1. International Product Strategy— From “products” to “offerings” “Anything of value offered by a firm in exchange for monetary payment or other consideration” A product may be a good, service, idea, place, person, or any combination of these A product is multidimensional and the sum of all its features/benefits determines the bundle of satisfactions (utilities) perceived by the consumer Newer terminology—”offering” or “market offering” Offerings exist at three levels—core, packaging, and support services

2. International Product Strategy— Product Component Model

3. Product Component Model ● Core Component ▶ Physical Product ▶ Features ▶ Design ● Packaging Component ▶ Style ▶ Brand Name ▶ Packaging ▶ Quality ▶ Labeling ▶ Price ▶ Trademarks ● Support Services Component ▶ Repair ▶ Warranties ▶ Maintenance ▶ Deliveries ▶ Instructions ▶ Spare Parts ▶ Installation

4. Product Adaptation Many “mature” U.S. products are considered new or innovative in other countries. U.S. products may need to be changed physically or intangibly to meet the requirements of a foreign market— for example *package size or label *green marketing requirements *color, odor, texture *brand name *product use or application Product homologation is used to describe the changes mandated by local product and service standards

5. Trends in Product Strategy Product Augmentation—the addition of value- added components to the core product to enhance the physical and psychological satisfaction received from the product Line and Brand Extensions—spin-offs or new varieties of existing popular or well-known products Strategic Product Alliances—firms combine resources to deliver an unusual or superior product Examples: La-Z-Boy/Microsoft; USPS and FedEx

6. The Drive for Quality Intense global competition is placing new emphasis on manufacturing quality products Quality, as a competitive tool, is the deciding factor in world markets Quality is closely associated with customer satisfaction Market-Perceived Quality—Quality from the customer’s point of view; includes intangibles that affect customer satisfaction Performance Quality—Quality from the company’s point of view; functional quality; often focuses on the physical aspects of the offering Quality is being measured in a variety of industries by objective, third-party organizations—e.g. J.D. Power and Associates

7. “Green Marketing” Explained Green marketing is a term used to identify concern with the environmental consequences of a variety of marketing activities The designation that a product is “environmentally friendly” is voluntary, and environmental success depends on the consumer selecting the eco-friendly product In some countries each level of the distribution chain is responsible for returning all packaging, packing, and other waste materials up the chain

8. European Union— Green Marketing Laws All transport packaging (crates, containers, drums, etc.) must be accepted back by the distributor and manufacturer for recycling All promotional and secondary packaging (displays, stands, etc.) must be accepted back by the distributor and manufacturer for recycling All final packaging (cartons, bottles, plastic containers, cans, foil wrap, etc.) must be accepted back by the retailer and manufacturer for recycling

9. European Union— Green Marketing Laws (cont.) By 2006, automobile manufacturers must accept back any vehicle no longer produced or that has no resale value and dispose of it properly By 2006, 85% of an automobile’s materials must be capable of being recovered for future use upon disposal

10. Global Brands A global brand is defined as the worldwide use of a name, term, sign, symbol (visual and/or auditory), design, or combination thereof intended to identify goods or services of one seller and to differentiate them from those of competitors A successful brand is the most valuable resource of a company Brand image is at the very core of business identity and strategy A global brand is defined as the worldwide use of a name, term, sign, symbol (visual and/or auditory), design, or combination thereof intended to identify goods or services of one seller and to differentiate them from those of competitors A successful brand is the most valuable resource of a company Brand image is at the very core of business identity and strategy Global brands such as Kodak, Sony, Coca- Cola, McDonald’s, Toyota, and Marlboro play an important role in their companies’ business strategies Perceived brand “globalness” leads to increases in sales

11. Country-of-Origin Effect Brands serve as external cues to taste, design, performance, quality, value, and prestige Many factors affect brand image, but one factor of great concern to international marketers is the country-of-origin effect on perceptions of the product Country-of-origin effect (COE) can be defined as any influence that the country of manufacture, assembly, or design has on a consumer’s perception of a product COE is a complex, multifaceted phenomenon. Research has shown it may be affected by the country, the type of product, the image of the company, the company’s full portfolio of brands, consumer demographic or psychographic characteristics (e.g. ethnocentrism) or any combination of these