INTERNATIONAL PRODUCT STRATEGIES International Marketing

INTERNATIONAL PRODUCTS A product is something offered to a market that satisfies a want or need. Tangible: Parts of the product that can be seen or felt Intangible: Parts of the product that cannot be seen or felt What parts of a product are tangible? Packaging, brand name, quality, design What parts of a product are intangible? Warranty, delivery, credit, installation; services are mostly intangible

STANDARDIZED V. ADAPTED PRODUCTS When Marketers Decide to go Global; they have four choices: 1.Keep their home country products the same 2.Adapt an existing product for new markets 3.Design new products for new markets 4.Design one product for a global marketplace

MCDONALD’S PRODUCT OPTIONS Keep Same Adapt New Market Design New Asian Markets: Fries w/seaweed flavoring Japan: The Cheese Katsu Burger Design One Product For Global Marketplace: What is a new item that could be sold in any McDonalds? Drinks, Side items (Apples, Carrots, etc..) Breakfast items, salads, pizza, tacos, pita & hummus, desserts, etc…

WHY DESIGN A STANDARDIZED GLOBAL PRODUCT? What is a standardized global product? Standardized products can create economies of scale in research & development, production, and marketing Economies of Scale: Produce more to lower overall costs A global product with a global brand image allows companies to compete against other global marketers

WHY ADAPT INSTEAD OF STANDARDIZED? Products may be used in different political & legal environments Consumers may have different cultural needs Local competition in foreign markets may be different than domestic Product customization may be necessary

#1: PRODUCTS NOT ALLOWED IN FOREIGN COUNTRIES Game Consoles: China (2000) The Chinese government enacted a ban on gaming consoles to prevent the youth from wasting their time and not working. Yellow Clothing: Malaysia (2011) The government decided that it was illegal to wear yellow, as it was the color of a certain group of activists Chewing Gum: Singapore (1992) Since 1992, the import and sale of gum has been illegal in the city in order to keep public places clean.

#2: CONSUMERS MAY HAVE DIFFERENT CULTURAL NEEDS Windup radio Invented for people in Africa because batteries were expensive & power supplies in rural areas didn’t exist

#3: LOCAL COMPETITION IS DIFFERENT THAN DOMESTIC 7-Eleven in Taiwan make up 50% of all convenience stores in country 80% of citizens shop these stores once a week Usually 3-4 every block Buy drinks, lotto tickets, pay utility bills, pay traffic tickets, get photos developed, order a designated driver, shop amazon & have it delivered to 7-Eleven

#4: PRODUCT CUSTOMIZATION MAY BE NECESSARY Proctor & Gamble started from scratch when they decided to sell diapers in Brazil, Russia, India, & China Adjusted fit, absorbency, packaging, & color to fit these markets & keep the costs down 1 diaper equals the price of 1 egg

TO STANDARDIZED OR ADAPT: THAT IS THE QUESTION THE MORE THEY HAVE IN COMMON, THE LESS ADAPTATION NEEDED Market characteristics : political and legal regulations, customer characteristics and preferences, purchasing patterns, and distribution systems Product characteristics : nature of the product, the ability to create a global brand, and the purpose for which the product is used, perception of product quality, perception of the product’s country of origin, and required after-sale service. Company characteristics : financial resources, international orientation of management

GLOBAL BRANDS A brand is a name, word, or design that identifies a product, service, or company Brands create a certain expectation in the minds of a customer Global brands must have a competitive advantage in order to compete with local brands in local markets Can be subject to “Country of Origin Effect” In the 1950’s The Phrase “Made in Japan” meant cheap In 2015, the phrase “Made in Japan” means high quality

PRODUCT POSITIONING Product Positioning refers to using a brand to create an image BMW usually signifies quality engineering, and a fast, sporty automobile Companies used to rely on TV advertising to create brand image Today they are shifting to the Internet, live events, cell phones, and movies

HOW ARE THEY POSITIONED?

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HOW ARE THESE SCHOOLS POSITIONED?

GLOBAL BRAND EQUITY Brand Equity is the additional value that a brand name brings to a product or company Interbrand Corporation tracks world Brands Estimates Apples Brand Equity at $ million

NEGATIVE AFFECTS ON BRAND EQUITY Counterfeits, forgeries, & grey markets can diminish brand equity A grey market exists when a product is sold outside an established authorized distribution system Countries like China & Mexico sell knock off products

EXAMPLES

PACKAGING & DESIGN Product Packaging & Design can have a strong impact on product image & sales Samsung wins a lot of awards for its Product Designs Suntory Tea changed the product, package, and name in 2003 to alter slow sales $1 billion in sales for 2005

PACKAGING

CHEAPER PRODUCT….CHEAPER PACKAGE

CHOOSING A BRAND NAME 1.Must be unique to the product and its market 2.May not be used by any other product or company 3.Should not have undesirable meaning across languages Family brand: typically the brand name of a company that also have individual product brands Ford Motor Company (family) sells Mustang (individual) Kellogg's (family) sells Rice Krispies (individual)

BRAND NAME Unique to its Market: Undesirable Names: American Motors tried to market its new car, the Matador, based on the image of courage and strength. However, in Puerto Rico the name means "killer" and was not popular on the hazardous roads in the country.