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MKT 531

Article regarding the differences of Local, Private, National and Global brand

Prepared by: Dayang Hafsah Abdul Naim (2011225886) Prepared for: Sir Franklin Hazley Lai

Article regarding the differences of local, private, national and global brand

A brand is influenced by consumers and their behavior attitudes toward brands, which are in turn affected by factors that are mutual and interactive. There are four types of brand such as local, private, national and global brand. Local brand is a brand that is sold and marketed (distributed and promoted) in a relatively small and restricted geographical area. A local brand is a brand that can be found in only one country or region. It may be called a regional brand if the area encompasses more than one metropolitan market. It may also be a brand that is developed for a specific national market. Private brand are products that are controlled and marketed by retailers. Frequently, but not always, these products carry the retailer's own name as the brand. Private brands are also known as corporate brand, store brands, own brand, and retailer brands. Then, national brand defines a national brand is a type of product brand that is nationally distributed and marketed. More often than not, national brands are owned and advertised by a manufacturer. A national brand differs from a local or regional brand. It is a national brand is a brand-name product that's circulated throughout the country. Examples of national brand food products include Hershey Butternet and Kraft. Global brand is one which is perceived to reflect the same set of values around the world. Its transcended their origins and creates strong enduring relationships with consumers across countries and cultures. They are brands sold in international markets. Examples of global brands include Facebook, Apple, Pepsi, McDonald's, MasterCard, Gap, Sony and Nike. These brands are used to sell the same product across multiple markets and could be considered successful to the extent that the associated products are easily recognizable by the diverse set of consumers.

The main interesting in local brand is that the local branding is more often done by consumers than by the producers since it reported as highly in brand familiarity in individual countries than global brands (Johansson, 2005). It is acquiring brands common way of entering foreign market is to acquire a local brand. The advantages of local brands is when product quality varies between countries such as cf Ericson which is product quality in China has to be at the same level as in Sweden. Since the local brands is very familiar because it is on the countries such as Sabah Tea, consumer more typically use and know information about the product. It is also easy to find the product where consumer can buy it at market and grocery nearby from their countries. The constraint of local brand is broad. Since the local brand product are only familiar in the one country. For example, Sabah Tea, only people in Sabah are known about Sabah Tea but no other countries such Peninsular Malaysia. Moreover, the local brand product is unknown to the entire world. It is because the local brand produces their product in one country. However, linguistic barriers such as global name may be unsuitable. Private brands began to become a successful phenomenon, most marketing and branding researchers view the modern marketing era as the most meaningful in the evaluation growth. Where the retailer has a particularly strong identity (such as Marks & Spencer in the UK clothing sector) this "own brand" may be able to compete against even the strongest brand leaders, and may outperform those products that are not otherwise strongly branded. This is can be prove according to Hoch (1996) and Kurata et al (2007), most national brand manufactures regard private labels as they would any other national brand and it is though competition that they must take seriously. Thus, the data prove that mass merchants have gained substantial market share at the expenses of the traditional supermarket format and that private labels are growing faster than national brands (Hoch, 1996; Dhar and Hoch, 1997; Tarzijan, 2004). The disadvantage of private brands is price pressure. It is the main risk to the manufacturer is supplying commodity to retailer in developing a private brands. Thus, it can be explain by according to Glemet and Mira (1995) that the decision to offer a private level can easily be made when distributors are willing to switch to a new supplier with a lower price. Launching a private label can also trigger a price war for the whole product category and it is also can even spread to weaker categories. In fact, brand manufacturers may be tempted to fill their production capacity by offering private label products to distributors even as they developed their own branded articles. This is mean that when consumers notice that a large amount of the products in a

category are private label goods, they may lose interest to the product in branded items and will judge them as little different from private brands. In this case, the brand leader is typically suffering most. For example Sears wanted RCA TVs under its brand and RCA declined but Sanyo and Toshiba agreed. The national brand is popularity because they are typically considered to be of better quality and can often demand higher prices versus regional or off brands from consumers. Another comparison study was conducted by Hsieh (2004), consumers from developed countries may be more familiar with the measured associations that are linked to brands while consumers from less developed countries may have a limited brand knowledge. A study by Polyorat and Alden (2005) investigated the moderating effects of self-construal and need for cognition on brand attitudes and purchase intentions for comparative versus non-comparative advertising in two distinct national markets. For example a national brand food product can demand a higher price than Kroger brand peanut butter which is a regional brand. It is because consumers are familiar with it and consumers associate Jiffy with existence a quality product because of its advertisement. The pricing behavior of national brands versus their competitors is affected by several factors. Author William P. Putsis Jr. of the Yale School of Management, applies the theories of supply and demand to the pricing behavior of national brands, determining that national brand pricing is determined more by market saturation than local market conditions. Japenese is more likely to create global brand such as Sony and national Panasonic. Their creations probably are known and have becoming more common as high technology products. In addition to taking advantage of the outstanding growth opportunities, the following drives the increasing interest in taking brands global:

Market efficiency and economies of scale (production and distribution) Lower marketing costs Laying the groundwork for future extensions worldwide Maintaining consistent brand imagery Increases in international business and tourism are also enablers

However, the up-front quality of globalness risks alienating local consumers. In response to this potential disconnection with local consumers, many foreign companies that practice global

brands take a global platform. Using a global brand as a platform with local adaptations also involves the customization of product ingredients to each markets specifications, as in "localized MacDonaldization" (Watson 1997) or the very different forms of actual coffee under the same brand name of Nescafe in different countries (Mitchell 2000). Thus, global organizations difficult to manage because of its constraints such as legal constraints which are the global brand may be in conflict with existing and antitrust or competition law since some implication product and market policies may be simple, complex, independent and interdependent such as no set rules. In conclusion, the local, private, national and brands have their advantages and constraints able to influence and dominate consumers decision making and its play an important role in the helping company maximize profits and most efficiently influence of the decision consumers. Consumer perception of a particular brand may differ from reality because of ignorance, lack of salience of brand information, or deliberate complication by companies concerned about consumer reactions.


Review of industrial Organization, An Empirical the Effect of Brand Proliferation on Private Label-National Brand Pricing Behavior; William P.Putsis Jr,;1997

Yen-Chun Jim Wu, Department of Business Management, National Sun Yat-Sen University, Kaohsiung, Taiwan Renaming effect of brand value: state owned enterprises journal of marketing

Ram Herstein, Kalanit Efrat and Eugene D. Jaffe Business School, Ruppin Academic Center, Emek Hefer, Israel The enigma of private brands in the emerging Mediterranean countries the case of Israel journal of marketing