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Global Consumer Products - PowerPoint

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					Products and Services
   for Consumers
                Global Perspective
       Hong Kong – Disney Rolls the Dice Again
•   Tokyo Disneyland – successful
•   EuroDisney – disaster
•   Hong Kong Disneyland – open for business
•   The opportunities and challenges for international marketers of
    consumer goods and services today is great and diverse.
     - Market offerings
     - Business-to-consumer marketing
• Quality products and services that meet the needs and wants of
  consumers at an affordable price should be the goal of any
  marketing firm.



                                                                      12 - 3
Global Product Usage Varies



                  Boy in Eastern
                  Mexico prepares
                  for Jaguar dance to
                  bring rain.




                                        12 - 4
                             Quality

•   Shift to a customer’s market
•   Increased customer knowledge
•   The customer defines quality
•   The cost and quality of a product are among the most important
    criteria by which purchases are made




                                                                     12 - 5
                      Quality Defined

• Quality can be defined on two dimensions:
   - Market-perceived quality
   - Performance quality
• Most consumers expect performance quality to be a given
• In many industries quality is measured by objective third parties
   - JD Power and Associates




                                                                      12 - 6
                  Maintaining Quality

• Damage in the distribution chain
   - Russian chocolate
• Quality is essential for success in today’s competitive global
  market
• The decision to standardize or adapt a product is crucial in
  delivering quality




                                                                   12 - 7
       Physical or Mandatory Requirements and
                     Adaptation
• Product homologation
• Product adaptation dictated by the following requirements:
   -   Legal
   -   Economic
   -   Political
   -   Technological
   -   Climate




                                                               12 - 8
   Green Marketing and Product Development

• Critical issues affecting product development:
   - Control of the packaging component of solid waste
   - Consumer demand for environmentally friendly products
• European Commission guidelines for ecolabeling
• Laws to control solid waste



    Green marketing is a term used to define concern
    with the environmental consequences of a variety
    of marketing activities.

                                                             12 - 9
     Products and Culture




Turka Cola competing well with Coke   12 - 10
                 Products and Culture

• A product is the sum of the physical and psychological
  satisfactions it provides the user.
   - Primary function
   - Psychological attributes
• The need for cultural adaptation is often necessary, affected by
  how the product conforms with:
   - Norms
   - Values
   - Behavior patterns




                                                                     12 - 11
     Innovative Products and Adaptation

• Determining the degree of newness as perceived by the intended
  market
• Diffusion
• Established patterns of consumption and behavior
• Foreign marketing goal: gaining the largest number of consumers
  in the market in the shortest span of time
   - Probable rate of acceptance




                                                                    12 - 12
                Diffusion of Innovations

• Crucial elements in the diffusion of new ideas:
   -   An innovation
   -   Which is communicated through certain channels
   -   Over time
   -   Among the members of a social system
• The element of time
• Variables affecting the rate of diffusion of an object:
   - The degree of perceived newness
   - The perceived attributes of the innovation
   - The method used to communicate the idea



                                                            12 - 13
     Five Characteristics of an Innovation

1.   Relative advantage
2.   Compatibility
3.   Complexity
4.   Trialability
5.   Observability




                                             12 - 14
             Production of Innovations

• Inventiveness of companies and countries
• Expenditures
• Japanese solutions
   - American-style education programs
   - American design centers
• New ideas come from a growing variety of sources, countries,
  acquisitions, and even global collaborations




                                                                 12 - 15
Analyzing Product Components for Adaptation

• Insert Exhibit 12.1 – Product Component Model




  Exhibit 12.1

                                                  12 - 16
  Marketing Consumer Services Globally

• Consumer services characteristics:
   -   Intangibility
   -   Inseparability
   -   Heterogeneity
   -   Perishability
• A service can be marketed both as an industrial (business-to-
  business) or a consumer service




                                                                  12 - 17
    Services Opportunities in Global Markets

•   Tourism
•   Transportation
•   Financial services
•   Education
•   Communications
•   Entertainment
•   Information
•   Health care




                                           12 - 18
       Barriers to Entering Global Markets for
                  Consumer Services
•   Protectionism
•   Restrictions on transborder data flows
•   Protection of intellectual property
•   Cultural barriers and adaptation




                                                 12 - 19
      Brands in International Markets

• Very important
• Most valuable resource a company has



  A global brand is defined as the worldwide use of
  a name, term, sign, symbol, design, or combination
  thereof intended to identify goods or services of
  one seller and to differentiate them from those of
  competitors.


