The number of multinational and transnational companies is on the rise due to changes in business dynamics and an increase in pressure on businesses to diversify their operations and make the most out of opportunities in far away nations. However, despite these changes businesses still feel immense pressure to ensure that they redesign their operations so as to make the most out of the available opportunities (Mizik & Jacobson 2009). The level of competition faced by transnational and international companies is high which had led to increased emphasis on the strategies that international firms can use to improve their positioning in various market segments.
With increase in globalization and development of global trends, international companies play a vital role in shaping business dynamics within local environments. Though competition with local businesses is one of the reasons for the high levels of competition faced by international companies, both have an influence on the strategies that are adopted at national levels. Furthermore, international businesses are responsible for nearly 60% of global trade volume which implies that their performance may affect national economies and influence global economic trends (Halsall 2008). It is therefore imperative on individual businesses and researchers to come up with strategies through which local and international businesses can strategize their operations such that they aid improvement of global economic conditions and their profitability.
Many international companies have adopted extensive branding strategies to help improve their brand image and therefore sustain their operations during economic hard times. Local businesses are also following the examples set by the international firms (Sriram, Balachander & Kalwani 2007). A critical review of branding reveals that it is a strategy that is commonly used in markets so as to create awareness on a product, develop a unique image of a product and help improve loyalty to product (McCarthy & Fram 2008). The uncertainty that has gripped the international market due to market shocks has forced businesses to review their operations and come up with clear roadmaps to improving sustainability of their operations. Furthermore, extensive branding strategies at the international marketplace are being driven by an increase in the number of players at both national and international level that compete with international companies (Jansen 2008). A thorough understanding of the requirements in branding and the brand development process while injecting creativity and innovation in developing brands remains a critical requirement for international businesses in strengthening their operations.
The increased use of celebrity endorsements amongst businesses and strengthening of corporate social responsibility strategies are seen as direct efforts by local and international businesses aimed at improving and maintaining their brand images. Evidently, innovation plays an important role in determining the overall gains that an international business will make (Raggio & Leone 2009). The multiple challenges faced by international businesses which include having to operate in different markets segments, varying cultures, complex business models and differing expectations by organizational stakeholders may hamper and complicate the brand development and branding processes (Nandan 2005). The geographical diversification of business operations may also affect coordination of branding and brand development activities.
Branding in local and international businesses is taken seriously due to the implications that it has on overall operations within segments. Furthermore, the brand development processes and overall branding strategies among businesses are complicated by a myriad of structural and model considerations. However, it is evident that branding among businesses affects not only the sustainability of their operations but may also affect the trends and specific strategies that they adopt. Moreover, the modelling difference between local and international businesses may result in different challenges and requirements in branding and brand development. The study will seek to determine the challenges that international businesses face in their branding and brand development strategies. Furthermore, the study will aim at providing a clear set of guidelines and requirements that international businesses should have in mind when designing their brand development efforts.
The following research questions will guide the study:
a) What are the challenges that local and international businesses face in branding?
b) Are there any differences in challenges faced by local and international firms in brand development and branding?
c) What are the requirements that local and international businesses should have in place to improve their brand development and branding initiatives?
Significance and Rationale
The background literature reveals the importance of branding to both local and international businesses. The complexities associated with branding have also been relayed. The importance of branding in improving performance of firms at national and international levels is a key rationale in carrying out the study which will also help determine aspects that may require improvements and measures that can be taken to make such improvements. It is noteworthy that there are few studies that address the difference in branding between local and international firms despite the potential effect that the different structures adopted by firms have on their operations. Understanding the differences in branding and brand development among international and local business may provide insight on differences in requirements and how they can be ported into practical strategies. The study will also help relay areas that need research with respect to branding and brand development among local and international businesses. Evidently, the study will have implications on practice and research.
