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Chapter 5 Product

This document discusses international product strategies for various companies. It summarizes Toyota, Honda, and McDonald's approaches to different markets. It also discusses developing global products versus adapting products for local markets. Standardization allows for economies of scale while adaptation meets local needs. The document also covers topics like quality standards, packaging, branding, and adapting consumer services globally.

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Nguyễn Vy
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119 views39 pages

Chapter 5 Product

This document discusses international product strategies for various companies. It summarizes Toyota, Honda, and McDonald's approaches to different markets. It also discusses developing global products versus adapting products for local markets. Standardization allows for economies of scale while adaptation meets local needs. The document also covers topics like quality standards, packaging, branding, and adapting consumer services globally.

Uploaded by

Nguyễn Vy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Chapter 4: International

Product Strategy
Strategic view of Toyota

Our global strategy used to center on “World cars”,


which we would modify slightly to accommodate
demand in different markets. Today our focus is
shifting to models that we develop and
manufacture especially for selected regional
market
Strategic view of Honda

We are the most international of the Japanese


companies. At the moment we are the most
diversified, and we will be more diversified
in the future. Still, I think it would be very
hard to build a one type world car. In the end,
I don’t think it would be very efficient
McDonald’s Product Options

Keep Same Adapt New Market Design New


Asian Markets: Fries w/seaweed flavoring Japan: The Cheese Katsu Burger

Design One Product For Global Marketplace:


What is a new item that could be sold in any McDonalds?
Drinks, Side items (Apples, Carrots, etc..) Breakfast items, salads, pizza, tacos, pita & hummus, desserts, etc…
Product Definition and Structure
Product definition
Structure of a product
- Philip Kotler: Core Values, Actual Product, Augmented
Product
- International/Global product: Standardization/Localization
- Product or Values?
Products fit market needs
Quality and Quality definition
International Product

Definition
- Attributes
- Offer to market that satisfies a want or need
Product components
- Tangible part: Packaging, brand, quality, design
- Intangible part: warranty, delivery, credits,
installation, service
Product component model
Standardization/Adaptation
Product Component Analysis for Adaption
Quality
Defined in 2 ways:
 “Market-perceived” quality
- How does the consumer perceive the quality of the
product or service
 “Performance” quality
- What is the overall “performance” of the product or
service (Firm’s perspective”
- Tends to focused on attributes or features or meeting
certain “performance” criteria.
Quality (Cont.)
 Physcial or Mandatory Requirements and Adaption
- Many countries require “homologation”
* Requires changes to be made to products based on local product and service
standards
- Mandatory adaption vs. cultural adaption
* Many believe adaption occurs most often based upon local laws or polices
- Green marketing and product development
 Quality is associated with customer satisfaction
 Customer satisfaction indexes developed are now being used to measure
satisfaction across a wide variety of consumer products and services
ISO 9000 Certification
An International Standard of Quality
 ISO 9000s, a series of five international industrial standards (ISO
9000-9004) originally designed by the International Organization
for Standardization in Geneva to meet the need for product quality
assurances in purchasing agreements
 The registration and certification of a manufacturer’s quality system
 The existence of a quality control system a company has in place to
ensure it can meet published quality standards
 A certification of the production process only, do not apply to
specific product, does not guarantee that a manufacturers produce a
“quality” product or service
Products and Culture
 A product is more than a physical item: it is a bundle of satisfactions
(or utilities) that the buyer receives
1. Facets of products: forms, taste, colours, texture; how it functions in
use; the package; the label; the warranty; manufacturer’s and
retailer’s servicing; the confidence of prestige enjoyed by the brand;
the manufacturer’s reputation
2. The adoption of some products by consumers can be affected as
much as by how the product concept conforms with norms, values,
and behaviour patterns
3. Many facets of products are influenced by culture
Why design a standardized global
product?
Standardized products can create economies of
scale in research & development, production, and
marketing
 Economies of Scale: Produce more to lower overall costs

