Entries by Florian Haller

Divide and conquer: Flooding product categories to market leadership

In major growth markets, the mid-price market segments are growing at practically the same pace as incomes. In order to capture larger market shares in dynamically growing product categories, an increasing number of companies are relying on a strategy known as “category flooding”. They aim at several target groups at the same level of the income pyramid, but also address other levels of the income pyramid. By offering more than one brand in the same category, they can achieve greater market share. You know: who only uses one single brand cannot increase sales above a certain level. The main reason for this natural “cap effect” is that consumers have different psychological needs and expectations compared to their preferred brand. Since brands also have a kind of personality, there are correspondingly many people who do not want to commit themselves to a certain brand.

“Branded House” or “House of Brands”: The role of the corporate brand in international brand building

Increasing competition, escalating advertising costs and rapidly growing product categories are confronting marketing managers in major growth markets with the challenge to design the best brand architecture. Depending on the choice, it can help a company grow in the fastest and most profitable way. First, it is important to analyze the circumstances in the target market and the brand status of your own company in this market. A company must then select the strategy that suits it best. If the company brand, usually the company name, already has a high degree of recognition and a high reputation or a larger country of origin bonus, it makes sense to take full advantage of this value.

Horizontal brand stretching: Using the brand image for other product categories

In recent years, offering very different product categories under one brand umbrella has become increasingly popular. Xerox expanded its core brand from copiers to computers. General Electric also sells financial services. We can book rooms in luxury Versace hotels, or surf the Internet with Ferrari notebooks. We can even wear shoes or watches from Caterpillar, Porsche or Jeep.

Exploiting the full potential: Separate brands for separate markets

In order to increase sales, many international companies are building up a differentiated brand portfolio in the major growth markets, consisting of a brand for the upper market and separate brands for medium and lower segments. This strategy, which is based on many brands, is mainly found in the consumer goods sector and has proven to be very effective if properly implemented. In countries such as China, where regulations often require joint ventures in the development of domestic brands, companies are occasionally forced to develop additional brands for political reasons.

How vertical brand stretching opens up further income groups

Business in growth markets has become increasingly important for multinational companies over the past decade. However, many companies are focusing too much on the premium segment when expanding into new markets, neglecting the large mid-market segment. Western managers like to underestimate how much purchasing power there is between the top ten percent of the population, the “super-consumers”, and the lower-income consumers in rural areas of the respective hinterland.

Shortcut into high-speed markets: The acquisition and revitalization of local brands

The major growth markets are more like continents than individual countries. Hundreds of languages, regional traditions, tastes and customs make them a huge conglomerate of markets. A “one size fits all” approach is doomed to fail here. However, it makes much more sense and is strategically more appropriate to concentrate on important regional areas or city clusters as a brand in order to find a starting point for the best growth opportunities. The leading cities are only one possible destination. Rapidly growing centers in the “hinterland” are another promising option within the framework of the cluster strategy.

Why geography matters in brand building: Expansion by regions and city clusters

The major growth markets are more like continents than individual countries. Hundreds of languages, regional traditions, tastes and customs make them a huge conglomerate of markets. A “one size fits all” approach is doomed to fail here. However, it makes much more sense and is strategically more appropriate to concentrate on important regional areas or city clusters as a brand in order to find a starting point for the best growth opportunities. The leading cities are only one possible destination. Rapidly growing centers in the “hinterland” are another promising option within the framework of the cluster strategy.

Catching the second wave: Customer loyalty as a special challenge

The dynamics in major growth markets can hardly be surpassed. Many things change at the same time. International brands and new local champions battle it out for market share. Entire development leaps in electronics, cars and Fintech turn markets upside down. Moreover, there are consumers who learn quickly, who are not really loyal and feel confident enough to try out lesser-known brands at an early stage. This makes customer loyalty a problem. Traditional brand loyalty campaigns often fail in the major emerging markets. This is also due to the fact that consumers climb up the premium ladder quickly. They are constantly raising their expectations and want to showcase their new status.

Good storytelling wins half the battle for young target groups

Most companies are convinced that their brand has fully exploited its potential. But far from it: the brand can only score maximum points in the target group if its tradition, its promise and its unique history are well known. The most general definition of a brand is: “The consumer’s idea of a product or service”. So it’s not just about knowing and recognizing, it’s above all about associative connections. Clearly, this is the big moment of storytelling.

Foreign sells: Why the country-of-origin effect is an important brand lever

Colorful advertisements, television ads and tourism: foreign influences in the major growth markets are getting ever stronger – and they are leaving a clear mark on the perception of local consumers. In addition, the economic opening up of these markets through their WTO entry and bilateral trade agreements are flushing more and more Western brands onto local shelves. The more respected the country of origin, the greater the propensity to buy. Sometimes the foreign brand origin proves to be an important factor in the international brand development.