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Summary papers - International Marketing (328253-M-6)
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International Marketing PapersWeek 2
Signaling Status with Luxury Goods: The Role of Brand Prominence (Han)
General information
Authors propose a taxonomy that assigns consumers to one of the 4 groups based on 2
measurable characteristics: their wealth and need for status. Their preferences for luxury
goods (quiet/ loud) correspond to their desire to associate with or dissociate from members
of their own and other groups.
The higher a person’s income, the greater its propensity to purchase luxury goods
for manufacturers: important how preferences vary among them.
Brand prominence = the conspicuousness of a brand’s mark or logo on a product, also the
extent to which a product has visible markings that help ensure observers recognize the
brand loud/ conspicuous vs. quiet/ discreet branding to appeal different types of
consumers.
Patricians: associate with other patricians through quiet signals.
Parvenus: markings make it transparent that the handbag is beyond the reach of
those beyond them = dissociate from have-nots & associate with haves.
Poseurs: a person who pretends to be what he or she is not = associate with
parvenus, but purchase counterfeits as cheap substitute for originals.
Proletarians: no association with haves, nor dissociation with themselves or poseurs,
but just don’t want loud luxury.
Study 1 market data: inconspicuously branded luxury goods cost more than the same
manufacturer’s goods with more conspicuous branding.
Consistent with patricians paying a premium for understatement.
People who purchase different classes of products value brand prominence
differently.
,Study 2 market data: counterfeiters tend to copy the louder luxury variants within the
product line of the brands, which appeal to poseurs seeking to emulate parvenus.
Study 3 field experiment: only patricians can read subtle brand cues correctly and thus use
quiet products to signal horizontally parvenus actually signal they are not patrician as they
use loud cues.
Two groups, selected based on their qualification as patricians or non-patrician (other
3 P’s) used zip code for high-income neighborhoods.
Together with study 1: patricians pay a premium for signals that only other patricians
can decipher.
Study 4: preferences for loud/ quiet luxury goods differ among the groups, corresponding to
their social motives (i.e., the people each groups wants to associate with or dissociate from).
Same sampling method as study 3.
Diaspora marketing (Kumar & Steenkamp)
Companies from emerging markets want to build a global brand possible by heavily
investing (only for the rich companies) & Diaspora marketing (for the poorer ones, as only
few resources are needed).
Diaspora: identify those that are likely to be receptive (mainly ‘rich’ immigrants) and
use them as springboards for growing revenue and gaining brand recognition use
them to reach the mainstream.
Affordable air travel and inexpensive communication services allow people to stay in
touch with relatives in their homelands, making it easier for emerging-market
companies to tap diasporas.
people’s mindset = crucial
Marginals: usually poor and low-educated people neither culture can influence their
purchase decisions, only functionality/ affordability can.
Better target segments for emerging giants:
Ethnic affirmers: downside that they hardly socialize with the mainstream culture.
, Biculturals: better educated, higher incomes/ socioeconomic status/ self-esteem
compared to ethnic affirmers. Their social relations (with the mainstream) make them
an attractive segment.
To assess the potential of diaspora, marketers must ask 4 questions:
1. Does the brand have universal appeal?
Ensure: superior product performance, compelling additional value, positive
country-of-origin effects
2. Is the diaspora large enough?
To justify investments in supply chain, distribution, advertising, marketing, etc.
as % of the total host country’s population.
3. Will the diaspora’s distribution allow the brand to expand nationally?
Not only for Bangladeshis, but also for Indians and even all Muslims.
And distribution of immigrants should be spread through whole country.
4. Will the diaspora’s socioeconomic profile help the brand?
Do they resemble the host population? As people tend to socialize with those
who are like them (homophily).
Example: how Dabur became a global brand
Indian brand that started exporting medicine products to diaspora in Dubai there are many
Indians. Arab woman like their personal care products too as they are fan of Bollywood
movies and associate beauty with the Indian film stars that Dabur uses in its campaigns.
Dabut could add country-of-origin credibility and claim superior product performance
by emphasizing its use of science that relies on herbs.
The path to become a developed economy: create global brands and adopt smart strategies
to face obstacles.
The Reverse Diaspora Effect: people often consume local products and brands during
vacations. If they enjoy the experience, they will try to replicate it when they return home.
Week 3
How perceived brand globalness creates brand value (Steenkamp, 2003)
In today’s multinational marketplace, it is increasingly important to understand why some
consumers prefer global brands to local brands.
Key question: “does a brand benefit from a consumer perception that it is global (so if consumers
believe it is marketed in multiple countries)?” Ways to form such perception:
Consumers learn that the same brand is found in other countries through, media
exposure, word of mouth, or their own travel.
A brand may imply its globalness through marketing communications that use brand
names, endorsers, advertising themes, packaging, and other symbols associates with
a ‘modern’, urban lifestyle.
RQ: do consumer perceptions of brand globalness affect purchase likelihood, why (i.e.,
through which pathways), and for whom (i.e., are there moderating factors)?
This paper highlights 3 pathways through which perceived brand globalness (PBG)
influences the likelihood of brand purchase.
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