How international brands affect consumers' choices

Satyasuryawan, Contributor, Jakarta

Who hasn't heard of the Hard Rock Cafe? Once just a dream for Jakartans, its arrival ten years ago allowed people here to really enjoy its world famous ambience. Today, the strong marketing of the Hard Rock Cafe not only lies in its restaurant business or merchandise sales, but has spilled over into other areas with Hard Rock FM radio and Hard Rock Hotel in Bali.

Strong world brands are highly valued marketing assets. Generally, consumers have a perception that such brands implicitly provide a guarantee for quality compared to unbranded products or unknown brands. Consumers seldom think twice before deciding to purchase these famous brands, even though there are other better quality and lower-priced substitutes available on the market.

Another business using an internationally renowned brand as its asset is the Starbucks Coffee cafe, which, PT Sari Coffee Indonesia, as its franchisee, opened in May for Jakarta's coffee lovers. Indonesia is the 25th country to host this American cafe, which is located in Plaza Indonesia and the Jakarta Stock Exchange.

"We have been overwhelmed with customers since the very first hour we opened and they don't seem to mind lining up," said Kiki Soewarso, its marketing manager. With such brisk business, it is only natural that the company plans to open another cafe in Pondok Indah Mall.

However, it's not an easy job to market an international brand when another strong brand -- also internationally well-known -- is well established in the same market segment. Take the worldwide battle between Coca-Cola and Pepsi Cola as a case in point. For Pepsi, it has been an uphill struggle to win over Indonesian soft drink consumers, who are relatively quite loyal to Coca-Cola.

Both brands are astute in distribution and product diversification strategies. In face of the stiff competition in the soft drink market, Pepsi has launched a bottled tea beverage: Tekita, while Coca-Cola's version is Fresstea. Coca-Cola is also marketing a bottled mineral water brand that it took over: Ades. These international players see the diversification strategy as necessary because they have to compete against major brands, including Aqua bottled mineral water and Teh Botol Sosro.

It is much easier to market products with well-known brands, as building an image through advertising campaigns is comparatively more costly in the case of new brands.

PT Hanjaya Mandala Sampoerna believes in this theory and that is why the manufacturer of "A Mild", in line with its diversification policy, has purchased the production and distribution license of a French cigarette brand, St. Dupont. The company is fully aware that it will face tough competition from other established brands, such as Marlboro and Lucky Strike.

"We have taken a major step in the premium brand segment, not only domestically but also in the international market," said Sugiarta Gandasaputra, the company's director for the Indonesian cigarette business, in SWA magazine in the Apr. 8 edition. In only one and a half years, this newcomer has proven to be a solid contender against the giant brands.

Apart from its positioning, a brand's success also depends on other crucial factors, such as its marketing strategy, product mix or differentiation, pricing policy and advertising as well as promotional campaigns. Consumers' emotions and experiences from using the product also play an important role. Likewise a "pioneer or leadership" position also helps a great deal, meaning whether the brand was introduced much earlier, hence it is more deeply rooted in consumers' minds than the newcomer.

David A. Aaker, a marketing expert, once said that while a product has functional benefits, a brand gives emotional benefits. Consumers buy a certain brand, because, among other things, it provides them with confidence and a feeling of security and that it is completely unique and embodies more value for money.

This is one of the reasons why Adidas, a sports shoe manufacturer, positions its brand as "a reflection of lively competition and sports lifestyle". Its customers are also pampered at its store, Adidas World of Sports on Jl. Kemang Raya. Here they can try on products on the basketball court and soccer field made available exclusively for them.

"We continually improve the quality, look, feel and image of our products not only to match, but to exceed our customers' expectations and we provide them with the highest value for their money," said Paul Hardisty, the managing director of PT Trigaris Sportindo, which is the sole agent for Adidas in Indonesia.

Impressionable and positive experiences are usually embedded in consumers' minds and in this way there is an emotional attachment between them and the brands.

Starbucks, for instance, also offers this kind of experience and emotional relationship to its customers. Not only does it make available a great variety of high quality coffee, ranging from Guatemala's robusta to other Latin American versions, but it also gives superb service in a cozy atmosphere that makes its customers feel very much at home.

Hard Rock Cafe also cleverly plays on the emotional factor. Its interior concept -- a giant guitar, memorabilia of legendary musicians, among other things -- and the quality of food and service are of the same high standard wherever it is located. Its ambience is contagious in the positive sense as indicated in the success of the Hard Rock FM Radio with its listeners.

A brand can also be enhanced through programs that attract consumers, like the off-air programs often broadcast by Hard Rock FM Radio using Hard Rock Cafe as its venue. This strategy produces a two-pronged effect, as the programs involving celebrated domestic and international artists benefit both the cafe and the radio while the consumers' loyalty is further strengthened.

Adidas also has quite a number of creative promotional programs that strengthen its bond with customers. Every year various events targeted at teenagers and children are held, such as the Street Ball Challenge basketball tournament and the Predator Cup soccer matches. These highly popular events are consistent with and closely linked to the main theme of Adidas' communications activities that use major international and domestic sports figures and clubs, such as David Beckham, Zinedine Zidane, Yayuk Basuki, Alibudimansyah and Romy C. Chandra as well as the Bima Sakti soccer club.

All these promotional events and activities are obviously used to strengthen consumers' emotional ties with the brand, solidify a lasting loyalty and give the brand top positioning.