Chapter 10 Product and Brand Decisions - PowerPoint PPT Presentation

Loading...

PPT – Chapter 10 Product and Brand Decisions PowerPoint presentation | free to download - id: 3b284a-MWNmZ



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

Chapter 10 Product and Brand Decisions

Description:

Chapter 10 Product and Brand Decisions Introduction: What to Sell ? The international marketer needs to determine what the market offering should be in a foreign ... – PowerPoint PPT presentation

Number of Views:206
Avg rating:3.0/5.0
Slides: 60
Provided by: webItuEd
Category:

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Chapter 10 Product and Brand Decisions


1
Chapter 10 Product and Brand Decisions
2
Introduction What to Sell ?
  • The international marketer needs to determine
    what the market offering should be in a foreign
    market
  • Defining the product offering
  • Products versus Services/Rights

3
The Product Offering
Potential Product
Augmented Product
Expected Product
Generic Product
Core Benefit
Source Adapted from P. Kotler, Marketing
Management, 1994
4
Basic Product Concepts
  • A product is a good, service, or idea
  • Tangible Attributes
  • Intangible Attributes
  • Product classification
  • Consumer goods
  • Industrial goods

5
Product Warranty and Service
  • Product Warranty
  • Should a company keep the same warranty for all
    markets or adapt it country by country ?
  • Should the firm use warranty as a competitive
    weapon ?
  • Product Service
  • Service capability to accredit the firm with
    foreign suppliers
  • high investment in facilities, staffing,
    training, and distribution network

6
Goods versus Services/Rights
  • Instead of marketing a product abroad, the
    company may also sell rights or services in a
    foreign market - rights brand / trademark /
    patent - services management skills (hotel
    chain)

7
Sales of Rights - Examples
  • Franchising business - Coca-Cola use of its
    name to licensed bottlers around the world. -
    Pilkington licensing of the process of
    float glass. - Other Manpower,
    McDonald's, etc.

8
Sales of Rights - Examples
  • Management Contracts - Sheraton Hotels
  • Management contract for hotels abroad
  • Sale of consulting and management contracts
  • Little equity invested Sheraton manages almost
    400 hotels worldwide but has equity in only 40 of
    them.
  • Advantages minimum risk strong competitive
    position.

9
Sales of Rights - Examples
  • Turn-Key operations
  • The firm is selling technical and engineering
    skills.
  • The firm is training foreign nationals to run a
    plant.
  • The firm is supplying material and equipment.

10
International Product Strategies
Straight
Product
Product
Extension
Adaptation
Innovation
The firm adopts the same policy used in its home
market.
The company caters to the needs and wants of
its foreign customers.
The firm designs a product from scratch for
foreign customers.
Source W.J. Keegan, Multinational Product
Planning Strategic Alternatives, Journal of
Marketing, 33, 1969, pp.58-62
11
Extend, Adapt, Create Strategic Alternatives in
Global Marketing
  • Extension offering product virtually unchanged
    in markets outside of home country
  • Adaptation changing elements of design,
    function, and packaging according to needs of
    different country markets
  • Creation developing new products for the world
    market

12
Global Product Planning Strategic Alternatives
Product
Communication
Same Different
Strategy 2 Product Extension Communication
Adaptation
Strategy 4 Dual Adaptation
Different Same
Strategy 3 Product Adaptation Communication Exten
sion
Strategy 1 Dual Extension
13
These Three Basic Strategies Can Be Further
Broken Down Into 5 Options
Source W.J. Keegan
14
How to Choose a Strategy?
  • Two errors that management makes in choosing a
    strategy
  • NIH (Not invented here) syndrome means managers
    ignore the advancements of subsidiaries overseas
  • Managers impose policies upon subsidiaries
    because they assume what is right for customers
    in one market is right in every market

15
How to Choose a Strategy?
  • Cave Dweller new products launched
    internationally to dispose of excess production
  • Naïve Nationalist company recognizes growth
    opportunities outside of home market
  • Globally sensitive company views world as
    competitive marketplace

16
How to Choose a Strategy?
  • The product itself, defined in terms of the
    function or need it serves
  • The market, defined in terms of the conditions
    under which the product is used, preferences of
    potential customers, and ability to buy the
    product
  • Adaptation and manufacturing costs the company
    will incur

17
Standardization versus Customization
  • Although the products sold abroad generally are
    not identical to their domestic counterparts,
    there is always a core of expertise that the firm
    can carry abroad.
  • Principle " All Business is local."

