Transcript 12 - McGraw Hill Higher Education

Chapter 12
Products for
Consumers
Copyright  2009 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Cateora
Slides prepared by Kate Mizerski, Edith Cowan University
12-1
Chapter Learning Objectives
• The importance of analysing the product
components
• Physical, mandatory, and cultural requirements for
product adaptation
• The relationship between product acceptance and
the market into which it is introduced
• The need to view all attributes of a product in order
to overcome resistance to acceptance
• The special issues in global marketing for services
Copyright  2009 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Cateora
Slides prepared by Kate Mizerski, Edith Cowan University
12-2
Global Perspective
Hong Kong – Disney Rolls the Dice Again
•
•
•
•
Tokyo Disneyland – successful
EuroDisney – disaster
Hong Kong Disneyland – open for business
The opportunities and challenges for international
marketers of consumer goods and services today
has never been greater or more diverse.
– Market offerings
– Business-to-consumer marketing
• Quality products and services that meet the needs
and wants of consumers at an affordable price
should be the goal of any marketing firm.
Copyright  2009 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Cateora
Slides prepared by Kate Mizerski, Edith Cowan University
12-3
What is a Product?
• A mixture of tangible and intangible
attributes that provide a benefit to
consumers.
• Can be broken into three components:
– Core component
– Actual component
– Supporting services component
• Firm must determine what need the
product fulfills, what benefit and
satisfaction it provides to the user and if
they have a competitive advantage.
Copyright  2009 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Cateora
Slides prepared by Kate Mizerski, Edith Cowan University
12-4
Product Component Model
Copyright  2009 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Cateora
Slides prepared by Kate Mizerski, Edith Cowan University
12-5
Product Strategies
• Three stages of complexity:
– Product extension
– Product adaptation
– Product invention
• As competition for world markets intensifies
and market preferences become more global,
selling what is produced for the domestic
market in the same manner as at home
becomes less effective.
Copyright  2009 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Cateora
Slides prepared by Kate Mizerski, Edith Cowan University
12-6
Product Adaptation Domains
Copyright  2009 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Cateora
Slides prepared by Kate Mizerski, Edith Cowan University
12-7
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 with:
– Norms
– Values
– Behaviour patterns
• The extent of product adaptation depends on
cultural differences in product use and perception
between the market the product was originally
developed for and the new market.
Copyright  2009 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Cateora
Slides prepared by Kate Mizerski, Edith Cowan University
12-8
Product Innovation and Diffusion
of Innovation
• Determining the degree of newness as perceived by the
intended market.
• Knowledge regarding diffusion of innovation is helpful in
developing a successful product strategy.
• Effect on established patterns of consumption and
behaviour.
• Foreign marketing goal: gaining the largest number of
consumers in the market in the shortest span of time.
– Probable rate of acceptance
Any idea perceived as new by a group of people is
an innovation.
Copyright  2009 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Cateora
Slides prepared by Kate Mizerski, Edith Cowan University
12-9
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:
– The degree of perceived newness
– The perceived attributes of the innovation
– The method used to communicate the idea
Copyright  2009 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Cateora
Slides prepared by Kate Mizerski, Edith Cowan University
12-10
Five Characteristics of an
Innovation
1.
2.
3.
4.
5.
Relative advantage
Compatibility
Complexity
Trialability
Observability
•
Perception of product characteristics by the
potential adopter, not the marketer, is crucial
to evaluation.
Copyright  2009 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Cateora
Slides prepared by Kate Mizerski, Edith Cowan University
12-11
Country and Culture and
Innovations
•
•
•
•
•
Inventiveness of companies and countries
Expenditures
Japanese solutions
– American-style education programs
– American design centres
New ideas come from a growing variety of sources,
countries, acquisitions, and even global collaborations.
Influence of culture on adoption of innovations can be
studied using Hofstede’s dimensions of:
– Power distance
– Uncertainty avoidance
– Individualism/collectivism
– Masculinity/femininity
Copyright  2009 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Cateora
Slides prepared by Kate Mizerski, Edith Cowan University
12-12
Brands in International Markets
• Very important
• Most valuable resource a company has
• Brand image is at core of business identity
and strategy
A global brand is defined as the worldwide use of a
name, term, sign, symbol, design, or combination
thereof intended to identify goods or services of one
seller and to differentiate them from those of
competitors.
Copyright  2009 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Cateora
Slides prepared by Kate Mizerski, Edith Cowan University
12-13
Top Twenty Brands
Rank
2005/2004
2005 Brand
Value (millions)
2004 Brand Value
(millions)
Change
(%)
Country of
Ownership
1/1 Coca Cola
$67,525
$67, 394
0%
U.S.
2/2 Microsoft
59,941
61,732
-2
U.S.
