International Marketing16th edition

Philip R. Cateora, Mary C. Gilly, and John L. GrahamMcGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction

• The opportunities and challenges for international marketers of consumer goods and services today have never been greater or more diverse

• The lack of distinction between “goods” and “services” has led to the invention of new terms encompassing both products and services, such as “market offerings” and “business-to-consumer marketing”

• The trend for larger firms is toward becoming global in orientation and strategy

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Overview• Quality• Products and culture

– Innovative products and culture, diffusion of innovations, and production of innovations

• Analyzing product components for adaptation– Core component, packaging component, and

support services component

• Marketing consumer services globally• Brands in international markets

– Global brands, national brands, country-of-origin effects and global brands, and private brands

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Global Perspective China – Disney Rolls the Dice Again

• Tokyo Disneyland – successful• EuroDisney – disaster• Hong Kong Disneyland – open for business• Opportunities and challenges for

international marketers of consumer goods and services are great and diverse

• Any marketing firm’s goal should be quality products and services that meet the needs and wants of consumers at an affordable price

• 2009 – new Disney park in Shanghai (2015)Roy Philip 13-4

Tokyo Disneyland

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Euro Disneyland

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Hongkong Disneyland

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Shanghai Disneyland

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Quality• Shift to a customer’s market• Increased customer knowledge• The customer defines quality• The cost and quality of a product

– Among the most important criteria by which purchases are made

• Most consumers expect performance quality • In many industries quality is measured by third

parties– JD Power and Associates

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International Marketing16th edition

Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Quality• Conformance to customer specifications and

expectations.

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International Marketing16th edition

Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Quality• defined on two dimensions

– Market-perceived quality– Performance quality

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Maintaining Quality

• Damage in the distribution chain– Russian chocolate

• Quality is essential for success in today’s competitive global market

• The decision to standardize or adapt a product is crucial in delivering quality

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International Marketing16th edition

Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Physical or Mandatory Requirements and

Adaptation• Product homologation• Product adaptation requirements

– Legal– Economic– Political– Technological– Climate

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Green Marketing and Product Development

• Green marketing concerns the environmental consequences of a variety of marketing activities

• Critical issues affecting product development– Control of the packaging component of solid

waste– Consumer demand for environmentally

friendly products

• European Commission guidelines for ecolabeling

• Laws to control solid waste

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International Marketing16th edition

Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Products and Culture• A product is the sum of the physical and

psychological satisfactions it provides the user– Primary function– Psychological attributes

• The need for cultural adaptation is often necessary, affected by how the product conforms – Norms– Values– Behavior patterns– Make-or-Break products for 2009

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International Marketing16th edition

Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Innovative Products and Adaptation

• Determining the degree of newness as perceived by the intended market

• Diffusion• Established patterns of consumption and

behavior• Foreign marketing goal

– Gaining the largest number of consumers in the market • In the shortest span of time

– Probable rate of acceptance

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12-22

Geox Shoes

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Airbus 380

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Airbus 380

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Airbus 380

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Airbus 380

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Boeing 787 Dreamliner

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Boeing 787 Dreamliner

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Boeing 787 Dreamliner

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Boeing 787 Dreamliner

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Boeing 787 Dreamliner

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Boeing 787 Dreamliner

Diffusion of Innovations• Crucial elements in the diffusion of new ideas

– An innovation– Which is communicated through certain channels– Over time– Among the members of a social system

• The element of time• Variables affecting the rate of diffusion of an

object– Degree of perceived newness– Perceived attributes of the innovation– Method used to communicate the idea– New Beauty Products of 2013

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Production of Innovations

• Inventiveness of companies and countries• Expenditures• Japanese solutions

– American-style education programs– American design centers

• New ideas come from a variety of sources– Countries– Acquisitions– Global collaborations

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International Marketing16th edition

Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Five Characteristics of an Innovation

• Relative advantage• Compatibility• Complexity• Trialability• Observability

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International Marketing16th edition

Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Analyzing Product Components for Adaptation• Product is multidimensional• Sum of its features determines the bundle

of satisfactions (utilities) received by consumer

• Three distinct components– Core – Packaging – Support services– Most Promising Products of 2010!

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Product Component Model

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Exhibit 13.1

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Core Components

• Product platform• Design features• Functional features

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Packaging Component

• Price• Quality• Packages• Styling• Trademark• Brand name

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Support Services Component

• Deliveries • Warranty• Spare parts• Repair and maintenance• Installation• Instructions• Other related services

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International Marketing16th edition

Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Marketing Consumer Services Globally

• More than half of Fortune 500 companies are primarily service providers

• Consumer services characteristics– Intangibility– Inseparability– Heterogeneity– Perishability

• A service can be marketed – As an industrial (business-to-business) – A consumer service

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International Marketing16th edition

Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Services Opportunities in Global Markets

• Tourism• Transportation• Financial services• Education• Communications• Entertainment• Information• Health care

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Barriers to Entering Global Markets for Consumer

Services• Four kinds of barriers face consumer

service marketers: – Protectionism– Restrictions on transborder data flows– Protection of intellectual property– Cultural barriers and adaptation

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International Marketing16th edition

Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Brands in International Markets

• A global brand is the worldwide use of a name, term, sign, symbol, design, or combination – Intended to identify goods or services of

one seller – To differentiate them from those of

competitors

• Importance is unquestionable• Most valuable company resource

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Top Twenty Brands

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Exhibit 13.2

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Top Twenty Brands (continued)

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Exhibit 13.2

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Top 100 Brands in 2011

Top 100 Brands in 2011 - Video

Global Brands

• The Internet and other technologies accelerate the pace of the globalization of brands

• Ideally gives the company a uniform worldwide image

• Balance• Ability to translate

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International Marketing16th edition

Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

National Brands

• Acquiring national brand names• Using global brand names• Nationalistic pride impact on brands• Use global brands where possible and

national brands where necessary

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• Country-of-Origin effect– Influences that the country of

manufacture, assembly, or design • Has on a consumer’s positive or

negative perception of a product

• Consumers have broad but somewhat vague stereotypes about specific countries and specific product categories that they judge “best”

• Ethnocentrism

Country-of-Origin Effects and Global Brands (1 of 2)

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• Countries are stereotyped – On the basis of whether they are

industrialized– In the process of industrializing– In process of developing

• Technical products– Perception of one manufactured in a less-

developed or newly industrializing country less positive

• Fads often surround product from particular countries or regions

Country-of-Origin Effects and Global Brands (2 of 2)

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Private Brands

• Growing as challengers to manufacturers’ brands

• Private labels– Provide the retailer with high margins– Receive preferential shelf space and in-

store promotion– Are quality products at low prices

• Manufacturers brands must be competitively priced and provide real consumer value

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Summary (1 of 2)

• The growing globalization of markets must be balanced with the continuing need to assess all markets for those differences that might require adaptation for successful acceptance

• In spite of the forces of homogenization, consumers also see the world of global symbols, company images, and product choice through the lens of their own local culture and its stage of development and market sophistication

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Summary (2 of 2)

• Each product must be viewed in light of how it is perceived by each culture with which it comes in contact

• Analyzing a product as an innovation and using the Product Component Model may provide the marketer with important leads for adaptation

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Airbus A380 http://www.airbus.com/en/myairbus/a380_wow

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To see images go to http://www.airbus.com/en/myairbus/a380wow

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Boeing 787 Dreamlinerhttp://www.boeing.com/commercial/787famil

y/

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To see images go to http://www.boeing.com/commercial/787family/

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