Chapter 12Copyright (c) 2007 John Wiley & Sons, Inc.1 Global Marketing Management, 4e Chapter 12 Global Product Policy Decisions II: Marketing Products and Services

Chapter 12Copyright (c) 2007 John Wiley & Sons, Inc.2 Chapter Overview 1. Global Branding Strategies 2. Managing Multinational Product Lines 3. Product Piracy 4. Country-of-Origin (COO) Effects 5. Global Marketing of Services

Chapter 12Copyright (c) 2007 John Wiley & Sons, Inc.3Introduction  Companies that brand their products have various options when they sell their goods in multiple countries.  More and more companies see global (or at least regional) branding as a must.

Chapter 12Copyright (c) 2007 John Wiley & Sons, Inc.4Introduction  Multinational product line management entails issues such as: –What product assortment should the company launch when it first enters a new market? –How should the firm expand its multinational product line over time? –What product lines should be added or dropped?  Global marketers also face the issue of global piracy.  In global marketing, firms have to use a multitude of strategies to handle the negative country-of- origin stereotypes.

Chapter 12Copyright (c) 2007 John Wiley & Sons, Inc.5 1. Global Branding Strategies  Global Brands (see Exhibit 12-1) –A truly global brand is one that has a consistent identity with consumers across the world. –The development costs for products launched under the global brand name can be spread over large volumes. –A global brand has much more visibility than a local brand. –The fact of being global adds to the image of a brand country.

Chapter 12Copyright (c) 2007 John Wiley & Sons, Inc.6 1. Global Branding Strategies

Chapter 12Copyright (c) 2007 John Wiley & Sons, Inc.7 1. Global Branding Strategies –Global brands are also able to leverage the country association for the product. –The value of a global brand (brand equity) usually varies a great deal from country to country (three key value dimensions: quality signal, global myth, and social responsibility). –Inter-country gaps in brand equity may be due to any following factors:  History  Competitive climate  Marketing support  Cultural receptivity to brands  Product category penetration

Chapter 12Copyright (c) 2007 John Wiley & Sons, Inc.8 1. Global Branding Strategies  Local Branding –Examples: Coca Cola owns numerous local and regional brands across the globe; Mecca Cola from France  Global or Local Brands? –Solo branding, hallmark branding, family branding, and extension branding. –A firm’s global brand is shaped by three types of factors:  Firm-based drivers  Product-market drivers  Market dynamics

Chapter 12Copyright (c) 2007 John Wiley & Sons, Inc.9 1. Global Branding Strategies

Chapter 12Copyright (c) 2007 John Wiley & Sons, Inc Global Branding Strategies

Chapter 12Copyright (c) 2007 John Wiley & Sons, Inc Global Branding Strategies  Brand Name Changeover Strategies –Fade-in/fade-out –Co-branding –Umbrella branding –Transparent forewarning –Summary axing

Chapter 12Copyright (c) 2007 John Wiley & Sons, Inc Global Branding Strategies  Private Label Branding (“Store Brands”): Factors explaining success of private labels: 1.Improved quality of private-label products 2. Development of premium private-label brands  A system where a single banner brand is used worldwide, often with a sub-brand name, for almost the entire product mix of the company. 3. Shift in balance of power between retailers and manufacturers 4. Expansion into new product categories 5. Internationalization of retail chains 6. Economic downturns

Chapter 12Copyright (c) 2007 John Wiley & Sons, Inc Global Branding Strategies  Umbrella (Corporate) Branding –Umbrella branding facilitates brand-building efforts over a range of products. –Umbrella branding makes it easier to add or drop new products.  Protecting Brand Names –Brands are vital assets to brand owners.

Chapter 12Copyright (c) 2007 John Wiley & Sons, Inc Global Branding Strategies –In the area of brand protection, the oldest treaty is the Paris Convention for the Protection of Intellectual Property. –The difference in opinion held by industrialized and developing countries on intellectual property (see Exhibit 12-5) –Many elements of the brand franchise may require protection.

Chapter 12Copyright (c) 2007 John Wiley & Sons, Inc Global Branding Strategies

Chapter 12Copyright (c) 2007 John Wiley & Sons, Inc Management of Multinational Product Lines  The product assortment is usually described on two dimensions: the width and the length.  Drivers affecting the composition of a firm’s international product line: –Customer Preference –Price Spectrum –Competitive Climate –Organizational Structure –History

Chapter 12Copyright (c) 2007 John Wiley & Sons, Inc Management of Multinational Product Lines  Categories of product lines: –Core products –Niche products –Seasonal products –Filler products

Chapter 12Copyright (c) 2007 John Wiley & Sons, Inc Management of Multinational Product Lines

Chapter 12Copyright (c) 2007 John Wiley & Sons, Inc Management of Multinational Product Lines

Chapter 12Copyright (c) 2007 John Wiley & Sons, Inc Product Piracy  Any aspect of the product is vulnerable to piracy, including the brand name, the logo, the design, and the package (see Exhibit 12- 8).  Strategic Options Against Product Piracy: –Lobbying Activities –Legal Action –Customs –Product Policy Options –Distribution –Communication Options

Chapter 12Copyright (c) 2007 John Wiley & Sons, Inc Country-of-Origin (COO) Stereotypes  Country-of-Origin (COO) Influences on Consumers –For many products, the “made in” label matters a great deal to consumers. –Key research findings of COO effects:  COO effects are not stable  Consumers prefer domestic products over imports  Both the country of design and the country of manufacturing/assembly play a role in consumer attraction.

Chapter 12Copyright (c) 2007 John Wiley & Sons, Inc Country-of-Origin (COO) Stereotypes  COO particularly influences the elderly, less educated, and politically conservative; consumer expertise also makes a difference.  Cultural orientation play a role.  Consumers are likely to use the origin of a product as a cue when they are unfamiliar with the brand name carried by the product.  COO effects depend on the product category.

Chapter 12Copyright (c) 2007 John Wiley & Sons, Inc Country-of-Origin (COO) Stereotypes  Strategies to Cope with COO Stereotypes:  Product Policy –Pricing –Distribution –Communication

Chapter 12Copyright (c) 2007 John Wiley & Sons, Inc Country-of-Origin (COO) Stereotypes

Chapter 12Copyright (c) 2007 John Wiley & Sons, Inc Country-of-Origin (COO) Stereotypes

Chapter 12Copyright (c) 2007 John Wiley & Sons, Inc Global Marketing of Services  Challenges in Marketing Services Internationally: –Protectionism –Immediate Face to Face Contacts with Service Transactions –Difficulties in Measuring Customer Satisfaction Overseas  Opportunities in the Global Service Industries: –Deregulation of Service Industries –Increasing Demand for Premium Services –Increased Value Consciousness

Chapter 12Copyright (c) 2007 John Wiley & Sons, Inc Global Marketing of Services  Global Service Marketing Strategies: –Capitalize on Cultural Forces in the Host Market –Standardize and Customize –Give Information Technologies (IT) a Central Role –Add Value by Differentiation –Establish Global Service Networks