And a good starting point is this, what I call a CCCI Matrix, which stands for Cross Country and Cross Industry. But we start at Country 1 and Industry A. And we need to grow, and how do you do that? There are many paths. We can grow through another cross industry. We could grow through another country and of course, we can do both. So in this segment, we'll talk about the horizontal dimension of going from one country, Country 1 to another country, Country 2. So if you are Apple and you're going abroad, what do you call yourself? Maybe the easy answer is Apple and of course, Apple has done that. But not every company is an Apple. So for some companies, they may actually call something else. I really have to relate to your vision as well, and this will look very familiar. It's my vision strategy. Action template or a framework. So we start with the vision, such as we have for Starbucks and in terms of your strategy of how to diversify, how to grow? Going to other countries may be part of that equation. So again, if you start from the US as Starbucks has done, they can go to other regions such as Asia. And ironically, a region that they haven't explored as much, expanded as much is Europe. And so if they go to Europe, if they go to the home of coffee like France and Italy, they call themselves Starbucks. But looking back we may ask, was that the right decision? Because Starbucks connotes to a lot of Europeans. Something which is maybe too American. And if they're very proud of their coffee, well again if something's too American, maybe that's not such a good thing. And I think a lot of you actually may not know that the original name for Starbucks, at least the company that Howard Schultz started was [FOREIGN], which is Italian. So that may, thinking back and maybe even thinking forward into the expansion into Europe could be a better name. This is a short list of many items that we can evaluate on the suitability of brands across countries. But these I think are some of the most important ones. I of course, am a big proponent of vision strategy and action, especially the vision part. We also have to think about Noon Nopi between countries. Legal restrictions may prevent you from using the same brand. And so we have a famous example of Burger King which wasn't able to use Burger King in Australia because it was already registered by someone else. And lastly of course, we have to think about the cost of standardizing your brands. So let's have a look at some of these issues. A good example of vision, I think is that of HSBC. I think many of you are not aware that HSBC was for a long time called Hongkong Bank or Hongkong and Shanghai Bank. And the reason's very simple, it was founded by a Brit way back in 1865 in Hong Kong and then later expanded to Shanghai. But when Hong Kong was being handed over back to the UK, they started acquiring and merging with other international banks and it was relocated and reincorporated in the UK as HSBC, which of course stands for Hongkong Shanghai Bank Corporation. I think for a lot of people elsewhere it doesn't ring with that same kind of connotation and benefitting its slogan it truly has become the world's local bank. On the other side of the spectrum of course, you have a brand that have individualized their branding per country or per regions. So we have some simple examples here like Snickers, so in many regions of the world including the US and including here in Asia, it's called Snickers. It's one of my favorite chocolate bars. But in the UK for the very long time it's called the Marathon. They also have cleaner called Mr. Clean. But in Spanish speaking country, it's called Don Limpio which translates into Mr. Clean. And lastly, there's a very famous cereal called Sugar Frosted Flakes with Tony the Tiger. But here in Korea, it was called Corn Frost. But they kept Tony, at least the mascot was kept. So again, it doesn't have to be worldwide in some cases as we can see here it can be customized to the Noon Nopi of the individual market. So we have to think about the pros and cons, the benefits and the costs of extending your brand across countries. So as we can see here, there are many benefits to speak of, especially in the long run, and that's what LR here stands for. That you have a unified image and standing from that can lead to a very high global brand equity. So the likes of Nike and Apple, they have brand equity that's in the tens of billions of dollars. Coca Cola is the same as well. And it gives you this very easy platform on which you can advertise. You can use the same kind of advertising everywhere. So a good example of that again, might be Nike where it might be even personified through some of their famous athletes like Michael Jordan or Tiger Woods. And it enables you to easily introduce new products everywhere. That said, as we can see here there are still many costs, especially in the short run and that's what SR here stands for. And thinking back to a Marathon consumers in the UK, it might confuse them. The packaging might look the same. It might taste the same, but overnight it's suddenly called Snickers. Before it was called Marathon. So what is it? Is it Marathon or is it Snickers? So it may confuse people, certainly in the short run. There are also application costs. That may be in the hundreds of millions of dollars. If you had two cars being made differently but then if you want to unify them. Well then everything about the car, including the badges have to be the same. That costs a lot of money. And store exterior that too has to be changed as well. Also for brands that have been in existence for some markets for a long time. You may lose your brand equity. So even though in the long run you have this unified brand equity for the globe, for that individual country, you're foregoing that built up brand equity that you worked so hard to achieve. Also from the Noon Nopi standpoint, for some countries again you may want to individualize your brand as we saw with Mr Clean. Because you want to easily convey what the proposition, the value proposition of your product is. So calling it Mr. Clean let's say, everywhere even in non English speaking countries doesn't allow you to have that same kind of easy loyalty that you would otherwise have with that localized one, and last but not least Gray Markets. Gray Markets or products where you can buy something cheaply elsewhere and let's say, you have a camera which is a Minolta model X and it's called Minolta model X. It's everywhere, but you can buy it more cheaply, let's say in Hong Kong. Well if you are a rational consumer, that's what you will do. So being called the same thing, actually facilitates this kind of transshipment or this phenomenon called Gray Markets. But if you were to call these brands something different then people would be confused and would maybe think twice before they bought something cheaper because it's called something else. So in summary, we have to balance or weigh which is greater. My example here, I stacked the deck towards a greater cost. In other cases, the benefits may outweigh the cost. But here the costs again are greater than the benefits. So the conclusion here that a company well, why that? It's that maybe it's not better to integrate your brands everywhere. So summing up, global branding is part of CCCI, which stands for Cross Country and Cross Industry extension. It should be based on the long term corporate vision and strategy that you have. And as we just learned, there are key caveats in terms of integrating your brands globally. And in some cases,the cost may outweigh the benefits.
