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Question:

Describe about the International Brand Communication?

 

Answer:

Introduction:

The term branding is defined as the process which is composed of the creation of a unique image and name for a particular product in the mind of the customers mainly by the help of the advertising campaigns along with a consistent theme. The aim and objective of branding is to establish a differentiated and significant presence in the competitive market which attracts the new customers and also retains the existing customers as the loyal customers. On the other hand, international branding means the branding which helps to attract customers from the whole world, therefore, the growth and the expansion of the company takes place worldwide. International branding and attracting customers through this branding is very difficult as people of various countries have various cultures and therefore, the meaning of the brand name, and also the advertising promotion campaign theme should vary such that none of the individuals of the different countries would get hurt regarding their culture and beliefs. Thus, in international branding, management plays an important or vital role. In the particular project, the company Skoda has been chosen, therefore, the international branding, its management and the communication through the international branding has been discussed.

 

PEST Analysis and Porter’s 5 Forces:

Among all the companies, decision has been made to visit the company “Skoda”. By visiting the company, the business environment of the company can be analyzed through most widely known tools, that is, PEST analysis and Porter’s 5 Forces. The modified analysis is the PESTEL analysis, where the acronym means political, environmental, technological, environmental and legal factors which affect or influence the company has been analyzed (Verissimo, 2013).

Generally, PESTEL analysis describes the outline of the macro environment with respect to the business environment. Political factors are consisted of various policies which are implemented by the government of the country like the involvement in the economy. It is also consisted of the various types of services and goods which should be produced and also the priorities are provided regarding the support of the business. In the company Skoda, the changes in the regulations and laws like – environmental laws, taxation requirements, legal power of the overseas countries and accounting standards might affect the business of the company especially in the international trade (Grönroos, C., 2007). Therefore, it can be said that monitoring the various regulations and policies of the government in a continuous manner is very critical. Therefore, according to the PESTLE analysis of the particular company, the alterations of various rules might affect the business of Skoda to a great extent. For example, the principles and rules regarding the accounting criterion, taxation requests, environmental laws and the authority of federations in the international market have an important role as it might affect the business of Skoda (Skoda.co.uk., 2015).

Economic factors that affect the company Skoda include interest rates, economic growth, inflation rates and also exchange rates. In the company Skoda, the interest rate might affect the cost of capital of the particular company (MacInnis, D. J., 2011). Thus, it determines the extent of the growth and also the expansion of the business. The costs of exporting goods, the price and the supply of imported goods might be affected by the exchange rates. Therefore, it can be said that economic factor affects the economic condition of Skoda.

Social factors include health perception, cultural aspects, age distribution, population growth and emphasis on safety. Generally, the changes in social factors influence the operation and product demand. In the company Skoda, to cope up with the trends like increased labor cost, less-willing workforce for aging and many more, various management strategies have been adopted by the management of the particular company (Kotler, P., 2011). Therefore, the HR department of the company Skoda is more concerned about the age limit during the recruitment of the new workers.

Technological factors includes rate of changes of technology, technical inducements and automation. These influence the outsourcing decisions, efficient production level and market entry barriers of a company. Skoda produces branded motor cars and thus, the main focus of the particular company is on the technology (Engelen, A., and Brettel, M., 2011). Technology helps to create opportunities for product improvement and new products. With the advancement of the technology new products might be launched.

Environmental factors include climate, weather, and the climatic changes which are considered to be the environmental factors. These factors influence the tourism, insurance and farming industries. Awareness regarding the potential impacts of climate change affects the operation of the company and also the various offers regarding their products that create both new markets in the society and also diminish the existing market. Thus the company Skoda manufactures environment friendly products with the aim to protect and preserve the irreplaceable environment and some models even provide the facility of meeting the EU4 emission standard (Skoda-auto.co.in., 2015).

Legal factors include discrimination law, antitrust law, consumer law, employment law, health and safety law. The company Skoda generally receives all the rights applicable in the nature of their business and each and every product developments and inventions are incorporated within the patented process (Skoda-auto.com., 2015).

