International Marketing Mix – Global Products and Services

Objectives

• To learn the importance of offering a product suitable for the intended market.

• To determine the importance of quality and how quality is defined.

• To distinguish the physical, mandatory and cultural requirements for product adaptation.

• To understand the need to view all attributes of a product to overcome resistance to acceptance.

• To be aware of country-of-origin effects on product image.

Quality

• Market-Perceived quality, or• Performance quality

Homologation

Global Strategy perspective Standardization?

Localization Versus

Adaptation?

Standardization

PROS

• Cost savings• Improved quality

(functioning)• Enhanced customer

preference• Global customers• Global segments

CONS

• Off target (diverse tastes and needs)

• Lack of uniqueness (Being special?)

• Vulnerable to trade barriers• Strong local competitors

that offer customized products

Standardization of Products

Localization versus Adaptation

• Localization– Changes required for a

product or service to function in a new country (telephone jack in different countries)

• Adaptation: – Changes are made to match

customer tastes or preferences

12-7

Global Brands

• A global brand is the worldwide use of a name, term, sign, symbol, design, or combination

• The brand is the most valuable company resource

Products and CultureCultural adaptation affected by how the product conforms norms, values and behavior patterns

Innovative Products and Adaptation

• Determining the degree of newness as perceived by the intended market

• Established patterns of consumption and behavior

• Foreign marketing goal is gaining the largest number of consumers in the market, in the shortest span of time Probable rate of acceptance

Product Component Model

Cateora, P., & Gilly, M. (2011). International marketing (15th ed.).New York, NY: McGraw-Hill/Irwin.

Core Component

• Product platform• Design features• Functional

features

Packaging Component

• Price• Quality• Packages• Styling• Trademark• Brand name

Support Services Component

• Deliveries • Warranty• Spare parts• Repair and maintenance• Installation• Instructions• Other related services

Top Ten World Brands 2014

Source: http://www.brandz100.com/

Country-of-Origin Effects and Global Brands

Countries are stereotyped – Has on a consumer’s

positive or negative perception of a product

Ethnocentrism

Marketing Consumer Services Globally

• Consumer services characteristics– Intangibility– Inseparability– Heterogeneity– Perishability

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

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