Transcript Ch 12 The Exporting Process

Chapter 12 and Chapter 13
Products and Services for Consumers
McGraw-Hill/Irwin
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Chapter Learning Objectives
1. The importance of offering a product suitable
for the intended market
2. The relationship between product acceptance
and the market into which it is introduced
3. The importance of quality and how quality is
defined
Chapter Learning Objectives
4. Country-of-origin effects on product image
5. Physical, mandatory, and cultural
requirements for product adaptation
6. The need to view all attributes of a product in
order to overcome resistance to acceptance
Global Perspective
 Disney’s
experiences internationally
– Tokyo Disney
– Euro Disney
– Hong Kong Disney (2006)
What Is a Product ?
 Product:
A bundle of attributes
 The Total Product
– Tangible attributes: materials, size, weight,
design, packaging, performance, comfort
– Intangibles: brand image, styling, other
benefits (installation, delivery, credit,
warranty, after-sale service, return policy)
Quality
Defined in 2 ways:
“Market-perceived” quality
– How does the market (consumer) perceive
the quality of the product or service
 1.
“Performance” quality
– What is the overall “performance” of the
product or service (firm’s perspective)
– Tends to be focused on attributes or
features or meeting certain “performance”
criteria
 2.
Quality (Cont.)
 Physical
or Mandatory Requirements and
Adaptation
– Many countries require “homologation”

Requires changes to be made to products based on local
product and service standards
– Mandatory adaptation vs. cultural adaptation



Many believe adaptation occurs most often based upon
local laws, or policies that are economic, political or
environmental
– Green Marketing and Product Development
Quality is associated with customer satisfaction
Customer satisfaction indexes developed are now
being used to measure satisfaction across a wide
variety of consumer products and services
ISO 9000 Certification:
An International Standard of Quality (Ch 13)
1.
2.
3.
4.
5.
6.
ISO 9000s, a series of five international industrial standards (ISO 9000–
9004) originally designed by the International Organization for
Standardization in Geneva to meet the need for product quality assurances in
purchasing agreements
ISO 9000 concerns the registration and certification of a manufacturer’s
quality system
It is a certification of the existence of a quality control system a company has
in place to ensure it can meet published quality standards
ISO 9000 standards do not apply to specific products
It is a certification of the production process only, and does not guarantee that
a manufacturer produces a “quality” product or service.
The series describes three quality system models, defines quality concepts,
and gives guidelines for using international standards in quality system
Products and Culture
A product is more than a physical item: It is a bundle of
satisfactions (or utilities) that the buyer receives
1.
2.
3.
Facets of products include its form, taste, color,
odor, and texture; how it functions in use; the
package; the label; the warranty; manufacturer’s
and retailer’s servicing; the confidence or prestige
enjoyed by the brand; the manufacturer’s
reputation;
The adoption of some products by consumers can
be affected as much by how the product concept
conforms with norms, values, and behavior
patterns
Thus, many facets of products are influenced by
culture, which markets must pay attention to
Products and Culture

Cultural Influences

Innovative Products and Adaptation


Three Variables Affecting Diffusion of Innovations
▶ Degree of Perceived Newness
▶ Perceives attributes of Innovation
▶ Communication Methods
Characteristics of Innovations

Product of Innovation
12-3
Irwin/McGraw-Hill
Innovative Products and Adaptation
 Product
Diffusion
– 1. Defined:
 “process
by which innovation spreads”
– 2. “Crucial elements” of diffusion of new
ideas are (Everett Rogers):
 1)
an innovation; 2) which is communicated
thru certain channels 3) over time 4) among
members of a social system
Degree of Newness
Congruent Innovations
12-4
Continuous Innovation
Dynamically Continuous Innovation
Discontinuous Innovation
Irwin/McGraw-Hill
The 5 Characteristics That Affect the
“Rate of Acceptance”
• Relative Advantage (marginal value of new
vs. old)
12-5
• Compatibility (to values, norms)
• Complexity (more complex, more time)
• Trialability (risk associated with product use)
• Observability (how easily benefits are
communicated)
Irwin/McGraw-Hill
Product Component Model
SUPPORT SERVICES
COMPONENT
PACKAGING
COMPONENT
Repair and
maintenance

