Download - Product and Brand Decision
-
7/29/2019 Product and Brand Decision
1/43
10-1
Product and
Brand Decisions
Ms. Kiran Sharma
-
7/29/2019 Product and Brand Decision
2/43
10-2
Analyzing Product Components
for Adaptation
(1) core component,
(2) packaging component, and
(3) support services component
Tangible vs. intangible productsConsumer vs. Industrial products
Components of products:
-
7/29/2019 Product and Brand Decision
3/43
Product Core : the core benefit or problem solving
services offered by the product
Packaging : the features, quality, design,
packaging, branding, and other attributesintegral to a products core benefit
Augmented : the support services and other
augmented components such as warranties,guarantees and after sales service
10-3
-
7/29/2019 Product and Brand Decision
4/43
10-4
Product standardization
The process of marketing a product in overseas markets with
little change except for some cosmetic changes such as modified
packaging and labelling
BENEFITS
o Projecting a global product image
o Catering to customers globally
o Cost savings in terms of economies of scale in production
o Designing and monitoring various components of marketingmix economically
o Facilitating the development of a product as a global brand
-
7/29/2019 Product and Brand Decision
5/43
10-5
Product adaptation
The process of making changes in a product in response to theneeds of the target market is termed product adaptation orcustomization
BENEFITS
Enables a firm to tap markets, which are not accessible due tomandatory requirements.
Fulfils the needs and expectations of customers in variedcultures and environments.
Helps in gaining market share. Increases sales leading to economies of scale.
-
7/29/2019 Product and Brand Decision
6/43
Factors influencing product adaptation in
International Markets
Mandatory factors
Governmentregulations
Packaging andlabelling regulations
Legal requirements
Voluntary
Consumer demographics
Culture
Local customs andtraditions
Price
10-6
-
7/29/2019 Product and Brand Decision
7/4310-7
Brands
Bundle of images and experiences in thecustomers mind
A promise made by a particular company
about a particular productDifferentiation between competing products
The sum of impressions about a brand is theBrand Image
-
7/29/2019 Product and Brand Decision
8/4310-8
Brand equity
The added value that accrues to a product as
a result of investments in the marketing of
the brandAn asset that represents the value created by
the relationship between the brand and
customer over time
-
7/29/2019 Product and Brand Decision
9/4310-9
Local Products and Brands
Brands that have achieved success in a singlenational market
Represent the lifeblood of domestic companies
Entrenched local products/brands can be asignificant competitive hurdle to global company
Coca Cola in Japan
o Non carbonated Ginseng flavored beverage beverage
o a blended tea known as Sokenbicha
o Lactia brand fermented milk drink
o Sports Goods company By Li NingSneakers in China
-
7/29/2019 Product and Brand Decision
10/4310-10
International Products and Brands
Offered in several markets in a
particular region
Euro Products and Euro-brandsoffered only in the European market
-
7/29/2019 Product and Brand Decision
11/4310-11
Global Products and BrandsThese 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 throughoutthe world
Nestle makes the very best
Gillette the best a man can get
BMW the ultimate driving machine
GE Imagination at work
-
7/29/2019 Product and Brand Decision
12/43
10-12
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 themthe 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
-
7/29/2019 Product and Brand Decision
13/43
10-13
Branding Strategies
Combination or tiered branding: allowsmarketers to leverage a corporate name
(Sony) is combined with a product brand
name (Walkman).
Co-branding features two or more different
company or product brands are featured on
product packaging or in advertising.
Intel Inside
-
7/29/2019 Product and Brand Decision
14/43
10-14
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
-
7/29/2019 Product and Brand Decision
15/43
10-15
Global Brand Development
Questions to ask when management seeks
to build a global brand:
Whether such a move fits well with theircompanies/ markets?
How difficult will it be to develop a global
brand team?
Can a single brand be imposed on all markets
successfully?
-
7/29/2019 Product and Brand Decision
16/43
10-16
Country of Origin as Brand Element
Perceptions about attitudes towardparticular countries often extend to
products and brands known to
originate in those countriesJapan - electronics
Germany quality engineering
Italystyle and fashion
-
7/29/2019 Product and Brand Decision
17/43
10-17
Packaging
Consumer Packaged Goods when thepackaging is designed to protect orcontain the product during shipping
Eco-Packaging because packagedesigners must address environmentalissues
Offers communication cues thatprovide consumers with a basis formaking a purchase decision
-
7/29/2019 Product and Brand Decision
18/43
10-18
Labeling
Provides consumers with various types of
informationRegulations differ by country regarding various
products
Health warnings on tobacco products
American Automobile Labeling Act clarifies
the country of origin, and final assembly point
All food products sold in USA must present
information regarding nutrition ( fats, calories)and serving size.
