Chapter 8 – International Product and Service Management Doole & Lowe International Marketing Strategy

The nature of products and services Do you agree to maintain the Product Quality (e.g. Smart Phones) is more difficult than maintaining Service Quality (e.g. banking Service)? The production of Pure Product may involve machine. The production of Pure Service may involve human. Can you suggest any implication?

The components of the international product offer For what purpose has the product been developed how would it be used in that country? What distinctive properties does it have? What benefits is the consumer expected to gain? How is it positioned what image do consumers perceive it to have? Which consumer segments are expected to buy it on what occasions and for what purpose? How does it fit into the total market?

Factors affecting international product and service management Balance between standardization and adapation Cultural, usage and legal factors Product accessibility and ethical issues Green environmental issues Shortening product life cycles Effect of differing market entry methods Changes in marketing management Ethical and green issues

Factors affecting international product and service management (cont.) Towards standardization Markets are becoming more homogeneous (e.g. technological products – we all use same standards) More identifiable international consumer segments (e.g. youth markets) Increase in number of firms moving towards globalization (e.g. in order to growth and lower the cost of production.) Forcing greater standardization in industry sectors (e.g. W3C https://www.w3.org/standards/about.html )

Product policy Overall growth/profit objectives Experience, philosophies and attitude of the company Characteristics of the market Requirements, expectations and attitudes of the consumers The products and services themselves Ease of distribution Support required from elements of the marketing mix Environmental constraints Level of risk the company is prepared to take Do you have any Product Policy for the drink or food that you want to target UK market. Especially in different stages of the product life cycle?

Managing products across borders The international product cycle suggests that products in international markets can have consecutive ‘lives’ in different countries. Soon after the product was launched in its domestic market it was introduced into another developed country, A. Later it was introduced to other developed and newly industrialized countries, B and C, and Recently to less developed country, D. In the domestic market and country, A, a replacement product is required, while considerable growth still possible in the other countries

Managing products across borders (cont.)

Image, branding and position Questions: In order to increase Brand Value: What benefits (e.g. low price, quality, self-image etc.) does a firm need to increase? What costs (e.g. labor, production, advertising etc.) does a firm need to decrease?

Image, branding and position (cont.) Branding strategies Umbrella brands (e.g. one brand supports several products, as is the case with Google) Product brands (e.g. P&G (Procter and Gamble)) Line brands (e.g. company has a number of complementary products sharing the same brand concepts – L'Oréal) Range brands (e.g. similar to Line Brands but include a broader range of products, Nestle uses Findus for frozen foods. Endorsing brands (e.g. Endorsing brands are weaker association of a corporate name with a product name. Over time, Nestle has graduately increased the size of ‘Nestle’ on the packaging of its acquired brands such as Kit Kat. Source brands (e.g. double branded such as Ford Mondeo)

Image, branding and position (cont.)

Image, branding and position (cont.)

Image, branding and position Brand piracy Outright piracy (same trademark as the original but is false) Reverse engineering (Reverse engineering is taking apart an object to see how it works in order to duplicate or enhance the object. The practice, taken from older industries, is now frequently used on computer hardware and software. ) Counterfeiting (product quality has been altered but the same trademark appears on the label. Burberry has been a victim.) Passing-off (involves modifying the product but retaining a trademark which is similar in appearance, phonetic quality or meaning – e.g. Colalgate for Colgate.) Wholesale infringement (is the questionable registration of the names of famous brand overseas rather than the introduction of fake products. It is entirely within the law. E.g. registration of dotcom)

Innovation and new product development (cont.) The new product development process Idea generation Initial screening Business analysis Development Market testing Commercialization and launch

Innovation and new development (cont.) Research and development strategies Companies must take decisions on: Location of their own internal R&D facilities Extent to which they contract out certain parts of their R&D programme Whether or not they might acquire a company which can provide either the required new technology or a new product Licensing the technology and process from another company Funding joint ventures or strategic alliances with companies that have complementary technology

Innovation and new product development (cont.) Uncover unmet needs and problems (e.g. develop ‘Blue Ocean Strategy rather than Red Ocean Strategy.’ such as ‘Smart Contact Lenses [Link]’ ) Develop a product with competitive advantage (e.g. cost leadership or product/service differentiation) Shepherd the products through the firm (e.g. encourage all levels of staff to think of how to improve products for different market segments)