International Marketing - Part 4 PDF

International Marketing - Part 4 Different countries - different products (Adaptation with regard to product) Cultural Differences Impact Product Preferences Different cultures have unique wants, needs, tastes, and demands ⟶ this leads to variations in product offerings across count...

International Marketing - Part 4 Different countries - different products (Adaptation with regard to product) Cultural Differences Impact Product Preferences Different cultures have unique wants, needs, tastes, and demands ⟶ this leads to variations in product offerings across countries. Examples of Product Adaptations Washing Powder: French Persil contains special ingredients and scents like soap from Marseille. Some countries use cold washing formulations (e.g., Tide Coldwater). Personal Care: Some cultures prefer shower soaps, while others prefer shower gels. Food Preferences: Jewish consumers require kosher food. More flavor variations of "Prinzenrolle" biscuits in France than in Germany. Electrical Goods: Different sockets and plugs across countries require product adaptations Developing products for different markets Key for Success: Local Technical Development & Testing Procter & Gamble established 25 R&D centers worldwide, including one in Beijing. Example: Gillette Razor for Indian Men Initial Testing: Conducted on Indian men studying at MIT. Problem: MIT students had running water, unlike much of India, making testing conditions inaccurate. Key Learning: Local product testing is crucial → Led to 2010 launch of Gillette Guard, a razor easier to rinse. Adaptation of Existing Products Innovation doesn’t always mean creating a new product—often, it’s about adapting existing products. Example: Body Cleanser for China Issue: Many Chinese consumers lack private bathrooms and prefer not to shower fully due to privacy concerns. Solution: A foam body cleanser that cleans effectively without much water, adapted from hair-color product technology. Product vs. Brands: The product-brand matrix ⟶ this matrix categorizes products and brands based on local and global dimensions. 1. Local Product / Local Brand Definition: A product made and sold within a specific region under a local brand. Example: Dulce de Leche from La Salamandra (South American product & Argentine brand). 2. Global Product / Local Brand Definition: A globally available product marketed under a local brand in different regions. Example: Tsingtao beer – A Chinese beer brand sold in 62 countries. 3. Local Product / Global Brand Definition: A regional specialty product sold under a globally recognized brand.  Example: Milka Alfajores – A South American specialty offered under the Milka brand. 4. Global Product / Global Brand Definition: A universally recognized product sold under a global brand worldwide. Example: Coca-Cola – A flagship global product and brand available worldwide. Local brands can offer strategic advantages Greater flexibility of local brands – better response to specific consumer needs (e.g., specific pricing) Faster entering into new markets by acquisition of successful local brands Risk management with a balanced brand portfolio Local brands benefit from higher brand awareness and a strong brand image (better value and trust perceptions) e.g. Unilever ice cream: standardization of logo, product, but keeping the well-known local brand names e.g. Coca Cola: multi-domestic approach e.g. Procter & Gamble: Dawn (vs. Fairy Ultra) in Germany e.g. L’Oréal: Maybelline used to have local complements (Gemey-Mabelline in France; Maybelline Jade in Germany), now Maybelline New York The fit between brand and country image: benefitting from local consumer culture positioning Although markets continue to globalize, many consumers still prefer to maintain their own local culture products that match their home country’s values and local needs “Many people prefer local consumption imagery because they more easily identify with local lifestyles, values, attitudes and behaviors (Crane 2002)” Local consumer culture (LCC) positioning reflects this desire for local consumption imagery by associating a brand with local cultural meanings Managers may exploit consumers’ home country associations by adapting the brand’s positioning to the country image the brand targets (i.e., consumers’ home country), thus capitalizing on LCC The BICI fit: the extent to which consumers in a specific country perceive a brand image as being congruent with their home country’s image Multi-attribute metric combines information on brand and country images into a country-specific multi-attribute measure offers insights into the reasons behind consumers’ high (versus low) fit assessments Managerial implications BICI fit offers insights … how to capitalize on LCC in brand-building activities ⟶ idea of BICI fit metric can be applied to own data … for the identification of concrete image attributes for positioning new and existing brands ⟶ e.g., in Germany “obliging,” “down to earth,” and “socially responsible” contribute most to BICI fit, whereas attributes like “fun” or “sensuous” have a negative weight and thus do not associate a brand with LCC … into segmenting markets and identifying consumers who are strongly influenced by BICI fit ⟶ stronger effect of BICI fit for female, older, and less innovative consumers with a high need for structure (Germany) … on category-specific characteristics that have to be considered The database: