Hyundai Marketing Strategy Narrative Essay Example

Virgin from the UK, or Sony and Mitsubishi from Japan.

Within the product branding, notable brands include Sprite and Mr. Bulb. The article "Marketing Intelligence & Planning Volvo. 24 NO. 4, 2006 up. 347-364" discusses the presence of these brands, along with others such as Coca-Cola umbrella, Lug and Dove from Milliner, Toyota and Lexus from Toyota, and Bonnet's Sisley and Killer Loop. The expansion of emerging markets is seen as a crucial factor for the future growth of the global economy, offering great opportunities for companies based in developed nations like the USA and members of the ELI.

As the mature economies in emerging markets continue to grow, there will be a greater demand for consumer goods from developed countries. According to Dewar and Psychotherapy (2002), multinational firms from developed countries need to adapt to market conditions in emerging markets to effectively enter these markets. This raises questions about the preferred branding strategy for firms when first entering emerging markets: corporate branding or product branding? What factors influence the choice of branding strategy in emerging markets?

According to Urdu (2003), firms have four main options for their "brand architectures": corporate, product, corporate-and-product (with a dominant use of the corporate brand), and product-and-corporate (with a dominant use of product brands). Some companies, like MOM, primarily emphasize their corporate brand, while others, like Procter & Gamble, focus their strategy on their product brands. There are also companies that deploy both corporate branding and product branding at the same time, adjusting their focus between the product and the corporation based on different markets and contexts.

Nestle, for instance, promotes its products using both the corporate brand and

individual brand names like Carnation, Ensnare, Nested, Magi, Peppier, and San Pipelining. Similarly, Intel emphasizes both its corporate brand and product brands such as Pentium and Echelon. This paper explores the branding structures of companies aiming to enter emerging markets that possess both corporate and product brands. Traditionally, the study of branding has predominantly focused on product brands within a brand portfolio.

In today's marketplaces, the rapid innovation, higher service levels, and declining customer loyalty have made corporate branding a crucial marketing tool (Morning and Christensen, 2001). Companies now face the decision of focusing on building either product brands or corporate identity (Loins, 1995). The significance of corporate branding has captured the interest of both industry professionals and academic researchers. According to Ward and Lee (2000), companies are increasingly shifting their reliance from product brands to corporate and service brands.

Recent research has shown an increase in the use of corporate branding (Asker, 1996; Blamer, 1995, 2001). However, most literature on branding strategies has primarily focused on American firms' marketing strategies. Interestingly, there is a lack of studies on multinational corporate-versus-product branding strategies in emerging markets within marketing and international business publications.

There is a research gap in both marketing and international business in relation to branding strategy and emerging markets. To address this issue in international marketing, we aim to analyze the branding strategies adopted by firms in developed countries when entering emerging markets. The remaining sections of this paper are organized as follows: a brief literature review on corporate and product branding will be presented.

The paper introduces a conceptual framework for analyzing the branding choices of firms from developed countries in emerging

markets. It presents propositions derived from this framework and discusses the implications of the findings, as well as providing recommendations for future research. While this themed issue concentrates on China and the Far East, it asserts that the discussed principles can have wider application.

The literature review discusses corporate branding and corporate brand architecture. It explains that corporate brand architecture is characterized by a shared set of core values among different products, creating an overall brand identity. This plays a crucial role in coordinating the brand-building process. The corporate brand is instrumental in establishing credibility in various situations, such as communication with the government, financial sector, labor market, and society at large (Urdu, 2003). The foundation of a corporate brand lies in organizational values, core values, and added values. The interaction among these elements forms the value-creating process of the corporate brand (Urdu, 2003).

To strengthen and differentiate their core values, companies must effectively manage their resources and internal processes. This will ultimately provide added value for consumers. Enhancing brand equity and competitive position relies on the vital connection between core values and the corporate brand. It is crucial for management and the entire organization to support this process. The corporate brand encompasses not only the main company but also its subsidiaries and affiliated groups of companies.

Blamer (1998) states that corporate identity is an important asset for a company. It includes the firm's ethics, goals, and values, which help distinguish it from competitors. In today's complex markets, where products and services can be easily replicated, maintaining differentiation is difficult. Therefore, it is necessary to position the entire corporation instead of just its individual products. As

a result, corporate values and images are crucial in differentiation strategies (Hatch and Schultz, 2001).