Michael E. Porter has developed an excellent and comprehensive conceptual framework to analyze the industry structure, assets the nature of the competitive environment and develop competitive strategies (MacKay, 2011). Porter’s Five Forces Model of competition includes:

Threat of Entry:

As the increased power of the consumers of buying in the former Soviet Union countries and also in emerging countries, many firms might take this as an opportunity with the aim to move the plants to Eastern Europe to decrease their costs and also to compete in the market. Additionally, for the first time in fifty years, the consumers of Eastern European have access to a wider variety of cars than they have had. Both these factors generally heat up the competitive environment (Elliott, Rundle-Thiele and Waller, 2012).

Bargaining Power of Buyers:

When the competition increases in the whole world regarding the automobile manufacturing industry, the customers get many choices from which they can select one while purchasing a car. The movement of the formerly a oligopoly or monopoly market within a particular country to a global industry has bound to increase the intense price competition (Kotler and Armstrong, 2012). Thus, this particular industry is also known as ‘buyer’s market’. In the developing countries, the customers are wooed with cheaper prices, and in much developed or highly developed countries, the customers are wooed with product differentiation, that is, the price of the products varies in each and every market.

Bargaining power of suppliers:

With the movement towards just-in-time inventory systems, the automobile manufacturing industry has greater pressure on the suppliers to move their plant locations to the supplying automobile plants (Pride and Ferrell, 2012). There are also some companies of automobile which have started to supply their own parts and thus, these companies have eliminated many of the suppliers they formerly used. Thus, the bargaining power of the suppliers have decreased or greatly weakened.

 

Pressure from substitute products:

A little pressure is put on the company by the substitute products in the current market as the automobiles have become the substitute product for other types of transport like – bicycles in developing countries (Grewal and Levy, 2012). But in the highly developed countries the mode of public transportation is heavily populated. Thus, this provides more threat to the automobile industries in these countries. In many European countries, the modes of public transportation have been widely refined.

Rivalry among existing competitors:

The global automobile manufacturing industry is the most competitive industry in the whole world. Additionally, various new companies have emerged in the developing countries of Central and Eastern Europe, and Asia. All these companies tried to decrease the costs by moving the industries to low cost countries, such that the location of Skoda in such a country would not be a competitive advantage for long (McConnell, 2011).

The company does not have to face only comlpetitive markets and challenges, but it has also future business prospects, like – the company appoints new Head of Marketing for media planning and buying, digital, events, advertising, retailer support and sponsorship. Their aim is to launch fantastic new models, which will help to drive the brand forward and vast growth in UK.

 

Models Of Branding:

The company’s marketing activities regarding the 4 P’s of the Marketing Mix can be better analyzed by the two models of Branding, that is, “Brand Onion” and “Brand triangle”.

Brand Onion is also known as Five Product Levels. It is constituted of five levels of product – core benefit, basic product, expected product, augmented product and potential product (Kotler and Keller, 2012). The core benefit is the most important feature of any product, thus it is kept in the centre of the model diagram. Then comes the basic product, then the expected product, fourthly the augmented product and finally the potential product, placed towards the outer side of the core benefit respectively. The Brand Onion model is represented as follows:

The brand model:

The brand model

The brand model of the company Skoda is composed of both internal and external layers like onions. The internal layers of the brand model are composed of vision and values of the company Skoda and the outer or the external layers are composed of personality and positioning. The layer ‘vision’ indicates the view point of the management of the company Skoda regarding the future of the company and their goals which they should fulfill through their innovative products. The layer ‘value’ indicates the belief system of the working employees of the company regarding their workplace and the product of the company Skoda. The value of a company helps to communicate all the employees of the organization Skoda with each and every level starting from the management to the line workers. Thus the well communicated employees can easily communicate with the customers of the company Skoda. The level of ‘personality’ is seen by the customers of the company Skoda regarding the information about the company and all their perception regarding the brand name, and the value of the company.  Lastly, ‘positioning’ indicates the position of the company in the competitive market from the view point of the customers of the company Skoda. Therefore it can be said that the positioning of the company Skoda includes the summary about the particular brand in relation to competition in the market in the mind of the consumers.

