developing global marketing strategies-chapter12 final

8/3/2019 Developing Global Marketing Strategies-chapter12 Final

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DEVELOPING GLOBAL MARKETINGSTRATEGIES

PRODUCTS AND SERVICES FOR CONSUMERS


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CHAPTERS OBJECTIVES

The importance of quality in International Market.

Cultural requirements for product adaptation.

Country-of-origin effects on product image.

The need to view all attributes of product in order toovercome resistance to acceptance.

The relationship between product acceptance andthe market into which it introduced.


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QUALITY

Due to intense global competition, companiesemphasize and depend more on product quality,competitive price, and innovative products.

Thus, quality aspect is very importance in marketingproducts in international market especially whenfirms market the products in advance and developingcountries.


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WHAT IS QUALITY

According to Cateora(2007), quality can be definedinto two dimensions:

1) Market-perceived quality (consumer

perception on brand, price, design,packaging and etc.)

2) Performance quality (the ability of theproduct to perform a tasks that is

supposed to.)


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Mandatory Requirements and Adaptation

Most of the time the companies change its product ina number of ways to meet the physical or mandatoryrequirements of the new market.

Product Homologation is where the companies hasto change its product mandated by the newmarket/country.

Example: Change the wiring system to meet the

voltage system, change the design to meet the safetystandards, and etc.


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Legal factors, economic factors, political factors,technological factors, and climate factors are amongthe factors that can force the company to change oradapt the product.

Example: When market in poor country, cigarettesmanufacturers change into small package or sellindividual cigarettes.

Example: When Proton export its car into Europe itfix the car with heater system.


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GREEN MARKETING AND PRODUCTDEVELOPMENT

Green marketing is marketing activities that concernand take consideration of the environmental impact.

For example packaging that is biodegradable.

Products that use aerosol that harm the ozone layeris taken out form the market.

Thus companies need to develop new products thatare environmentally friendly in international market

due to this new concern.


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PRODUCTS AND CULTURE

Cultural aspects do affect the products design andproduct adaptation in international market.

Usually it affects the brand name, size, color, design,price and other products attributes/features.

The greater the cultural differences between the homecountry and the foreign country the greater the productadaptation.

Example: Shisedo introduce its cosmetic products inUSA. After a while the company has to modify theproducts to make it easy to use to suit with the Americanculture which do not have much time at home.


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ANALYZING PRODUCT COMPONENTSFOR ADAPTATION

Most of the time companies adapt their products tosuit with the foreign regulations, culture, and thecustomers taste.

The next question is which part of product that needto be adapted???

The brand? The packaging? The design? Theadditional services? The ingredients?


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To identify all the possible ways a product may beadapted it is useful to separate product dimensionsinto three dimensions such as:

1) Core Component.2) Packaging Component.

3) Support Services Component.


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PRODUCT CORE COMPONENT

The core component of the product consist threeparts which are:

1) Product Platform (contains the essential

technology).2) Design features.

3) Functional features.


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Usually the company wont adapt the productplatform because it will involve high capitalinvestment such as building new plant, new machineand new processing facility.

However, the company can change the design, color,and other functional features to suit with the foreignculture, regulation and customer taste.

Example: Proton includes the heater system in itsautomobile that it market in UK.

Pizza Hut introduce curry flavor in its Malaysianrestaurant


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5

This special coke canonly be found inworlds exclusive

club. Coca Cola

change the design tomeet the taste of itsexclusive customersaround the world.
http://dieline.typepad.com/.shared/image.html?/photos/uncategorized/m5.jpg


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PACKAGING COMPONENT

The packaging component includes style features,packaging, labeling, trademarks, brand name,quality, price, and other aspects of packaging.

Some parts of the packaging component must beadapted to suit with the foreign regulation.

For example some countries require labels to beprinted in more than one language.

Plastic packaging cannot be used in USA and most ofEurope.

In Malaysia Nestle use Halal sign to suit with Muslimpopulation.


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Procter & Gamble use Oil of Olay in USA but use Oilof Ulan in Malaysia.

Exxon-Mobil use Exxon brand name in USA but useEsso in Malaysia.


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EXXON IN USA

ESSO INMALAYSIA


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SUPPORT SERVICES COMPONENT

The support services component includes repair andmaintenance, instruction, installation, warranties,deliveries, and the availability of spare parts.

Repair and maintenance are difficult problems indeveloping countries.

Parts are also difficult problem in developing countrywhich usually does not have many spare parts

retailers and distributors. Instruction that the company provides in the

packaging or instruction manual must be adaptedaccording to education level.


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Pizza Hut deliver its pizza by using motorbike in Malaysia,China, and most of the Asian countries due to its traffic condition


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MARKETING SERVICES GLOBALLY

Many types of services are also marketed all over theworld.

Services such as Banking, Tourism, Hospital,

Airlines, Insurance, Financial consulting, Hotel,Communication, Pay or Cable TV, Sporting events,are found all over the world.


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Example of Foreign Services in Malaysia

Putrajaya MarriotHotel


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BARRIERS TO ENTER GLOBAL SERVICESMARKET

The vast majority of services enter foreign marketthrough licensing, franchising, or direct investment.

Thus marketing services in foreign countries always

meet with four kinds of barrier which are:1) Protectionism.

2) Restriction on transborder data flow.

3) Protection of intellectual property.

4) Cultural barriers and adaptation.


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BRAND IN INTERNATIONAL MARKET

When deciding the brand name of the products theinternational company can choose to use global

brand, national brand or private brand.

Global brand is where the international company usethe same brand for all countries.

This give the company uniformity and easier tointroduce other products later on by using the same

name. Example of global brand are : Levis, Coca-Cola,

MacDonald, KFC, IBM, Nokia, Apple, Playstationand many more.


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Another type of brand that the company could use isthe National Brand.

This is the new brand that the company give to the

products that the company market in internationalmarket.

The international company might use specific brandfor each country.

Usually the company use national brand or countryspecific brand to accommodate with the foreignculture and preferences.


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Private brand is where the retailer use its own nameas the brand name to the products that it sell in itsstore.

Retailing companies such as Tesco, Carrefour, Giantand Wallmart use its own brand on certain products.

Customers can only buy the Tesco brand only atTesco outlet.


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COUNTRY OF ORIGIN

Country where the products are made also can affectthe consumer perception toward certain products.

Consumer can have positive or negative perceptions

toward the products by looking from where it weremade.

Certain country has its own image.

For example: Japan is known as quality in electronic,

,camera robotic and sushi. USA is known as quality in Satellite technology,

heavy industries, medical, and entertainment.


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Italy is known for its design and fashion.

China is known for its silk.

Malaysia is known for its rubber and palm oil.

Thus the international company has to be aware onthe effect of the country of origin on its brand.

It may mentioned the country name on its label or itmay not mentioned if the consumers have negative

feeling.

For example: Nike shoes which is made fromVietnam may not be very good compared to made

from USA.


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END OF CHAPTER

developing global marketing strategies-chapter12 final

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