Transcript Slide 1

International Marketing
14th Edition
P h i l i p R. C a t e o r a
M a r y C. G i l l y
John L. Graham
Products
and Services
for Consumers
Chapter 12
McGraw-Hill/Irwin
International Marketing 14/e
Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
What Should You Learn?
• The importance of offering a product suitable for the
intended market
• The relationship between product acceptance and
the market into which it is introduced
• The importance of quality and how quality is defined
• Country-of-origin effects on product image
• Physical, mandatory, and cultural requirements for
product adaptation
• The need to view all attributes of a product in order
to overcome resistance to acceptance
12-2
Global Perspective Hong Kong –
Disney Rolls the Dice Again
• Tokyo Disneyland – successful
• EuroDisney – disaster
• Hong Kong Disneyland – open for business
• Opportunities and challenges for international
marketers of consumer goods and services are
great and diverse
• Any marketing firm’s goal should be quality products
and services that meet the needs and wants of
consumers at an affordable price
12-3
Quality
• Shift to a customer’s market
• Increased customer knowledge
• The customer defines quality
• The cost and quality of a product
– Among the most important criteria by which purchases are made
• Quality can be defined on two dimensions
– Market-perceived quality
– Performance quality
• Most consumers expect performance quality
• In many industries quality is measured by third parties
– JD Power and Associates
12-4
Maintaining Quality
• Damage in the distribution chain
– Russian chocolate
• Quality is essential for success in today’s
competitive global market
• The decision to standardize or adapt a product
is crucial in delivering quality
12-5
Physical or Mandatory
Requirements and Adaptation
• Product homologation
• Product adaptation requirements
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Legal
Economic
Political
Technological
Climate
12-6
Green Marketing
and Product Development
• Green marketing concerns the environmental
consequences of a variety of marketing activities
• Critical issues affecting product development
– Control of the packaging component of solid waste
– Consumer demand for environmentally friendly products
• European Commission guidelines for
ecolabeling
• Laws to control solid waste
12-7
Products and Culture
• A product is the sum of the physical and
psychological satisfactions it provides the user
– Primary function
– Psychological attributes
• The need for cultural adaptation is often
necessary, affected by how the product
conforms
– Norms
– Values
– Behavior patterns
12-8
Innovative Products
and Adaptation
• Determining the degree of newness as
perceived by the intended market
• Diffusion
• Established patterns of consumption and
behavior
• Foreign marketing goal
– Gaining the largest number of consumers in the market
►
In the shortest span of time
– Probable rate of acceptance
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Diffusion of Innovations
• Crucial elements in the diffusion of new ideas
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An innovation
Which is communicated through certain channels
Over time
Among the members of a social system
• The element of time
• Variables affecting the rate of diffusion of an
object
– Degree of perceived newness
– Perceived attributes of the innovation
– Method used to communicate the idea
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Five Characteristics
of an Innovation
• Relative advantage
• Compatibility
• Complexity
• Trialability
• Observability
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Production of Innovations
• Inventiveness of companies and countries
• Expenditures
• Japanese solutions
– American-style education programs
– American design centers
• New ideas come from a variety of sources
– Countries,
– Acquisitions
– Global collaborations
12-12
Analyzing Product
Components for Adaptation
• Product is multidimensional
• Sum of its features determines the bundle of
satisfactions (utilities) received by consumer
• Three distinct components
– Core
– Packaging
– Support services
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Product Component Model
Exhibit 12.1
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Core Components
• Product platform
• Design features
• Functional features
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Packaging Component
• Price
• Quality
• Packages
• Styling
• Trademark
• Brand name
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Support Services Component
• Deliveries
• Warranty
• Spare parts
• Repair and maintenance
• Installation
• Instructions
• Other related services
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Marketing Consumer
Services Globally
• Consumer services characteristics
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Intangibility
Inseparability
Heterogeneity
Perishability
• A service can be marketed
– As an industrial (business-to-business)
– A consumer service
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Services Opportunities
in Global Markets
• Tourism
• Transportation
• Financial services
• Education
• Communications
• Entertainment
• Information
• Health care
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Barriers to Entering Global Markets
for Consumer Services
• Protectionism
• Restrictions on transborder data flows
• Protection of intellectual property
• Cultural barriers and adaptation
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Brands in International Markets
• A global brand is the worldwide use of a name,
term, sign, symbol, design, or combination
– Intended to identify goods or services of one seller
– To differentiate them from those of competitors
• Importance is unquestionable
• Most valuable company resource
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Top Twenty Brands
Exhibit 12.2
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Global Brands
• The Internet and other technologies accelerate
the pace of the globalization of brands
• Ideally gives the company a uniform worldwide
image
• Balance
• Ability to translate
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National Brands
• Acquiring national brand names
• Using global brand names
• Nationalistic pride impact on brands
• Use global brands where possible and national
brands where necessary
12-24
Country-of-Origin Effects
and Global Brands
• Country-of-Origin effect
– Influences that the country of manufacture, assembly, or design
►
Has on a consumer’s positive or negative perception of a product
• Consumers have broad but somewhat vague
stereotypes about specific countries and specific
product categories that they judge “best”
• Ethnocentrism
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Country-of-Origin Effects
and Global Brands
• Countries are stereotyped
– On the basis of whether they are industrialized
– In the process of industrializing
– In process of developing
• Technical products
– Perception of one manufactured in a less-developed or newly
industrializing country less positive
• Fads often surround product from particular
countries or regions
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Private Brands
• Growing as challengers to manufacturers’
brands
• Private labels
– Provide the retailer with high margins
– Receive preferential shelf space and in-store promotion
– Are quality products at low prices
• Manufacturers brands must be competitively
priced and provide real consumer value
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Summary
• The growing globalization of markets must be
balanced with the continuing need to assess all
markets for those differences that might require
adaptation for successful acceptance
• In spite of the forces of homogenization,
consumers also see the world of global symbols,
company images, and product choice through
the lens of their own local culture and its stage of
development and market sophistication
12-28
Summary
• Each product must be viewed in light of how it is
perceived by each culture with which it comes in
contact
• Analyzing a product as an innovation and using
the Product Component Model may provide the
marketer with important leads for adaptation
12-29