creating products and brands for consumers in global markets
Post on 21-Dec-2015
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Product Components
Core ComponentCore Component
Packaging ComponentPackaging Component
Support Services ComponentSupport Services Component
Product Component Model
Repair and maintenance
SUPPORT SERVICESCOMPONENT
CORECOMPONENT
Installation
Instructions
Other related services
Deliveries
Warranty
Spare parts
Legal
Trademark
Brand name
Legal
Product platform
Design features
Functional features
Legal
PACKAGINGCOMPONENT
Price
Quality
Package
Styling
4 Ps - Product Product decisions are all decision which relate to the physical product and/or
service offering, including its name, packaging, warranty, and availability. Product dimensions include:– Size of the product– Color(s) of product– Scent of the product– Materials/ composition of the product– Design of the product– Packaging materials– Package colors and package design– Brand name– Warranty– Availability of options– Customizing services– After-sale service offerings– Inventory levels
The International Marketing Dilemma
ProductProduct
StandardizationStandardization
ProductProduct
AdaptationAdaptationVSVS..
Benefits of Product Standardization
+ Lower manufacturing costs
+ Lower input costs
+ Cost savings due to elimination of product adaptation efforts
+ Fast global roll-outs are possible
Benefits of Product Standardization
+ Product available for global customers
+ Enhance consumer perceptions of global brand
PRESSURES FOR PRODUCT ADAPTATIONCompetitive offerings
Climate, geography, & infrastructureGovernment regulations & international standards
Customer expectations, preferences, & buyer behavior
Factors Influencing Product Adaptation vs. Standardization
Stage in Product Life CycleStage in Product Life Cycle
Legal/Standards ConstraintsLegal/Standards Constraints
Product InnovativenessProduct Innovativeness
Cultural DifferencesCultural Differences
Types of Product Adaptation
Mandatory – Necessary for product to be sold in a local
market Discretionary
– Not necessary but may be beneficial
Benefits of Product Adaptation
+ Penetrate otherwise closed markets
+ Able to use products in different climates & infrastructures
+ Better product performance in different use conditions
+ Decreased costs due to varying local inputs
Benefits of Product Adaptation
+ Decreased costs due to feature elimination
+ Increased sales due to better meeting industry norms or cultural preferences
Strategic Adaptation to Foreign Markets
High
Low
Degree ofCulturalGrounding
Need forAdaptation
Industrial/ Technology Intensive
Consumer
Nature of Product
International Product Trade Cycle Model
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
1 3 4 5 6 7 8 9 10 11 12 13 14 15
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
High Income Countries
Medium Income Countries
Low Income Countries
Time
Stages of Production Development
New Product Standardized ProductMaturing Product
Quantity
production
consumption
2
Characteristics of Innovations
Relative Advantage
Compatibility
Complexity
Trialability
Observability
What is a brand?
A name, term, sign, symbol, or design, or combination of them which is intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competitors (Kotler, 1991)
Brand Strategies
Global BrandsGlobal Brands
National BrandsNational Brands
Global/National Brand MixGlobal/National Brand Mix
Private BrandsPrivate Brands
Global v. Local branding In 1989, Mars changed the name of Kal Kan cat food to
Whiskas. Why?
– Sharing of ideas in global corporation
– Pet owners travel and might switch if their familiar brand was not available somewhere.
– Two years earlier, Mars had created to other global brands Kal Kan dog food Pedigree in U.S. Mealtime dry dog food Pedigree Mealtime
– High market share in U.S.
– Brand associations
Global v. Local Brands
Global brands provide:– Scale economies in the
Development of advertising, packaging, promotion, etc.
– Exploitation of: Media overlap Exposure to customers who
travel
– Associations of a global presence of the “home” country
Local brands provide:– Names, symbols, and
associations that can be: Developed locally Tailored to local market Selected without the constraints
of a global brand
– Reduced risk from “Buy Local” sentiments
Brand Name Decisions
Arbitrary or invented word (Lexus)
Recognizable English (or foreign language) word but unrelated to product (Cheer)
Recognizable English (or foreign language) but suggestive of product (Mr. Clean)
English (or foreign language) word descriptive of product but may not be understandable to outsiders (Pampers)
Geographic place or common surname (Kentucky Fried Chicken)
Device, design, number or some other element (3M)
What is brand equity?
A set of brand assets linked to a brand, its name and symbol, that add to or subtract from the value provided by a product or service to a firm and/or to that firm’s customers.
Developing A Framework For Generic Brands Based on Brand Knowledge
Brand Awareness– Recognition– Recall
Brand Image– Type– Strength– Favorability– Uniqueness
of Brand Associations
Components of Brand Knowledge (Keller, 1992)