Course title:

Centre for visual and cultural studies

Name:

GiGi

The required submission date:

Monday 13th March 2006 by 12 noon

The task question:

Compare the strategies of two or three companies in their marking of products. Do they take a uniform, globalised approach or modify it for local cultural sensitivities and identities?

The task name and a title relevant to submission: 

正文：

The companies’ global strategies

The world’s economy has developed incalculably fast, and a number of companies and brands have been found everywhere. However, every successful global company has their own unique strategies. For instance, some companies would take a uniform company strategy; on the other hand, some companies modify their company strategy for local cultural sensitivities and identities. Following this, I am going to take examples from the world’s best-known bands such as the Coca-Cola Company and Louis Vuitton and will identify and discuss these points through the companies’ branding of products, marketing, promotion and so on.

To begin this discussion, I am going to analyze the strategy of the Coca-Cola Company. The Coca-Cola Company has differences in design, quality, and availability of their products, packaging, marketing and advertising around the world.

First of all, what is Coca-Cola? An encyclopedia entry states that: “Coca-Cola is a carbonated soft drink, or cola, produced by the Coca-Cola Company of Atlanta. […] Coke is one of the world's most recognizable and widely sold commercial brands. […]Though faced with critiques of its health effects and various allegations of wrongdoing by the company, Coca-Cola has remained an internationally popular soft drink.”[1]

Secondly, according to Coca-Cola products and brands, the company is most commonly associated with Coca-Cola, but also produces many other soft drinks. “During the 1990s the company responded to the growing consumer interest in healthy beverages by introducing several new non-carbonated beverage brands. The company refreshes people across the globe and meeting the demands of local tastes and cultures with nearly 400 brands in over 200 countries.”[2] Coca-Cola produces brands under different names in different parts of the world. In Scotland, Irn Bru is locally produced by Coca-Cola and is the most popular soft drink, ‘outselling even Coca-Cola’[3]. Similarly, Qoo is another example of a beverage from the Coca-Cola Company. It is non-carbonated and was initially launched in Japan in 1999. The packaging of Qoo is a cartoon and the design is lovely and recognizable. All the advertisements of Qoo show cartoon animation. Every bottle of Qoo has particularly added vitamin and calcium, and Qoo’s is aim to make every child happy and healthy. Qoo is now available throughout much of Asia and in Germany in a variety of flavors.

The Coca-Cola Company not only produces beverages, but also manufactures many other widely marketed and consumed products such as promotional bags, clocks, footballs, advertising promotional items Coca-Cola gifts and so on. Although the company produces lots of different bands and products, Coca-Cola is undoubtedly the best-selling soft drink in most countries.

Judging from the marketing of the company, the plan of Coca-Cola Company is still not fixed, at least at present. “A key Coca-Cola Enterprises principle is that everyone who touches our products should receive a benefit. For retail customers, this means attracting more consumers and making a profit. Through a strategy we call community marketing, our employees play a major role in customer success by increasing the presence of Coca-Cola at the neighborhood level.”[4] In this case, Coca-Cola Company has taken the uniform approach to its international marketing strategy.

Before 1984, the main marketing strategy of the Coca-Cola Company was the ‘3As’, affordability, availability and acceptability. Affordability refers to requests for the Coca-Cola Company product to be suitable in its retail price, guaranteeing the consumer is able to buy it. Availability refers to demands that the Coca-Cola Company product is distributed throughout, making sure the consumer can always buy Coca-Cola when they want to. Acceptability tries to persuade the consumers to accept and wish for the Coca-Cola Company product, and makes them glad to purchase and drink it.

Since 1984, along with the development and the change of the characteristics of the market and consumerism, the Coca-Cola Company rested on the actual market and the company condition and the marketing strategy of the ‘3As’ was developed to the ‘3Ps’. The ‘3Ps’ are price to value, pervasiveness and preference. Price to value refers to whether the consumers can not only afford the Coca-Cola Company product, but also make them feel they had obtained the value repayment or even surpassed their paying. Pervasiveness requests the Coca-Cola Company product must be spread all over, make sure the consumer can easy to buy the product anytime, anywhere. Preference demands the Coca-Cola Company product not only accept by the consumer, but also make Coca-Cola as their first chose and the most fancy product or band. [5]

After World War II, the Coca-Cola Company carried out a worldwide development strategy of ‘localization’. This is the reason why Coca-Cola can gradually get rid of regional characteristics and more consumers accept it.

Obviously, the Coca-Cola Company’s ‘localization’ strategy is developed along with the unceasing development of the enterprise and the market. Initially, the localized strategy core is ‘2L, 3O’ which is long term, local, optimism, opportunity and obligation. Now, the Coca-Cola Company has already proposed ‘the local thought’ in global: ‘Think Local, Act Local’, the main point of which is to modify the company strategy when needed, and make sure the company is suitable for local culture.[6]

The Coca-Cola Company uses localised employment as a local clerk is familiar with the local market conditions and the company could save nonessential expenditure such as transport fares and accommodation rental. In 2002, the Coca-Cola Company in the whole world had around 49, 000 employees.[7] Good products can be shared all over the world, maintaining the consistency of "localization" and "internationalization". One example is Qoo, the best-selling product in the Chinese market at the present which was first invented and successfully spread by the Japanese Coca-Cola Company.