12-6



Installation


Brand name


Other related
services
Irwin/McGraw-Hill


Instructions
Legal

CORE
COMPONENT
Trademark

Product platform
Deliveries
Price


Quality
Warranty
Design features
Functional features


Package

Legal

Spare parts
Styling

Legal
Product Component Analysis for
Adaptation
12-7
● Core Component
▶ Physical Product
▶ Design
● Packaging Component
▶ Style
▶ Packaging
▶ Labeling
▶ Trademarks
● Support Services Component
▶ Repair
▶ Maintenance
▶ Instructions
▶ Installation
Irwin/McGraw-Hill
▶ Features
▶ Brand Name
▶ Quality
▶ Price
▶ Warranties
▶ Deliveries
▶ Spare Parts
Managing
a Global Product
Product Line
Exploiting
Life Cycles
Possible Product Life Cycle for a Product in Different Countries
Country D
Unit Sales
Country C
Home
Country
Country B
Country A
Introduction Growth
Maturity Saturation Decline
Time
Marketing Consumer Services Globally
Advice regarding adapting products for international consumer
markets also applies to adapting services or intangible products
However, many consumer services are distinguished by four
unique characteristics:
1.
2.
3.
4.
•
intangibility,
inseparability,
heterogeneity, and
perishability
There are several services opportunities in global markets from
travel and tourism, TV, movies, to financial services
Top Consumer Services Exports Service Opportunities in Global Markets
12-9
1. Tourism
5. Telecommunications
2. Transportation
6. Entertainment
3. Financial Services
7. Information
4. Education
8. Health Care
Irwin/McGraw-Hill
Four Barriers That Face Consumer
Services Marketers
12-10
1. Protectionism
2. Restrictions on trans-border data flows
• Transferring personal data on consumers
over borders (income, spending
preferences) conflict with rights to
privacy.
3. Protection of intellectual property
4. Cultural Barriers and Adaptation
• Foreign companies policies or “ways of
conducting business” may be conflicting
with host country values
Irwin/McGraw-Hill
Brands in International Markets
A global brand is defined as the worldwide use of a name, term,
sign, symbol (visual and/or auditory), design, or combination
thereof intended to identify goods or services of one seller and
to differentiate them from those of competitors
A successful brand is the most valuable resource of a company
Brand image is at the very core of business identity and strategy
1.
2.
Global brands such as Kodak, Sony,
Coca-Cola, McDonald’s, Toyota,
and Marlboro play an important role
in that process
Perceived brand “globalness” leads to
increases in sales
Insert Photo of two cars
Branding Strategies
– 1. Global Brands
 Uniform
worldwide
– 2. National Brands
 Country
specific
– 3. Private Brands
– Note: Country-of-origin effect can create
positive or negative impact on consumers’
perceptions
Country-of-Origin Effect and
Global Brands





Brands are used as external cues to taste,
design, performance, quality, value, and
prestige
Many factors affect brand image, but one factor
of great concern is the country-of-origin effect
on the market’s perception of the product
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
When the customer becomes aware of the
country of origin, there is the possibility that
the place of manufacture will affect product or
brand image
The country, the type of product, and the image
of the company and its brands all influence
whether the country of origin will engender a
positive or negative reaction
Global Warranty and Service Policies
 Product
Warranties
 Global Product Service
Global Product Strategies
Managerial Issues
Industrial and Consumer
Product Elements
Industrial and Consumer
Service Elements
Features
Service Design
Branding
Service Name
Packaging
Warranty
Barriers to
Customization
Product Life
Cycles
Service
International
Product
Decisions
Delivery Systems
Locations
Quality Levels
Quality
Customized
Products
Generic
International
Product
Strategies
Standardized
Products
Barriers to
Standardization
Product Line
Decisions
The View from Toyota
Our
global strategy used to center on
“world cars,” which we would modify
slightly to accommodate demand in
different markets. Today our focus is
shifting to models that we develop and
manufacture especially for selected
regional markets.
The View from Honda
“We are the most international of the Japanese
companies. At the moment we are the most
diversified, and we will be more diversified in the
future. Still, I think it would be very hard to build
a one-type world car. In the end, I don’t think it
would be very efficient.”
---Nobuhiko Kawamoto
President and CEO, Honda Motor Company
Ch 13--Trade Shows: A Crucial Part
of Business-to-Business Marketing





Trade shows serve as the most important vehicles for selling products,
reaching prospective customers, contacting and evaluating potential agents
and distributors, and marketing in most countries
Trade shows serve a much more important role in other countries where most
prospects are found
European trade shows attract high-level decision makers who are there to buy
products
Trade shows provide the facilities for a manufacturer to exhibit and
demonstrate products to potential users and to view competitors’ products
Trade shows create an opportunity to create sales and establish relationships
with agents, distributors, franchisees, and suppliers that can lead to morepermanent distribution channels in foreign markets
Relationship Marketing
in Business-to-Business Contexts





Building long-term relationships with customers is a viable
strategy for business-to-business marketing
The objective of relationship marketing is to make the
relationship an important attribute of the transaction, thus
differentiating oneself from competitor
It shifts the focus away from price to service and long-term
benefits
The reward is loyal customers that translate into substantial
long-term profits
Focusing on long-term relationship building will be especially
important in most international markets where culture dictates
stronger ties between people and companies