Product decisions Standardisation v Adaptation

• Three levels of product • Global products • Advantages/disadvantages of standardisation • Problems with standardisation • Brand globalisation potential

Installation Packaging Brand name Delivery
and credit Features

Augmented product Actual product
Aftersales service

Core benefit or service Styling

Quality

Core product

Warranty Three levels of product

Global Products
• Localisation of a product or service to fit local regulation and usage requirements e.g. local voltages and safety laws • Adaptation fits the product to buyer preferences e.g. Air-conditioning in USA • Standardised global products are not adapted to local preferences, but must still be localised. E.g Coca-Cola obey local hygiene laws

Advantages of standardisation
• Cost reduction - e.g. economies of scale • Improved quality - resources can be focussed • Enhanced customer preference - positive experiences lead to global brand loyalty • Global customers - uniform quality and services • Global segments - e.g. software, cameras.

Disadvantages of Standardisation
• Lack of uniqueness - exclusivity may be behind purchase decision • Off-target - miss the customer target completely • Vulnerable to trade barriers - local production may be necessary, so economy of scale benefits are lost • Strong local competition - customisation by competitors, lack of local knowledge

Problems with global standardisation
• • • • • Insufficient market research Overstandardisation Poor follow-up Narrow vision Rigid implementation

Polaroid SX-70
• Insufficient market research • Used US campaign/agency in European launch • TV testimonials from ‘unknown’ people • hence local lack of awareness

• Overstandardisation • First ‘positioned’ as the expert’s choice in all markets • Then endorsed by John Newcombe (Tennis Champion) • Created a much bigger market for single-lens reflex cameras world-wide

Canon AE-1

Henkel Pritt
• Poor follow-up • Pritt stick launched as an umbrella brand • failed to capitalise on initial momentum • local business units were under resourced • weak results had to be turned around

Unilever - Domestos
• Narrow Vision • Vision lead from HQ • UK took lead in promoting Domestos • In Germany positioned as dirt remover, not germ killer • UK ignored this consumers confused

Lego Buckets
• Rigid implementation • In US, competitor Tyco offered plastic buckets • Danish HQ refused to act • Denmark relented after market slide • Now use buckets worldwide

Brand globalisation potential
• Does the brand name make sense outside of the country? Nokia from Finland is aware name sounds Japanese (same roots) • Does the name have a positive, country specific image? E.g GM’s Opel and Chevrolet • Is the name available legally in many countries? Dutch Philips, Phillips Oil registered in USA

• Does the brand complement other global brands in the portfolio(or not)? E.g. Sony supports Aiwa at a lower price • Should the growth be limited to the creation of a regional brand? E.g. Strasbourg beer maker, ‘Kronenbourg’ in global markets, as ‘1866’ in S. Europe. Local brand can be difficult to remove. Johnny K. Johansson (1999)

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