Product Policy and Planning

Major Categories U.S. Exports Category Percentage Services Total 28.5 Travel (hotels, etc) 8.7 Transportation (fares, freight, and port services) 7.5 Commercial, professional, and technical services (advertising, accounting, legal, construction, engineering) 1.7 Financial services (banking and insurance) 1.5 Education and training services (most foreign student tuition) 1.0 Entertainment (movies, books, records) 0.8 Other categories (telecommunications, information, health care) 7.3 Irwin/McGraw-Hill 13-2 Source: U.S. Department of Commerce, http://

Major Categories U.S. Exports 13-3 Irwin/McGraw-Hill Source: U.S. Department of Commerce, http:// Category Percentage Merchandise Total 71.5 Food, feeds, and beverages (wheat, fruit, meat) 4.8 Industrial supplies (crude oil, plastics, chemicals, metals) 15.1 Capital goods (construction equipment, aircraft, computers telecommunication) 32.1 Automotive vehicles, engines, and part 7.7 Consumer goods (pharmaceuticals, tobacco, toys, clothing) 8.2 Other categories 3.6

“Companies must learn to operate as if the world was one large market.” - Theodore Levitt (1983)

I.Global vs. International Marketing II.Standardization vs. Adaptation Controversy A. Benefits of Standardization 1) Cost Saving 2) Levitt’s Argument 3) Uniform Brand Image 4) Improved Coordination

II. Standardization vs. Adaptation Controversy B. Advantages of Adaptation 1) Differing Use Conditions 2) Legal/Regulatory Factors 3) Different C.B. Patterns 4) The Marketing Concept

Creating Products for Consumers in Global Markets III. The Product Components Model IV. Country of Origin Effects V. Methods of Naming Brands

Product Component Model Repair and maintenance SUPPORT SERVICES COMPONENT CORE COMPONENT Installation Instructions Other related services Deliveries Warranty Spare parts Legal Trademark Brand name Legal Product platform Design features Functional features Legal PACKAGING COMPONENT Price Quality Package Styling

Product Variables The Core Product –a product or services that is essentially the same as that of competitors The Tangible Product –a product or service that is differentiated composition, origin, or tangible features from competing products The Augmented Product –a product or service which is serviced after the sale and carries a warrantee from the producer, producing a continuing relationship with the seller.

Alu-Fanny: French Foil wrap Crapsy Fruit: French cereal Kum Onit: German pencil sharpeners Plopp: Scandinavian chocolate Pschitt: French lemonade Atum Bom: Portuguese tuna Kack: Danish sweets Mukk: Italian yogurt Pocari Sweat: Japanese sport drink Poo: Argentine curry powder Would They Sell in the United States?

Methods of Naming Brands 1)Translation 2)Transliteration 3)Transparency 4)Trans-culture

VI. New Product Development 1) Idea generation 2) Screening 3) Evaluation 4) Market Testing 5) Entry / Launch VII. Product Elimination

Creating Products for Consumers in Global Markets VIII. International Services 1)Growth of the Service Sector i) Deregulation / Privitization ii) Technological Advancements

Irwin/McGraw-Hill 12-8 Unique Characteristics of Services 1.Inseparable in that its creation cannot be separated from its consumption. 2.Heterogeneous in that it is individually produced and is thus virtually unique. 3.Perishable in that once created it cannot be stored but must be consumed simultaneously whit its creation.

Irwin/McGraw-Hill 12-9 Top Consumer Services Exports 1.Tourism5. Telecommunications 2.Transportation6. Entertainment 3.Financial Services7. Information 4.Education 8. Health Care

Creating Products for Consumers in Global Markets 2)Difficulties in Marketing Services Internationally i) Protectionism ii) Controls on Transborder Data Flow iii) Protection of Intellectual Property iv) Cultural Requirements for Adaptation 3)U.S. Strengths in Marketing Services i) High Service Expectations ii) Experience with Tough Regulations

“I search the room but you’re not there. Your perfume lingers everywhere.” A global appeal???