The purpose of creating a corporate brand is to differentiate the firm from its competitors and support all aspects of the organization (Harris and De Cornerstone, 2001; Mind, 1997; Blamer, 2001). Corporate branding enables firms to incorporate their entire organizational vision and culture as part of their distinctiveness (Blamer, 1995, 2001; De Cornerstone, 1999). According to De Cornerstone (2001), it is important for firms to align their strategic vision with their brand building efforts. Corporate brands have a greater potential than product brands in enhancing the firm's visibility, recognition, and reputation.

According to Blamer and Gray (2003), strong corporate brands have the advantage of attracting deliberate investors and presenting more opportunities for strategic or brand alliances. They also play a crucial role in recruiting and retaining valuable employees. Alan (1996) attributes the increase in corporate branding to factors such as advertising costs, retailer influence, product fragmentation, cost efficiencies in new product development, and consumer expectations regarding corporate credentials.

Corporate versus 349 350 Product branding

Product branding offers various benefits for companies. McDonald et al. (2001) contend that if a firm opts for a product-brand strategy instead of corporate branding, the company's corporate image will suffer less if one of its individual brands fails. In the case of the Ethylene brand facing criticism in the USA due to contaminated batches, Procter & Gamble's name and reputation were partially protected by the product-branding strategy, ensuring that Pampers and Tide were unaffected by the Ethylene scare.

The adaptability and market appeal of a company's product brand are exemplified by Budweiser beer. Positioned as a

reasonably priced option, it caters to various consumer segments in the United States while also embodying the American way of life. However, targeting different brands at smaller individual segments can result in higher marketing costs and lower brand profitability. The primary goal of branding and brand management is to establish uniqueness and customer preference.

The idea of product branding is centered around preserving distinctiveness within a particular market. Corporate branding expands on this notion by establishing differentiation and recognition at the company level. Furthermore, corporate branding extends its reach beyond customers to encompass stakeholders like employees, investors, suppliers, partners, regulators, and local communities.

The text discusses the difference between corporate branding and product branding. Corporate branding encompasses the marketing efforts of a corporation to present a controlled representation of its value system and identity. It involves strategic focus and combines corporate strategy, communications, and culture. In contrast, product branding focuses on individual products. According to Blamer and Gray (2003) and Hatch and Schultz (2003), corporate branding differs from product branding in various ways, with the main shift being from the product to the corporation.

The exposure of the corporation and its members is increased through corporate branding. The middle-management marketing function typically handles the responsibility for product brands, while strategic considerations at a higher executive level are involved in corporate brands. Product brands target specific consumers, whereas corporate brands relate to all stakeholders and the firm's products and services. Product-brand management is usually handled within the marketing department, while corporate branding requires support and coordination across the corporation and multiple functions.

In comparison to corporate brands, product brands are typically shorter-term in nature with a

focus on functionality. Therefore, corporate branding is more strategic as it encompasses the company's long-standing heritage and vision. According to Hatch and Schultz (2003), corporate branding involves integrating strategic vision, organizational culture, and corporate image to establish the firm's position in the marketplace and implementing internal support systems aligned with its strategic significance. Likewise, Mind (1997) highlights three primary distinctions.

Corporate branding encompasses multiple aspects. Firstly, it gains tangibility through the firm's messages and relationships with stakeholders. Secondly, corporate branding is more intricate than product branding due to the array of messages and relationships involved, potentially leading to confusion. Thirdly, it requires a greater consideration for ethical and social responsibility. While a product brand focuses primarily on customers, a corporate brand centers on stakeholders.

In extending a product line or diversifying into other product lines, corporate brands can provide a sense of trust and quality for the firm (Blamer and Gray, 2003). This potential can be translated to other markets (Apteral, 1993). It is commonly observed that corporate brands are extensively used to launch new products in new markets. Corporate branding typically utilizes the total corporate communication mix to engage argue audiences who perceive and Judge the company and its products or services.

The corporate level image of the firm is anticipated to create brand equity, according to Keller (2000). The image of the firm is influenced by its core company values and heritage, as well as the strategic vision. Stakeholders typically seek and utilize information about the firm that goes beyond its regular offerings. Hatch and Schultz (2003) state that firms that successfully establish a corporate brand are more competitive than those that solely

rely on product branding in the fragmented markets resulting from globalization.