According to the 2004 Annual Report[8], ‘the company sells beverage products in more than 200 countries and more than 50 billion beverage servings of all types consumed worldwide every day. Coca-Cola had gallon sales as 28% in the United States, 26% in Mexico, Brazil, Japan and China and 46% in spread throughout the world. In 2002, the average in global of drank the Coca Cola Company product has already to achieve 74 cups per person per year and the company product have achieved 9% in soft drink market in global.’

Coca-Cola advertisement strategies including investment in extensive advertising, diversifying the ways of promotion, careful designing of the packaging and skillful naming. Examples of Coca-Cola’s advertisement strategy can be seen in China. Coca-Cola arrived in China in 1927 and attracted the Chinese consumer by the most typical American style. They chose uniformity in promotion as they only translated the language of American TV advertising. This global advertisement strategy has lasted till 1998.

However, due to local conditions and social customs of different countries, the Coca-Cola Company has modified its advertisement strategy since 1999. They have changed the advertisements through indigenization, for example, the way they choose the media, the design, the spokesperson, the advertising theme and the language must be related to the style of the local culture.

The translation of ‘Coca-Cola’ into Chinese is a classic which is ‘可口可乐’. It is pronounced as ‘ke kou ke le’ and this sounds similar to ‘Coca-Cola’. Furthermore, the meaning of ‘可口可乐’ is even better than the ‘Coca-Cola’, meaning tasty and fun. Moreover, the advertisements always feature a local spokesperson who is familiar to the local citizen. The Coca Cola Company not only uses advertisement for promotion, but is also the sponsor of large sports events such as the Olympic Games and the World Cup. Besides that, the Coca Cola Company also sponsored benevolent welfare activities.

To sum up, owing to the Coca Cola Company altering the company strategy for local conventions, they have a highly successful market around the world. Along with McDonald's, Coca-Cola has become an international symbol of American culture, and especially of American consumerism. Coke is the most universally recognized word on the earth.

On the contrary, Louis Vuitton takes a uniform, globalised company strategy. Louis Vuitton is one of the most famous luxury brands in the world. ‘Vuitton's handbags and luggage are now a status symbol around the world and are often looked to in the world of fashion. The Louis Vuitton "LV" Monogram design can be considered the very first ‘designer logo’ on a product (first in the contemporary sense), as it was created in 1896 with the intent of preventing counterfeiting.’[9]

Judging by the products of Louis Vuitton, the company has focused on luggage and handbags. In 1904, the Louis Vuitton company introduced a new line of trunks that had special compartments for items such as perfumes, clothing, and other goods. Instead of creating new brands or special products for each local culture, Louis Vuitton sell the same products in every country. The design of the ‘LV’ pattern is recognisable and symbolizes the aristocrat status. The products are of good quality and are hardwearing. As a result, every Louis Vuitton product is valuable and posh, and only noble and rich people can afford it.

Moreover, according to the Louis Vuitton’s marketing, the company takes the same marketing strategy worldwide. For instance, the company take the visuals of shop window displays seriously, they change the theme of the shop window display monthly and the theme design will be the same in every store in the world. Due to the Louis Vuitton products being expensive, Louis Vuitton stores are only located in developed countries. The company is careful about staff training and marketing. The first Louis Vuitton store opened in the Chinese mainland in 1992 and the reason why the company took the market in China is that the Chinese have very strong brand consciousness and are fastidious about status. Furthermore, Chinese luxury goods consumers are more numerous than in western countries and they are extremely young. It follows that the Louis Vuitton Company has been highly successful in expanding into the Asian market. The newest annual report[10] of the LVMH[11] pointed out that, the strongest profit growths are in Asia, Europe and US. Besides that, the Asian market (not including Japan) increased 15% profit higher than the European market.

On the basis of the advertising of the Louis Vuitton Company, the company uses the same promotion globally. Namely, they always design the promotion scheme in the head office in France, and then announce it to the branch stores worldwide. Admittedly, the company has never had an Asian spokesperson. In my point of view, Asians might perfer Western models for the advertisiments as the ‘foreign model’ with the ‘foreign brand’ seems more posh. In addition, the Louis Vuitton Company pubilished advertisments in magazines instead of on TV as Louis Vuitton products are not for the general populace.

To conclude, the Louis Vuitton Company uses the same strategy worldwide. In my opinion, as the company products are precious luxury goods, it seems not unnecessary to modify the company strategy for local cultures. Meanwhile, Coca-Cola is a mass product and everyone can afford it. In contrast, Louis Vuitton products are exquisite, hand made and only for wealthy people. Given these situations, the companies have chosen the proper global strategies. 

[1] From Wikipedia, the free encyclopedia, <http://en.wikipedia.org/wiki/Coca-cola>, accessed 03/03/06