Transcript GLOBAL POLICY AND PRICING DECISIONS II: MARKETING

Global Marketing Management
Masaaki Kotabe & Kristiaan Helsen
Third Edition
John Wiley & Sons, Inc., 2004
Chapter 12
Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
1
Chapter 12
Global Product Policy Decisions
II: Marketing Products and
Services
Chapter 12
Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
2
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
Chapter 12
Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
3
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.
Multinational product line management entails
issues such as:
– What product assortment should the company
launch when it first enters a new market?
Chapter 12
Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
4
Introduction (contd.)


– 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.
Chapter 12
Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
5
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.
Chapter 12
Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
6
1. Global Branding Strategies (contd.)
– 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.
– Inter-country gaps in brand equity may be due
to any following factors:
» History
» Competitive climate
» Marketing support
Chapter 12
Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
7
1. Global Branding Strategies (contd.)


» Cultural receptivity to brands
» Product category penetration
Local Branding
– Examples: Interbrew has a portfolio of 200
local and regional brands across the globe;
Mecca Cola from France
Global or Local Brands?
– Solo branding, hallmark branding, family
branding, and extension branding.
Chapter 12
Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
8
1. Global Branding Strategies (contd.)

– A firm’s global brand is shaped by three types
of factors:
» Firm-based drivers
» Product-market drivers
» Market dynamics
Brand Name Changeover Strategies
– Fade-in/fade-out
Chapter 12
Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
9
1. Global Branding Strategies (contd.)

– Co-branding
– Umbrella branding
– Transparent forewarning
– Summary axing
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
Chapter 12
Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
11
1. Global Branding Strategies (contd.)
– 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
Chapter 12
Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
12
1. Global Branding Strategies (contd.)


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.
Chapter 12
Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
13
1. Global Branding Strategies (contd.)
– 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 12-6)
– Many elements of the brand franchise may
require protection.
Chapter 12
Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
14
2. Managing 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
Chapter 12
Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
16
2. Managing Multinational Product Lines
(contd.)

Categories of product lines:
– Core products
– Niche products
– Seasonal products
– Filler products
Chapter 12
Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
17
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 12-10).
Strategic Options Against Product Piracy:
– Lobbying Activities
– Legal Action
– Customs
– Product Policy Options
– Distribution
– Communication Options
Chapter 12
Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
18
4. Country-of-Origin 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.
Chapter 12
Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
19
4. Country of Origin Stereotypes (contd.)
» 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.
Chapter 12
Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
20
4. Country of Origin Stereotypes (contd.)


Strategies to Cope with COO Stereotypes (see
Exhibit 12-11):
Product Policy
– Pricing
– Distribution
– Communication
Chapter 12
Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
21
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
Chapter 12
Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
22
5. Global Marketing of Services (contd.)

– Increased Value Consciousness
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
Chapter 12
Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
23
Copyright © John Wiley & Sons, Inc. 2004
Chapter 12
Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
24