3/3 IBM
53,376
53, 791
-1
U.S.
4/4 GE
46, 996
44,111
7
U.S.
5/5 Intel
35,588
33,499
6
U.S.
6/8 Nokia
26,452
24,041
10
Finland
7/6 Disney
26,441
27,113
-2
U.S.
8/7 McDonalds
26,041
25,001
4
U.S.
9/9 Toyota
24,837
22,673
10
Japan
10/10 Marlboro
21,139
22,128
-4
U.S.
Copyright  2009 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Cateora
Slides prepared by Kate Mizerski, Edith Cowan University
12-14
Top Twenty Brands (continued)
Rank 2005/2004 2005 Brand
Value (millions)
2004 Brand Value
(millions)
Change
(%)
Country of
Ownership
11/11 MercedesBenz
$20,006
$21,331
-6
Germany
12/13 Citi
19,967
19,971
0
U.S.
13/12 HP
18,559
17,683
5
U.S.
14/14 Am Ex
18,534
16,723
5
U.S.
15/15 Gillette
17,534
16,723
5
U.S.
16/17 BMW
17,126
15,886
8
Germany
17/16 Cisco
16,592
15,948
4
U.S.
18/44 L Vuitton
16,077
NA
NA
France
19/18 Honda
15,788
14,874
6
Japan
20/21 Samsung
14,956
12,553
19
S. Korea
Copyright  2009 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Cateora
Slides prepared by Kate Mizerski, Edith Cowan University
12-15
Brands in International Markets
(cont.)
• The Internet and other technologies
accelerate the pace of the globalisation of
brands.
• Global brand gives the company a uniform
worldwide image.
• Balance benefits of a global brand against the
risk of losing the benefits of an established
brand.
• Ability to translate
• Nationalistic pride
Copyright  2009 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Cateora
Slides prepared by Kate Mizerski, Edith Cowan University
12-16
Nestle Branding Tree
Copyright  2009 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Cateora
Slides prepared by Kate Mizerski, Edith Cowan University
12-17
Country-of-Origin Effects
• Consumers have broad but somewhat vague stereotypes
about specific countries and specific product categories
that they judge “best.”
• Ethnocentrism
• Countries stereotyped on the basis of whether they are
industrialised, in the process of industrialising, or
developing.
• The more technical the product, the less positive is the
perception of one manufactured in a less-developed or
newly industrializing country.
• Foreign-made products generally preferred over domesticmade in less developed countries.
Country-of-origin effect (COE) can be defined as any influence that the
country of manufacture, assembly or design has on a consumer’s positive
or negative perception of a product.
Copyright  2009 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Cateora
Slides prepared by Kate Mizerski, Edith Cowan University
12-18
Country-of-Origin Effects (cont.)
• Fads often surround product from particular
countries or regions.
• Poor country image can be compensated for by
lower prices, longer warranties or selling through
high quality retailer.
• COE and it underlying country image operate at
a direct level to affect consumer decision-making.
• ‘Country brand’ enhancing strategies.
Copyright  2009 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Cateora
Slides prepared by Kate Mizerski, Edith Cowan University
12-19
Product–Country Match and Mismatches:
Examples and Strategic Implications
Copyright  2009 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Cateora
Slides prepared by Kate Mizerski, Edith Cowan University
12-20
Marketing Consumer Services
Globally
• Consumer services characteristics:
–
–
–
–
Intangibility
Inseparability
Heterogeneity
Perishability
• A service can be marketed both as an
industrial (business-to-business) or a
consumer service.
Copyright  2009 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Cateora
Slides prepared by Kate Mizerski, Edith Cowan University
12-21
Opportunities for Services in
International Markets
•
•
•
•
•
•
•
•
Tourism
Transportation
Financial services
Education
Telecommunications
Entertainment
Information
Health care
Copyright  2009 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Cateora
Slides prepared by Kate Mizerski, Edith Cowan University
12-22
Barriers to Entering International
Markets for Consumer Services
•
•
•
•
Protectionism
Restrictions on transborder data flows
Protection of intellectual property
Cultural barriers and adaptation
Copyright  2009 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Cateora
Slides prepared by Kate Mizerski, Edith Cowan University
12-23
Summary
• The growing internationalisation of markets
provides the impetus to adopt a global mindset.
• Understanding that an established product in one
culture may be considered an innovation in another
is critical in planning and developing consumer
products.
• Exporting products requires awareness of factors
that affect diffusion of innovation and the effect of
culture.
• Country-of-origin effects and international brands
are important areas of marketing focus.
• Services have been showing strong positive growth
as exports and pose special challenges to
international marketers.
Copyright  2009 McGraw-Hill Australia Pty Ltd
PPTs t/a International Marketing by Cateora
Slides prepared by Kate Mizerski, Edith Cowan University
12-24