National expansion of British regional brands: parallels with internationalisation
| Published date | 01 October 1999 |
| DOI | https://doi.org/10.1108/10610429910295948 |
| Pages | 369-386 |
| Date | 01 October 1999 |
| Author | Chris Lewis,Sara Stubbs |
| Subject Matter | Marketing |
National expansion of British
regional brands: parallels with
internationalisation
Chris Lewis
Principal Lecturer, Nottingham Business School, The Nottingham
Trent University, Nottingham, UK
Sara Stubbs
Promotions Manager, Binney & Smith (Europe) Ltd, Bedford, UK
Keywords Brands, Marketing strategy, Marketing theory, Product management
Abstract While international and even national brand owners may be more concerned
with tailoring their brands for local markets, local and regional brand owners are still
keen to expand to national level. Examines the elements of the decision-making process
for brand owners expanding beyond their home region, and compares this process with
the internationalisation of national brands. Case study research in five companies from
the UK food and drink sector provides examples, and a checklist for decision making is
proposed.
Introduction
The first half of the 1990s saw a crisis of confidence in brands, characterised
by heavy price cuts and moves to low-price strategies by major brand owners
such as Marlboro and Texaco. Nevertheless, the long-term health problems
forecast for manufacturers' brands in the UK (Mitchell, 1994) do not seem to
have materialised. Companies seeking opportunities for growth may develop
new brands, but the costs and risks of introducing new brands nationally can
be high (Aaker, 1990), compared to the development of strong regional
brands at national, and, if appropriate, international level. The benefits of
nationally-successful brands arise from access to a larger national market,
and some economies of scale in marketing activities, especially promotion.
But will the brand strengths which have brought success at local level have
meaning in other regions and translate into genuine customer benefits at
national level? If they do, the brand is likely to be successful nationally.
Arguably there is still the risk that existing customers will be alienated by the
fact that ``their'' special, local brand is now just another national brand with
no loyalty to them as customers. If the brand strengths do not have positive
associations in other regions, or do not translate into strong customer benefits
at national level, marketers are faced with difficult choices:
.abandon or at least tone down the product or brand characteristics which
made the brand successful locally;
.develop new regional characteristics which work at national level;
.attempt to develop new national brand characteristics.
These decisions are critical because any alteration to or dilution of the
character of a successful brand risks alienating existing customer loyalty,
without any guarantee of attracting new uncommitted customers. The surge
of interest in relationship marketing during the 1990s has emphasised the
importance and profitability of retaining existing customers and the dangers
of concentrating on the acquisition of new customers at the expense of the
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Risks of introducing new
brands
JOURNAL OF PRODUCT & BRAND MANAGEMENT, VOL. 8 NO. 5 1999, pp. 369-386, #MCB UNIVERSITY PRESS, 1061-0421 369
An executive summary for
managers and executive
readers can be found at the
end of this article
existing ones. Companies could risk gambling away the regional customer
franchise which they have currently in the hope of winning a greater national
franchise.
It is clear that the process by which such decisions are made can be critical to
the success of the operation. Yet there appears to have been little research
carried out so far on the process by which the expansion to national scale is
carried through. Most national brands must have begun life as local brands,
but many grew to national level before the development of theories of brand
image in the 1970s (e.g. King, 1970; 1973). We may speculate that where
national expansion took place before branding was understood or developed,
the decision must have been purely commercial, in the sense of taking new
orders outside the region and seeking to build on these.
This paper therefore reviews literature on regional to national branding and
seeks to learn from parallels in national to international branding. These
issues are reviewed through five case studies which illustrate the process of
transformation of five regional brands into national brands. In some cases the
process is largely complete; in others it has only recently begun. From the
cases we identify key issues in the expansion of brands from regional to
national scale and learn something of the decision-making process marketing
managers went through in order to make the change
Branding
We take here de Chernatony and McDonald's (1994, p. 18) definition of a
successful brand as ``an identifiable product, service, person or place,
augmented in such a way that the buyer or user perceives relevant unique
added values which match their needs most closely''. By acting as a
guarantee of consistent quality, brands reduce performance risk (de
Chernatony and Dall'Olmo Riley, 1997). Consumers often select a single
feature on which to base their perception of the brand (Arnold, 1992) and this
may not be the most obvious feature to the marketer. Consumers endow
brands with personalities with which they identify (Aaker, 1997), according
to how closely the personality reflects their own self-image. They look to
brands to enable them to communicate something about themselves and also
to better understand the people around them (de Chernatony and McDonald,
1994). Aaker (1996) sees brand personality as a sustainable point of
differentiation, difficult to copy and ineffective if copied.
Regional brands
A search for literature on regional brands revealed a surprising absence of
useful sources from the UK. In the USA, literature on regional marketing
takes the opposite point of view from that which we take in this paper, in that
it concentrates on focusing national US brands back into the regions
(Mehotra, 1989; Linnemann and Stanton, 1992). Mehotra takes the
viewpoint that there are great variations in customer preferences, competitive
structures and channels of distribution across regions, and therefore, a ``one
size fits all'' strategy does not work any more. Abernathy (1991) also
supports the view that regional marketing has been used in the USA to
stimulate growth in national brands competing in stagnant categories, and to
build networks of acquired regionally marketed brands to national scale and
efficiency. These authors demonstrate that the move from regional to
national branding is by no means a one-way process; indeed, it may be a
strategy which is already out of date for some product categories in the USA.
Little research carried out
Brands with personalities
370 JOURNAL OF PRODUCT & BRAND MANAGEMENT, VOL. 8 NO. 5 1999
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