Transcript global brand

Chapter
12
Products and Services
for Consumers
McGraw-Hill/Irwin
International Marketing, 13/e
© 2007 The McGraw-Hill Companies, Inc., All Rights Reserved.
Chapter Learning Objectives
• The importance of offering a product suitable for the intended
market
• The relationship between product acceptance and the market into
which it is introduced
• The importance of quality and how quality is defined
• Country-of-origin effects on product image
• Physical, mandatory, and cultural requirements for product
adaptation
• The need to view all attributes of a product in order to overcome
resistance to acceptance
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Global Perspective
Hong Kong – Disney Rolls the Dice Again
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Tokyo Disneyland – successful
EuroDisney – disaster
Hong Kong Disneyland – open for business
The opportunities and challenges for international marketers of
consumer goods and services today is great and 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.
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Quality
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Shift to a customer’s market
Increased customer knowledge
The customer defines quality
The cost and quality of a product are among the most important
criteria by which purchases are made
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Quality Defined
• Quality can be defined on two dimensions:
- Market-perceived quality
- Performance quality
• Most consumers expect performance quality to be a given
• In many industries quality is measured by objective third parties
- JD Power and Associates
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Maintaining Quality
• Damage in the distribution chain
- Russian chocolate
• Quality is essential for success in today’s competitive global
market
• The decision to standardize or adapt a product is crucial in
delivering quality
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Physical or Mandatory Requirements and
Adaptation
• Product homologation
• Product adaptation dictated by the following requirements:
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Legal
Economic
Political
Technological
Climate
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Green Marketing and Product Development
• Critical issues affecting product development:
- Control of the packaging component of solid waste
- Consumer demand for environmentally friendly products
• European Commission guidelines for ecolabeling
• Laws to control solid waste
Green marketing is a term used to define concern
with the environmental consequences of a variety
of marketing activities.
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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
- Behavior patterns
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Innovative Products and Adaptation
• Determining the degree of newness as perceived by the intended
market
• Diffusion
• Established patterns of consumption and behavior
• Foreign marketing goal: gaining the largest number of consumers
in the market in the shortest span of time
- Probable rate of acceptance
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Diffusion of Innovations
• Crucial elements in the diffusion of new ideas:
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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
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Five Characteristics of an Innovation
1. Relative advantage ( the perceived marginal value of the new
product relative to the old)
2. Compatibility ( its compatibility with acceptable behavior,
norms, values, and so forth)
3. Complexity ( the degree of complexity asssociated with product
use)
4. Trialability ( the degree of economic and /or social risk
associated with product use)
5. Observability ( the ease with which the product benefits can be
communicated)
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Production of Innovations
• Inventiveness of companies and countries
• Expenditures
• Japanese solutions
- American-style education programs
- American design centers
• New ideas come from a growing variety of sources, countries,
acquisitions, and even global collaborations
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Analyzing Product Components for Adaptation
• Insert Exhibit 12.1 – Product Component Model
Exhibit 12.1
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Marketing Consumer Services Globally
• Consumer services characteristics:
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Intangibility
Inseparability
Heterogeneity
Perishability
• A service can be marketed both as an industrial (business-tobusiness) or a consumer service
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Services Opportunities in Global Markets
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Tourism
Transportation
Financial services
Education
Communications
Entertainment
Information
Health care
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Barriers to Entering Global Markets for
Consumer Services
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Protectionism
Restrictions on transborder data flows
Protection of intellectual property
Cultural barriers and adaptation
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Brands in International Markets
• Very important
• Most valuable resource a company has
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.
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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.
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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
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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
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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
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Japan
20/21 Samsung
14,956
12,553
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S. Korea
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Global Brands
• The Internet and other technologies accelerate the pace of the
globalization of brands
• Ideally gives the company a uniform worldwide image
• Balance
• Ability to translate
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National Brands
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Acquiring national brand names
Using global brand names
Nationalistic pride impact on brands
Use global brands where possible and national brands where
necessary
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Country-of-Origin Effect and Global Brands
• 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 industrialized, in
the process of industrializing, or developing
• The more technical the product, the less positive is the perception of one
manufactured in a less-developed or newly industrializing country
• Fads often surround product from particular countries or regions
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.
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Private Brands
• Growing as challengers to manufacturers’ brands
• Private labels:
- Provide the retailer with high margins
- Receive preferential shelf space and in-store promotion
- Are quality products at low prices
• Must be competitively priced and provide real consumer value
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Summary
• The growing globalization of markets must be balanced with the
continuing need to assess all markets for those differences that
might require adaptation for successful acceptance.
• In spite of the forces of homogenization, consumers also see the
world of global symbols, company images, and product choice
through the lens of their own local culture and its stage of
development and market sophistication.
• Each product must be viewed in light of how it is perceived by
each culture with which it comes in contact.
• Analyzing a product as an innovation and using the Product
Component Model may provide the marketer with important leads
for adaptation.
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