Indiaindication between vegetarian and non
vegetarian products is mandatory.
-
7/29/2019 Product and Brand Decision
19/43
10-19
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 aproduct failure
Warranties can be used as a competitive
tool
-
7/29/2019 Product and Brand Decision
20/43
10-20
Extend, Adapt, Create: Strategic
Alternatives in Global Marketing
Extensionoffering product virtuallyunchanged in markets outside of homecountry
Adaptationchanging elements of design,function, and packaging according to needsof different country markets
Creationdeveloping new products for theworld market
-
7/29/2019 Product and Brand Decision
21/43
10-21
Global Product Planning: Strategic
Alternatives
Product
Same Different
Communication
Different
SameStrategy 1:
Dual Extension
Strategy 2:
Product ExtensionCommunication
Adaptation
Strategy 4:
Dual Adaptation
Strategy 3:Product Adaptation
Communication
Extension
-
7/29/2019 Product and Brand Decision
22/43
Strategy 1: Dual Extension
Sell exactly the same product, with sameadvertising and promotional appeals as usedin the home country, in some or all world-market countries or segments.
This strategy is utilized by companies instage 2 i.e. International companies. Thedual extension strategy grows out ofethnocentric orientation.
Companies learn the hard way that dualextension approach does not wok in everymarket.
10-22
-
7/29/2019 Product and Brand Decision
23/43
Strategy 1: Dual Extension
For instance, Campbell soup tried to sell its
tomato soup in the United Kingdom and
realized after substantial losses that theEnglish prefer a more bitter taste than
Americans.
10-23
-
7/29/2019 Product and Brand Decision
24/43
10-24
Global Product Planning: Strategic
Alternatives
Product
Same Different
Communication
Different
SameStrategy 1:
Dual Extension
Strategy 2:
Product ExtensionCommunication
Adaptation
Strategy 4:
Dual Adaptation
Strategy 3:Product Adaptation
Communication
Extension
-
7/29/2019 Product and Brand Decision
25/43
Strategy 2:Product Extension
Communication Adaptation
- Low cost of implementation, unchangedphysical product.
- Avoid expenditures of R & D,manufacturing and inventory.
- Ben & Jerrys Homemade Ice creamlaunched in UK
10-25
-
7/29/2019 Product and Brand Decision
26/43
The product extension/ communicationadaptation strategy ultimately results inproduct transformation.
Costs are in identifying different productfunctions and revising marketingcommunications (advertising, salespromotion, and point-of-sale material) andother communication material.
This strategy can be used by stage 3 i.e.
multinational companies.
10-26
-
7/29/2019 Product and Brand Decision
27/43
10-27
Global Product Planning: Strategic
Alternatives
Product
Same Different
Communication
Different
SameStrategy 1:
Dual Extension
Strategy 2:
Product ExtensionCommunication
Adaptation
Strategy 4:
Dual Adaptation
Strategy 3:Product Adaptation
Communication
Extension
-
7/29/2019 Product and Brand Decision
28/43
28
Strategy 3: Product Adaptation/Communication Extension.
Involves extending the basic home marketcommunications strategy while adaptingthe product to local use or preferences.
This strategy may be utilized by both stage3 and 4 i.e. Multinational as well as Globalcompanies.
In case of stage 3 i.e. multinationalcompany, the product adaptation strategygrows out of polycentric orientation as itassumes that all markets are different.
-
7/29/2019 Product and Brand Decision
29/43
29
In case of stage 4 i.e. global companies, theproduct adaptation is due to geocentric
orientation that makes their managers moresensitive to actual differences between themarkets.
(1) Exxon adapts its gasoline formulations tomeet the weather conditions prevailing indifferent markets while extending the basiccommunications appeal, Put a tiger in your
tank without change.
-
7/29/2019 Product and Brand Decision
30/43
30
(2)Soap and detergent manufacturers have adjustedtheir product formulations to meet the local
water and washing equipment conditions with nochange in their basic communications approach.
(3) Household appliances have been scaled to sizes
appropriate to different use environments.