Brand equity is considered by a majority of researchers as the key concept in brand managements and is representative of the overall value of a brand. From a theoretical dimension researchers have for years sought to determine what constitutes brand equity (Fetscherin & Toncar 2009). Managers gave on the other hand taken interests in brand equity as an avenue to improving their marketing processes so as to improve their positioning in the market (Taylor 2005). However, despite varied research and multiple perspectives a common definition of brand equity is still elusive. The dominant views of brand equity emphasizes that it is a set of customer based brand related associations held by customers. Under this dimension, brand equity is made of attitudes, beliefs and other subjective experiences associated with a brand. Additional consumer constructs such as purchase intentions and brand loyalty are increasingly being included in the conceptualization of brand equity (Laidler-Kylander & Simonin 2009; Rego, Billett & Morgan 2009). Many researchers are keen on determining the effect that brand loyalty and purchase intentions have on purchase behaviours (Rubinson & Pfeiffer 2005). This implies that brand equity is more than just a network of brand related associations for it transcends consumer attitudes and purchase behaviours (Villarejo-Ramos & Sánchez-Franco 2005). This complexity is central to the varied strategies that have been adopted by researchers in determining what constitutes an effective approach to branding and brand development. Read also Research Proposal sample on customer satisfaction
Brand development activities are internal strategic efforts that have to be carried out with keen considerations on the strategic positioning of a firm and its products. The availability of resources and expertise that can be channelled to branding activities may also affect the extent of the brand development strategies adopted by a firm (Lin & Wang 2008). This implies that the internal positioning of a firm plays an important role in determining the efficiency of the brand development strategies. This is further supported by findings positing that good branding strategies can potentially result in gain of competitive advantage and enhance employee experiences (Ind & Bjerke 2007). This points to the effect that branding activities have on the internal capabilities of an organization. Having the ability to design internal systems such as customer relationship management systems may also affect brand equity development within firms. Poor customer relationship management strategies develop a bad brand image for an organization and its products (Wiedmann 2005). Such organization wide strategies can easily be managed by small organizations that on the other hand may lack the technical capability and financial backing to develop effective customer relationship management systems.
Furthermore, different divisional cultures within an organization which is a common phenomenon within multinational companies may adversely affect the implementation of branding strategies (Henseler, Wilson, Götz & Hautvast 2007). A strong uniform culture provides a uniform platform for a firm to develop internal strategies whereas a divided corporate culture is associated with multiple threats that complicate the implementation of strategies.
A large number of international companies start their operations as local companies and diversify to other nations. Moreover, the operational model adopted by most international companies support both centralized and decentralized decision making (Taylor, Becerra, Stuart & Case 2009; Madhavaram, Badrinarayanan & McDonald 2005). International businesses that have a global brand name for instance Nike depend largely on consumption experiences in improving memorability of a brand name or logo. In general, developing quality products and ensuring that this quality is felt by consumers may affect the development of brand attitudes (Holt 2007). Moreover, companies have different approaches to quality management which may affect their brand development efforts.
The experience that a businesses has had in operating in a given market segments may provide it an edge over new entrants. Though many international firms may have some difficulties in determining market trends in new niches, their experience in operating in varied products segments and in different market conditions may give them an edge over local businesses (Roehm & Brady 2007). Furthermore, the experience or brand knowledge that an organization has may present it an edge over others. Established brand names generally have advantage over others due to the high loyalty they enjoy and a deeper understanding of what variables customers value in their brand. This knowledge is accumulated through years of operating within the same product and market segments (Maheswaran & Yi 2006). This implies that international companies like Coca Cola have established a deeper understanding of their brand development initiatives than local bottling companies due to their experiences. It is therefore not surprising that such established companies are associated with strong brand names and high loyalty.
The strategies adopted by a business in branding are dependent on their capabilities, knowledge of branding and brand development, positioning in the market and structure of their operations. Branding activities are financially intensive which implies that businesses have to strengthen their internal systems if they are to make the most out of their available resources. The structure and cohesion within a business may also affect its ability to carry out branding activities (Reynolds & Phillips 2005). Despite the multiple dimensions and even models that have been developed to analyze branding activities, few researchers have sought to determine if there are any differences in branding between local and international firms (Chiang, Lin & Wang 2008; Wright, Millman & Martin 2007). Though a review of the requirements in branding reveals a likelihood of the existence of such differences, there are no clear direct steps on the part of researchers to determine the exact differences and the implications they have on branding. This is an issue that ought to be awarded preference considering the importance of branding in the modern business environment and the intense direct competition between local and international businesses in both local and national markets.
