Discuss standardization-versus-adaptation decisions, and how companies create global brand positions & equity

 Something offered to an international market that satisfies a want or a need. Products can contain both tangible and intangible parts ◦ Tangible: Parts of a product that can be seen and felt  i.e. packaging, brand name, quality, design ◦ Intangible: Parts of a product that cannot be seen or felt.  i.e. warranty, delivery, credit, installation; services are mostly intangible

 Four choices for marketers when moving products into new markets ◦ keep their home country products the same ◦ adapt an existing product for new markets ◦ design new products for new markets ◦ design one product for a global marketplace

◦ Standardized products can create economies of scale in research & development, production, and marketing ◦ A global product with a global brand image allows companies to compete against other global marketers

◦ Products may be used in different political & legal environments ◦ Consumers may have different cultural needs ◦ Local competition in foreign markets may be different than domestic ◦ Product customization may be necessary

 Companies need to evaluate the following in order to make choice between standardization- verses-adaptation ◦ market characteristics:  political and legal regulations, customer characteristics and preferences, purchasing patterns, and distribution systems ◦ product characteristics:  nature of the product, the ability to create a global brand, and the purpose for which the product is used, perception of product quality, perception of the product’s country of origin, and required after-sale service. ◦ company characteristics:  financial resources, international orientation of management

◦ Brand: name, word, or design that identifies a product, service, or company ◦ Creates a certain expectation in the minds of customers ◦ Global brands need a competitive advantage when competing with local brands in local markets ◦ Can be subject to country-of-origin effect  i.e., in the 1950’s “Made in Japan” meant low- quality to consumers  Today “Made in China” can mean low quality, while Japanese products signal high quality

 Using a brand to create an image  BMW usually signifies quality engineering, and a fast, sporty automobile  Disney suggests wholesome family entertainment  Companies used to rely on TV advertising to create brand image  Today they are shifting to the Internet, live events, cell phones, and movies  iquely/TVAndNewMedia/BMWfilms.aspx iquely/TVAndNewMedia/BMWfilms.aspx   BHzHAmCCk The Ambush and Devil BHzHAmCCk

 The additional value that a brand name brings to a product or company  Coca-cola estimated at over $67 billion  Counterfeits, forgeries, and grey markets can diminish brand equity—may cause product to be viewed as cheap/poor quality  Grey markets exist when products are sold outside an authorized distribution system  /Best-Retail-Brands.aspx /Best-Retail-Brands.aspx  Interbrand top 50 brands    Brand Equity defined

 Can have a strong impact on product image ◦ Logos and trademarks are intangible assets with a dollar value or brand equity  Should translate well across cultures

 Must be unique to the product and its market  May not be used by any other product or company  Should not have undesirable meaning across languages  Family brand: typically the brand name of a company that also have individual product brands  Ford Motor Company (family) sells Mustang (individual)  Kelloggs (family) sells Rice Krispies (individual)