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- 1. International Marketing 16th edition Philip R. Cateora, Mary C. Gilly, and John L. Graham McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
- 2. 13 Introduction • The opportunities and challenges for international marketers of consumer goods and services today have never been greater or more diverse • The lack of distinction between “goods” and “services” has led to the invention of new terms encompassing both products and services, such as “market offerings” and “business-to- consumer marketing” • The trend for larger firms is toward becoming global in orientation and strategy Roy Philip 13-2
- 3. 13 Overview • Quality • Products and culture – Innovative products and culture, diffusion of innovations, and production of innovations • Analyzing product components for adaptation – Core component, packaging component, and support services component • Marketing consumer services globally • Brands in international markets – Global brands, national brands, country-of-origin effects and global brands, and private brands Roy Philip 13-3
- 4. 13 Global Perspective China – Disney Rolls the Dice Again • Tokyo Disneyland – successful • EuroDisney – disaster • Hong Kong Disneyland – open for business • Opportunities and challenges for international marketers of consumer goods and services are great and diverse • Any marketing firm’s goal should be quality products and services that meet the needs and wants of consumers at an affordable price • 2009 – new Disney park in Shanghai (2015) Roy Philip 13-4
- 5. 13 Quality • Shift to a customer’s market • Increased customer knowledge • The customer defines quality • The cost and quality of a product – Among the most important criteria by which purchases are made • Most consumers expect performance quality • In many industries quality is measured by third parties – JD Power and Associates Roy Philip 13-5
- 6. International Marketing 16th edition Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin
- 7. 13 Quality • Conformance to customer specifications and expectations. Roy Philip 13-7
- 8. International Marketing 16th edition Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin
- 9. 13 Quality • defined on two dimensions – Market-perceived quality – Performance quality Roy Philip 13-9
- 10. 13 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 Roy Philip 13-10
- 11. International Marketing 16th edition Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin
- 12. 13 Physical or Mandatory Requirements and Adaptation • Product homologation • Product adaptation requirements – Legal – Economic – Political – Technological – Climate Roy Philip 13-12
- 13. 13 Green Marketing and Product Development • Green marketing concerns the environmental consequences of a variety of marketing activities • 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 Roy Philip 13-13
- 14. International Marketing 16th edition Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin
- 15. 13 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 – Norms – Values – Behavior patterns Roy Philip 13-15
- 16. International Marketing 16th edition Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin
- 17. 13 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 Roy Philip 13-17
- 18. 13 Diffusion of Innovations • Crucial elements in the diffusion of new ideas – 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 – Degree of perceived newness – Perceived attributes of the innovation – Method used to communicate the idea Roy Philip 13-18
- 19. 13 Production of Innovations • Inventiveness of companies and countries • Expenditures • Japanese solutions – American-style education programs – American design centers • New ideas come from a variety of sources – Countries – Acquisitions – Global collaborations Roy Philip 13-19
- 20. International Marketing 16th edition Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin
- 21. 13 Five Characteristics of an Innovation • Relative advantage • Compatibility • Complexity • Trialability • Observability Roy Philip 13-21
- 22. International Marketing 16th edition Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin
- 23. 13 Analyzing Product Components for Adaptation • Product is multidimensional • Sum of its features determines the bundle of satisfactions (utilities) received by consumer • Three distinct components – Core – Packaging – Support services Roy Philip 13-23
- 24. 13 Product Component Model Roy Philip Exhibit 13.1 13-24
- 25. 13 Core Components • Product platform • Design features • Functional features Roy Philip 13-25
- 26. 13 Packaging Component • Price • Quality • Packages • Styling • Trademark • Brand name Roy Philip 13-26
- 27. 13 Support Services Component • Deliveries • Warranty • Spare parts • Repair and maintenance • Installation • Instructions • Other related services Roy Philip 13-27
- 28. International Marketing 16th edition Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin
- 29. 13 Marketing Consumer Services Globally • More than half of Fortune 500 companies are primarily service providers • Consumer services characteristics – Intangibility – Inseparability – Heterogeneity – Perishability • A service can be marketed – As an industrial (business-to-business) – A consumer service Roy Philip 13-29
- 30. International Marketing 16th edition Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin
- 31. 13 Services Opportunities in Global Markets • Tourism • Transportation • Financial services • Education • Communications • Entertainment • Information • Health care Roy Philip 13-31
- 32. 13 Barriers to Entering Global Markets for Consumer Services • Four kinds of barriers face consumer service marketers: – Protectionism – Restrictions on transborder data flows – Protection of intellectual property – Cultural barriers and adaptation Roy Philip 13-32
- 33. International Marketing 16th edition Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin
- 34. 13 Brands in International Markets • A global brand is the worldwide use of a name, term, sign, symbol, design, or combination – Intended to identify goods or services of one seller – To differentiate them from those of competitors • Importance is unquestionable • Most valuable company resource Roy Philip 13-34
- 35. 13 Top Twenty Brands Roy Philip Exhibit 13.2 13-35
- 36. 13 Top Twenty Brands (continued) Roy Philip Exhibit 13.2 13-36 Best Global Brands in 2012 Best Global Brands in 2013
- 37. 13 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 Roy Philip 13-37
- 38. International Marketing 16th edition Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin
- 39. 13 National Brands • Acquiring national brand names • Using global brand names • Nationalistic pride impact on brands • Use global brands where possible and national brands where necessary Roy Philip 13-39
- 40. 13 • Country-of-Origin effect – Influences that the country of manufacture, assembly, or design • Has on a consumer’s positive or negative perception of a product • Consumers have broad but somewhat vague stereotypes about specific countries and specific product categories that they judge “best” • Ethnocentrism Country-of-Origin Effects and Global Brands (1 of 2) Roy Philip 13-40
- 41. 13 • Countries are stereotyped – On the basis of whether they are industrialized – In the process of industrializing – In process of developing • Technical products – Perception of one manufactured in a less- developed or newly industrializing country less positive • Fads often surround product from particular countries or regions Country-of-Origin Effects and Global Brands (2 of 2) Roy Philip 13-41
- 42. 13 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 • Manufacturers brands must be competitively priced and provide real consumer value Roy Philip 13-42
- 43. 13 Summary (1 of 2) • 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 Roy Philip 13-43
- 44. 13 Summary (2 of 2) • 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 Roy Philip 13-44