Corporate branding is more complex compared to product branding as it involves the simultaneous and effective interaction of strategic vision, organizational culture, and images. According to De Cornerstone (1999), it enables customers to explore the brand further and assess the nature of the firm. Trust in the firm's products and brand leads customers to trust its claims about other products and services. This conceptual framework explores branding strategy in emerging markets.

An emerging market is a country that has experienced rapid economic growth and has embraced economic liberalization and a market economy (Arnold and Squelch, 1998). These markets can be classified into two main groups: the developing countries in Asia, Latin America, Africa, and the Middle East; and the transition economies of former Soviet Union and China (Hosking's et al., 2000). The list of emerging economies is not fixed as their economic development varies over time.

In this study, the terms "emerging market" and "emerging economy" are used interchangeably to refer to the same concept in related studies, despite potential disagreements among scholars. Businesses are turning their focus towards emerging markets for growth and expansion due to slow growth in developed markets. The attractiveness of emerging markets can be attributed to three main reasons.

The first point is that firms in developed countries can capitalize on an immediate sales opportunity by establishing a presence and attracting new customers if they have a strong reputation. Secondly, the saturation of developed markets pushes companies to tap into emerging economies to protect themselves from economic recessions and changing demographics. Lastly, market size and growth present a

significant potential for marketing success (Naked and Sparkman, 1997).

The entry into emerging markets presents considerable difficulties due to political risks, lack of transparency in government policies, fiscal limitations, and other related factors. Historically, emerging countries have safeguarded their economies and state-owned enterprises, which can lead to limited product availability and consumer options. Consequently, competition is low but demand remains high (Arnold and Squelch, 1998).

The strategy and performance of a firm are influenced by the environmental opportunities and challenges it faces, which impact operating costs and risks. In emerging economies, market opportunities differ between industries and are influenced by local environmental conditions (Lou, 2002). Firms may need to implement market-based strategies in various markets and at different stages. As such, the interaction between firms and their environments significantly shapes strategy development in emerging markets (Hosking's et al., 2000).

The development of brand strategy in emerging markets relies on comprehending the economic, technological, socio-cultural, and competitive conditions that can significantly influence the operations and performance of incoming firms. Figure 1 presents a conceptual framework illustrating the factors that impact a firm's initial selection of branding strategy for emerging markets. These factors form the foundation for the subsequent research propositions. In terms of stakeholder interest, product brands typically target a specific group of stakeholders, primarily customers who purchase and use the product.

In contrast, corporate brands must consider various factors such as internal and external stakeholder interests, firm characteristics (age, size, experience), corporate image and reputation, market complexity, choice of branding strategy, and marketing costs. Firms in emerging markets have identified stakeholders that find corporate brands more significant for the overall well-being of the company compared

to product brands (Davies and Chunk, 2002).

Staying true to the original sentiment, it can be said that stakeholders form their perceptions of a corporate brand through ongoing interaction and communication with the firm. The value of a corporate brand lies in its recognition among customers and shareholders, thus contributing to the firm's reputation. Esteemed authors suggest that corporate branding should be adapted to meet the needs of different stakeholders (Blamer, 2001; Hatch and Schultz, 2001). However, Van Riel and van Bragger (2002) posit that decision makers at the business-unit level may still find it beneficial to fully embrace corporate branding.

According to Van Riel and van Bragger (2002, p. 242), management attitudes towards the corporate brand at this level can be influenced by four factors: corporate strategy (related or unrelated), internal organization (degree of centralization), driving force (organizational identification within the unit), and perceived external prestige. The authors define a corporate branding strategy as a systematically planned and implemented process of creating and maintaining a favorable reputation of an organization and its constituent elements by sending signals to stakeholders using the corporate brand.

The impact of regulations, rules, and policies imposed by local governments is a significant distinction between emerging economies and developed economies (Hosking's et al., 2000; Penn, 2000). The continuous and unpredictable fluctuations in these factors can result in intricacy and uncertainty within the business environment (Lou and Penn, 1999). To effectively exploit revenue possibilities in emerging markets, it is vital to establish a favorable relationship with the host governments. Conversely, a positive relationship can provide benefits like market access and technological advancements.