18
Reasons for Product Standardization
  • Economies of scale Production, RD, Marketing
  • Common Consumer needs Drinking patterns, car
    sizes
  • Consumer Mobility Customer retention
    Loyalty American Express, Kodak, ...
  • Home Country Image US jeans, French
    Perfumes,...
  • Impact of technology B to B Markets

19
Convergence in Drinking Patterns
20
Convergence of Car Sizes
21
Reasons for Product Adaptation
  • Climate US Air-conditioning equipment
  • Skill level of users Computers in Africa
  • National consumer habits - front-loading/top-loa
    ding washing machines - car models four-door
    (F) - two-door (Germ.)
  • Government regulations on products, packaging,
    and labels.
  • Company history and operations (subsidiaries)

22
Example European Toothpaste Market
  • Market Size in France FF 1,8 Bill. (1996)
  • Trends
  • Multiple number of toothpastes/family
  • Therapeutic / sophisticated products
  • Cosmetic products
  • Volume
  • Price
  • Competitors in France
  • Unilever 33
  • Colgate 22,5
  • Henkel 19
  • Smithkline B. 12
  • PG 0

23
Drivers of Product Adaptation Example COLGATE
Toothpaste
  • (1) Differences in National Regulations
  • Triclosan forbidden in Germany
  • High fluorine content in local water (UK)
  • Obligation to sell high fluorine content
    toothpaste in pharmacy (France)
  • Stringent clinical tests in France

24
Drivers of Product Adaptation Example COLGATE
Toothpaste
  • Packaging
  • Ecological Stand-up tubes in Germany
  • Failure in France (Carrefour)
  • Distribution
  • Role of pharmacy in Italy and Spain
  • Role of drugstore in UK
  • Communication
  • Medical in Italy and Spain (recommended by
    dentist)
  • Non-medical in UK

25
  • Attributes
  • Brand (Global vs. Local)
  • Packaging
  • Quality
  • Services (after-sale services, support)
  • Positioning

26
  • Strong customer recognition/reassurance
  • Economies of scale and scope
  • Leverages power with retailers
  • Consolidates efforts across countries
  • Potential for extension
  • Not locally responsive
  • Demotivating for country managers
  • Difficult to manage
  • Need to maintain consistency across
  • countries and product-lines

27
Product Types
  • Buyer orientation
  • Amount of effort expended on purchase
  • Convenience
  • Preference
  • Shopping
  • Specialty

28
Brands
  • Bundle of images and experiences in the
    customers mind
  • A promise made by a particular company about a
    particular product
  • A quality certification
  • Differentiation between competing products
  • The sum of impressions about a brand is the Brand
    Image

29
Brands
30
Brands
  • The added value that accrues to a product as a
    result of investments in the marketing of the
    brand
  • An asset that represents the value created by the
    relationship between the brand and customer over
    time

31
Brands
  • We have to shift to high value-added products,
    and to do that we need to improve our brand.
  • - Noboru Fujimoto, President Sharp Electronics
    Corporation

32
Local Products and Brands
  • Brands that have achieved success in a single
    national market
  • Represent the lifeblood of domestic companies
  • Entrenched local products/brands can be a
    significant competitive hurdle to global companies

33
International Products and Brands
  • Offered in several markets in a particular region
  • Euro-brands

34
Naming your product
Atum Bom Portuguese tuna Kack Danish
sweets Mukk Italian yogurt Pocari Sweat
Japanese sport drink Poo Argentine curry powder
Alu-Fanny French Foil wrap Crapsy Fruit French
cereal Kum Onit German pencil
sharpeners Plopp Scandinavian
chocolate Pschitt French lemonade
35
Naming your product
? Phonetic Problems with Brand Names - Bardok
(Sounds like Brothel in Russian) - Misair
(Sounds like Misery in French) ? Translations Int
ent Translation - Stepping Stone - Stumbling
Block - Car Wash - Car Enema - Highly
Rated - Over Rated Symbols - Owl - Bad Luck
in India ? Other Countries make mistakes too -
Zit (Chocolate from Germany) - Koff (Beer)
36
Global Products and Brands
  • Global products meet the wants and needs of a
    global market and is offered in all world regions
  • Global brands have the same name and similar
    image and positioning throughout the world

37
Global Products and Brands
  • A multinational has operations in different
    countries. A global company views the world as a
    single country. We know Argentina and France are
    different, but we treat them the same. We sell
    them the same products, we use the same
    production methods, we have the same corporate
    policies. We even use the same advertisingin a
    different language, of course.
  • - Alfred Zeien Former Gillette CEO

38
Family Brands
USA
Europe
Mexico
"Rabbit"
"Golf"
"Caribe"
-gt lightness
-gt prestige
-gt avoid negative connotation
39
Private Label Branding
  • Large retailers are moving increasingly into
    their own brand, i. e. Marks Spencer.
  • They try to obtain greater control and higher
    margins.
  • Private branding can be an effective way to break
    into foreign markets. (Asian TV manufacturers)

40
European Consumer Preferences Regarding Private
Labels
Product Category
Fr.
All.
It.
Es.
GB
Edible Oils
19
20
10
11
27
Pasta
16
24
12
12
24
Yoghurt
14
14
6
6
12
Frozen Vegetables
5
11
5
6
34
Fresh Pasta
3
7
4
3
5
Breakfast Cereals
4
8
2
2
18
Instant Soups
3
9
0
2
14
Icecream
6
10
4
2
21
Whiskey
3
1
2
1
4
Smoked Salmon
3
4
1
1
2
Champagne
3
4
2
3
6
Private labels per product category ( of sales
in qunqtities in hypermarkets and
supermarkets) Source Secodip International, 1998
41
European Households Judging Credibility of
Private Labels
Europe
Germ.
Spain
France
Italy
UK
Criteria
3 19 78
3 12 85
3 26 72
3 29 68
1 13 86
More expensive Same Less expensive
2 16 83
5 78 17
2 90 8
3 78 19
7 71 22
4 77 18
Higher quality Same Lower quality
6 73 21
6 74 21
3 84 12
4 73 23
10 66 24
5 74 21
More confidence Same Less confidence
7 71 22
Private labels per product category ( of sales
in qunqtities in hypermarkets and
supermarkets) Source Secodip International, 1998
42
Country of Origin effect
  • 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.

