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How to Build an International Brand through Eunimart- Part 1
Globalisation and its impact on BrandsGlobalisation today is an unavoidable phenomenon that is driving the world towards one big market, a global village per se. Though globalisation is not a very recent concept, yet it has taken a new shape of late due to the rapid advancement of technology, increased migration, increased cross-border trade, investment in cross-border businesses as well as economic development. With the world becoming a single market, companies that are doing well in their domestic markets are no longer content with a mere domestic presence but want to establish themselves as International Brands. There is good data supporting this decision as there are a number of advantages to becoming an international brand. However, to create an influential brand name is difficult and requires a rather large war chest. Brand name refers to the unique design, symbol, sign, words or, at times, a combination that is used for building the image of a company and its products which creates instant recall among customers and leads to brand loyalty.
Significance of Brand Equity for an International BrandEntering the international markets is difficult, requires a good amount of planning and preparation, implementation and execution for a brand to achieve a certain level of quality, credibility as well as satisfaction in the minds of the customers. In order to build brand equity, brands carry out pricing and quality benchmarking exercises to create consumer awareness. Brand equity or brand value is the premium a company extracts from a specific product or series of products with an identifiable name in comparison to most of its other generic products; this is done by making the products branded or very easily recognisable, memorable and of high quality.
Factors influencing Brands’ decision to go internationalAs the battle for supremacy intensifies in India, Indian brands are gradually realising the advantages which lie in greener pastures internationally.
- Customers value International Brands at a premium: There is a noticeable perception amongst the Indian buyers or shoppers that a brand with a global presence is more reliable than an indigenous brand that is limited to the national borders. In order to cash in, Indian brands wish to make themselves more internationally relevant, thereby increasing the number of orders as well as the revenue generated per order.
- Reaching out to bigger markets: Spreading your wings globally allows you access to greener pastures. This means higher per capita order values, higher discretionary spending and higher number of loyal customers, paying a much greater value for the same product.
- Markets more conducive to your products: Carrying out overseas operation for your business can actually help you check and analyse the suitability of the markets for your products. You can enjoy access to a wide variety of market alternatives to test which country or market to focus on for a particular category of product or series of products which when selling domestically is not easily achievable.
- Augmenting revenue: It goes without saying that while being an international brand, getting hold of bigger markets makes way for greater visibility of your products which in turn directly affects the sales thereby ensuring a steady inflow of profits for your business.
Why have brands not been able to execute this so far?Time and again Indian brands have tried going global but have suffered serious setbacks more often than not. The two major reasons that have actually deterred Indian businesses from expanding overseas so far are as following:
- Non-existent Country Brand Reputation: Brand reputation of a country is of vital importance as all brands tend to piggyback on the respective country’s reputation for doing well while selling international. A favourable brand reputation of a country ensures that the brands piggybacking on the country’s reputation get positive response for its products from the customers worldwide. Case in point, France for fashion apparel, China for cheap electronics or South Korea for cosmetics. India so far didn’t have any such brand reputation on which the brands could rely on to make the big leap.
- No proper infrastructure to test a market: It is always advisable to test a market response for a particular product or series of products before making a huge investment to become an international brand. Previously, Indian brands either didn’t have a proper infrastructure to check the market response for its products overseas at scale or lacked the funding to do so. The brands directly made investments, suffered losses and stopped trying.