Pre-Reading
Pre-Reading Activity
Look at the definition below. Then, discuss the questions below.
brand recognition: the ability of potential customers to recognize a company’s logo, products, or services without any effort
- What brand do you think is the most well recognized around the world?
- What are your favorite global brands? What other international brands do you know?
- How do brands build brand recognition?
- Is it easier for certain types of companies, for example clothing companies, to have strong brand recognition? Why or why not?
This is a shorter reading; it’s 448 words long. It’s a good opportunity for you to practice reading fast like we learned about in Reading 1. Use a timer to track how long it takes you to read this. If you read it in 2 minutes, then your reading speed is 224 wpm, but if you challenge yourself to read it in 1.5 minutes, then your reading speed would be 300 wpm.
Reading 5: Expanding Around the Globe [1]
U.S. Brands Face Global Competition
America dominates consumer goods brands. Here, wealthy consumers have supported Apple, Google, Coca-Cola, Microsoft, and countless other companies. Many of those brands then spread around the world.
But American brands are slowly losing their place in the global marketplace. From Samsung to Toyota to Mercedes Benz, companies in Europe and Asia are creating top-quality goods and selling them as such rather than competing on price. “There are longer-term trends toward greater competition. The United States was the only global brand country [but] that’s no longer the case,” says Earl L. Taylor, chief marketing officer of the Marketing Science Institute. “Consumers prefer brands that they take to be of higher quality” regardless of the country of origin, he notes. “Increasingly, there will be other successful global brands in the U.S. [market].”
Of the brands at the top of Interbrand’s recent list of the world’s most valuable, four of the top five still originate in the United States; the five most valuable are Apple, Google, Coca-Cola, and Microsoft, while Toyota (Japan) comes in at number five. American companies have lost the most ground in the middle tier of recognizable brand names, says George T. Haley, professor of marketing at the University of New Haven’s School of Business.
One area from which U.S. brands are feeling the pressure is the Asia-Pacific region, which harbors the fastest-growing markets today. In the kitchen appliance category, two Chinese companies, Haier and Kelon, are becoming top competitors for well-known U.S. brands Whirlpool and Maytag. In fact, Haier bought the American company GE’s appliance division in 2016. The Chinese branding trend is not confined only to large goods. Sporting goods and sportswear brand Li Ning, well known within China, is building its international profile. While the Chinese basketball team wore Nike uniforms at the Athens Olympic Games, the Spanish team wore Li Ning apparel. The threat to U.S. brands is not restricted to China, however. South Korean brands, such as Samsung, LG, and Hyundai, have emerged on the global stage in specific categories, such as smartphones, household appliances, and automobiles.
In Europe, the weakened relationship with the United States has translated into a preference for European or even Asian brands at the expense of U.S. brands. Plus, experts say, European brands are simply becoming stronger and more consistent.
Meanwhile, European brands are gaining momentum in the areas of consumer goods, putting the pressure on well-known U.S. brands, experts say. For instance, Gaggenau is a popular, high-end European kitchen appliance brand, along with Bosch and Dyson. Other European brands maintaining a strong positive reputation—if not always with the allure of luxury—include Absolut Vodka, Virgin Airlines, Mini Cooper, Red Bull, and Ikea.
Sources: “Interbrand: Best Global Brands 2016 Rankings,” http://interbrand.com, accessed June 30, 2017; Vasileios Davvetas and Adamantios Diamantopoulos (2016), “How Product Category Shapes Preferences toward Global and Local Brands: A Schema Theory Perspective,” Journal of International Marketing, 24 (4), 61–81; Deborah Vence, “Not Taking Care of Business?” Marketing News, March 15, 2005, pp. 19–20.
Reading Comprehension
Choose the best answers to the following questions according to the reading.
- What is the main idea of the reading?
- Companies are increasingly selling their goods and services abroad.
- European brands are becoming more popular globally.
- The trends in the global markets are changing rapidly.
- American companies have been popular globally, but that’s changing.
- What country do the most popular global brands come from, according to the reading?
- The United States
- Japan
- Germany
- China
- Which team wore Li Ning apparel at the Olympics?
- Spanish
- Chinese
- Mexican
- Saudi Arabian
Read the statements. Put T for True or F for False. If the statement is false, correct the error to make the statement true.
- ______ European brands are stronger in the global market than American ones.
- ______ The top global brand is Apple.
- ______ Political relations affect global branding.
- ______ The fastest growing markets are in Asia and the Pacific.
- ______ Red Bull is an American brand.
Answer the questions in your own words.
- What can U.S. multinational firms do to regain and maintain their leadership in global branding?
- Do you think that the quality of American products and services is declining, or are products from the rest of the world just getting better? Explain your answer.
Vocabulary Practice
Part of knowing a word is understanding all of its forms. Complete the chart below and answer the questions.
| NOUN | VERB | ADJECTIVE | ADVERB |
| category | ____ | ____ | |
| consistent | |||
| consumer | ____ | ||
| dominate | ____ | ||
| emerge | ____ | ||
| expert | ____ | ||
| globally | |||
| institute | institute | ||
| maintain | ____ | ____ | |
| specific |
- What suffix do we sometimes add to nouns to make them verbs?
- What suffix do we sometimes add to verbs to make them nouns?
- Can you think of any other suffixes that change the part of speech?
- Choose five words from the table that you are the least familiar with and write sentences with them.
Reading Discussion
Discuss these questions with your classmates.
- How fast did you read the passage?
- What strategies did you use to try to read faster?
- How did you handle any new words you encountered?
- Which type of questions (multiple choice, true-false, or open-ended) were easiest to answer? Why?
- When might it be inappropriate to read a text very quickly?
- Download the original, un-adapted version for free at https://cnx.org/contents/Tgl3H6iq@8.5:Evkwu-WM@7/3-8-The-Impact-of-Multinational-Corporations ↵