Basic Product Concepts. The Global Marketing Mix: Brand and Product Decisions. Topic #10. A product is a good, service, or idea

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1 The Global Marketing Mix: Brand and Product Decisions Topic #10 Basic Product Concepts A product is a good, service, or idea Tangible A+ributes Intangible A+ributes 2015 by Pearson Education

2 Products and Culture A product is more than a physical item: It is a bundle of satisfactions (or utilities) that the buyer receives These include: Its form, taste, colour, odour, and texture How it functions in use The package; the label; the warranty Manufacturer s and retailer s servicing The confidence or prestige enjoyed by the brand The manufacturer s reputation The country of origin Physical or Mandatory Requirements and Adaptation Product homologation is used to describe the changes mandated by local product and service standards Legal, economic, political, technological, and climatic requirements of the local marketplace often dictate product adaptation The less economically developed a market is, the greater the degree of change a product may need for acceptance 2006 McGraw-Hill Ryerson, Ltd. All rights reserved. 2

3 Product Component Model 2006 McGraw-Hill Ryerson, Ltd. All rights reserved. RANGE OF CREDIT CARD BENEFITS FOR AMERICAN EXPRESS CUSTOMERS 3

4 Labeling Provides consumers with various types of informagon RegulaGons 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 genegcally modified crops 2015 by Pearson Education 10-7 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 Offers communicagon cues that provide consumers with a basis for making a purchase decision Eco- Packaging is key because package designers must address environmental issues 2015 by Pearson Education

5 Brands Bundle of images and experiences in the customer s mind A promise made by a pargcular company about a pargcular product A quality cergficagon DifferenGaGon between compegng products The sum of impressions about a brand is the Brand Image 2015 by Pearson Education 10-9 Brand Equity The added value that accrues to a product as a result of investments in the markegng of the brand An asset that represents the value created by the relagonship between the brand and customer over Gme 2015 by Pearson Education

6 Local Products and Brands Brands that have achieved success in a single nagonal market Represent the lifeblood of domesgc companies Entrenched local products/brands can be a significant compeggve hurdle to global companies 2015 by Pearson Education Offered in several markets in a pargcular region Honda 5- door hatchback auto is known as Fit in Japan and Jazz in Europe Interna:onal Products and Brands Daimler s Smart car is offered in European and U.S. markets 2015 by Pearson Education

7 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 posigoning throughout the world BMW : UlGmate Driving Machine GE: ImaginaGon at Work Visa: Life takes Visa 2015 by Pearson Education In any language GilleCe s trademarked brand promise is easy to understand. Global Products and Brands Global brands are not the same as global products ipod = brand mp3 player= product 2015 by Pearson Education

8 Global Brand Characteris:cs Quality signal allows a company to charge premium price in a highly compeggve market Global myth marketers can use global consumer culture posigoning to link the brand idengty to any part of the world 2015 by Pearson Education Global brands in china 8

9 Strategic Brand/Product Alterna:ves in Global Marke:ng Extension offering product virtually unchanged in markets outside of home country AdaptaGon changing elements of design, funcgon, and packaging according to needs of different country markets CreaGon developing new products for the world market 2015 by Pearson Education Global Product Planning: Strategic Alterna:ves 9

10 Global Product Planning: Strategic AlternaGves Dual Extension May be very profitable, simple Used with consumer durables, B2B or industrial products E.g., LocGte adhesives, Apple iphone Product Extension Communica:on Adapta:on No product changes (reduced costs) Costs in market research advergsing, sales promogon, point- of- sale material Ex. Miller Genuine Drad is an internagonal lifestyle brand (GCCP) in Central Europe rather than an American brand (FCCP) in other parts of the world 2015 by Pearson Education Global Product Planning: Strategic AlternaGves Product Adapta:on Communica:on Extension Adapt the product to local use but the message stays the same E.g., Oreos in China failed ungl they were reformulated to be less sweet and expensive Dual Adapta:on Both may need to change for legal, cultural or other environmental reasons Regional managers may simply act independently Nike global shoes and Just Do It approach didn t work in China. Less expensive shoes created in the country and ads featuring Chinese athletes in line with cultural principles of harmony and respect for authority Innova:on Important for reaching mass markets in less industrialized nagons and certain segments in industrialized countries 2015 by Pearson Education 10

11 Maslow s Hierarchy of Needs 2015 by Pearson Education Asian Hierarchy of Needs 2015 by Pearson Education

12 Country of Origin as Brand Element PercepGons about and aftudes toward pargcular countries oden extend to products and brands known to originate in those countries Japan Germany France Italy French perfume 2015 by Pearson Education