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Brand andPro uct
Global Marketing
Global Marketing
Global EditionChapter 10
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Chapter topics: Branding concepts Local international & lobal brands Country-of-origin effect Strategic alternatives New products
Brand Asset Valuator (BAV) BCG Product Portfolio Protectin successful brand names
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A roduct is a ood
service, or idea
Intangible Attributes
Product classification
Industrial goods
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p pe s an examp eof an industrial product
Express Warranty is a written guarantee that
for or provides a remedy in case of a producta ure
Warranties can be used as a com etitive tool
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Consumer Packaged Goods refers to productsw ose pac ag ng s es gne to protect orcontain the product during shipping, at retail,or po nt o use
Eco-packaging is key because packagedesigners must address environmental issues
Offers communication cues that rovideconsumers with a basis for making aurchase decision
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rov es consumers w t
various types of information egu at ons er y country
regarding various products ea warn ngs on o acco
products
clarifies the country of origin and
final assembly point European Union requires labels on
all food products that include
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modified crops
Global marketers must
understand theimportance of visualaesthetics
Aesthetic st les de reeof complexity found on alabel differ around the
world
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Buyer orientation
Amount of effort
expended Level of risk
Buyer involvement
Bu er orientationframework
Convenience
Preference
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Bundle of images and experiences in thecustomer s m n
A promise made by a particular companyabout a particular product
A ualit certification
Differentiation between competing products
Brand Image
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product as a result of investments ine mar e ng o e ran
An asset that re resents the value
created by the relationship between the
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Greater loyalty
Less vulnerability to marketing crises
arger marg ns
More inelastic consumer response to pricencreases
More elastic consumer response to price
ecreases Increased marketing communication
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e ec veness
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Brands that have achieved success in asingle national market
epresen e e oo o omes ccompanies
Entrenched local products/brands can
global companies
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Offered in severalmar e s n aparticular regionEuro-brands
Honda 5-doorhatchback auto is
known as Fit inapan an azz nEurope The Smart car was developed by
DaimlerChrysler for the European
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market and is now sold in the US
Global products meet the wants and needs of a
o a ran s ave t e same name an s m arimage and positioning throughout the world
Harley Davidson has dealers inover 60 countries
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Quality signal allows a company to charge
a premium price in a highly competitivemarket
Global myth marketers can use globalconsumer culture ositionin to link the brandidentity to any part of the world
addresses social problems
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Global brands are not the
iPod = brand
mp3 p ayer = pro uct
Brand Asset Valuator
worlds most powerful
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ran s
Combination or tiered branding allows
marketers to levera e a com an s re utationwhile developing a distinctive identity for aline of roducts
Sony Walkman
-or product brands
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Intel Inside
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Brand acts as an umbrella for new products
Virgin Entertainment: Virgin Mega-stores and MGM Cinemas
Vir in Tradin : Vir in Cola and Vir in Vodka
Virgin Radio
Virgin Rail (UK only)
Virgin Media Group: Virgin Publishing, Virgin Television,Virgin Net (UK only)
Virgin Travel Group: Virgin America Airways, Virgin Holidays,Virgin Galactic
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Worlds Most ValuableBrands (2010)
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Minor variants of a single
EXTENSIONproduct are marketed underthe same brand name
Extensions of the brand
EXTENSION
name o o er pro uccategories
----Dissimilar
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LINE EXTENSIONS BRAND EXTENSIONS
HorizontalExtension
VerticalExtension
AnotherProductClass
RangeBrand
Co-Branding
Up from
Core
Down from
CoreBrand Brand
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Questions to ask when management seeks to
u a g o a ran : Does this move fit the company and/or its markets?
Will anticipated scale economies materialize?
How difficult will it be to develop a global brandteam?
Can a single brand be imposed on all markets
success u y
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Global Brand Leadership
Using organizational structures, processes,and cultures to allocate brand-buildingresources globally, to create globalsynergies, and to develop a global brandstrategy that coordinates and leveragescountry brand strategies
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2. Think about all elements of brand identity and selectnames marks and s mbols that have the otential forglobalization
3. Develop a company-wide communication system to shareeverage now e ge n o
4. Develop a consistent planning process across markets
5. Assign specific responsibility for managing branding
best practices
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. strengths and respond to relevant local differences
Country-of-Origin asBrand Element
Perceptions about and attitudes toward
products and brands known to originaten ose coun r es
Japan French perfume
Germany
Italy
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Stereotyped attitudes toward foreign products &
serv ces can avour or n er mar e ng e or s If the quality is perceived to be low
Foreign origin of the product can be disguised
Foreign identification of the product can becontinued & consumer attitudes towards theproduct can be changed
In some market segments foreign productshave a substantial advantage because they are
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ore gn
Strategic Alternatives inGlobal Marketing
unchanged in markets outside of home
Adaptation changing elements of design,,
of different country markets
rea on eve op ng new pro uc s or eworld market
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Global Product Planning:Strategic Alternatives
ProductSame Different
Strategy 2:Product extensionCommunication
adaptation
Dual adaptation
Communication
Strategy 3:Same
Dual extensionProduct adaptation
Communicationextension
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Strategy 5: Innovation Important for reaching mass markets in less
industrialized nations and certain segments inn ustr a ze countr es
Hand-cranked radios for areas with no electricity
segmentation
Product ualit is essential but must besupported with imaginative, value-creatingadvertising & marketing communication
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Two errors that management makes in
c oos ng a s ra egy NIH (not invented here) syndrome means
managers gnore t e a vancements osubsidiaries overseas
Managers impose po icies upon su si iariesbecause they assume what is right for
market
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function or need it serves
,under which the product is used, preferences
,product
ap a on an manu ac ur ng cos s ecompany will incur
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Pursue o ortunities in com etitive arenasof global marketplace
Active involvement from senior management
y o recru an re a n es emp oyees
Understand the importance of speed inbringing product to market
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What is a new product?