43
Branding Strategies
  • Combination or tiered branding allows marketers
    to leverage a companys reputation while
    developing a distinctive identity for a line of
    products
  • Sony Walkman
  • Co-branding features two or more company or
    product brands
  • NutraSweet and Coca-Cola
  • Intel Inside

44
Branding Strategies
  • Brand acts as an umbrella for new products
  • Example The Virgin Group
  • Virgin Entertainment Virgin Mega-stores and MGM
    Cinemas
  • Virgin Trading Virgin Cola and Virgin Vodka
  • Virgin Radio
  • Virgin Media Group Virgin Publishing, Virgin
    Television, Virgin Net
  • Virgin Hotels
  • Virgin Travel Group Virgin Atlantic Airways,
    Virgin Holidays

45
Global Brand Development
  • Questions to ask when management seeks to build a
    global brand
  • Will anticipated scale economies materialize?
  • How difficult will it be to develop a global
    brand team?
  • Can a single brand be imposed on all markets
    successfully?

46
Global Brand Development
  • Global Brand Leadership
  • Using organizational structures, processes, and
    cultures to allocate brand-building resources
    globally, to create global synergies, and to
    develop a global brand strategy that coordinates
    and leverages country brand strategies

47
Global Brand Development
  • Create a compelling value proposition
  • Think about all elements of brand identity and
    select names, marks, and symbols that have the
    potential for globalization
  • Research the alternatives of extending a national
    brand versus adopting a new brand identity
    globally
  • Develop a company-wide communication system

48
Global Brand Development
  • Develop a consistent planning process
  • Assign specific responsibility for managing
    branding issues
  • Execute brand-building strategies
  • Harmonize, unravel confusion, and eliminate
    complexity

49
Local versus Global Products and Brands A
Needs-Based Approach
50
Country of Origin as Brand Element
  • Perceptions about and attitudes toward particular
    countries often extend to products and brands
    known to originate in those countries
  • Japan
  • Germany
  • France
  • Italy

51
Packaging
  • Consumer Packaged Goods when the packaging is
    designed to protect or contain the product during
    shipping
  • Eco-Packaging because package designers must
    address environmental issues
  • Offers communication cues that provide consumers
    with a basis for making a purchase decision

52
Product Packaging and Labeling
53
European Packaging Trends
54
  • POM brand Pomegranate juice used a distinctively
    shaped bottle to gain attention on the grocery
    shelf

55
Labeling
  • Provides consumers with various types of
    information
  • Regulations differ by country regarding various
    products
  • Health warnings on tobacco products
  • American Automobile Labeling Act clarifies the
    country of origin, and final assembly point
  • European Union requires labels on all food
    products that include ingredients from
    genetically modified crops

56
(No Transcript)
57
Labeling
As Americans become increasingly concerned about
cholesterol, the FDA (Food and Drug
Administration) has responded by requiring food
manufacturers to list trans fat (i.e., trans
fatty acids) on the Nutrition Facts portion of
product labels, effective 1/1/06.
58
(No Transcript)
59
Aesthetics
  • Global marketers must understand the importance
    of visual aesthetics
  • Aesthetic Styles (degree of complexity found on a
    label) differ around the world

60
Product Warranties
  • Express Warranty is a written guarantee that
    assures the buyer is getting what they paid for
    or provides a remedy in case of a product failure
  • Warranties can be used as a competitive tool

61
New Products in Global Marketing
  • Pursue opportunities in competitive arenas of
    global marketplace
  • Focus on one or only a few businesses
  • Active involvement from senior management
  • Ability to recruit and retain best employees
  • Understand the importance of speed in bringing
    product to market

62
Identifying New Product Ideas
  • What is a new Product?
  • New to those who use it or buy it
  • New to the organization
  • New to a market

63
The International New Product Department
  • How big is the market for this product at various
    prices?
  • What are the likely competitive moves in response
    to our activity?
  • Can we market the product through existing
    structure?
  • Can we source the product at a cost that will
    yield an adequate profit?
  • Does product fit our strategic development plan

64
Testing New Products
  • When do you test a new product?
  • Whenever a product interacts with human,
    mechanical, or chemical elements because there is
    the potential for a surprising and unexpected
    incompatibility
  • Test could simply be observing the product being
    used within the market

65
Looking Ahead
  • Chapter 11 Pricing decisions
About PowerShow.com