Due to rapid growth and intensified competition, effective

mass communication is crucial in emerging markets. In order to succeed in such environments, it is essential for firms to foster genuine partnerships between manufacturers and dealers, as relationship-building plays a pivotal role. Conversely, foreign firms face the significant challenge of establishing a streamlined and effective sales and distribution system in emerging markets, which requires integrating diverse organizations to achieve efficiency in these intricate markets (Bator, 1997).

Corporate branding can be a practical and effective strategy in these circumstances. Multinational firms have the potential to successfully build corporate brands internationally, with a high-quality brand identity, clearly identified stakeholders, and brand positioning (Burt and Sparks, 2002). In markets where market mechanisms are supplemented by self-evident in realizing firms' goals, corporate branding is more likely to be chosen by firms operating in emerging markets. The broader the stakeholders' interests, the greater the likelihood of choosing corporate branding.

Corporate image refers to the collective impressions and expectations that stakeholders and the public have about an organization (Topical, 2003). Recent research in the field of organizational management highlights the importance of effectively managing corporate reputation (Bombproof and Van Riel, 1997). Hatch and Schultz (1997) argue that branding is a crucial tool for aligning the internal culture of a company with its external image.

The management of an organization's brand or brands starts with the organization's vision. The study of corporate branding has developed alongside the rise of concern for corporate image or reportage reputation (Brat, 1989). Asker (1996) suggests that brands differentiate products from competitors through consumer perceptions. Kelly (1998) and Sharp (1995) both argue that many firms have realized the competitive advantage of a strong corporate brand in

an increasingly competitive market.

To enhance brand strength, businesses must shape positive customer perceptions. This task becomes more challenging in emerging markets due to variations in market structure and consumer behavior. Kowalski and Pawls (2002) argue that how outsiders perceive a company's organizational culture can impact its reputation. Hence, firms should acknowledge that maintaining a favorable public perception of their culture can yield positive effects on reputation. The coordination process within the company can be facilitated by promoting shared values and ideas through the corporate brand.

Public and media interest in companies has significantly grown in recent years, as evidenced by the notable increase in the breadth and depth of business news reporting. The demand for transparency has been amplified by the emergence of various "new media" platforms. According to DiMaggio and Powell's (1983) research, the creation of a positive corporate image contributes to being a "good corporate citizen" within different environments. Additionally, Frogman (1999) and Freeman (1984) argue that corporate branding strategies that foster respect, legitimacy, and trust can effectively aid firms in managing their supply-chain or distribution channels, both directly and indirectly.

According to Blamer and Wilkinson (1991), a strong corporate image is the most effective way to differentiate a product. It is becoming harder for companies to establish a competitive advantage. The expenses associated with maintaining individual brands are high, and there is increasing pressure from government and interest groups for corporations to be socially responsible. Moreover, the growing importance of corporate ethics in decision-making has contributed to the prominence of the corporate brand. Nowadays, factors such as price, product specification, and product quality are considered basic requirements rather than sources of

differentiation.

Customers today expect firms to be more ethical than their competitors. This has created a need for companies to communicate their distinct values. In recent years, there has been increasing pressure for transparent and sound corporate behavior in international markets. The core of corporate branding involves two important concepts: corporate identity and corporate associations. Corporate associations refer to the beliefs and feelings that individuals have towards an organization, while corporate identity refers to the characteristics or associations that strategists in an organization aim to establish in the minds of both internal and external audiences. Decision makers within a company will determine the intended corporate identity and promote it to different audiences, who will then form their own corporate associations and make purchasing decisions accordingly. With products constantly changing across markets, customers often rely on corporate brand names and identities to identify and understand products or services.

Multinational firms often utilize corporate identities to showcase their quality, prestige, and style to stakeholders (Enamelware and Saunders, 1999). The perception of a product brand by customers is typically shaped by its advertising, distribution, and communicated image. In contrast, corporate brand images are typically formed through customers' interactions with the company's employees, historical presence, and overall marketing efforts. The intangibility and complexity of a corporate brand are widely recognized as key features (Mind, 1997).

In terms of corporate branding, it can offer strategic direction for positioning the brand, ensuring consistency in marketing and communication efforts across the company (Siegel, 1994). This is particularly relevant for multinational corporations based in developed countries, as they often have various subsidiaries, brands, and cultures. Consequently, conflicting corporate associations can hinder effective communication

between the company and its stakeholders, leading to a lack of coherence and coordination problems (Unwilled and Will, 2002).