Powerpoint for a global product European sections

1. GLOBALIZATION
The Example of a
Global Product

2. A Global Product: definition
A global product is a commercial product, such as Coca Cola or the Barbie doll,
that is marketed throughout the world under the same brand name. It is a
product whose manufacture, transport and sales use the new global economic
system in order to ensure minimum production costs and attain maximum
profits.
Using the new global economic system
- TNCs OUTSOURCE their production to countries with a CHEAP LABOUR FORCE
to reduce production costs
- they IMPORT their RAW MATERIALS from countries often near to their production
sites
- PRODUCTION SITES merely assemble the products
- the FINISHED PRODUCT is then transported at a cheap cost by CONTAINER
SHIPS to the retail markets
- the RETAL MARKETS are often in the industrialsed world where the final product is
sold at a high price
- the AIM is to make MAXIMUM PROFITS at the LOWEST PRODUCTION COSTS
possible

3. The ADVANTAGES of a global market approach
Economies of scale in production and distribution
Lower marketing costs
Power and scope
Consistency in brand image
The DISADVANTAGES of a global market approach
Differences in consumer needs and wants for products
Differences in consumer response to marketing
Differences in brand and product development and the competitive environment

4. To what extent can we consider Barbie a global product ?
Barbie is t he most prof it able t oy product in hist ory. I t was based on a German doll
called Bild Lilli but t he pat ent (brevet ) was bought by Mat t ell in 1964. The f irst
Barbie doll was produced in 1959 . .. and was eit her blond or brunet t e.
Barbie doll is a product of Mat t el. Mat t el, I nc.' s name is derived f rom Harold "Mat t "
Mat son and Elliot Handler, who f ounded t he company in 1945. I t is based in El
Segundo, Calif ornia and rat es 413t h
in t he Fort une 500 index. Mat t el employs 28 000
people around t he world and has a revenue of around $6.5 million …but t he Barbie
doll has never been produced in t he USA.
Mat t el boast s t hat 2 Babie dolls are sold every second. There are around 50
dif f erent models of Barbie, f amily and f riends which are sold in 150 dif f erent
count ries.
So, Barbie' s global scale is obvious. I t is an immediat ely recognizeable product all
over t he world. I t has const ant ly evolved t o suit new market s and react t o changing
public t ast es.
… but where and how is Barbie made ?

5. Producing at a minimum cost : cheap labour force
1. Barbie has never been made in the USA
2. The first Barbie dolls were produced in Japan in 1959. Japan had a struggling economy after
WWII and provided a cheap labour force.
3. When the Japanese economy grew, and thus labour costs, Mattell relocated production to
Taiwan, Hong Kong and the Phillipines.
4. In 1988, following a labour dispute, Mattell closed two factories in the Phillipines which
employed 4000 people.
5. Today, Mattel runs four factories in Asia, two in China, and the other two in Indonesia and
Malaysia.
6. Workers work long hours for low wages in huge factories called « sweatshops »
7. The average Chinese factory worker earns around $30 a month.

6. What is Barbie made of and where is she sold?
Barbie is made from plastic resins.
Historically, the major toy producers were Japan and Taiwan.
Mattel still buys its plastic resins from these countries since its factories are in south east Asia.
The oil used in the production of plastic resins is imported by the Chinese Petroleum Corporation,
owned by the Taiwan state.
The petroleum comes mainly from Saudi Arabia, but also Oman, Kuwait, Iran and the United Arab
Emirates.
The nylon for the hair also comes from Japan.
Machines and tools are provided by the USA, Europe and Japan.
The paint for the face comes from the USA.
The packaging, a major promotion necessity, uses wood from Indonesia.
The finished dolls and products are then shipped by container. 40% of production is sold outside
the USA, mainly in Europe and Japan.

7. CRITICISMS of BARBIE and MATTEL
The major critism of the Barbie doll is the effect of its unrealistic figure on young girls
Barbie measures 36-18-33 inches (chest-waist-hips) which is roughly 90-45-82 cm …
physically impossible and medically dangerous. It has led to cases of anorexia and
plastic surgery.
Ukranian Valeria Lukyanova had
plastic surgery to be a Barbie
look alike. She had facial
reconstruction, liposuction, a
nose job, breast implants, and
much more ...

8. CRITICISMS of BARBIE and MATTEL
In 2011, Mattel was accused by Greenpeace of destroying the delicate Indonesian
rainforest in order to produce cheap packaging for Barbie products. Four months later
Mattel began a paper sustainability policy.

10. Fact File (all information given by TCCC)
- over 500 non-alcoholic beverages
- present in over 200 countries
- employs roughly 700 000 people
worldwide
- company associates worldwide:
over 146 000
- 1.8 billion drinks served each day
- operating income $10.2 billion in
2010
- 80% of production outside the USA