1. Chapter 11 Product Management and Global Brands

2. Product Variables The Core Product The Tangible 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.
( Brand name, Aesthetics, country of origin, positioning, quality, packaging)
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.

3. Standardization versus Adaptation
Alternative approaches to international marketing:
Sell the product as it is internationally.
Modify product for different countries or regions.
Design new products for foreign markets.
Incorporate all differences into one product and introduce it globally.

4. Standardization versus Adaptation
FACTORS ENCOURAGING STANDARDIZATION
Economies of scale in production
Economies in product R&D
Economies in marketing
“Shrinking” of the world marketplace/economic integration
Global competitions
FACTORS ENCOURAGING ADAPTATION
Differing use conditions
Government and regulatory influences
Differing consumer behavior patterns
Local competition

5. Strategic Adaptation to Foreign Markets
High
Need for Adaptation
Degree of Cultural Grounding
Low
Industrial/ Technology Intensive
Consumer
Nature of Product

6. The Market Environment
Government Regulations
Political and social agendas often dictate regulatory requirements. (Sweden Spray, Google China)
Nontariff Barriers
Product standards, testing, subsidized local products.
Customer Characteristics, Expectations, and Preferences
Physical size, local behaviors, tastes, attitudes, and traditions.
Consumption patterns, psychosocial characteristics, and general cultural criteria.
(Snapple soft drink, GE medical systems, DD in Brazil, Campbel soup ,Coca-cola light)

7. The Market Environment
Economic Development
The stage of economic development affects the market size and demand characteristics. Backward innovation of the product may be required to meet local requirements.
Competitive offerings
Monitoring competing local products is critical in adjusting the product for competitive advantage.
Climate and geography
Local climatic conditions and can make products vulnerable to damage. (Kitkat in Asia, Winter wares)

8. Product Characteristics
Product components (Oreo in China, Maharaja Mac)
Branding
Packaging
Appearance
Method of Operation or Usage
Quality
Service
Country-of-Origin Effects

9. Packaging and Appearance
Packaging serves three major functions:
Protection
Improper handling and pilferage
Promotion
Language and symbols
User convenience
Packaging aesthetics- color and shape, overall size, and purchase quantity
Adaptations in styling, color, size, and other appearance features play an important role in how a consumer perceives a product.

10. Method of Operation or Usage
The product that is operable in the domestic market may not be operable in the foreign market.
Electrical voltages and connectors vary around the world. English and metric standards are not comparable.
Software may have to be translated into the local language.

11. Quality and Service
Quality is essential to marketing products internationally
ISO compliance may be required by buyers.
Servicing products in international markets requires producers to develop local repair staffs.

12. Country-of-Origin Effects
The origin of a product may have a strong effect on consumer perceptions and biases about foreign products.
“Mad Cow”
Swiss
France

13. Company Considerations
Organizational capabilities?
Is it worth it?
Can we afford not to do it?
Can a specific return-on-investment (ROI) be attained?
What about quality, price, and user perceptions?
Warranties?
Managerial talent?