PP 11 Product

Global Marketing Management

Warren J. Keegan

Chapter 11 Product Decisions

Keegan: Global Marketing Perspective Chapter 11/ 2

Overview

Basic Concepts Product Positioning Product Saturation Levels Product Design ConsiderationsAttitudes Towards Country of OriginGeographic ExpansionNew Products in Global MarketingSummary


Learning Objectives

Know the differences between local, national, international & global brands

Learn alternatives for positioning global brandsAppreciate the importance of saturation levelsBe aware of design considerations and attitudes

toward country of originKnow why development of new products are

keys to survival and global growth


Basic Concept of Products

Products can be defined as a collection of physical, psychological and symbolic attributes that can collectively yield satisfaction, or benefit, to a buyer or user.

Products can be classified into consumer & industrial goods

Products can be classified by the way they are purchased or their life-span


Local, National, International and Global Products

Local products are offered in a portion of a national market

National products are offered in a single national Market

International products are offered in multinational, regional markets

Global products are offered in the global market. They are international and multi-regional


Global Brand

A symbol about which customer have beliefs & perceptions

Same name or same meaning in another language

Similar image & positionGuided by same strategic principlesMarketing mix may vary from country to

country


Positioning of Products and Services

Attribute or BenefitQuality/PriceUse/UserHigh-Tech PositioningHigh-Touch Positioning


Product Saturation Levels in Global Markets

Many factors determine a product`s market potentialProduct saturation level increases as national income per

capita increasesThe presence or absence of a particular companion

product can be significant


Product and Service Design Considerations

PreferencesCostsLaws and RegulationsCompatibilityLabeling and instructions


Attitude towards the Country of Origin

Stereotyped attitudes toward foreign products & services can favor or hinder marketing efforts

If the quality is perceived to be low Foreign origin of the product can be disguised Foreign identification of the product can be continued &

consumer attitudes towards the product can be changed

In some market segments foreign products have a substantial advantage because they are foreign


Geographic Expansion-Strategic Alternatives

Different

Same

Same DifferentedlichProduct

Co

mm

un

ica

tio

ns

Strategy 2: Product Extension,CommunicationsAdaptation

Example: Motorbikes

Strategy 1: Dual Expansion

Example: Applications Software

Strategy 4: Dual Adaptation

Example: Greeting Cards

Strategy 3: Product Adaptation,CommunicationExtension

Example: Electrical products

Global Product Planning: Strategic Alternatives for Expanding into Global Markets


Strategy 1: Product/Communication Extension or Dual Extension

Company sells exactly the same product or service with the same advertising as used in the home country

Company assumes that all markets are alikeDoes not work in all marketsOften used because it saves costsExample: Campbell Soup


Strategy 2: Product Extension, Communications Adaptation

If the product serves different needs in various countries, only marketing communication may have to be adapted

Adaptation can happen by design or accidentCheap implementation because product does not changeExample: Motor scooters


Strategy 3: Product Adaptation, Communication Extension

Product is adapted to the new market, but basic home market communication strategy remains unchanged

Product is adapted to the environment and the preferences of the consumers in the new market

Example: Exxon


Strategy 4: Product/Communication Adaptation or Dual Adaptation

Using Dual Adaptation the company must adapt the product or service as well as the marketing communication to the foreign market

Example: Unilever fabric softener


Strategy 5: Product Invention

Demanding but potentially rewarding strategy for reaching mass markets in LDCs

Product quality is essential but must be supported with imaginative, value-creating advertising & marketing communication


How to Choose a Strategy

3 StagesCave Dweller – primary motivation is to dispose of excess capacityNaïve Nationalist – Sees adaptation as the only alternativeGlobally Sensitive- Evaluated across countries with some standardization & some differentiation


New Products and Services in Global Marketing (1)

New to consumer & company ( Product or service innovation)

New to consumer but not new to company (Product/service or line extension)

Not new to consumer but new to company (New product or service duplication)


New Products and Services in Global Marketing (2)

New-product development process Permanent identification of new-product ideas Screening of these ideas and identification of candidates for

further investigation Stringent investigation and analysis of the selected new-

product ideas Organisation of sufficient resources

The international new-product departmentTesting new products & services in national markets


New Products in Global Markets - Reiner

Global companies in fierce competition so must be world class

Focus on 1 or a few businessesSenior management is actively involvedRecruit & retain the best & the brightestUnderstand the importance of speed to

market


Summary

Product and services are the most important elements of the marketing program

Important factors: preferences, costs, laws and regulations, and compatibility

Five strategic alternatives for geographic expansion: Product/communication extension, product

extension/communications adaptation, product adaptation/communications extension, dual adaptation and product invention

PP 11 Product

Documents

global marketing perspective

global marketing

marketing communication

geographic expansion

global markets

product communication extension

product extension

dual adaptation