Brand & Product Decisions in Global Marketing

Brand & Product Decisions in Global Marketing

• Satisfaction is no longer enough; delight customers. -Philip Kotler

Key Points

• Brand and product concepts
• Local, international, and global brands
• Product design issues
• Attitudes toward foreign products
• Strategic alternatives
• New product issues

Basic Product Concepts

• A product is an offering that satisfies customer needs.
• Management must develop product and brand policies sensitive to market needs, competition, and company ambitions and resources, globally.

Basic Product Concepts (continued)

• A product is a good, service, or idea
• Tangible attributes: assessed physically (weight, dimensions, materials). Examples include a 42-inch flat-panel TV with an OLED screen.
• Intangible attributes: include ownership status, manufacturer's service commitment, and brand reputation/mystique.

Product Types

• Framework for product classification
• Consumer Products: Bought for personal consumption. Vary in how consumers buy them.
• Industrial Products: Bought for further processing or use in a business. Bought by other businesses (not end consumers).

Product Types (continued)

• Buyer Orientation: A composite measure of customer effort, risk level, and involvement in a purchase.
• Convenience products: routinely purchased (e.g., Electronics)
• Shopping products: considerable effort is exerted in the purchase decision
• Specialty products: customers are loyal and will seek out these specific products

Product Warranties

• Express warranty: written guarantee assuring the buyer gets what they paid for, or provides remedy in case of failure.
• Warranties are an element of a product's value proposition.
• Warranties can be used as a competitive tool to favorably position a company in a global market.
• Example: Hyundai's 10yr/100,000 mile warranty program boosted sales significantly.

Packaging

• Packaging is integral to product decisions.
• Packaging protects products shipped worldwide.
• Eco-packaging is important; addresses environmental issues (recycling, biodegradability, and sustainable forestry).
• Packaging is a communication tool, influencing consumer purchase decisions.

Packaging (continued)

• Packaging improves brand experience: engaging the senses, creating emotional connection and enhancing consumer brand experience.
• The Coca-Cola bottle's distinctive shape makes it easily recognizable.

Packaging (continued)

• Nestle improves packaging quarterly, through:
• Plastic lids for easier ice-cream container opening
• Deeper indentations of candy wrapper ends for easier ripping open.
• Deeper notches on single-serve Nescafé packets.
• Glue used in Smarties chocolate tube for louder clicking sounds.

Labeling

• In today's self-service retail environments, product labels are designed to attract attention, support positioning, and persuade consumers to buy.
• Labels provide information to consumers; crucial to global marketing.
• Multilanguage labeling is common in a modern global marketplace..
• Mandatory health warnings are required (e.g., warnings on tobacco products).
• The American Automobile Labeling Act clarifies country of origin, assembly point, and percentages of foreign content for vehicles.
• The U.S. enacted a country-of-origin labeling law in 2008 (COOL), requiring retailers to display the origin of meat, poultry, and other food products.

Aesthetics

• Global marketers must understand the importance of visual aesthetics.
• Aesthetic styles vary across the world. (E.g., colour associations).

Brands

• A brand is a name, term, sign, symbol, or combination intended to identify the goods or services of one seller and to differentiate them from those of competitors.
• Bundles of images and experiences in the customer's mind.

Brands (continued)

• Brand functions:
• A promise a company makes about a product quality.
• Differentiating competing products.
• Enable customers to organise their shopping experience.

Brand Image

• Brand image is the sum of impressions about a brand.
• Information about products and brands comes from various sources (advertising, personnel, publicity, sales, packaging).
• Consumer perceptions of service after the sale, price, and distribution are considered when evaluating brand image.
• Industry sector competitors differentiate using brand image (e.g., Apple vs Samsung in smartphones).

Brand Equity

• Brand equity adds value to a brand during its existence.
• Brand equity represents the value created by the relationship between a brand and its customers over time.
• The global megabrands (such as Coke) have billions of dollars in brand equity.
• Strong brand equity fosters loyalty, less vulnerability to marketing actions and crises, larger margins, and a more positive consumer response to price changes.

Brand Components

• Companies develop visual representations of brand through logos, packaging, and other communications.
• Examples: Brand name, word mark (e.g., Coke), non-word mark (e.g., Coca-Cola logo wave).

Brands (continued)

• Companies register names, logos, and other brand elements (e.g., trademarks, service marks) to protect their substantial investment of time and money.
• Safeguarding intellectual property is crucial in global marketing

Products & Local Market

• Locally successful products and brands are fundamental to domestic companies and often represent a significant hurdle to global success.

International Products & Brands

• Products are offered in several markets in a particular region (e.g. Europe).
• GM’s Opel Corsa, designed in Europe, is an example of an international brand.

Global Products & Brands

• Global products meet worldwide needs.
• Global brands share a name and similar image/positioning.
• A true global product is available in all regions.
• Global brands are not the same as global products, although they are often regionally adapted.

Local Products and Brands (continued)

• Successful brands in one nation are often a major competitive hurdle for global companies.

Global Product Strategies

• Three broad global product strategies are:
• Extension strategy: products sold virtually unchanged in different markets.
• Adaptation strategy: adjusting (design, function, packaging) to local tastes and conditions.
• Creation strategy: developing new products to meet the unique needs of different markets..
• A number of strategies exist according to different combinations of adapted or non adapted products and communications. (Refer to slides 43-44).

Global Product Strategies (continued)

• New product development process in a foreign market identifies needs and addresses questions:
• What new products should be developed for different markets?
• What products should be added, discarded, or modified?
• What brand names should be used globally?
• How should products be packaged and serviced?

Poor Product Policy

• Ikea's initial market failure in the USA demonstrates that poor product policy can result from poor understanding of local market preferences (e.g., American preference for larger furniture vs Ikea's standard products).

Global Product Invention/Innovation

• Global product invention/innovation often addresses local markets in more efficiently than simply adapting similar products.

Global Product Strategies (continued)

• Key Value dimensions for Global Brands:
• Product quality and reputation.
• Global brands are culturally important.
• Global brands engender a feeling of belonging.
• Social responsibility.

Global Brand Development

• Guidelines for establishing Global Brand Leadership:
• Create a compelling value proposition.
• Think about elements (names, marks, etc): Potential for globalization.
• Consider extending vs. adopting a new brand identity.
• Develop a company-wide communication system.

Testing New Products

• Test new products—interacting with humans, mechanical, and chemical elements to spot potential for unexpected issues.
• Testing can be as simple as observing product usage within the market.

This quiz explores the fundamentals of brand and product decisions in the context of global marketing. Participants will assess brand concepts, product design issues, and the attitudes toward foreign products. It emphasizes the importance of delighting customers and understanding market needs for successful global strategies.