3. Topics to be covered
Product policy and planning
Product design and standardization
Developing an international product line
Foreign product diversification
International branding decisions
International packaging
International warranties and services
4. Designing
the marketing programme
Once the firm has decided how it will enter the
international market, the next issue is how to
desigh the international/global marketing mix.
There are different forces in the international
environment that may favour either increasing
globalization or increasing adaptation of the firm.
Supporters of adaptation state that there are
substantial differences between countries and
even between regions in the same countries.
6. Main decisions
in product policy
What kind of product?
Product life cycle
New product development and innovations
As a product we can consider anything what
can be offered to our customer.
7. Which products for
international markets?
The same as for home market
Adapted products
Standardized products
New products
Define the reasons
for each option!
9. Factors of adaptation
Different conditions of
use
Intercultural differencies
in consumer behaviour
and purchasing
behaviour
Differences in purchasing
power
Different conditions in
supplying with
production inputs
Different legislation
10. Factors
of standardization
Economics of scale
High costs of adaptation
process
Industrial and high tech
products
Entering the similar
markets
Export
Global competition
Strong image of the
country/producer/brand
13. Benefits of strong brand in
local/regional market
New product in
brand portfolio
Repositioning the
traditional product
Seasonal product for
larger market
Brand partnership
14. In international markets, success depends on satisfying
the market demands. The product or service must be
suitable and acceptable for its purpose.
According to Doole & Lowe (1999, p.296),
“The main issue for a company about to commence
marketing internationally, is to assess the suitability of
the existing products for international markets.”
Product policy abroad: firm must decide which aspects of
a product need to be adapted and which can be
standardised.
Standardisation Vs Adaptation
15. Standardisation policy: offering a uniform version of a
product in all of its foreign markets.
Adaptation policy: offering a product to targeted foreign
consumers altered to specific tastes, preferences and
needs. Adaptation can concern all the characteristics of
the product.
Decision between standardisation and adaptation is not
mutually exclusive rather it is a matter of degree
A certain degree of adaptation of a product is required in
international markets.
Standardardisation Vs Adaptation
16. International Product Strategies
Straight
Extension
Product Product
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
17. These Three Basic Strategies Can Be Further
Broken Down Into 5 Options
International
Product Strategy
Product
Example
Consumer Need
Satisfied
Product Strategy Communication Strategy
Strategy 1
Product and
Communication
Extension
Gillette
Razor
Disposable, easy to use
product
Extension Extension
Strategy 2
Product Extension
Communication
Adaptation
Wrigley
Chewing Gum
USA: Substitute for
Smoking
Europe: Dental benefits
Extension Adaptation
Strategy 3
Product Adaptation
Communication
Extension
McDonalds Fast-Food Adaptation:
Adding local products to
range
Extension:
Using global campaign
Strategy 4
Product and
Communication
Adaptation
Slim Fast Identical:
Lose Weight
Adaptation:
Consumer preferences
for different flavors
Adaptation:
Celebrity in Germany,
Teacher in UK
Strategy 5
Product Invention Buckler Beer Non-alcoholic beer Invention Develop new
communication
Source: W.J. Keegan
18. Adaptation
Mandatory Product Adaptation
Government regulations
Electrical current
standards
Measurement systems
Operating systems
Optional Product Adaptation
Physical distribution
Local use conditions
Climatic conditions
Space constraint
Consumer demographics as
related to physical appearance
User's habits
Environmental characteristics
Price
Limiting product movement
across national borders (gray
marketing)
Historical preference or local
customs and culture
19. International Product Strategies
Standardized Product
- Domestic product introduced internationally, with minor or no
modification
Localized Product
- Domestic product adapted for foreign markets
- Product designed specifically for foreign markets
Global Product
- Product designed with international (not national) markets in
mind
- Product having universal features
- Product being adaptation-ready, when necessary
20. Country-of-Origin Effects
Impact of where the product is manufactured
perceived quality?
patriotism/nationalism?
Country-of-origin versus country-of-manufacture
Interaction of country-of-origin and brand name effects
Hybrid products (e.g., components manufactured in multiple countries; products via
strategic alliances)
“…any influence that the country of manufacture, assembly, or design has on a
consumers positive or negative perception of a product” (Cateora & Graham, 2002,
p.369)
Stereotypes – positive or negative
Significant influence on product positioning
Adapt positioning from country to country
22. 22
Considerations in adapting products
Target Market
Macro-
environment
Government
Regulations
Competition
Who buys
the product?
Who uses
the product?
How is it
used?
Where/ why/
when is it
bought?
Geography
Climate
Economic
Socio-
cultural
Political/
legal
Tariffs
Labeling
Patents/
trademarks
Taxes
Other
Price
Performance
Design or
style
Patent
protection
Brand name
Package
Services
23. The Market Environment
Government Regulations
Political and social agendas often dictate regulatory requirements
Nontariff Barriers
Product standards, testing, subsidized local products
Customer Characteristics, Expectations, and Preferences
Physical size, local behaviors, tastes, attitudes, and traditions
Consumption patterns, psychosocial characteristics, and general
cultural criteria
24. The Market Environment
Economic Development
The stage of economic development affects the market size and
demand characteristics. Backward innovation of the product may
be required to meet local requirements.
Competitive offerings
Monitoring competing local products is critical in adjusting the
product for competitive advantage.
