Global product decision


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Global product decision

  1. 1. Creating Products and Brands for Consumers in Global Markets
  2. 2. Product Components Core ComponentCore Component Packaging ComponentPackaging Component Support Services ComponentSupport Services Component
  3. 3. Product Component Model Repair and maintenance SUPPORT SERVICES COMPONENT CORE COMPONENT Installation Instructions Other related services Deliveries Warranty Spare parts Legal Trademark Brand name Legal Product platform Design features Functional features Legal PACKAGING COMPONENT Price Quality Package Styling
  4. 4. 4 Ps - Product Product decisions are all decision which relate to the physical product and/or service offering, including its name, packaging, warranty, and availability. Product dimensions include: – Size of the product – Color(s) of product – Scent of the product – Materials/ composition of the product – Design of the product – Packaging materials – Package colors and package design – Brand name – Warranty – Availability of options – Customizing services – After-sale service offerings – Inventory levels
  5. 5. The International Marketing Dilemma ProductProduct StandardizationStandardization ProductProduct AdaptationAdaptation VSVS..
  6. 6. Benefits of Product Standardization + Lower manufacturing costs + Lower input costs + Cost savings due to elimination of product adaptation efforts + Fast global roll-outs are possible
  7. 7. Benefits of Product Standardization + Product available for global customers + Enhance consumer perceptions of global brand
  8. 8. PRESSURES FOR PRODUCT ADAPTATION Competitive offerings Climate, geography, & infrastructure Government regulations & international standards Customer expectations, preferences, & buyer behavior
  9. 9. Factors Influencing Product Adaptation vs. Standardization Stage in Product Life CycleStage in Product Life Cycle Legal/Standards ConstraintsLegal/Standards Constraints Product InnovativenessProduct Innovativeness Cultural DifferencesCultural Differences
  10. 10. Types of Product Adaptation Mandatory – Necessary for product to be sold in a local market Discretionary – Not necessary but may be beneficial
  11. 11. Benefits of Product Adaptation + Penetrate otherwise closed markets + Able to use products in different climates & infrastructures + Better product performance in different use conditions + Decreased costs due to varying local inputs
  12. 12. Benefits of Product Adaptation + Decreased costs due to feature elimination + Increased sales due to better meeting industry norms or cultural preferences
  13. 13. Strategic Adaptation to Foreign Markets High Low Degree of Cultural Grounding Need for Adaptation Industrial/ Technology Intensive Consumer Nature of Product
  14. 14. Adopter Categories in Diffusion Process
  15. 15. Exploiting Product Lifecycles
  16. 16. International Product Trade Cycle Model 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 1 3 4 5 6 7 8 9 10 11 12 13 14 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 High Income Countries Medium Income Countries Low Income Countries Time Stages of Production Development New Product Standardized ProductMaturing Product Q u a n t i t y production consumption 2
  17. 17. Characteristics of Innovations Relative Advantage Compatibility Complexity Trialability Observability
  18. 18. What is a brand? A name, term, sign, symbol, or design, or combination of them which is intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competitors (Kotler, 1991)
  19. 19. Brand Strategies Global BrandsGlobal Brands National BrandsNational Brands Global/National Brand MixGlobal/National Brand Mix Private BrandsPrivate Brands
  20. 20. Global v. Local branding In 1989, Mars changed the name of Kal Kan cat food to Whiskas. Why? – Sharing of ideas in global corporation – Pet owners travel and might switch if their familiar brand was not available somewhere. – Two years earlier, Mars had created to other global brands Kal Kan dog food Pedigree in U.S. Mealtime dry dog food Pedigree Mealtime – High market share in U.S. – Brand associations
  21. 21. Global v. Local Brands Global brands provide: – Scale economies in the Development of advertising, packaging, promotion, etc. – Exploitation of: Media overlap Exposure to customers who travel – Associations of a global presence of the “home” country Local brands provide: – Names, symbols, and associations that can be: Developed locally Tailored to local market Selected without the constraints of a global brand – Reduced risk from “Buy Local” sentiments
  22. 22. Brand Name Decisions Arbitrary or invented word (Lexus) Recognizable English (or foreign language) word but unrelated to product (Cheer) Recognizable English (or foreign language) but suggestive of product (Mr. Clean) English (or foreign language) word descriptive of product but may not be understandable to outsiders (Pampers) Geographic place or common surname (Kentucky Fried Chicken) Device, design, number or some other element (3M)
  23. 23. What is brand equity? A set of brand assets linked to a brand, its name and symbol, that add to or subtract from the value provided by a product or service to a firm and/or to that firm’s customers.
  24. 24. Developing A Framework For Generic Brands Based on Brand Knowledge Brand Awareness – Recognition – Recall Brand Image – Type – Strength – Favorability – Uniqueness of Brand Associations Components of Brand Knowledge (Keller, 1992)
  25. 25. Packaging & Labeling Adaptations Size, shape, materials – Product packaging norms – Existing standards – Economic development – Environmental concerns Color & text – Promotional strategy – Cultural meaning & implications – Government regulations – Language issues