According to Ger, Belk and Lascu (1993), advances in communications and information systems technology have shrunk distances, thereby linking markets through flows of information across markets. These trends enhance the management of global operations and drives up the need to deal effectively with global competition. As firms enter international markets, branding plays an important role in its marketing strategy. Many consumers use brands as clues to indicate product performances, instead of engaging themselves in search for information when deciding between competing brands. Consumers use brands as cues to make decisions to purchase or try products. During the recent years, there has been a great shift from local brands to global brands due to the display of similar needs and preferences by the consumers. This study aims in analyzing the consumer’s perception of global brands vs. local brands. The research explores and comprehends consumers’ perceptions of global brand vs. local brand.
According to Wolfe (1991) local brands are brands that exist in one country or in a limited geographical area. Local brands belong to a local, international, or global firm. Local brands provide a link between the national economy and individual well-being. Levitt (1983) said that global brands as brands that use the same marketing strategy and mix in all target markets. Global brands benefit from the scale and scope of having presence in multiple markets. The authors have defined well global brands and local brands. The researcher agrees with the authors definitions. A global brand is a brand that is marketed under the same name in multiple countries with similar and centrally coordinated marketing strategies. Akram, Merunka & Akram (2011) added that quality is the subjective judgment of consumers towards a product or brand superiority and distinction. Perceived quality is important in determining consumer preferences towards global and local brand.
A global brand is defined from a consumer’s perspective as a brand which is believed to be marketed and recognised in multiple countries. In turn, a local brand is produced domestically for a specific national market and usually only obtainable in the particular region. It is identified that a local brand may be preferred when consumers can identify with others in their community as the local brand is often positioned to understand local needs and culture. On the other hand, Batra et al. (2000) stated that global brands have been perceived to be of higher quality in developed and developing countries. This is due to the fact that global brands are accepted globally and charges a premium price.
Consumers also regard global brands as having higher prestige and are preferred essentially because of brand globalness, in regards to be internationally desirable and demanded. Additionally, it was found that global brands even appeal to local consumers due to higher perceived quality, status and prestige. The above authors have the same perception of global brands. Global brands are of more quality than local brands. The researcher agrees with these authors. On the contrary, Keller (2003) stated that as far as global brand is concerned, perceived brand globalness is normally associated to brand quality and prestige, higher esteem, having the ability of enhancing the consumer’s self-image as being cosmopolitan, sophisticated and modern. Consumers consider global brands to be symbols of cultural ideas, using brands to participate in a perceived global identity that they share with other people worldwide. Some of these brands have attained the status of global icons, becoming cultural systems in their own right that speak a universal language. Schuiling et. Al. (2004) added that local brands benefit from strong brand equity and specifically, local brands benefit from higher consumer awareness than international brands do, and they enjoy a strong brand image.
Local brands benefit not only from a good quality image but also from a better value and trust perception that international brands do. Value is linked with the fact that prices of local brands are usually lower than those of international brands, providing consumers a sense of better value for the money. Furthermore, Holt et al. (2003) added that local brands are also perceived as more down to earth than international brands, meaning that local brands offer a more basic frills brand proposition. Local brands are perceived as more traditional than international brands, because local brands are linked more to local traditions and local culture than international brands are. Trust is an important advantage for local brands because it provides a unique relationship with consumers that take years to develop. De Mooij (2005) avows that local brands are not more flexible than global brands in terms of their marketing activities when they compete in a foreign product category due to cultural categories being associated with the product category.
Just as global brands need to conform to international marketing dictums, local brands sometimes need to conform to deeply held preconceptions about the product category in which they operate. Moreover, Kapferer (2002) added that local brands still hold important advantages, such as long-standing emotional links that represent a critical proximity to consumers’ values, high awareness levels and extensive distribution networks developed through time. The authors have cited some advantages and disadvantages between local brands and global brands. The power of a brand resides in consumer’s mind and occurs when the consumer has a high level of awareness and familiarity with the brand and holds some strong, favorable and unique brand associations in memory. The researcher agrees with the advantages and disadvantages cited by the authors. On the researcher’s point of view, consumers are attracted to international brands but in reality they prefer to purchase local brands. Johansen & Ronkainen (2004) stated thatmMassive presence of Global brands is fuelled by the increasing similarity that consumers display in their consumption habits and preferences. It has also been argued that Global brands, are perceived to be more value-added for the consumer, either through better quality or by enhancing the consumer’s self perception as being cosmopolitan, sophisticated and modern.
Consumers throughout the world are becoming increasingly sophisticated and international brands offer a measure of exclusivity or even eccentricity that are increasingly sought after and valued because such appeals are universal. As the world is shrinking in to a global marketplace, it is increasingly significant to understand the consumers’ perception of global brands to local brands. There is also need to uncover the reasons for consumers’ preference for global brands over local brands.
With globalisation as a precedential force for companies to succeed in the marketplace, it has become increasingly important to understand consumers’ perception and factors that influence their purchasing behavior. The concept of brand globality and locality is an important source of strategic insight to marketers in the automobile industry. The difference between global and local brand is significant for both high and low status-seeking groups. Consumers are also attracted to global brands as global brands are perceived to be of higher quality. Like many other developing nations, the perceived quality in global brands is common for developing countries. It is important for local companies to note that although globalisation helps large companies they can obtain similar advantages as well through understanding and connecting with consumers. It is highly significant to highlight the studies on foreign brands by researchers as a symbolic acquisition communicative of social distinctions in negotiating status and prestige. This incidence exists in country markets where economic transition and income disparities are high and social mobility magnifies the tendency to claim differential status through the brands one consumes. Consumers perceive foreign brand that it might have superior quality because of its developed nation of origin.