Creating Products and Brands for Consumers in Global Markets

Product Components Core Component Packaging Component Support Services Component

Product Component Model Repair and maintenance SUPPORT SERVICES COMPONENT CORE COMPONENT Installation Instructions Other related services Deliveries Warranty Spare parts Legal Trademark l Brand name Legal Product platform Design features Functional features Legal PACKAGING COMPONENT Price Quality Package Styling

4 Ps - Product F 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 ProductStandardizationProductAdaptation VS.

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 ADAPTATION Competitive offerings Climate, geography, & infrastructure Government regulations & international standards Customer expectations, preferences, & buyer behavior

Factors Influencing Product Adaptation vs. Standardization Stage in Product Life Cycle Legal/Standards Constraints Product Innovativeness Cultural Differences

Types of Product Adaptation F Mandatory –Necessary for product to be sold in a local market F 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 of Cultural Grounding Need for Adaptation Industrial/ Technology Intensive Consumer Nature of Product

Adopter Categories in Diffusion Process

Exploiting Product Lifecycles

International Product Trade Cycle Model High Income Countries Medium Income Countries Low Income Countries Time Stages of Production Development New ProductStandardized ProductMaturing Product QuantityQuantity production consumption 2

Characteristics of Innovations Relative Advantage Compatibility Complexity Trialability Observability

What is a brand? F 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 Brands National Brands Global/National Brand Mix Private Brands

Global v. Local branding F In 1989, Mars changed the name of Kal Kan cat food to Whiskas. F 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 u Kal Kan dog food  Pedigree in U.S. u Mealtime dry dog food  Pedigree Mealtime –High market share in U.S. –Brand associations

Global v. Local Brands F Global brands provide: –Scale economies in the Development of advertising, packaging, promotion, etc. –Exploitation of: u Media overlap u Exposure to customers who travel –Associations u of a global presence u of the “home” country F Local brands provide: –Names, symbols, and associations that can be: u Developed locally u Tailored to local market u Selected without the constraints of a global brand –Reduced risk from “Buy Local” sentiments

Brand Name Decisions F Arbitrary or invented word (Lexus) F Recognizable English (or foreign language) word but unrelated to product (Cheer) F Recognizable English (or foreign language) but suggestive of product (Mr. Clean) F English (or foreign language) word descriptive of product but may not be understandable to outsiders (Pampers) F Geographic place or common surname (Kentucky Fried Chicken) F Device, design, number or some other element (3M)

What is brand equity? F 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 F Brand Awareness –Recognition –Recall F Brand Image –Type –Strength –Favorability –Uniqueness of Brand Associations Components of Brand Knowledge (Keller, 1992)

Packaging & Labeling Adaptations F Size, shape, materials –Product packaging norms –Existing standards –Economic development –Environmental concerns F Color & text –Promotional strategy –Cultural meaning & implications –Government regulations –Language issues