A global product with a global brand image allows


companies to compete against other global
marketers
Why adapt instead of standardized?
 Products may be used in different political & legal environments

 Consumers may have different cultural needs

 Local competition in foreign markets may be different than domestic

 Product customization may be necessary


To Standardized or Adapt: That is the question
The more they have in common, the less adaptation needed

 Market characteristics:
 political and legal regulations, customer characteristics and preferences,
purchasing patterns, and distribution systems

 Product characteristics:
 nature of the product, the ability to create a global brand, and the purpose for
which the product is used, perception of product quality, perception of the
product’s country of origin, and required after-sale service.

 Company characteristics:
◦ financial resources, international orientation of management
Global Product Strategies
Advantages of Product Advantages of Product Adaption
Standardization
Scale Economies Meet local consumer needs

Global Image Meet local economic, climate,


technological, requirements
Easier planning and control Utilize local advantages

Convergence in consumer tastes Increase motivation for local staff

Global customers Meet legal and technical standards


Product life cycle
Global Brands
 A brand is a name, word, or design that identifies a product,
service, or company

 Brands create a certain expectation in the minds of a customer

 Can be subject to “Country of Origin Effect”


In the 1950’s The Phrase “Made in Japan” meant cheap
In 2015, the phrase “Made in Japan” means high quality
Brands in International Markets
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
Brand strategies

Global Brands – Uniform worldwide


National Brands – Country specific
Private Brands
Choosing a brand name
1. Must be unique to the product and its market
2. May not be used by any other product or company
3. Should not have undesirable meaning across languages

Family brand: typically the brand name of a company that


also have individual product brands
◦ Ford Motor Company (family) sells Mustang (individual)
◦ Kellogg's (family) sells Rice Krispies (individual)
 https://www.youtube.com/watch?v=uPjyyZu-csA
Product Positioning

Product Positioning refers to using a brand to create


an image
 BMW usually signifies quality engineering, and a fast, sporty
automobile

 Companies used to rely on TV advertising to create brand image

 Today they are shifting to the Internet, live events, cell phones,
and movies
Packaging & Design
 Product Packaging & Design can have a strong impact on product
image & sales

 Samsung wins a lot of awards for its Product Designs

 Suntory Tea changed the product, package, and name in 2003 to


alter slow sales
$1 billion in sales for 2005
Packaging
Cheaper Product….Cheaper Package
Packaging
Definition
A process of covering, wrapping of goods into a package.
Involve designing & producing the wrapper for a product
Consumer packaging vs Industrial packaging
Functions of Packaging - Primary function
Primary functions

PRESENTATION: attractive and eye catching


PROTECTION:
PRESERVATION: Preserves original colours, Quality,
favour
ECONOMY: Packaging of a product should be economy
CONVENIENCE: packaging should be light to handle
Secondary function
Secondary function

 Containment: premearsured, preweight and then placed in box


 Identification: packaging helps to identify the products easily
 Labeling: It helps to promote the sale of goods
 Handling: when package is light in weight it facilitate easy handling
of cargo
 Suitability: packaging should be match with the product
Factors Influence Packaging Decisions in
International Market
 General Considerations Affecting Packaging Decisions
1. Physical Characteristics
2. Physio-chemical Factors
3. Economy
4. Purpose
5. Convenience
6. Statutory Regulations
7. Environmental factors
Special Considerations Affecting Packaging
Decisions in International Marketing
Regulations
Buyer’s Specifications
Socio- cultural Factors
Retailing requirements
Environmental Factors
Disposability
Language, colours, size
Packaging Component Adaption

Hong Kong Disneyland: Cantonese, Mandarin,


English
Country of origin labelling for food products
Sunsilk shampoo- in a tiny plastic bag
Marketing Consumer Service Globally

Adapting service for international consumer


markets
Several services opportunities in global
markets from travel and tourism, TV, movies,
to financial services
Top Consumer Service Exports
Service Opportunities in Global Markets

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