Svend Hollensen GLOBAL MARKETING 4 th Edition Product decisions Lecture by Ewa Baranowska-Prokop,...
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Transcript of Svend Hollensen GLOBAL MARKETING 4 th Edition Product decisions Lecture by Ewa Baranowska-Prokop,...
Svend Hollensen
GLOBAL MARKETING4th Edition
Product decisions
Lecture by Ewa Baranowska-Prokop, Ph.D.
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-2
Learning objectives
Discuss the influences that lead a firm to standardize or adapt its products
Explore how international service strategies are developed
Distinguish between the product life cycle and the international product life cycle
Discuss the challenge of developing new products for foreign markets
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-3
Learning objectives (2)
Explain and illustrate the alternatives in the product communication mix
Define and explain the different branding alternatives
Discuss brand piracy and the possible anti-counterfeiting strategies
Explain what is meant by a ‘green’ productDiscuss alternative environmental management
strategies
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-4
Figure 1 Environmental factors influencingthe balance between standardization
and adaptation
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-5
Figure 2 Standardization and adaptationof the international marketing mix
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-6
Figure 3 Analysis of a company’sstandardization potential
Source: adapted from Kreutzer, 1988. Reproduced with kind permission from Emerald Group Publishing Ltd.
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-7
Figure 14.1 The three levels of a product
functional features, performance,perceived value, image,
technology
Delivery, installation, guarantees, after-sales service,
spare parts
brand, quality, design, packaging, price,country of origin, staff behaviour, size
Core productbenefits
Productattributes
Support services
Ability to standardize product elements
Low
High
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-8
Figure 14.2 Scale of elemental dominance
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-9
Characteristics of services
Intangibility
Perishability
Heterogeneity
Inseparability
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-10
Three categories of service
People processing
Possessionprocessing
Information-based
services
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-11
Categories of supplementary service
InformationConsultation/adviceOrder takingHospitality
SafekeepingExceptionsBillingPayment
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-12
Differences in the B2B market (versus consumer markets)
Fewer and larger buyersDerived, fluctuating, and relatively inelastic
demandMany participants in buying processProfessional buyersCloser relationshipsAbsence of intermediariesTechnological links
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-13
What is this?
The _____ states products or brands follow a sequence of stages including introduction, growth, maturity, and sales decline.
Product life cycle
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-14
Figure 14.3 The product life cycle
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-15
Figure 14.4 Comparisons of PLCs
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-16
International product life cycles
Describes diffusion of an innovation across national boundaries
Demand grows first in innovating country and is then exported
Eventually demand grows in LDCs
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-17
Figure 14.6 IPLC curves
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-18
Figure 14.7 PLCs of different countries for a specific product
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-19
Japanese manufacturers compete on time to market
Early integration of customers and suppliersMultiskilled project teamsInterlinking of R&D, production and marketingTotal quality managementParallel planning of new products and required
production facilitiesOutsourcing
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-20
Figure 14.8 Compression of R&D cycles and PLCs
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-21
Figure 14.9 Development and test periods for suppliers
to the car industry
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-22
Figure 14.10 Different degrees of product newness
Low Newness to Company High
High
Newnessto
InternationalMarket
Low
RepositionExistingproducts
Line extensions/
improvements
New to company
New to home
country
Cost reductions
New toInternational
markets
Increasingrisk
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-23
Figure 14.11 Product/ communication mode
Promotion
Product
Standard
Adapt
NewAdaptStandard
Straight extension
Promotionadaptation
Productadaptation
Dualadaptation
Productinvention
Source: Source: adapted from Keegan, 1995.
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-24
Motorola’s promotion adaption for Korean market
http://www.motorola.com/kr/
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-25
Kellogg’s dual adaption for Indian market
http://www.kelloggcompany.com
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-26
What is this?
Which term refers to the effect on quality perceptions caused by knowledge of the production country location for the product?
Country of origin effects
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-27
What is this?
Which term refers to the premium a customer would pay for the branded product compared to an identical unbranded version of the same product?