Y&R‘s Brand Asset Valuator (BAV) 35 Consumers’ perceptions of a multitude of brands in several countries Consumer panels composed based on quotas for traits like age, gender, and region  Each data-collection wave covers several hundred brands Individual respondents evaluate a subset of brands, every brand is evaluated by several respondents In addition, respondents evaluate several countries, potentially including their home country Respondents assess brands and countries on48 image attributes, e.g., “authentic,” “reliable,” or “fun” BAV data for more than 1,100 food and beverage brands in three countries (Germany, France, United Kingdom) Nation Brands Index (NBI) – Germany in top position Index assesses the current reputation of a country in 6 different categories: Exports, government, culture, people, tourism, immigration and investments “Germany” (as a brand) finds itself in the leading position until 2023 (then only 2nd to Japan) Constant strength over several categories (particularly German labor market and German products are perceived very positively on an international level) Nations as personality– Germany is associated the most with the attribute “tough” (39 %) The country-of-origin effect: refers to how consumers associate certain mental perceptions or beliefs with the country where a product is made. These perceptions can impact purchasing decisions. Consumers use country-of-origin as a quality cue – When evaluating a product, people often consider where it was made. Stronger country reputation = More emphasis on "Made in..." labels – If a country is perceived positively, brands will highlight its origin. Effect depends on the type of product – For example, people care about where cars are made but may not focus on where lubricating oil is from. A country’s image can influence all its products – If a country is known for high-quality goods, people may assume all its products are high quality. COO Impact on Branding: Positive COO: Brands highlight the country-of-origin Neutral COO: No strong emphasis on country-of-origin Negative COO: Brands may try to link their product to another country to avoid negative perceptions Cultural variation of country-of-origin effects This study examines how a product’s country of origin influences consumer opinions in Japan vs. the USA using a mountain bike made either in Japan or the USA. Key Findings: Japanese consumers preferred home-country products no matter the quality. American consumers preferred home-country products only if they were superior to competitors. Why? Japan (Collectivist culture) ⟶ People prioritize group interests and support local products. USA (Individualist culture) ⟶ People focus on personal success and prefer superior products, regardless of origin. Foreign branding implicitly uses country-of-origin effects Foreign branding uses names that sound like they come from another country to influence consumer perception. Goal: To associate products with qualities linked to a specific country (e.g., German engineering, French elegance). Example brands: Renkus-Heinz – Sounds German, but is from the USA. Galanz – Sounds German, but is from China.  Merci – Sounds French and is actually from France. Landwind – Sounds German, but is from China. Effect: Consumers may assume higher quality or specific attributes based on the perceived country of origin. This strategy helps brands gain credibility and appeal in global markets. What happens if consumers recognize the incongruence? Foreign Branding vs. "Made In" Label Both foreign branding and "made in" labels signal a product’s origin. Companies must clearly state the country of manufacture on packaging. Issue: If the brand name suggests one country, but the label says another, consumers may notice the inconsistency. Empirical Study Tested New Zealand consumers with different product scenarios: Foreign-sounding brand names (e.g., Croixbergière/Kreuzberger). Product types: Hedonic (luxury/pleasure-focused) vs. Utilitarian (practical). Manufacturing locations: Congruent (matching brand image) vs. Incongruent (mismatch, especially from emerging countries). Major Results Consumers react negatively if they recognize the mismatch between branding and manufacturing origin. Stronger negative effect on hedonic (luxury) products than on practical products. Emerging country manufacturers suffer more from this effect. Conclusion: Branding should align with actual manufacturing origin to avoid consumer distrust and protect sales, especially for luxury items. Ad copy techniques can reduce the negative effect Information Processing Utilitarian products: Consumers focus on product attributes (not branding or country-of-origin cues). Hedonic products: Consumers evaluate the overall experience and rely more on stereotypes (e.g., country of origin). Rhetorical questions in ads help shift focus to product features, reducing negative perceptions. Empirical Study Tested the effect of rhetorical questions in advertising for incongruent branding cases. Studied hedonic vs. utilitarian products with two ad styles: Statement-based ads vs. rhetorical question-based ads. Control group: Products with matching foreign branding and “made in” labels. Conducted with New Zealand consumers via an online panel. Major Results Rhetorical questions help reduce the negative effect of branding inconsistencies in hedonic products. Purchase intention remains stable, showing that this technique helps mitigate distrust.