Creating Products and Brands for Consumers in Global Markets.

Creating Products and Brands for Consumers in

Global Markets

Product Components

Core ComponentCore Component

Packaging ComponentPackaging Component

Support Services ComponentSupport Services Component

Product Component Model

Repair and maintenance

SUPPORT SERVICESCOMPONENT

CORECOMPONENT

Installation

Instructions

Other related services

Deliveries

Warranty

Spare parts

Legal

Trademark

Brand name

Legal

Product platform

Design features

Functional features

Legal

PACKAGINGCOMPONENT

Price

Quality

Package

Styling

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

The International Marketing Dilemma

ProductProduct

StandardizationStandardization

ProductProduct

AdaptationAdaptationVSVS..

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

Benefits of Product Standardization

+ Product available for global customers

+ Enhance consumer perceptions of global brand

PRESSURES FOR PRODUCT ADAPTATIONCompetitive offerings

Climate, geography, & infrastructureGovernment regulations & international standards

Customer expectations, preferences, & buyer behavior

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

Types of Product Adaptation

Mandatory – Necessary for product to be sold in a local

market Discretionary

– Not necessary but may be beneficial

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

Benefits of Product Adaptation

+ Decreased costs due to feature elimination

+ Increased sales due to better meeting industry norms or cultural preferences

Strategic Adaptation to Foreign Markets

High

Low

Degree ofCulturalGrounding

Need forAdaptation

Industrial/ Technology Intensive

Consumer

Nature of Product

Adopter Categories in Diffusion Process

Exploiting Product Lifecycles

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

Quantity

production

consumption

2

Characteristics of Innovations

Relative Advantage

Compatibility

Complexity

Trialability

Observability

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)

Brand Strategies

Global BrandsGlobal Brands

National BrandsNational Brands

Global/National Brand MixGlobal/National Brand Mix

Private BrandsPrivate Brands

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

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

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)

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.

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)

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