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Chapter 11 Product Decision

This chapter discusses product and service decisions in global marketing from a European perspective. It covers key concepts related to products and services, positioning, saturation levels, and design considerations. The chapter also addresses attitudes towards country of origin, strategies for geographic expansion, and developing new products and services for global markets. The objectives are to understand differences between global brands and services, alternatives for positioning brands, and the importance of new products for survival and growth in global markets.

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Srishti Shrestha
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0% found this document useful (0 votes)
105 views20 pages

Chapter 11 Product Decision

This chapter discusses product and service decisions in global marketing from a European perspective. It covers key concepts related to products and services, positioning, saturation levels, and design considerations. The chapter also addresses attitudes towards country of origin, strategies for geographic expansion, and developing new products and services for global markets. The objectives are to understand differences between global brands and services, alternatives for positioning brands, and the importance of new products for survival and growth in global markets.

Uploaded by

Srishti Shrestha
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
You are on page 1/ 20

Global Marketing

Management
A European Perspective

Product and Service Decisions

Warren J. Keegan
Bodo B. Schlegelmilch
Overview
 Basic Concepts of Products and Services
 Positioning of Products and Services
 Product Saturation Levels in Global Marketing
 Product and Service Design Considerations
 Attitudes towards Country of Origin
 Geographic Expansion
 New Products and Services in Global Marketing
 Summary
Keegan/Schlegelmilch Chapter 11/ 2
Global Marketing Management: A European Perspective
Learning Objectives
 Know the differences between services and products and
global brands
 Learn several alternatives for positioning global brands
 Appreciate the importance of saturation levels
 Be aware of strategic alternatives for geographical
expansion
 Know why development of new products are keys to
survival and global growth

Keegan/Schlegelmilch Chapter 11/ 3


Global Marketing Management: A European Perspective
Product and Services: Important
Concepts
 Product
 Service
 Characteristics of Services
 National, International, Global Products and Services
 Global Brand
 Positioning
 Country of Origin Effects

Keegan/Schlegelmilch Chapter 11/ 4


Global Marketing Management: A European Perspective
Basic Concept of Products
 Products can be defined as a collection of physical,
psychological and symbolic attributes that can
collectively yield satisfaction, or benefit, to a buyer or
user.
 Products can also be defined by intangible attributes
 Products can be classified into consumer and industrial
goods
 Products can be classified by the way their are purchased
or their life-span
Keegan/Schlegelmilch Chapter 11/ 5
Global Marketing Management: A European Perspective
Basic Concept of Services
 Service can be defined as intangible benefits purchased
by customers that do not involve ownership
 Characteristics:
 Intangibility
 Perishability
 Variability
 Simultaneous Production and Consumption

Keegan/Schlegelmilch Chapter 11/ 6


Global Marketing Management: A European Perspective
Product-Service Continuum

Oil & Grease


Office Supplies
Machinery
Computer
Telecommunication Systems
Tangible Meeting or Convention Hotel Intangible
Dominant Dominant
Advertising Agency
Plant janitorial and cleaning
Freight Forwarding
ManagementConsulting
University Class

Product-Related Equipment-Based People-Based

Source: Adopted from: G. Lynn Shostack, „Breaking Free from Product Marketing;“ Journal of Marketing 41 (April
1997): p.77

Keegan/Schlegelmilch Chapter 11/ 7


Global Marketing Management: A European Perspective
National, International and Global
Products and Services
 National products or services are offered in a single
national Market
 International products or services are offered in
multinational, regional markets
 Global products and services are offered in the global
market. They are international and multiregional

Keegan/Schlegelmilch Chapter 11/ 8


Global Marketing Management: A European Perspective
Positioning of Products and Services
 Attribute or Benefit
 Quality/Price
 Use/User
 High-Tech Positioning
 High-Touch Positioning