Brand Triangle is also known as brand loyalty pyramid. Through this pyramid, the loyalty of the customers towards the product of the company is tested. It consists of five levels, they are listed here from the base to the peak of the pyramid, and they are – switchers or price sensitive, satisfied buyer, satisfied buyer who would incur costs to switch, likes the brand and the committed buyer respectively (Martin and Schouten, 2012). The Brand Loyalty Pyramid model is represented as follows:

Brand Triangle

Brand Triangle Model

The base of the brand triangle model represents the price sensitivity, that is, the customers at first notice the price for the product, whether the price is within their budget or not. Then they switch over the new product of the new brand. In the second step, the buyer gets satisfied by buying the product. In the third step, the satisfied buyer will incur costs to switch, and influence other customers to buy the same product. In the fourth step, customers started to like the brand and the product and get attached to the brand. In the last step, the buyers get committed to the brand and the company. Thus, the peak of the triangle or the pyramid represents the customers who are loyal to the brand. Therefore, in future, these loyal customers would buy the product from the same brand or company, whatever may be the price of the product, and it would not affect them (Ferrand, Chappelet and Séguin, 2012).

The marketing activities of any company are represented by the Market Mix, that is, 4 P’s – Price, Place, Promotion and Product (Mukaila Ayanda and Joseph Adefemi, 2011). Generally, these four marketing planning activities are practiced by the organization Skoda.

Thus, for PRODUCT- Skoda focuses on product variety, quality, design, features, services, warranties and even on customer feedback. So that by utilizing market intelligence services it could make customers happy (Hooley, Piercy and Nicoulaud, 2012). Skoda has won many awards for the quality of automobile production by introducing innovations in features, electronics and designs. Manpower is the greatest strength of Skoda, thus the company is able to produce good quality products and in large numbers. Due to this, Skoda is the achiever of highest growth in whole Europe that is, Eastern Europe, Western Europe and Central Europe.

PRICE –The focus is on price, discounts, allowances, and payment period and credit terms (Kotler and Sheth, 2012). Skoda introduced many financial schemes across the developed countries like – UK and also in developing countries like – India. Skoda gives different facilities to its customers, regarding the price or financial matter of buying the Skoda car, like – Business finance, Personal Finance, Skoda Finance, Skoda insurance, and various finance offers.

PROMOTION – Here focus is on sales promotion, advertising, sales force, and public relations (Kotler, Hessekiel and Lee, 2012). Skoda is concentrated on promotion of the products, but main focus is on the price of the products. Latest model Fabia was launched with a huge number of promotional advertisements on newspapers, magazines and television in UK. The other factors which support Skoda in promoting its all products are the awards it won, customer promise, their 4 x 4 models, peace of mind, quality production, reviews and winning design.

PLACE – Here the main focus is on the target market. Low cost country sourcing strategy helped the company to increase its target market and target customers (Lilien and Grewal, 2012). At first, the target market of the company Skoda was only the developed countries like – UK, but later on they started to make the developing countries or the emerging countries as their targeted market, and applied different strategies of pricing, marketing, promotion to spread the goodwill and the company’s market in the developing countries.

 

Different Marketing Strategies Followed By Skoda:

In the year 1890, Skoda started manufacturing bi cycles and later on in the year 1925, the company started to produce cars in Czechoslovakia. Their basic strategy is to make reasonable and affordable price cars, thus they kept the cars simple and of sober manner. The mission of the company is to make quality products and make customers happy and satisfied. Thus, designs are made according to the customers’ desire and needs and always of good standard. These are the main attractiveness of the company Skoda. The other value of the company Skoda is its dedication to develop their products further and produce them in different innovative ways. Thus, total assets are increasing gradually by spreading the business in both developed and emerging countries.

