5 things that create global brandpower

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 global brand combines that message but adapts it to local culture and tastes, a ‘glocal’ (global + local) strategy.  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 non-beef, either vegetarian, or chicken.

Both are 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 powerful of global brands and came up with five main features.

1. 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.
2. 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.
3. 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.’
4. Access to the global village. Consuming the brand equals membership in a global club.
5. 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.

One ETF that bundles global brand leaders together is Harvest Portfolio Group’s  Harvest Brand Leaders Plus Income ETF (TSX: HBF).

As of March 31, 2019 the fund held 23 global leaders who are the dividend elite, including Apple, Google, Amazon and Microsoft,  as well as such names as Disney, Caterpilla, Visa, Johnson & Johnson and PepsiCo. The average dividend yield of 1.98%. The dividends are paid monthly and are payable as cash or through a Dividend Reinvestment Plan (DRIP).

The companies are chosen from the World’s Top 100 Brands and Harvest uses a covered call strategy to reduce volatility and generate an attractive tax efficient distribution stream.

The Brand Leaders Fund has has a 1-year return including dividends of 7.66%, a 3-year return of 11.16% and a 5-yr return of  11.16%.  The ETF’s management fee is 0.75% and is eligible for RRSPs and TFSAs. The dividends are available as cash or DRIPs.