(4) Food products due to high degree ofenvironmental sensitivity are often adapted suchas Kellogg.
-
7/29/2019 Product and Brand Decision
31/43
10-31
Global Product Planning: Strategic
Alternatives
Product
Same Different
Communication
Different
SameStrategy 1:
Dual Extension
Strategy 2:
Product ExtensionCommunication
Adaptation
Strategy 4:
Dual Adaptation
Strategy 3:Product Adaptation
Communication
Extension
-
7/29/2019 Product and Brand Decision
32/43
32
Strategy 4:Dual Adaptation
Marketers experience that environmentalconditions and consumer preferences in theforeign markets are different when compared tohome markets.
This calls for a different product offering as wellas different receptivity to advertising appeals.
This strategy of product and communicationsadaptation is used by stage 4 company i.e. globalcompanies
Stage 3 company i.e. multinational can also usedual adaptation as it may be warranted by marketconditions, preferences.
-
7/29/2019 Product and Brand Decision
33/43
33
Examples:
Fabric Softener marketed by Unilever inEurope is typical case of multinational roadto adaptation. It had in 10 different
countries under 7 different brand namesand marketing strategies
Because of decentralized structure productand marketing decisions were left to
country managers, they chose names thathad local-language appeal and selectedpackage designs to fit local tastes.
-
7/29/2019 Product and Brand Decision
34/43
34
In Europe the function of greeting cards is
to provide for a space for a sender to writean individual message whereas U.S. cardscontain a prepared message.
This calls for changing both product andcommunications in response toenvironmental differences.
-
7/29/2019 Product and Brand Decision
35/43
10-35
How to Choose a Strategy?
The product itself, defined in terms of thefunction or need it serves
The market, defined in terms of theconditions under which the product is used,preferences of potential customers, andability to buy the product
Adaptation and manufacturing costs thecompany will incur
-
7/29/2019 Product and Brand Decision
36/43
10-36
New Products in Global Marketing
Pursue opportunities in competitive arenasof global marketplace
Focus on one or only a few businesses
Active involvement from seniormanagement
Ability to recruit and retain best employees
Understand the importance of speed inbringing product to market
-
7/29/2019 Product and Brand Decision
37/43
New product launch
Waterfall approachThe launch of a new product in
international markets in a phased
manner
Useful when:
lifecycle of product is long
high fixed costs of entry into
individual markets
foreign markets are not equally
developed
some customization is needed
firms have little foreign
experience
Sprinkler approachSimultaneous product launch in
various international markets
Useful when:
short product life cycle
high R&D costs in product
development
competition is very strong
(pre-emption of markets)
firms have existing
presence in targetcountries
homogenized preferences
10-37
-
7/29/2019 Product and Brand Decision
38/43
10-38
The International New Product
Department
How big is the market for this product at variousprices?
What are the likely competitive moves in response
to our activity?Can we market the product through existingstructure?
Can we source the product at a cost that will yield
an adequate profit?
-
7/29/2019 Product and Brand Decision
39/43
The International Product Life
Cycle
MNC Manufactures
Product in Developed
Countries; Exports to
Developing Countries
MNC Moves
Production to
Developing
Country; BeginsImporting to
Home Country
Developing
Country
Competitor
Exports ProductTo MNC Home
Country;
Competes
with MNC
Imports
Developing Country
Markets Remain Viable
Target Markets for
MNC; MNC HomeCountry Market Is
Diminishing
Sales
Introduction
and Growth
Stages:
Early
Maturity:
Late
Maturity
Decline
Time
-
7/29/2019 Product and Brand Decision
40/43
International Product Life Cycle,
continuedThe Product Introduction Stage Products are developed and marketed in developed countries
-
7/29/2019 Product and Brand Decision
41/43
International Product Life Cycle,
continued
The Growth Stage Increasing competition and rapid product adoption
Marketed primarily in developed countries
Product is exported to developing countries
-
7/29/2019 Product and Brand Decision
42/43
International Product Life Cycle,
continued
The Maturity Stage Product is adopted by most target consumers
Sales are leveling off
Profits decline due to intense competition Manufacturing operations move to developing countries to take
advantage of cheap labor
New competitors: firms from developing countries
-
7/29/2019 Product and Brand Decision
43/43
International Product Life Cycle,
continued
The Decline Stage Products are rapidly losing ground to new technologies and
product alternatives
Decrease in sales and profits Product lifecycle is extended through sales to consumers in
developing countries