“I do not want this title to lead to mistakes, as Spanish brands are already having success on the international markets”. So began the lecture of Jan-Benedict Steenkamp, Professor of Marketing at the University of North Carolina and guest of the Forum of Brands in the setting of its 2016 General Assembly .
The conference ‘Taking your brand global: how Spanish brands can succeed Internationally’ took place on June 23 at the Telefonica Foundation, followed by a group discussion with the participation of Maria Sanchez del Corral, Director of Institutional Marketing and the Brand of Telefonica, Gabriela Salinas, Global Brand Manager of Deloitte and Carmen Abril, Professor of Innovation and Marketing at the IE Business School.
Why back a global market?
- The Spanish market is very small in comparison to the global one.
- Backing a global market implies a reduction in risk in the event of economic crisis in your country.
- Strong global brands create equity for shareholders, as evidenced by studies such as that of BrandZ for Millward Brown.
For these reasons, investing in the brand is important for the CEO, but also for investors.
A proposal for solid equity
To make itself stand out from the competition a brand must know what makes it different from the rest, it must have a solid brand proposal and its target audience must be clearly identified. It is not enough just to promise a series of benefits, you have to actually deliver them. This is achieved by telling stories. Through storytelling a brand is able to reach consumers and create an emotional bond with them.
In his lecture Professor Steenkamp categorised global brands into 5 types, depending on the equity proposal offered by the brand to its potential customers:
- Value brands: are those that offer the best price-quality ratio. The target sector for these brands are people with money concerns.
- Mass brands: are brands that offer high quality for a slightly higher price than the previous ones. These brands are the most consumed by the middle classes and people, who are more concerned about quality than price.
- Premium brands: are those brands that offer very high quality, at a much higher price. These brands are bought for their quality or for emotional reasons.
- Prestige brands: are aspirational brands, are particularly expensive and are only accessible to the few. People buy them because others do not have them.
- Fun brands: these are the brands that have the most emotions associated with them. These are fun, distinctive brands, associated with change and positive values.
Depending on the type of brand you are offering, you will need to follow one type of sales strategy or another. There must always be an equilibrium between production costs, retail price, quantity sold and profit margin.
The traditional paths towards internationalisation are organic growth or acquisition. The first is slower but surer, while the second is quicker but involves more risk, given that by buying another brand you assume the risk, for example, that this brand has a poor reputation.
Another important factor when taking a brand global, and in which Spain and its brands could improve, is highlighting the geographical provenance of the product. Geographical origins, in many cases, lend the product values associated with quality, innovation, design, prestige, social responsibility, etc.
Lastly, Jan-Benedict Steenkamp highlighted a third path towards internationalisation, which is the digital channel, a medium that is available to all brands and allows them to become global much more quickly than in the past. E-commerce is a great opportunity for companies because it allows you to reach a worldwide audience without being physically established in other countries, and to test whether your product will work or not in other markets.
Challenges and trends in brand management
After the conference, Steenkamp held a group debate during which a discussion took place on the main challenges facing brands today, the evolution of companies in relation to brand management, new consumers, the different perceptions of marketing managers, CEOs and CFOs regarding the equity of the brand, the importance of high quality communication and employer branding, among other relevant topics for brands and internationalisation.
Currently, companies are more oriented towards the brand: as Gabriela Salinas stated, “In 2001 Spanish companies were starting to take on board the concept, but now they have fully caught on to the idea and assimilated this awareness”, and, as shown by studies such as the II Barometer of Aeband, for 80% of companies brand management is important for achieving business objectives, although there is a resourcing gap, with 8 out of 10 entrepreneurs admitting to not having the resources necessary for its management. To improve resourcing it is important that brand and marketing managers know how to convey its importance to the CEOs and CFOs of the company, which may be done through metrics and taking into account future trends.
In the same way, more and more importance is given within companies to employer branding. Brands want to be attractive to their own employees and so retain their talents, as well as having the entire company united around the company´s culture and its goals. Maria Sanchez del Corral confirmed this concern by stating “For a company like Telefonica, which has 125,000 employees worldwide, it is a great challenge to align all our employees, but it is achievable.” In this regard, it is important to take into account that the nature of employees is also changing. As Carmen Abril declared: “The students we currently have at the IE Business School are not only concerned about pay, but also about the values of the company and how it behaves in the world.”
As well as this new type of employee, the nature of consumers is also changing, with them now being less loyal to brands and more demanding, and this places companies in a new scenario of having to adapt in order to survive.
To round off the day of the 23, a session was held behind closed doors, ‘The big businesses of small companies‘ between Jan-Benedict Steenkamp and members of the Club of Brands with High International Potential. During this session both the lecturer and members of the MAPI Club shared their visions of the future related to this topic.