5 things that create global branding power

April 29, 2019

Global brands have a few things in common which help them project the same image no matter where they are sold.

One of the key factors is a simple marketing message that is consistent across the different markets. This creates lasting economic value by ensuring consumers can find the brand, recognize it and be assured that if they buy it, it has the same quality and features as their home market.

A truly successful glocal (global+local) brand combines that message but adapts it to local culture and tastes.  It’s the same brand and the same message but with a regional variation. McDonald’s customers can recognize the same ubiquitous Golden Arches anywhere in the world. The same goes for its packaging and main menu items. However, in India, the main sandwich is vegetarian and called the Maharaja Big Mac. In coffee-crazy Australia, the Big Mac meal may not come with a soft drink, but a ‘flat white’, espresso or latte, made by a McDonald’s barrista.

A recent article in the Harvard Business review looked at the power of global brands and came up with five main features.

  • The same worldwide positioning. This includes a consistent message, the same product quality and the emotional appeal that goes with it. Examples include Pepsi, Disney and Nike.
  • A single product category. Pepsi sells beverages, but the brand is an appeal to a youthful spirit, making it the beverage choice of a ‘new’ generation.
  • The company name is the brand. All marketing is concentrated on that name. Apple and IBM are examples. Google’s name is synonymous with Internet search in the same way the Kleenex brand is synonymous with tissues. The Google Home device reinforces the brand every time you use it. It will not respond unless you say: ‘Hey, Google.’
  • Access to the global village. Consuming the brand equals membership in a global club.
  • Social responsibility. Consumers expect global brands to lead on social responsibility, leveraging their technology to solve the world’s problems. Nike’s global brand image is enhanced by a commitment reducing its carbon footprint by improving manufacturing processes and using renewable energy. It is also committed to a diverse and inclusive workplace.

Interbrand, an international marketing firm, recently released its top global brands.  It found that Apple, Google, and Amazon are the top three with Microsoft in 4th.

This brand power is a powerful marketing tool for these multinationals, creating a steadily expanding stream of revenues, dividends that tend to rise over time and stability when market conditions are choppy. 

These companies are among the top holdings in the Harvest Portfolio Group Inc.’s Harvest Brand Leaders Plus Income ETF (TSX: HBF, HBF.U).

As of March 31, 2019 the ETF held 20 global brand leaders who are the dividend elite, with an average dividend yield of 1.98%. The ETF distributions are paid monthly and are payable as cash or through a Dividend Reinvestment Plan (DRIP).  

The ETF’s management fee is 0.75% and is eligible for RRSPs, RRIFs, RESPs and TFSAs. The Harvest Brand Leaders Plus Income ETF is an actively managed concentrated portfolio of companies with strong leadership in the markets where they operate. Selection criterion includes such factors as they are a leading global brand, meet specific financial metrics and are positioned to benefit from their geographically diverse operations. Accordingly, they have the ability to pay and potentially increase their dividends over time.

This ETF takes advantage of Harvest Portfolio’s guiding principles which are defined as building wealth for clients through ownership of strong businesses that have the potential to grow and generate steady income over the long term.

Founded in 2009, Harvest offers a diversified range of investment products that focus on leading quality businesses. The Harvest Brand Leaders Plus Income ETF is an equally weighted portfolio of 20 companies that are:

  • Globally diversified by sector and region;
  • Chosen from a universe of companies among the World’s Top 100 Brands;
  • Meet specific financial criteria that include quality and growth metrics;
  • Available for an active covered call strategy which generates an attractive tax-efficient distribution stream;

For more on Harvest Portfolio Group Inc. investment products, click here.

The views and/or opinions expressed in the blog are of a general nature and are for informational purposes only. Blog contents should not be considered as advice and/or a recommendation to purchase or sell the mentioned securities or used to engage in personal investment strategies. Investors should consult their investment advisor before making any investment decision. 

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