Figure 1: Integrative Brand Model
Source: (Kaynak, Gultekin & Tatoglu 2010)
The conceptual model clearly shows that seeking brand equity which is the main goals in brand development and branding activities helps firms gain value through enhancing internal capabilities and customer experiences. The conceptual model further emphasizes the importance of brand loyalty, brand awareness, perceived quality, brand associations and proprietary brand assets that emanates from developing strong brand equity. Evidently, brand equity can be looked at as a composite made up of the five brand assets variables. Organizational ability to comprehensively address each of the brand asset variables in its brand development and branding initiatives therefore plays a role in determining the gains that they will make. However, the business model adopted by a firm may affect the specific strategies that are adopted by a company. International companies are generally defined by complex matrix structures whereas local organizations have simple structures depending on their business model (Carlson, Meloy & Russo 2006). These differences may affect the requirements in brand developments and the specific strategies that are adopted by firms in branding.
The methodological strategies adopted affect the overall integrity of the study. Therefore the study has been designed with key consideration on ethicality, validity and reliability which contribute to improving the integrity and overall authenticity of the findings. A review of the existing literature and the conceptual model adopted in the study reveal that brand development and branding initiatives within local and international firms are driven by five different goals that all seek to develop brand equity. Furthermore, branding is an area that has been adversely addressed by researchers though there are some themes that are yet to be adequately addressed. The five aspects that lead to brand equity in the adopted conceptual framework can be designed and incorporated in branding and promotional strategies at firm level. This implies that there is existing literature and some aspects of the research area that have yet to be adequately addressed. This is the main reason why a mixed research methodology involving qualitative and quantitative research will be adopted in the study. The existing studies cannot be ignored and the study must also address the existing gaps in research thus the adoption of a mixed methodology is in order.
The qualitative research will mainly involve determining what has already been addressed with respect to the research questions. An extensive review of the existing literature resources will be used for this purpose. Peer reviewed journal articles on branding among local and international companies will be analyzed to determine any findings that can be used to address the research questions. The use of peer reviewed journal articles aims at improving the accuracy and reliability of the data used for qualitative analysis. Relevance of the articles used in the qualitative analysis will be guaranteed by scheming through the abstract of the journals retrieved from online databases before they are incorporated in the study.
Collection of primary data is a process that will start by determining local and international companies that have elaborate branding and brand development initiatives. The companies are contacted and relevant authorities informed of the intent to carry out the study. Only companies that grant permission for the study to be carried out will be considered for data collection that will focus mainly on the marketing and promotion department. The emphasis on this department is aimed at ensuring that the participants in the study have a thorough understanding of the theory underpinning branding and the practical strategies that their companies have adopted which improves the accuracy of the collected data. Data collection will involve the distribution of questionnaires to informed participants. The participants will be allowed to participate in the study only after they have been told the procedures and measures that have been included to protect their identity thus privacy and confidentiality. This is a measure that also improves the ethicality of the study since the study seeks informed consent.
Questionnaires will be designed such that they have both open and closed questions. The open questions will be used to elaborate on responses from the closed questions. This approach seeks to maximize input from different participants. Employees at different positions, levels of experience and educational levels will be involved in the study under the condition that they are willing to participate. The participants will then be divided into two groups: participants from international firms and those from local firms. A random sample of thirty participants is chosen from each group. It is noteworthy that this is a form of simple stratified random sampling that allows for normalization of random errors.
Analysis of the collected primary data will be at a descriptive level and will mainly involve a review of the responses to determine similarities and differences. Tables and graphs will be used in determining the similarities and differences between responses from participants from the international and local firms. Use of graphs and tables is aimed at bringing out a clear visual impression of the themes relating to the research questions in the responses.
Ethicality, Reliability and validity
The study is ethical because it incorporates seeking permission from relevant authorities and ensuring informed consent from the participants (Creswell 2009). Use of participants with theoretical knowledge of branding and brand development activities within their respective companies helps improve accuracy thus validity of the findings (Creswell 2009). Randomization of the sample used in the study helps minimize the effects of random errors on the study which improves generalisability and therefore the reliability of the study (Creswell 2009).
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