7.01 product strategies

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Powerpoint from International Marketing Unit 7.01

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7.01 product strategies

  1. 1. Discuss standardization-versus-adaptation decisions, and how companies create global brand positions & equity
  2. 2.  Something offered to an international market that satisfies a want or a need. Products can contain both tangible and intangible parts ◦ Tangible: Parts of a product that can be seen and felt  i.e. packaging, brand name, quality, design ◦ Intangible: Parts of a product that cannot be seen or felt.  i.e. warranty, delivery, credit, installation; services are mostly intangible
  3. 3.  Four choices for marketers when moving products into new markets ◦ ◦ ◦ ◦ keep their home country products the same adapt an existing product for new markets design new products for new markets design one product for a global marketplace
  4. 4. ◦ Standardized products can create economies of scale in research & development, production, and marketing ◦ A global product with a global brand image allows companies to compete against other global marketers
  5. 5. ◦ Products may be used in different political & legal environments ◦ Consumers may have different cultural needs ◦ Local competition in foreign markets may be different than domestic ◦ Product customization may be necessary
  6. 6.  Companies need to evaluate the following in order to make choice between standardizationverses-adaptation ◦ market characteristics:  political and legal regulations, customer characteristics and preferences, purchasing patterns, and distribution systems ◦ product characteristics:  nature of the product, the ability to create a global brand, and the purpose for which the product is used, perception of product quality, perception of the product’s country of origin, and required after-sale service. ◦ company characteristics:  financial resources, international orientation of management
  7. 7. ◦ Brand: name, word, or design that identifies a product, service, or company ◦ Creates a certain expectation in the minds of customers ◦ Global brands need a competitive advantage when competing with local brands in local markets ◦ Can be subject to country-of-origin effect  i.e., in the 1950’s “Made in Japan” meant lowquality to consumers  Today “Made in China” can mean low quality, while Japanese products signal high quality
  8. 8.  Using a brand to create an image  BMW usually signifies quality engineering, and a fast, sporty automobile  Disney suggests wholesome family entertainment  Companies used to rely on TV advertising to create brand image  Today they are shifting to the Internet, live events, cell phones, and movies
  9. 9.  The additional value that a brand name brings to a product or company  Coca-cola estimated at over $67 billion  Counterfeits, forgeries, and grey markets can diminish brand equity—may cause product to be viewed as cheap/poor quality  Grey markets exist when products are sold outside an authorized distribution system
  10. 10.  Can have a strong impact on product image ◦ Logos and trademarks are intangible assets with a dollar value or brand equity  Should translate well across cultures
  11. 11.  Must be unique to the product and its market  May not be used by any other product or company  Should not have undesirable meaning across languages  Family brand: typically the brand name of a company that also have individual product brands  Ford Motor Company (family) sells Mustang (individual)  Kelloggs (family) sells Rice Krispies (individual)

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