International Product Strategy

1
International Product StrategyFrom products to
offerings

• Anything of value offered by a firm in exchange
  for monetary payment or other consideration
• A product may be a good, service, idea, place,
  person, or any combination of these
• A product is multidimensional and the sum of all
  its features/benefits determines the bundle of
  satisfactions (utilities) perceived by the
  consumer
• Newer terminologyoffering or market offering
• Offerings exist at three levelscore, packaging,
  and support services

2
International Product StrategyProduct Component
Model
3
Product Component Model

• ? Core Component
• ? Physical Product ? Features
• ? Design
• ? Packaging Component
• ? Style ? Brand Name
• ? Packaging ? Quality
• ? Labeling ? Price
• ? Trademarks
• ? Support Services Component
• ? Repair ? Warranties
• ? Maintenance ? Deliveries
• ? Instructions ? Spare Parts
• ? Installation

4
Product Adaptation

• Many mature U.S. products are considered new or
  innovative in other countries.
• U.S. products may need to be changed physically
  or intangibly to meet the requirements of a
  foreign marketfor example
• package size or label
• green marketing requirements
• color, odor, texture
• brand name
• product use or application
• Product homologation is used to describe the
  changes mandated by local product and service
  standards

5
Trends in Product Strategy

• Product Augmentationthe addition of value-added
  components to the core product to enhance the
  physical and psychological satisfaction received
  from the product
• Line and Brand Extensionsspin-offs or new
  varieties of existing popular or well-known
  products
• Strategic Product Alliancesfirms combine
  resources to deliver an unusual or superior
  product Examples La-Z-Boy/Microsoft USPS and
  FedEx

6
The Drive for Quality

• Intense global competition is placing new
  emphasis on manufacturing quality products
• Quality, as a competitive tool, is the deciding
  factor in world markets
• Quality is closely associated with customer
  satisfaction
• Market-Perceived QualityQuality from the
  customers point of view includes intangibles
  that affect customer satisfaction
• Performance QualityQuality from the companys
  point of view functional quality often focuses
  on the physical aspects of the offering
• Quality is being measured in a variety of
  industries by objective, third-party
  organizationse.g. J.D. Power and Associates

7
Green Marketing Explained

• Green marketing is a term used to identify
  concern with the environmental consequences of a
  variety of marketing activities
• The designation that a product is
  environmentally friendly is voluntary, and
  environmental success depends on the consumer
  selecting the eco-friendly product
• In some countries each level of the distribution
  chain is responsible for returning all packaging,
  packing, and other waste materials up the chain

8
European UnionGreen Marketing Laws

• All transport packaging (crates, containers,
  drums, etc.) must be accepted back by the
  distributor and manufacturer for recycling
• All promotional and secondary packaging
  (displays, stands, etc.) must be accepted back by
  the distributor and manufacturer for recycling
• All final packaging (cartons, bottles, plastic
  containers, cans, foil wrap, etc.) must be
  accepted back by the retailer and manufacturer
  for recycling

9
European UnionGreen Marketing Laws (cont.)

• By 2006, automobile manufacturers must accept
  back any vehicle no longer produced or that has
  no resale value and dispose of it properly
• By 2006, 85 of an automobiles materials must be
  capable of being recovered for future use upon
  disposal

10
Global Brands

• A global brand is defined as the worldwide use of
  a name, term, sign, symbol (visual and/or
  auditory), design, or combination thereof
  intended to identify goods or services of one
  seller and to differentiate them from those of
  competitors
• A successful brand is the most valuable resource
  of a company
• Brand image is at the very core of business
  identity and strategy

Global brands such as Kodak, Sony, Coca-Cola,
McDonalds, Toyota, and Marlboro play an
important role in their companies business
strategies Perceived brand globalness leads to
increases in sales
11
Country-of-Origin Effect

• Brands serve as external cues to taste, design,
  performance, quality, value, and prestige
• Many factors affect brand image, but one factor
  of great concern to international marketers is
  the country-of-origin effect on perceptions of
  the product
• Country-of-origin effect (COE) can be defined as
  any influence that the country of manufacture,
  assembly, or design has on a consumers
  perception of a product
• COE is a complex, multifaceted phenomenon.
  Research has shown it may be affected by the
  country, the type of product, the image of the
  company, the companys full portfolio of brands,
  consumer demographic or psychographic
  characteristics (e.g. ethnocentrism) or any
  combination of these