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TRANSCRIPT
Global Marketing Management
Warren J. Keegan
Chapter 11 Product Decisions
Keegan: Global Marketing Perspective Chapter 11/ 2
Overview
Basic Concepts Product Positioning Product Saturation Levels Product Design ConsiderationsAttitudes Towards Country of OriginGeographic ExpansionNew Products in Global MarketingSummary
Keegan: Global Marketing Perspective Chapter 11/ 3
Learning Objectives
Know the differences between local, national, international & global brands
Learn alternatives for positioning global brandsAppreciate the importance of saturation levelsBe aware of design considerations and attitudes
toward country of originKnow why development of new products are
keys to survival and global growth
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Basic Concept of Products
Products can be defined as a collection of physical, psychological and symbolic attributes that can collectively yield satisfaction, or benefit, to a buyer or user.
Products can be classified into consumer & industrial goods
Products can be classified by the way they are purchased or their life-span
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Local, National, International and Global Products
Local products are offered in a portion of a national market
National products are offered in a single national Market
International products are offered in multinational, regional markets
Global products are offered in the global market. They are international and multi-regional
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Global Brand
A symbol about which customer have beliefs & perceptions
Same name or same meaning in another language
Similar image & positionGuided by same strategic principlesMarketing mix may vary from country to
country
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Positioning of Products and Services
Attribute or BenefitQuality/PriceUse/UserHigh-Tech PositioningHigh-Touch Positioning
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Product Saturation Levels in Global Markets
Many factors determine a product`s market potentialProduct saturation level increases as national income per
capita increasesThe presence or absence of a particular companion
product can be significant
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Product and Service Design Considerations
PreferencesCostsLaws and RegulationsCompatibilityLabeling and instructions
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Attitude towards the Country of Origin
Stereotyped attitudes toward foreign products & services can favor or hinder marketing efforts
If the quality is perceived to be low Foreign origin of the product can be disguised Foreign identification of the product can be continued &
consumer attitudes towards the product can be changed
In some market segments foreign products have a substantial advantage because they are foreign
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Geographic Expansion-Strategic Alternatives
Different
Same
Same DifferentedlichProduct
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Strategy 2: Product Extension,CommunicationsAdaptation
Example: Motorbikes
Strategy 1: Dual Expansion
Example: Applications Software
Strategy 4: Dual Adaptation
Example: Greeting Cards
Strategy 3: Product Adaptation,CommunicationExtension
Example: Electrical products
Global Product Planning: Strategic Alternatives for Expanding into Global Markets
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Strategy 1: Product/Communication Extension or Dual Extension
Company sells exactly the same product or service with the same advertising as used in the home country
Company assumes that all markets are alikeDoes not work in all marketsOften used because it saves costsExample: Campbell Soup
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Strategy 2: Product Extension, Communications Adaptation
If the product serves different needs in various countries, only marketing communication may have to be adapted
Adaptation can happen by design or accidentCheap implementation because product does not changeExample: Motor scooters
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Strategy 3: Product Adaptation, Communication Extension
Product is adapted to the new market, but basic home market communication strategy remains unchanged
Product is adapted to the environment and the preferences of the consumers in the new market
Example: Exxon
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Strategy 4: Product/Communication Adaptation or Dual Adaptation
Using Dual Adaptation the company must adapt the product or service as well as the marketing communication to the foreign market
Example: Unilever fabric softener
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Strategy 5: Product Invention
Demanding but potentially rewarding strategy for reaching mass markets in LDCs
Product quality is essential but must be supported with imaginative, value-creating advertising & marketing communication
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How to Choose a Strategy
3 StagesCave Dweller – primary motivation is to dispose of excess capacityNaïve Nationalist – Sees adaptation as the only alternativeGlobally Sensitive- Evaluated across countries with some standardization & some differentiation
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New Products and Services in Global Marketing (1)
New to consumer & company ( Product or service innovation)
New to consumer but not new to company (Product/service or line extension)
Not new to consumer but new to company (New product or service duplication)
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New Products and Services in Global Marketing (2)
New-product development process Permanent identification of new-product ideas Screening of these ideas and identification of candidates for
further investigation Stringent investigation and analysis of the selected new-
product ideas Organisation of sufficient resources
The international new-product departmentTesting new products & services in national markets
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New Products in Global Markets - Reiner
Global companies in fierce competition so must be world class
Focus on 1 or a few businessesSenior management is actively involvedRecruit & retain the best & the brightestUnderstand the importance of speed to
market
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Summary
Product and services are the most important elements of the marketing program
Important factors: preferences, costs, laws and regulations, and compatibility
Five strategic alternatives for geographic expansion: Product/communication extension, product
extension/communications adaptation, product adaptation/communications extension, dual adaptation and product invention