What is a Product?Multidimensional, sum of all its features, bundle of utility

Product Component Model Repair and maintenanceSUPPORT SERVICES COMPONENTCORECOMPONENT Installation Instructions Other related services Deliveries Warranty Spare parts Legal Trademark Brand name Legal Product platform Design features Functional features LegalPACKAGINGCOMPONENT Price Quality Package StylingIrwin/McGraw-Hill12-6

Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Product Marketing DecisionsNumerousAffected by Environmental FactorsAffected by internal Strengths and Weaknesses

Types of Product Decisions (1) Product PositioningPositioning refers to the act of locating a brand in customers minds relative to competitive products in terms of product attributes and benefits

Positioning Map: Automobiles For Generation YersMore EdgyLess EdgyExpensiveInexpensiveScionKia Sorrento$13kCubeCivic$20K

Types of Product Decisions: (2) Product Mix DecisionsDef.: Set of all products and items that a particular seller offers to buyers. Decisions include selection of width, length, depth, and consistency

Product Mix / Assortment E.g. P&G

(3) Product Line DecisionsA product line is a group of products that are closely related because they perform a similar function, are sold to the same customer groups, are marketed through the same channelsDecisions include Product Line length, modernization, featuring, pruning

(4) Brand Name

A companys unique designation ortrademark, which distinguishes its offering from other product categoryentries

(5)The LogoGraphic design element that is related to the brand nameCompanies use logos with or without brand namesNot all brand names possess a distinct logo but many doe.g., the Nike swoosh, Ralph Laurens Polo

(6) Packaging DecisionsColorDesign and ShapePhysical MaterialsProduct Information on Package

What is a Service?Any act that one party can offer to another that is essentially intangible and does not result in the ownership of anything. May or may not be tied to a physical product

Major Categories U.S. Exports of ServicesCategory PercentageServices Total 28.5 Travel (hotels, etc) 8.7Transportation (fares, freight, and port services) 7.5Commercial, professional, and technical services (advertising, accounting, legal, construction, engineering) 1.7Financial services (banking and insurance) 1.5Education and training services (most foreign student tuition) 1.0Entertainment (movies, books, records) 0.8Other categories (telecommunications, information, health care) 7.3Irwin/McGraw-Hill13-2Source: U.S. Department of Commerce, http://www.doc.gov. 2001

Service Marketing DecisionsProduct MixProduct LineBrand NameLogoStore Layout

Types of Service Marketing Decisions Product Positioning

Montevideo, Uruguay

What is an Industrial Product?Goods intended for industrial use, i.e. creating other goods & servicesMaterials & parts (enter manufacturers product completely, e.g. oil, lumber, tires, small motors)Capital Items (long lasting, facilitate developing finished product, e.g. buildings, generators, lift trucks)Supplies & business services (short lasting, e.g. pens, brooms, maintenance & repair services)

Major Categories U.S. ExportsIndustrial13-3Irwin/McGraw-HillSource: U.S. Department of Commerce, http://www.doc.gov. 2001Category PercentageMerchandise Total 71.5 Food, feeds, and beverages (wheat, fruit, meat) 4.8Industrial supplies (crude oil, plastics, chemicals, metals) 15.1Capital goods (construction equipment, aircraft, computers telecommunication) 32.1 Automotive vehicles, engines, and part 7.7Consumer goods (pharmaceuticals, tobacco, toys, clothing) 8.2Other categories 3.6

To Standardize or Adapt Product/Service?That is the Question.

Products & Services for ConsumersTwo Approaches for International Product DevelopmentAdaptation The strategy of altering products to meet the needs of local marketsGlobal Standardization The standardization of products across markets & ultimately the standardization of the marketing mix worldwide

Global Standardization vs. Local Adaptation ContinuumContinuum not One or the otherGlobal Standardization - Ideal, theoreticalRegional Standardization uniform marketing within a particular region, EUGlobalize components, e.g. Brand Name, Logo, Image, Positioning, physical product,

GlobalizationA little boy from Japan flies to the United States with his parents, and on the way in from the airport they pass the "miracle mile" most places have now. The little boy turns to his parents and says, "Hurray! They have McDonald's here in America too!"

GlobalizationBraun (Gillette) sells kitchen appliances using same marketing mix across continents with minor mandatory adaptations (voltage, cycles)

Pro Globalization ArgumentsGlobal Consumers Needs of consumers are becoming more homogenous world wideGlobal Brand Awareness facilitated by travel, communication, internetResults in lower price due to standardized product research, economies of scale, promotion

Adaptation - Love Hotels in JapanYou'll find "Love Hotels" all over Japan, places designed for folks to get together. The rooms offer a fantasy of luxury and escape from crowded tiny apartments where families or neighbors might spy on licit or illicit physical pleasures. You can tell the love hotels by their bright-lit neon signs with funny names, often English inflected: Hotel Elmer, Hotel Carrot, Hotel Charm, Hotel Princess, Hotel Chrystal. And the signs out front will list two or three prices: short stays, long stays, overnight stays. In the lobby, you won't see any people. Only a large room menu on the wall. If a photo of a room is lit up, the room is available. You like that room, press a button next to the photo. A faceless person behind dark glass hands you a key after you hand them your cash.

Love Hotel

Love Hotel Price InformationStay 4500 ($40)-- OPENRest 3600 ($30)-- CLOSEAM 10:00-PM 5:00PM 3:00-PM 6:00 2600AM 10:00-PM 4:00 ($20)

Which Components of the Product May Require Adaptation?Irwin/McGraw-Hill12-7 Core Component Physical Product Features Design *Positioning Psychological Packaging Component Style Brand Name Packaging Quality Labeling Price Trademarks Support Services Component Repair Warranties Maintenance Deliveries Instructions Spare Parts Installation

Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Would They Sell in the United States?Alu-Fanny: French Foil wrap

Crapsy Fruit: French cereal

Kum Onit: German pencil sharpeners

Plopp: Scandinavian chocolate

Pschitt: French lemonadeAtum Bom: Portuguese tuna

Kack: Danish sweets

Mukk: Italian yogurt

Pocari Sweat: Japanese sport drink

Poo: Argentine curry powderIrwin/McGraw-Hill12-9

Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Adapt or Standardize?

ShampooMakes hair shiny, for normal hair, packaged in 400 gram size

Detergent Powder (Hand laundry detergent) Strong cleaner, well-known in international markets packaged in 150, 480 gram and 20 kilogram sizes

How could this product be adapted to U.S.?Product?Package?Support Services?

ServicesAdaptation important because it involves people to people contact

Industrial ProductsIndustrial Products Require Less AdaptationIndustrial goods share similar buying motives worldwideIndustrial Products main U.S. export

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