Transcript GLOBAL POLICY AND PRICING DECISIONS II

Global Marketing Management, 4e
Chapter 12
Global Product Policy
Decisions II:
Marketing Products and
Services
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Chapter Overview
1. Global Branding Strategies
2. Managing Multinational Product Lines
3. Product Piracy
4. Country-of-Origin (COO) Effects
5. Global Marketing of Services
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Introduction
 Companies that brand their products have
various options when they sell their goods in
multiple countries.
 More and more companies see global (or at
least regional) branding as a must.
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Introduction
 Multinational product line management entails
issues such as:
– What product assortment should the company
launch when it first enters a new market?
– How should the firm expand its multinational
product line over time?
– What product lines should be added or
dropped?
 Global marketers also face the issue of global
piracy.
 In global marketing, firms have to use a multitude
of strategies to handle the negative country-oforigin stereotypes.
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1. Global Branding Strategies
 Global Brands (see Exhibit 12-1)
– A truly global brand is one that has a consistent
identity with consumers across the world.
– The development costs for products launched
under the global brand name can be spread
over large volumes.
– A global brand has much more visibility than a
local brand.
– The fact of being global adds to the image of a
brand country.
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1. Global Branding Strategies
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1. Global Branding Strategies
– Global brands are also able to leverage the
country association for the product.
– The value of a global brand (brand equity) usually
varies a great deal from country to country (three
key value dimensions: quality signal, global myth,
and social responsibility).
– Inter-country gaps in brand equity may be due to
any following factors:
 History
 Competitive climate
 Marketing support
 Cultural receptivity to brands
 Product category penetration
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1. Global Branding Strategies
 Local Branding
– Examples: Coca Cola owns numerous local and
regional brands across the globe; Mecca Cola from
France
 Global or Local Brands?
– Solo branding, hallmark branding, family branding, and
extension branding.
– A firm’s global brand is shaped by three types of factors:
 Firm-based drivers
 Product-market drivers
 Market dynamics
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1. Global Branding Strategies
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1. Global Branding Strategies
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1. Global Branding Strategies

Brand Name Changeover Strategies
– Fade-in/fade-out
– Co-branding
– Umbrella branding
– Transparent forewarning
– Summary axing
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1. Global Branding Strategies
 Private Label Branding (“Store Brands”): Factors explaining
success of private labels:
1. Improved quality of private-label products
2. Development of premium private-label brands
 A system where a single banner brand is used worldwide, often
with a sub-brand name, for almost the entire product mix of the
company.
3. Shift in balance of power between retailers and
manufacturers
4. Expansion into new product categories
5. Internationalization of retail chains
6. Economic downturns
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1. Global Branding Strategies
 Umbrella (Corporate) Branding
– Umbrella branding facilitates brand-building
efforts over a range of products.
– Umbrella branding makes it easier to add or
drop new products.
 Protecting Brand Names
– Brands are vital assets to brand owners.
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1. Global Branding Strategies
– In the area of brand protection, the oldest treaty
is the Paris Convention for the Protection of
Intellectual Property.
– The difference in opinion held by industrialized
and developing countries on intellectual
property (see Exhibit 12-5)
– Many elements of the brand franchise may
require protection.
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1. Global Branding Strategies
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2. Management of Multinational Product
Lines
 The product assortment is usually described on
two dimensions: the width and the length.
 Drivers affecting the composition of a firm’s
international product line:
– Customer Preference
– Price Spectrum
– Competitive Climate
– Organizational Structure
– History
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2. Management of Multinational Product
Lines
 Categories of product lines:
– Core products
– Niche products
– Seasonal products
– Filler products
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2. Management of Multinational
Product Lines
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2. Management of Multinational
Product Lines
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3. Product Piracy
 Any aspect of the product is vulnerable to
piracy, including the brand name, the logo,
the design, and the package (see Exhibit 128).
 Strategic Options Against Product Piracy:
– Lobbying Activities
– Legal Action
– Customs
– Product Policy Options
– Distribution
– Communication Options
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4. Country-of-Origin (COO) Stereotypes
 Country-of-Origin (COO) Influences on
Consumers
– For many products, the “made in” label
matters a great deal to consumers.
– Key research findings of COO effects:
 COO effects are not stable
 Consumers prefer domestic products
over imports
 Both the country of design and the
country of manufacturing/assembly play
a role in consumer attraction.
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4. Country-of-Origin (COO) Stereotypes
 COO particularly influences the elderly, less
educated, and politically conservative;
consumer expertise also makes a difference.
 Cultural orientation play a role.
 Consumers are likely to use the origin of a
product as a cue when they are unfamiliar
with the brand name carried by the product.
 COO effects depend on the product category.
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4. Country-of-Origin (COO) Stereotypes
 Strategies to Cope with COO Stereotypes:
 Product Policy
– Pricing
– Distribution
– Communication
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4. Country-of-Origin (COO)
Stereotypes
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4. Country-of-Origin (COO)
Stereotypes
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5. Global Marketing of Services
 Challenges in Marketing Services Internationally:
– Protectionism
– Immediate Face to Face Contacts with Service
Transactions
– Difficulties in Measuring Customer Satisfaction
Overseas
 Opportunities in the Global Service Industries:
– Deregulation of Service Industries
– Increasing Demand for Premium Services
– Increased Value Consciousness
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5. Global Marketing of Services
 Global Service Marketing Strategies:
– Capitalize on Cultural Forces in the Host
Market
– Standardize and Customize
– Give Information Technologies (IT) a
Central Role
– Add Value by Differentiation
– Establish Global Service Networks
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