Brand equity
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-28
Brand equity’s assets and liabilities
Brand loyalty
Brand awareness
Perceived quality
Brand associations
Other proprietary brand assets
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-29
The functions of branding
To distinguish a company’s offering and differentiate one particular product from its competitors
To create identification and brand awareness
To guarantee a certain level of quality and satisfaction
To help with promotion of the product
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-30
Figure 14.12 Branding decisions
Source: Source: adapted from Onkvisit and Shaw, 1993, p. 534.
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-31
Figure 14.13 Three brand options
Private branding 100% externalizing
Co-branding Brand alliance
Manufacturer’sbrand
100% internalizing
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-32
What is this?
Which term refers to a retailer’s own brand (like Marks & Spencer’s)?
Private label
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-33
Perspectives on private labels
Retailer perspective Better profit margins Strengthens retailer
image
Manufacturer perspectiveNo promotional expensesProvides access to shelf
spaceRequires competing on
priceLoss of controlMay cannibalise other
manufacturer brands
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-34
What is this?
_____ describes a form of cooperation between two or more brands, which can create synergies that are valuable for both participants, above the value they would expect to generate on their own.
Co-branding
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-35
Shell and Ferrari co-branding
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-36
Requirements for ingredient suppliers
Supplier should offer a product with substantial advantages over existing products
Ingredient should be critical to success of final product
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-37
What is this?
_____ branding involves sight, sound, smell, touch, and taste.
Sensory
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-38
What is this?
When a famous person uses his or her status in society to promote a product, it is called _____.
Celebrity branding
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-39
Determinants of value of celebrity license
Celebrity Q score
Product being promoted
Quality of licensed product
Amount of design control
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-40
Steps involved with international celebrity licensing
Identify the rights involvedNegotiate the terms and scope of the
licenseDetermine the payment and other terms of
the license
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-41
What is this?
What term refers to the integration of business practices and products that are friendly to the environment while also meeting the needs of the consumers?
Green marketing
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-42
Figure 14.16 Types of environmental
strategic posture
Changeorientation
Value creation approach
Proactive
Accommo-dative
Cost reductionBenefit
enhancement
Green productinnovation
Green productdifferentiation
Pollution preventionBeyond compliance
Pollution preventionCompliance
Source:Source: adapted from Starik et al., 1996, p. 17.
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-43
Benefits of strategic alliances with environmental groups
Increased consumer confidence in green products and claims
Access to environmental informationMarketer access to new marketsPositive publicity and reduction of criticismEducation for consumers about key
environmental issues
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-44
Swiss Army: A case study (2)
Are there any problems for channels of distribution associated with the prospect of Swiss Army stores?
How might Swiss Army use ‘non-traditional advertising’ to promote its brands and new products?
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-45
For discussion (1)
How would you distinguish between services and products? What are the main implications of this difference for the global marketing of services?
What implications does the product life cycle theory have for international product development strategy?
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-46
For discussion (2)
To what degree should international markets be offered standardized service and warranty policies that do not differ significantly from market to market?
Why is the international product policy likely to be given higher priority in most firms than other elements of the global marketing mix?
Describe briefly the IPLC theory and its marketing implications.
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-47
For discussion (3)
What are the requirements that must be met so that a commodity can effectively be transformed into a branded product?
Discuss the factors that need to be taken into account when making packaging decisions for international product lines.
When is it appropriate to use multiple brands in (a) a single market and (b) several markets?
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-48
For discussion (4)
What is the importance of ‘country of origin’ in international product marketing?
What are the distinguishing characteristics of services? Explain why these characteristics make it difficult to sell services in foreign markets.
Identify the major barriers to developing international brands.
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-49
For discussion (5)
Discuss the decision to add or drop products to or from the product line in international markets.
Why should customer-service levels differ internationally? Is it, for example, ethical to offer a lower customer-service level in developing countries than in industrialized countries?
What are the characteristics of a good international brand name?
Hollensen, Global Marketing 4e, © Pearson Education 2008 14-50
Swiss Army: A case study (1)
Which factors are attributable to the strong global brand equity of Swiss Army?
What are the main motives behind the product line extension from Swiss Army Knives into other product areas?
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