How international brands affect consumers' choices

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.