                                                       12 - 20
Top Twenty Brands



               Top 10 Global
               Brands for 2006
               based on brand
               value



           Business Week and Interbrands 2006
                                                12 - 21
                      Top Twenty Brands
Rank 2005/2004   2005 Brand Value   2004 Brand Value   Change   Country of
                 (millions)         (millions)         (%)      Ownership
1/1 Coca Cola    $67,525            $67, 394           0%       U.S.

2/2 Microsoft    59,941             61,732             -2       U.S.

3/3 IBM          53,376             53, 791            -1       U.S.

4/4 GE           46, 996            44,111             7        U.S.

5/5 Intel        35,588             33,499             6        U.S.

6/8 Nokia        26,452             24,041             10       Finland

7/6 Disney       26,441             27,113             -2       U.S.

8/7 McDonalds    26,041             25,001             4        U.S.

9/9 Toyota       24,837             22,673             10       Japan

10/10 Marlboro   21,139             22,128             -4       U.S.
                                                                             12 - 22
           Top Twenty Brands (continued)
Rank 2005/2004    2005 Brand Value   2004 Brand Value   Change   Country of
                  (millions)         (millions)         (%)      Ownership
11/11 Mercedes-   $20,006            $21,331            -6       Germany
Benz
12/13 Citi        19,967             19,971             0        U.S.

13/12 HP          18,559             17,683             5        U.S.

14/14 Am Ex       18,534             16,723             5        U.S.

15/15 Gillette    17,534             16,723             5        U.S.

16/17 BMW         17,126             15,886             8        Germany

17/16 Cisco       16,592             15,948             4        U.S.

18/44 L Vuitton   16,077             NA                 NA       France

19/18 Honda       15,788             14,874             6        Japan

20/21 Samsung     14,956             12,553             19       S. Korea

                                                                              12 - 23
          Imitation is Flattery?




China’s “Chery” company’s QQ looks a little
too much like GM Daewoo’s Spark

                                              12 - 24
                       Global Brands

• The Internet and other technologies accelerate the pace of the
  globalization of brands
• Ideally gives the company a uniform worldwide image
• Balance
• Ability to translate




                                                                   12 - 25
Global Brands



          Caterpillar Apparel a
          hit in Norway –
          consumers like the
          industrial strength




                              12 - 26
                      National Brands

•   Acquiring national brand names
•   Using global brand names
•   Nationalistic pride impact on brands
•   Use global brands where possible and national brands where
    necessary




                                                                 12 - 27
   Country-of-Origin Effect and Global Brands

• Consumers have broad but somewhat vague stereotypes about specific
  countries and specific product categories that they judge “best.”
• Ethnocentrism
• Countries stereotyped on the basis of whether they are industrialized, in
  the process of industrializing, or developing
• The more technical the product, the less positive is the perception of one
  manufactured in a less-developed or newly industrializing country
• Fads often surround product from particular countries or regions

    Country-of-origin effect (COE) can be defined as any
    influence that the country of manufacture, assembly, or
    design has on a consumer’s positive or negative perception
    of a product.

                                                                           12 - 28
                       Private Brands

• Growing as challengers to manufacturers’ brands
• Private labels:
   - Provide the retailer with high margins
   - Receive preferential shelf space and in-store promotion
   - Are quality products at low prices
• Must be competitively priced and provide real consumer value




                                                                 12 - 29
                         Summary

• The growing globalization of markets must be balanced with the
  continuing need to assess all markets for those differences that
  might require adaptation for successful acceptance.
• In spite of the forces of homogenization, consumers also see the
  world of global symbols, company images, and product choice
  through the lens of their own local culture and its stage of
  development and market sophistication.
• Each product must be viewed in light of how it is perceived by
  each culture with which it comes in contact.
• Analyzing a product as an innovation and using the Product
  Component Model may provide the marketer with important leads
  for adaptation.

                                                                 12 - 30

				
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