Climate and geography
Local climatic conditions and terrain features can make products
vulnerable to damage.
25. What should be the product’s…
Physical attributes?
Size, design, materials, weight, color, etc.
Package attributes?
Protection, color, design, brand, etc.
Service attributes?
Use instructions, installation, warranties,
repair/maintenance, spare parts, etc.
Expected profit contribution of each
adaptation?
27. Product Characteristics
Product Constituents
Branding
Packaging
Appearance
Method of Operation or Usage
Quality
Service
Country-of-Origin Effects
28. Protecting International Brand Names and
Trademarks
The firm must evaluate each market / brand whether
to seek protection.
(Blue Bell Inc. - trademark Wrangler registered in
135 countries)
Global brands versus national brands :
Priority in Use <-> Priority in Registration
(Ford Mustang in Germany renamed Taunus)
Brand piracy : local imitation or deliberate
registration
30. Product Packaging and Labeling
Protection
Legal ConstraintsPromotion
Climate
Transport & Handling
Buyer's slow usage rate
Lack of storage facilites
Merchandising ( income level, shopping habits)
Minimum breakage / theft
Ease of handling
Multilingual Labels to Convey an International
Image (Zara, Hollywood Chewing Gum)
Recycling of Packaging
(Duales System, Eco-Emballage)
Regulations on consumer info.
(Origin, weight, ingredients)
http://www.pg.com/company/who_we_are/global_products.shtml
31. International packaging and European
Packaging Trends
Transportation Concerns
Climate Concerns
Economic Concerns
Cultural Factors
Promotional Considerations
Market Retailing Structure
Labelling
32. Company Considerations
Organizational capabilities?
Is it worth it?
Can we afford not to do it?
Can a specific return-on-investment (ROI) be
attained?
Quality, price, and user perceptions?
Warranties?
Managerial talent?
33. 33
Strategic Competitive Outcomes
International diversification: A strategy through
which a firm expands the sale of its goods or services
across the borders of global regions and countries into
different geographic locations or markets
Strategic Competitive Outcomes
International diversification and returns
As international diversification increases, firms’ returns initially
decrease, but then increase quickly as firm learns to manage
international expansion
Firms that are broadly diversified into multiple international
markets usually achieve the most positive stock returns
34. 34
Strategic Competitive Outcomes
Strategic Competitive Outcomes (cont.)
International diversification and innovation
Potential to achieve greater returns on innovations while
reducing risks of R&D investments
Exposure to new products and processes and the
opportunity to integrate this new knowledge into operations
Provides incentives to innovate
Competitive advantage potential
Locating activities
Transferring competencies
Coordinating activities
Profit sanctuaries and cross market subsidization
35. 10-
35
Brands
Bundle of images and experiences in the
customer’s 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
36. 10-
36
Brand Equity
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
37. 10-
37
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
38. 10-
38
International Products and Brands
Offered in several
markets in a
particular region
Euro brands
The Smart car was developed by
DaimlerChrysler for the European
market.
39. 10-
39
Global Products and Brands
Global products meet the wants and needs of
a global market and are offered in all world
regions
Global brands have the same name and
similar image and positioning throughout the
world
40. 10-
40
Global Brand Characteristics
Quality signal—allows a company to charge a
premium price in a highly competitive market
Global myth—marketers can use global
consumer culture positioning to link the brand
identity to any part of the world
Social responsibility—shows how a company
addresses social problems
41. 10-41
Global Products and Brands
Global brands are
not the same as
global products
iPod = brand
Mp3 player=
product
42. 10-
42
Branding Strategies
Combination or tiered branding allows
marketers to leverage a company’s 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
43. 10-
43
Brand Extension
Brand acts as an umbrella for new products
Ex: 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
44. 10-
44
Global Brand Development
Questions to ask when management seeks to
build a global brand
Does this move fit the company and/or its markets?
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?
45. 10-
45
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
46. 10-
46
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
47. 10-
47
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
48. 10-
48
Packaging
Consumer packaged goods refers to products
whose packaging is designed to protect or
contain the product during shipping, at retail, or
point of use
Eco-packaging is key because package
designers must address environmental issues
Offers communication cues that provide
consumers with a basis for making a purchase
decision
49. 10-
49
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
50. 10-
50
Aesthetics
Global marketers must understand the
importance of visual aesthetics
Aesthetic styles (degree of complexity found
on a label) differ around the world
Aesthetic elements that are deemed
appropriate, attractive, and appealing in
one’s home country may be perceived
differently elsewhere.
51. Red: South Africa = mourning; India =
purity; China = celebration, good luck;
Russia = Bolsheviks, communism; Western
= excitement
Yellow: China = nourishing; Egypt =
mourning; India = merchants; Western =
hazard, warning, hope
10-
51
52. Green: China = exorcism; India = Islam;
Ireland = the country; Western = Spring,
rebirth, go, ecology
Blue: Iran = heaven and spirituality;
Western = depression, sadness, “something
blue” bridal tradition, conservative
Purple: Thailand = mourning; Western =
royalty
10-
52
53. White: Japan white carnation = death; Eastern
= funerals; Western = brides, angels, good
guys, hospitals, doctors, peace
10-
53
54. 10-
54
Product Warranties
Express warranty is a written guarantee that
assures the buyer is getting what he or she
paid for or provides a remedy in case of a
product failure
Warranties can be used as a competitive tool