International Marketing: Chapter 13 Key Concepts

Diffusion of Innovations Theory Degree of Newness Characteristics of Innovations Continuum of Environmental Sensitivity Product Component Model Global Brands Country-of-Origin-Effect on Brands Unique Characteristics of Services Barriers to Marketing Services Internationally

Today’s Competitive Global Market

More products, more choices

Shift to a consumer’s market

More informed consumers

Consumers expect quality

Impacts the decision to adapt or standardize

Mandatory Product Adaptation Requirements

Legal

Economic

Political

Technological

Climate

Green Marketing and Product Development

Environmental consequences of marketing

Critical issues affecting product development

– Control of packaging component of solid waste

– Consumer demand for eco-friendly products

European Commission guidelines for eco-labeling

Laws to control solid waste

Global Product Strategy

Diffusion of Innovations Theory

Product Component Model & Analysis

Continuum of Environmental Sensitivity

Diffusion of Innovations Theory

New products (innovations) have particular characteristics that can be manipulated to increase the rate at which consumers adopt (purchase) the products

(Perceived) degree of newness Characteristics of an innovation

Degree of Newness(How new is it perceived to be?)

Degree of Newness:General Rule of Thumb

The greater the disruption to consumption patterns, the greater the likelihood that you will have to adapt your marketing strategy

Disruption = Adaptation

Characteristics of Innovations

Relative Advantage

Compatibility

Complexity

Trialability

Observability

Continuum of Environmental Sensitivity(How sensitive is it perceived to be?)

Insensitive

Industrial productsand services

Highly sensitive

High style andfaddish

consumerproducts

Basic consumerstaples

Product Component Model

Global Brands Global 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

Most valuable company resource

Provides uniform global image

Internet accelerates pace of global brands

Country-of-Origin effect

– Country of manufacture, assembly, or design

– Impact on a consumer’s 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

Marketing Consumer Services Globally

More than half of Fortune 500 companies are service providers

Consumer services characteristics– Intangibility

– Inseparability

– Heterogeneity

– Perishability

Barriers to Entering Global Markets for Consumer Services

Protectionism

Restrictions on transborder data flows

Protection of intellectual property

Cultural barriers and adaptation