Keegan/Schlegelmilch Chapter 11/ 9


Global Marketing Management: A European Perspective
Product Saturation Levels in Global
Markets
 Many factors determine a product`s market potential
 Product saturation level increases as national income per
capita increases
 The presence or absence of a particular companion
product can be significant

Keegan/Schlegelmilch Chapter 11/ 10


Global Marketing Management: A European Perspective
Product and Service Design
Considerations
 Preferences
 Costs
 Laws and Regulations
 Compatibility

Keegan/Schlegelmilch Chapter 11/ 11


Global Marketing Management: A European Perspective
Attitude towards the Country of
Origin
 Stereotyped attitudes toward foreign products and
services can favour or hinder marketing efforts
 If the quality is perceived to be low
 Foreign origin of the product can be disguised
 Foreign identification of the product can be continued and
consumer attitudes towards the product can be changed
 In some market segments foreign products have a
substantial advantage because they are foreign

Keegan/Schlegelmilch Chapter 11/ 12


Global Marketing Management: A European Perspective
Geographic Expansion-Strategic
Alternatives
Different

Strategy 2: Product Extension, Strategy 4: Dual Adaptation


Communications
Communications

Example: Greeting Cards


Adaptation
Example: Motorbikes

Strategy 1: Dual Expansion Strategy 3: Product Adaptation,


Communication
Example: Applications Software
Extension
Example: Electrical products
Same

Same Different
Product edlich

Global Product Planning: Strategic Alternatives for Expanding into Global Markets

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Global Marketing Management: A European Perspective
Strategy 1: Product/Communication
Extension (Dual Expansion)
 Company sells exactly the same product or service with
the same advertising as used in the home country
 Company assumes that all markets are alike
 Dual Extension does not work in all markets
 Dual Extension is often used because it saves costs
 Example: Campbell Soup

Keegan/Schlegelmilch Chapter 11/ 14


Global Marketing Management: A European Perspective
Strategy 2: Product Extension,
Communications Adaptation
 If the product serves different needs in various
countries, only marketing communication may have to
be adapted
 Adaptation can happen by design or accident
 Cheap implementation because product does not change
 Example: Motorbikes

Keegan/Schlegelmilch Chapter 11/ 15


Global Marketing Management: A European Perspective
Strategy 3: Product Adaptation,
Communication Extension
 Product is adapted to the new market, but basic home
market communication strategy remains unchanged
 Product is adapted to the environment and the
preferences of the consumers in the new market
 Example: Mueslix

Keegan/Schlegelmilch Chapter 11/ 16


Global Marketing Management: A European Perspective
Strategy 4: Product/Communication
Adaptation (Dual Adaptation)
 Using Dual Adaptation the company must adapt the
product or service as well as the marketing
communication to the foreign market
 Example: Colgate

Keegan/Schlegelmilch Chapter 11/ 17


Global Marketing Management: A European Perspective
New Products and Services in
Global Marketing (1)
 New to consumer and company ( Product or service
innovation)
 New to consumer but not new to company
(Product/service or line extension)
 Not new to consumer but new to company (New product
or service duplication)

Keegan/Schlegelmilch Chapter 11/ 18


Global Marketing Management: A European Perspective
New Products and Services in
Global Marketing (2)
 New-product development process
 Permanent identification of new-product ideas
 Screening of these ideas and identification of candidates for
further investigation
 Stringent investigation and analysis of the selected new-
product ideas
 Organisation of sufficient resources
 The international new-product department
 Testing new products and services in national markets

Keegan/Schlegelmilch Chapter 11/ 19


Global Marketing Management: A European Perspective
Summary
 Product and services are the most important elements of
the marketing program
 Important factors: preferences, costs, laws and
regulations, and compatibility
 Five strategic alternatives for geographic expansion:
 Product/communication extension, product
extension/communications adaptation, product
adaptation/communications extension, dual adaptation and
product invention

Keegan/Schlegelmilch Chapter 11/ 20


Global Marketing Management: A European Perspective

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