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

Features

Augmented product Actual product

Aftersales service

Delivery and credit

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

Canon AE-1
Overstandardisation First positioned as the experts choice in all markets Then endorsed by John Newcombe (Tennis Champion) Created a much bigger market for single-lens reflex cameras world-wide

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 GMs 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)