Adaption (localization) vs. Standartization in international Brand Management. How to successfully launch and manage brands in international markets.
In conclusion, businesses have several strategy options for international brand management. Multinational and global brand strategies have their advantages and disadvantages, and a hybrid strategy may be preferred in some cases.
"Managing a brand internationally is a complex task that requires a deep understanding of the target market and cultural differences."
Strategic options to internationalize a brand
In today's globalized world, international brand management is essential for businesses to succeed. Managing a brand internationally requires a deep understanding of the target market, the competition, and cultural differences. There are several strategy options for international brand management, and each strategy has its advantages and disadvantages. In this article, we will discuss multinational vs. global brand strategies, hybrid strategies, and the country of origin effect as part of the brand strategy.
Multinational vs. Global Brand Strategies
Multinational brand strategies and global brand strategies are two opposites in international competition. A multinational brand strategy adapts all elements of the brand identity and the marketing mix in each market. It generates higher brand revenues through specific adaptation to local customer needs, considers local legal aspects, and offers higher flexibility in market development. However, this strategy can be costly due to complexity, and the different brand identities may irritate international customers. On the other hand, a global brand strategy targets the creation of a single global brand with identical positioning and a uniform brand policy in all major markets. It standardizes strategic and operational brand management and exploits economies of scale and scope. Global brands are recognized worldwide, generating prestige and confidence, and new products can achieve a global market penetration faster. However, this strategy does not consider local customer needs, and problems in one country may damage the reputation of the brand worldwide.
Hybrid Strategy
Executives often prefer hybrid strategies, which mix complete localization and total globalization of a brand or product. For example, the core benefits of the brand can be standardized, and unified brand strategies for specific regions can be implemented. Indicators that influence the standardization or specification questions are appellation, appellation good will, country-of-origin-effect, international branding, support of key information, protectability, and implementation of international brand strategy. These needs for adaptation also influence design and communication.
Country of Origin Effect as Part of the Brand Strategy
The country of origin effect is the differential consumer response to a product due to the perceived country of origin. It influences the brand image, quality perception, and purchase intention. The country of origin effect can be a part of the brand strategy, and businesses can leverage it to their advantage. For example, luxury brands such as Rolex or Cartier appeal to a worldwide audience in the high-price segment, and their country of origin is a part of their brand image.*
Conclusion
In conclusion, businesses have several strategy options for international brand management. Multinational and global brand strategies have their advantages and disadvantages, and a hybrid strategy may be preferred in some cases. The country of origin effect can also be a part of the brand strategy and can influence the brand image and purchase intention. Managing a brand internationally is a complex task that requires a deep understanding of the target market and cultural differences. Therefore, businesses should carefully choose their international brand management strategy to ensure long-term corporate success.
Implications for FinTech companies
Based on the discussion of multinational, global, and hybrid brand strategies, there are several implications for fintech startups. Fintech startups are companies that offer innovative financial services through technology, and they often operate in a global market.
One possible strategy for fintech startups is to adopt a global brand strategy. As mentioned, global brands are recognized worldwide and can generate prestige and confidence, which is important in the financial services industry. Moreover, new fintech products can achieve a global market penetration faster by taking advantage of an already established and globally accepted brand. However, this strategy should be carefully implemented, as the limited attention to the needs of the local customer can be a disadvantage. Fintech startups need to balance the benefits of a global brand strategy with the importance of understanding local customer needs. Another possible strategy for fintech startups is to adopt a hybrid strategy. Fintech startups can standardize the core benefits of their products, while adapting to specific local needs in different markets. For example, a fintech startup that offers a digital payment service could standardize the payment processing system while adapting the payment methods and currencies to specific local markets. This strategy allows fintech startups to take advantage of economies of scale while addressing local market needs.
Moreover, fintech startups should consider the country of origin effect (COO) as part of their brand strategy. The COO effect can have a significant impact on consumer perceptions of fintech startups. For example, a fintech startup that originates from a country with a strong reputation for financial stability and innovation may have an advantage in gaining consumer trust and credibility. On the other hand, a fintech startup that originates from a country with a less favorable reputation for financial stability may face challenges in gaining consumer trust.
In conclusion, fintech startups have several options for international brand management, including multinational, global, and hybrid strategies. Fintech startups should carefully consider their brand strategy in light of the local market needs, the country of origin effect, and their goals for long-term corporate success. A well-executed brand strategy can help fintech startups build trust, credibility, and recognition in the global market.
* Sources
Berndt/Altobelli/Sander 2010 - http://livre21.com/LIVREF/F1/F001108.pdf
Geigenmüller 2003 - https://www.researchgate.net/publication/315722229_Regionale_Marken_und_Konsumentenverhalten
https://www.researchgate.net/journal/Journal-of-Social-and-Clinical-Psychology-0736-7236