Posted on : 2022-07-10 21:47:35
Article : Good morning, Monday, Management solution for TASK 198- Companies build brand equity by creating a positive experience and association with their products.
Companies build brand equity by creating a positive experience and association with their products that either cannot be found with competitor products or that is better than competitor products. To build brand equity a company must first start building brand awareness to achieve brand recognition, deliver a high-quality product, and then create a positive experience for the customer to establish brand preference.
Starbucks -Thanks in part to Starbucks' loyalty program, which in Q1 2021 had more than 21 million members, up 15% year over year, Starbucks is one of the most powerful brands in the world. Rated the fifth-most-admired company in the world by Fortune magazine, Starbucks is held in high regard for its pledge to social responsibility.
Starbucks main competitors are Dunkin Donuts, Costa Coffee, McDonald's, and Tim Hortons—companies with their own strong brand equity. With more than 32,000 stores around the globe, Starbucks remains the largest roaster and retailer of Arabica coffee beans and specialty coffees. Among Fortune 500 rankings for 2021, Starbucks ranks no. 125.
Coca-Cola-With a brand value of $64.4 billion according to Forbes's 2020 list, up 9% from 2019, Coca-Cola is often rated as the best soda brand in the world. However, the brand itself represents more than just the products; it's symbolic of positive experiences, a proud history, even the U.S. itself.
Also recognized for its unique marketing campaigns, the Coca-Cola corporation has made a global impact on its consumer engagement. According to Fortune, Coca-Cola is the 22nd most admired company in the world. Among beverage companies, it ranks no. 1. For the Fortune 500 rankings, Coca-Cola comes in at no. 93.
Coca-Cola outsells its historical rival, controlling almost 45% of the soft drink market while Pepsi controls a little less than 25%. The next largest share of the market, approximately 19%, is controlled by Keurig Doctor Pepper. It appears that Coca-Cola is winning the cola wars.
Here are some examples of companies that failed internationally due to a lack of social understanding and an in-depth breakdown of what really went wrong.
Walmart in Japan and Their Failure to Differentiate- In 2018, Walmart brought in more than $500 billion in sales globally. Not surprisingly, 3/4 of those sales came from the U.S. But, overseas — particularly in Japan, things are not going so well for the American retail giant.
Recent reports have shown that Walmart may be looking to exit Japan nearly 17 years after its initial expansion into the Japanese market. This expansion involved purchasing a minority stake in Seiyu — a Japanese grocery store in 2002, which then turned into a fully-owned subsidiary in 2008. Like Walmart, Seiyu uses the “Everyday Low Prices” mantra to market to their consumers. In between then and now, not much has gone right for Walmart in Japan. Aeon, the top supermarket in Japan, owns 45% of the market share. Meanwhile, Walmart’s Seiyu sits at 12%. That may not sound terrible, but to put it into perspective, let’s compare it to another U.S. supermarket that has expanded into Japan with much more success — Costco. Costco only has 26 stores in Japan, but in 2017 they brought in just over $3 billion in revenue. Seiyu, on the other hand, has 331 locations and brought in $7.1 billion in revenue.
End point- While determining the brand equity and market share with global markets presence, marketers need to strengthen their brand quality, marketing localisation to stay in markets to gain more loyal consumers. In case of Walmart -Seiyu, what went wrong exactly is with the low-price strategy that both Walmart and Seiyu abide by is not nearly as effective in Japan as it is in the United States. While consumers in the U.S. appreciate the convenience of being able to find great deals at one central location, Japan consumers are not as concerned with this convenience, making it less of a differentiator in the Japanese market.
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