1. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Chapter Twelve Global Products and Services

2. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 12 - 1 TO STANDARDIZE OR NOT TO STANDARDIZE, THAT IS THE QUESTION WHILE STANDARDIZATION IS MAKING GREAT INROADS IN MARKETING, MANY OF THE WORLD’S MARKETS ARE NOT YET VERY SIMILAR. FURTHERMORE, WITHIN EACH MARKET, THERE IS MORE AND MORE VARIETY AS ECONOMIC GROWTH TAKES PLACE.

3. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 12 - 2 THERE IS MORE THAN ONE WAY TO STANDARDIZE PRODUCTS GLOBAL VS. REGIONAL STANDARDIZATON: –GLOBAL PRODUCTS: ARE STANDARDIZED WITH UNIFORM FEATURES IN ALL COUNTRIES (EX: GILLETTE RAZOR BLADES, SONY T.V.s). –REGIONAL PRODUCTS: ARE UNIQUE TO A PARTICULAR TRADING REGION (EX: NISSAN’S PRIMERA FOR THE EU MARKET).

4. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 12 - 3 LOCALIZATION VERSUS ADAPTATION LOCALIZATION: THIS REFERS TO THE CHANGES REQUIRED FOR A PRODUCT OR SERVICE TO FUNCTION IN A NEW COUNTRY (EX: FAX MACHINES FITTED WITH NEW TYPES OF TELEPHONE JACKS FOR USE IN A FOREIGN COUNTRY). LOCALIZATON AVOIDS HAVING POTENTIAL CUSTOMERS REJECT A PRODUCT OUTRIGHT. ADAPTATION: WHEN PRODUCTS ARE CHANGED TO MATCH CUSTOMER TASTES OR PREFERENCES. ADAPTATION GIVES CUSTOMERS A POSITIVE REASON FOR CHOOSING A GIVEN PRODUCT.

5. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 12 - 4 Advantages Cost Reduction Enhanced Customer Preference Improved Quality Global Customers Global Segments Advantages Cost Reduction Enhanced Customer Preference Improved Quality Global Customers Global Segments Drawbacks Missed Targets Lack of Uniqueness Sensitive to Protectionism Strong Local Competitors Drawbacks Missed Targets Lack of Uniqueness Sensitive to Protectionism Strong Local Competitors Advantages and Drawbacks of Standardization

6. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 12 - 5 The Tradeoff Between Standardization and Adaptation Fully standardized Fully adapted Incremental manufacturing cost Combined costs Cost of lost sales

7. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 12 - 6 STANDARDIZED TECHNOLOGY PRODUCTS THREE FORCES WHICH NATURALLY FAVOR STANDARDIZED TECHNOLOGY PRODUCTS: 1.SIMILAR CUSTOMER NEEDS 2.THE NEED TO LEARN NEW FUNCTIONS, USES 3.COMPATIBILITY BETWEEN COMPLEMENTARY PRODUCTS

8. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 12 - 7 PITFALLS OF GLOBAL MARKETING GLOBAL STANDARDIZATION MAY FAIL DUE TO: 1. INSUFFICIENT MARKET RESEARCH 2. OVERSTANDARDIZATION 3. POOR FOLLOW-UP 4. NARROW VISION 5. RIGID IMPLEMENTATION

9. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 12 - 8 GLOBAL PRODUCT LINES PRODUCT LINES IN EVEN THE MOST GLOBAL COMPANY ARE RARELY IDENTICAL ACROSS COUNTRIES.

10. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 12 - 9 REASONS: HISTORY M&A PREFERENCES CAPACITY CHANNELS

11. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 12 - 10 GLOBAL BRANDS GLOBAL BRANDS ARE BRANDS ASSOCIATED WITH GLOBAL PRODUCTS WHICH ARE WELL KNOWN AND RESPECTED IN MOST IF NOT ALL COUNTRIES OF THE WORLD. Ex's: SONY, MERCEDES-BENZ, MICROSOFT, COCA-COLA.

12. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 12 - 11 GLOBAL BRAND ADVANTAGES DEMAND SPILLOVER. GLOBAL CUSTOMERS. SCALE ECONOMIES.

13. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 12 - 12 GLOBAL BRAND DISADVANTAGES "BAD NEWS" TRAVEL FASTER ACROSS COUNTRY MARKETS. NEGATIVE PUBLICITY SPILLOVER TO OTHER PRODUCTS. LOCAL BRAND LOYALTIES.

14. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 12 - 13 MANAGEMENT ISSUES IN GLOBAL BRANDING BRAND EQUITY THE BRAND HIERARCHY THE BRAND CYCLE BRAND EXTENSIONS

15. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 12 - 14 IN BRAND EQUITY MEASUREMENT: FIRST, A BRAND'S AWARENESS, KNOWLEDGE AND ATTRACTIVENESS LEVELS ARE COMBINED INTO A MEASURE OF BRAND STATURE. SECOND, A BRAND'S LEVEL OF DIFFERENTIATION AND RELEVANCE TO A PARTICULAR TARGET SEGMENT ARE USED TO GET AT THE LEVERAGE OR VITALITY OF A BRAND. THIRD, STATURE AND VITALITY ARE WEIGHED TOGETHER TO COME UP WITH A SCORE ON BRAND EQUITY. BRAND EQUITY RISES WITH BOTH STATURE AND VITALITY.

16. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 12 - 15 ASSESSING BRAND GLOBALIZATION POTENTIAL 1. DOES THE BRAND NAME MAKE SENSE OUTSIDE OF THE SOURCE COUNTRY? 2. IF THE NAME SUGGESTS A COUNTRY ASSOCIATION, IS THE EFFECT POSITIVE? 3. IS THE NAME AVAILABLE LEGALLY IN MANY COUNTRIES? 4. DOES THE BRAND COMPLEMENT OTHER GLOBAL BRANDS IN THE PORTFOLIO OR COMPETE DIRECTLY AGAINST THEM? 5. SHOULD THE GROWTH BE LIMITED TO THE CREATION OF A REGIONAL BRAND?

17. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 12 - 16 BRAND RECOGNITION AND PRODUCT IDENTITY 1. COORS PUT ITS SLOGAN “TURN IT LOOSE,” INTO SPANISH, WHERE IT WAS READ AS “SUFFER FROM DIARRHEA.” 2. CLAIROL INTRODUCED THE “MIST STICK,” A CURLING IRON, INTO GERMAN ONLY TO FIND OUT THAT “MIST” IS SLANG FOR MANURE. NOT TOO MANY PEOPLE HAD USE FOR THE “MANURE STICK.” 3. WHEN GERBER STARTED SELLING BABY FOOD IN AFRICA, IT USED THE SAME PACKAGING AS IN THE U.S., WITH THE BEAUTIFUL CAUCASIAN BABY ON THE LABEL. LATER IT LEARNED THAT IN AFRICA, COMPANIES ROUTINELY PUT PICTURES ON THE LABEL OF WHAT’S INSIDE, SINCE MOST PEOPLE CAN’T READ ENGLISH.

18. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 12 - 17 4. AN AMERICAN T-SHIRT MAKER IN MIAMI PRINTED SHIRTS FOR THE SPANISH MARKET WHICH PROMOTED THE POPE’S VISIT. INSTEAD OF “I SAW THE POPE” (EL PAPA), THE SHIRTS READ “I SAW THE POTATO” (LA PAPA). 5. PEPSI’S “COME ALIVE WITH THE PEPSI GENERATION” TRANSLATED INTO “PEPSI BRINGS YOUR ANCESTORS BACK FROM THE GRAVE,” IN CHINESE. 6. FRANK PERDUE’S CHICKEN SLOGAN, “IT TAKES A STRONG MAN TO MAKE A TENDER CHICKEN” WAS TRANSLATED INTO SPANISH AS “IT TAKES AN AROUSED MAN TO MAKE A CHICKEN AFFECTIONATE.” BRAND RECOGNITION AND PRODUCT IDENTITY

19. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 12 - 18 7. WHEN PARKER PEN MARKETED A BALL-POINT PEN IN MEXICO, ITS ADS WERE SUPPOSED TO HAVE READ, “IT WON’T LEAK IN YOUR POCKET AND EMBARRASS YOU.” INSTEAD, THE COMPANY THOUGHT THE WORD “EMBARAZAR” (TO IMPREGNATE) MEANT TO EMBARRASS, SO THE AD READ: “IT WON’T LEAK IN YOUR POCKET AND MAKE YOU PREGNANT.” 8. THE COCA-COLA NAME IN CHINA WAS FIRST READ AS “KE-KOU- KE-LA,” MEANING “BITE THE WAX TADPOLE” OR “FEMALE HORSE STUFFED WITH WAX,” DEPENDING ON THE DIALECT. COKE THEN RESEARCHED 40,000 CHARACTERS TO FIND THE PHONETIC EQUIVALENT “KO-KOU-KO-LE,” TRANSLATING INTO “HAPPINESS IN THE MOUTH.” BRAND RECOGNITION AND PRODUCT IDENTITY

20. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 12 - 19 GLOBAL BRANDING LOCAL IMPLEMENTATION 1. CAN THE BRAND BE GLOBALIZED BY SIMPLY CHANGING OTHER LOCAL BRAND NAMES? 2. WHICH LOCAL BRANDS SHOULD BE CHANGED? 3. CAN THE LOCAL MANAGERS BE PERSUADED TO DROP ONE OF THEIR BRANDS?

21. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 12 - 20 BRAND CHANGEOVER TACTICS FADE-IN/FADE-OUT ENDORSEMENT BRANDING DOUBLE-BRANDING SUMMARY AXING

22. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 12 - 21

23. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 12 - 22 MONEY ISN’T THE ONLY THING THAT CAN BE COUNTERFEITED COUNTERFEITS OR KNOCKOFFS ARE FAKE PRODUCTS THAT ARE DESIGNED AND LABELED SO AS TO MISLEAD THE CUSTOMER INTO ASSUMING THAT THEY ARE “THE REAL DEAL.” WORLDWIDE LOSSES DUE TO COUNTERFEITING IS OVER $20 BILLION ANNUALLY. COUNTERFEITERS OPERATE AT ALL LEVELS OF THE ECONOMY, JUST ABOUT ANY PRODUCT OR TECHNOLOGY DEVELOPMENT IS FAIR GAME. EVEN THOUGH COUNTERFEITING CAN BE DIFFICULT TO STOP, WITH SOME DEDICATED EFFORT IT CAN BE DONE.

24. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 12 - 23 THE RISE OF SERVICES MARKETING SERVICE INDUSTRIES INCLUDE: HOTELS AND OTHER LODGING PLACES PROFESSIONAL SERVICES (EX: LEGAL, HEALTH AND ENGINEERING SERVICES) EDUCATIONAL INSTITUTIONS WHOLESALE AND RETAIL TRADE FIRMS GENERAL GOVERNMENT TRANSPORTATION COMMUNICATIONS PUBLIC UTILITIES

25. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 12 - 24 THE SERVICE “PRODUCT” A SERVICE CAN BE VIEWED AS A PRODUCT. THE STANDARD MARKETING VIEW OF PRODUCTS CAN BE APPLIED TO SERVICES AS WELL: CORE SERVICE: IS WHAT THE BUYER IS REALLY BUYING. FOR EXAMPLE, AN OIL CHANGE AND TUNE-UP FOR YOUR CAR PROVIDES TROUBLE-FREE OPERATION. BASIC SERVICE PACKAGE: SPECIFICSERVICES OFFERED TO THE CUSTOMER INCLUDING PRICE, SERVICE FEATURES, THE PACKAGING, GUARANTEES. AUGMENTED SERVICE: THE TOTALITY OF THE BENEFITS A CUSTOMER RECEIVES OR EXPERIENCES THEY HAVE WHEN BUYING THE PRODUCT.

26. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 12 - 25 THE SERVICE “PRODUCT” Generic benefits Provider’s behavior Physical surroundings Provider’s appearance Brand image Features Quality Packaging After-sales support Price Warranty Core service Formal service package Augmented service