New to those who use it or bu it New to the organization
New to a market
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The InternationalNew Product Department
How big is the market for this product at
What are the likely competitive moves in
Can we market the product through existing
Can we source the product at a cost that will
Does product fit our strategic development
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Whenever a product interacts with human,mec an ca , or c em ca e emen s ecausethere is the potential for a surprising andunexpec e ncompa y
Test could simply be observing the product
being used within the market
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2011 Pearson Education, Inc.Happy Year of the Dragon (http://landor.com/#!/locations/hong-kong/gong-xi-fa-cai/)
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An Examination o t e IPLC an its App ication wit in Mar etingOnkvisit & Shaw
- diffusion of innovations across national boundaries (e.g., semiconductors,y wr r , ru r r u , r
- incorporates supply-side variables (comparative advantages)
1. overseas innovation (pioneering or international introduction stage)2. maturity.
4. reversal (product standardization and comparative disadvantage)
1. USA (initiating country)2. MDCs (other advanced nations)3. LDCs lesser develo ed countries
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Stage Import/Export Target Market Competitors Prodn. Costs
0) local none USA few: local firms initially highinnovation
1) overseas increasing export USA & advanced few: local firms decline due toinnovation nations econ. o sca e
2) maturity stable export advanced nations advanced nations stable& LDCs
3) worldwide declining export LDCs advanced nations increase due toimitation lower econ. of
scale
4) reversal increasing import USA& LDCs advanced nations increase due tocomparativedisadvantage
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1. Product policy
continue innovating (high quality & sophisticated models in
produce diff. components in diff. countries to best use comparativeadvantage
use pa en s me a van age2. Pricing policy
high introductory price to recoup R&D costs lower prices in middle stages (maintain market share) skim in reversal
3. Promotion policy non-price promotioni.e., promote premium product with high quality image
4. Distribution olic
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build strong dealer network
Hi h Low
Relative Market Share
ate
High
thR
Gro
Low
dustr
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- ra eg c us ness nz key business unit within diversified firmsz a division, product line, or single product may define an SBUz
firms may redefine their SBUs as market conditions dictate
Relationships among three characteristics of each product:(1) market share relative to that of largest competitor
high vs. low (dividing line at 1x, arbitrary).
(2) growth rate in market (corrected for inflation). ,
growth vs. maturity stages of PLC
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pro uc s con r u on o organ za on n erms o o ar sa esrepresented by area or diameter of circle
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Strategic implications of matrix interpreted according to
followin rules of thumb:
margins and cash generated are a function of market share(experience curve effect)
growth requires cash input to finance added assetsno product market can grow indefinitely
Relative market share cash generated
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Protecting SuccessfulBrand Names
Strong brand name is one of most valuable assetsthat company possesses
ra emar reg s ra on:Lodge application at Trade Marks Registry in country
Separate application in every country
Specify category of goods to which registrationwill relate (e.g., Ray-Ban sunglasses will notprotect use of mark on shorts)
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Protecting SuccessfulBrand Names
Name pirates register others famous trademarks,
large profit
Some countries (e.g., Indonesia) operate trademarkregistration system based on first to file application,ra er an rs o use sys em a op e n ; on y wayto get it back is by buying it
Legislative Council of HK introduced bill for servicemarks (e.g., insurance companies, banks, accountants,
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Protecting SuccessfulBrand Names
Not always possible to transliterate words made up of lettersin Roman alphabet into Chinese characters; not problem incoun r es w p one c oca a p a e , e a an , orea,Japan
In countries like HK, Taiwan and China, local populationinsists that products have Chinese names; nicknames maydevelop (not always desirable) e.g., Quaker Oats old manbrand (laoren pai), Polo three legged horse (santui ma)
Chinese character trademarks should be developed and
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Club Volvo