Various types of marketing strategies are applied by the company Skoda in the countries U.K. and India. These are as follows:

U.K.

India

Strategy 1: Think big and audit the timing of the company

Strategy 1: Collect e-mail addresses of the common people of the area or the region.

Strategy 2: The company put itself as a different or unique from the other automobiles manufacturers and therefore stands out from the competitions.

Strategy 2: Top sales people are hired for the growth of the company in an overseas country.

Strategy 3: Build relationships with the customers.

Strategy 3: People of the country are paid for ‘pay-per-click advertising’.

Strategy 4: A shopping cart is put on the website of the company Skoda.

Strategy 4: Customer service commandments are used by the company with the aim to create good habits.

 

 

References:

Elliott, G., Rundle-Thiele, S. and Waller, D. (2012). Marketing. Milton, Qld.: John Wiley and Sons Australia.

Ferrand, A., Chappelet, J. and Séguin, B. (2012). Olympic marketing. Abingdon, Oxon: Routledge.

Grewal, D. and Levy, M. (2012). Marketing. New York: McGraw-Hill/Irwin.

Hooley, G., Piercy, N. and Nicoulaud, B. (2012). Marketing strategy & competitive positioning. Harlow, England: Pearson Financial Times/Prentice Hall.

Kotler, P. and Armstrong, G. (2012). Principles of marketing. Boston: Pearson Prentice Hall.

Kotler, P. and Keller, K. (2012). Marketing management. Upper Saddle River, N.J.: Prentice Hall.

Kotler, P. and Sheth, J. (2012). Legends in marketing. New Delhi: SAGE Publications.

Kotler, P., Hessekiel, D. and Lee, N. (2012). Good works. Hoboken, N.J.: Wiley.

Lilien, G. and Grewal, R. (2012). Handbook of Business-to-Business Marketing. Cheltenham: Edward Elgar Pub.

MacKay, C. (2011). Effective Marketing in Easy Steps. Southam: In Easy Steps Limited.

Martin, D. and Schouten, J. (2012). Sustainable marketing. Upper Saddle River, N.J.: Pearson Prentice Hall.

McConnell, J. (2011). Readers' ten most influential. The Lancet Infectious Diseases, 11(10), pp.726-727.

Mukaila Ayanda, A. and Joseph Adefemi, B. (2011). Marketing Mix Practice as a Determinant of Entrepreneurial Business Performance. IJBM, 7(1).

Pride, W. and Ferrell, O. (2012). Marketing. Australia: South-Western Cengage Learning.

Siebert, R. (2015). Entering New Markets in the Presence of Competition: Price Discrimination versus Cannibalization. Journal of Economics & Management Strategy, 24(2), pp.369-389.

Verissimo, D. (2013). Pest Control: Embrace Marketing. Science, 342(6160), pp.798-799.

Grönroos, C. (2007). An applied service marketing theory. European journal of marketing, 16(7), 30-41.

MacInnis, D. J. (2011). A framework for conceptual contributions in marketing.Journal of Marketing, 75(4), 136-154.

Kotler, P. (2011). Reinventing marketing to manage the environmental imperative. Journal of Marketing, 75(4), 132-135.

Engelen, A., and Brettel, M. (2011). Assessing cross-cultural marketing theory and research. Journal of Business Research, 64(5), 516-523.

Skoda.co.uk (2015). ŠKODA UK - ŠKODA. [online] Skoda.co.uk. Available at: https://www.skoda.co.uk [Accessed 16 Oct. 2015].

Skoda-auto.co.in (2015). [online] Available at: https://www.skoda-auto.co.in/about-skoda/company-perspective/environment/environment [Accessed 16 Oct. 2015].

Skoda-auto.com  (2015). [online] Available at: https://skoda-auto.com [Accessed 16 Oct. 2015].

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