International Marketing

Dr. Thuy-Phuong NGUYEN

 Course contents
Chap 1: Introduction to International Marketing
Chap 2: International Marketing Environment and Market Research
Chap 3: World Market Entry Strategies
Chap 4: International Competitive Strategies
Chap 5: International Product strategies
Chap 6: Pricing decision
Chap 7: Marketing channel and physical distribution
Chap 8: Communication decisions
Chap 9: Implementing the International Marketing
 Chapter 5
International Product Strategies

Dr. Thuy-Phuong NGUYEN

 Objectives
• Review the basic product concepts
• Compare and contrast local/international/global products and brands
• Explain how Maslow’s needs hierarchy helps global marketers
• Outline the importance of “country of origin”
 Main contents
• International product planning and development
• Product standardization and adaptation
• International product packaging
• International product labeling
• International product positioning
 Main contents
• International product planning and development
• Extension strategy
• Adaptation strategy
• Product invention
• Elimination
• Product standardization and adaptation
• International product packaging
• International product labeling
• International product positioning
 Product
• A product is a good, service, or idea with both tangible and
intangible attributes that collectively create value for a buyer or
user (Keegan & Green, 2016, p. 325)
• Types
• consumer and industrial goods
• Life span: durable, non-durable, disposable
 Product extension strategy
• “A company that has developed a successful local product or brand can
implement an extension strategy that calls for offering a product virtually
unchanged (i.e., “extending” it) in markets outside the home country”
(Keegan & Green, 2016, p.342)
 Adaptation strategy
• “involves changing elements of design, function, or packaging in response
to needs or conditions in particular country markets.” (Keegan & Green,
2016, p. 342)
• Ex: European Commission sets product standards that force many non-EU
companies to adapt product/service offerings to satisfy domestic market regulations
 Product invention strategy
• “entails developing new products “from the ground up” with the world
market in mind.” (Keegan & Green, 2016, p.342)
• The extension/adaptation/creation decision is one of the most fundamental
issues addressed by a company’s global marketing strategy.
 Global Product planning: Strategic alternatives

Source: Keegan & Green (2016, p. 344)

 Strategy 1: Dual extension
• this is a very straightforward marketing strategy
• sell the same product with virtually no adaptation + using the same advertising and
promotional appeals
advertiser’s message must be understood across different cultures
Ex: Apple launched its iPhone in US in mid-2007. In the following months, it was
gradually rolled out in several more markets. 1 year later, it was launched in 21 countries
simultaneously.
• Normally, this strategy is more frequently with industrial (business-to-business)
products than with consumer products.
• Industrial products tend to be less deeply rooted in culture than are consumer goods
 Strategy 2: Product extension –
Communication adaptation
• Product itself is unchanged => expenditures for R&D, manufacturing setup, and
inventory are avoided => low-cost of implementation
The biggest costs associated with the market research and revising
communication activities
• Ex: Intel launched a global ad. campaign that features different combinations of
celebrities (comedian John Cleese, actress Lucy Liu, and skateboard king Tony Hawk…)
• Ex: Coca-cola ads in Vietnam: https://www.youtube.com/watch?v=h952HXDQulc
In US https://www.youtube.com/watch?v=fd9G9MBdv2U
 Strategy 3: Product adaptation –
Communication extension
• adapt the product to local use or preference conditions
• Minimal change in communications strategy or brand name
• Ex: Oreos were too sweet for the Chinese palate and that the price—14
cookies for 72 cents—was too high => reformulated: less-sweet,
chocolate-covered, four-layer wafer filled with vanilla and chocolate
cream + new wafer contains fewer cookies but sell for about 29 cents
• (Source: https://www.mashed.com/481472/the-real-difference-between-oreos-in-
china-and-the-us/ )
 Strategy 4: Dual adaptation
• environmental conditions or consumer preferences differ from country to
country => both the product and one or more promotional elements are
adapted for a particular country or region
• Ex: Nike – Just do it
• a global brand with technologically advanced, premium-priced athletic shoes + advertising that
emphasizes U.S.-style
• When penetrating to China:
• communications avoid the Nike’s “bad boy” image, respect the authority
• Product: creating a shoe that could be assembled in China specifically for the Chinese market using less
expensive material => sold for less price
• Ad video in China: https://www.youtube.com/watch?v=h2NPKFKsKp0
 Strategy 5: Innovation
• Extension & adaptation strategies are effective but not to all global market
• Ex: the market only have need, not purchasing power
• Innovation: “the process of endowing resources with a new capacity to
create value” (Keegan & Green, 2016, p.348)
• Invent new material to reduce cost
• Invent the designs/technology for user-friendly installation/usage
 How to choose strategies

• Based on 3 factors
• Product: function, need
• Market: product using conditions, customer preferences,
customer’s ability & willingness to purchase
• Company’s adaptation & manufacturing costs
 Main contents
• International product planning and development
• Product standardization and adaptation
• International product packaging
• International product labeling
• International product positioning
 Product standardization and adaptation

Product Standardization Product Adaptation

• Globalization
• A global company: views the
world as a single country, sells the
same product, uses the same
policies, the same advertising (but
in different language)
• Localization
• to cater to the needs and
preferences of particular country
markets
 Product standardization and adaptation
Product Standardization Product Adaptation

• In French: “La perfection au masculin”

• In German: “Für das Besteim Mann”
• In Italian: “Il meglio di un uomo” Ginseng-Flavor Blended tea Sokenbicha
• In Portuguese: “O melhorpara o homem”)
Coca-Cola in Japan
 Main contents
• International product planning and development
• Product standardization and adaptation
• International product packaging
• International product labeling
• International product positioning
 International product packaging
• Packaging is an integral element of product-
related decisions, esp. the products that are
shipped to markets in far-flung corners of the
world
• “Eco-packaging” is a key issue today
• Packages (and the labels attached to them) offer
communication cues
• Should engage the senses, make an emotional
connection, and enhance a consumer’s brand
experience
Godiva chocolate: “The experience of the product
begins with the package, the beautiful gold box that feels
precious. It’s removing the bow, it’s opening the box,”
 International product labeling

• product labels:
• attract attention
• support a product’s positioning
• persuade consumers to buy
• Provide information: ingredients, country-of-origin, serving size, etc.
 International product positioning
Segmentation, Targeting, and Positioning (Keegan & Green, 2016, p.
228-229)
• Market segmentation: an effort to identify and categorize groups of customers
and countries according to common characteristics.
• Targeting: the process of evaluating the segments and focusing marketing efforts
on a country, region, or group of people that has significant potential to respond
• Positioning: to differentiate the product or brand in the minds of target
customers
Bases for Segmenting Consumer Markets

Geographic segmentation Demographic segmentation

Psychographic
Behavioral segmentation
segmentation
Demographic Segmentation
Age & life-
Life stage
cycle stage

Race & Gender

culture

Generation Income
 Demographic Segmentation
• Generation: Silent generation
 Psychographic Segmentation
• Psychographics = psychology + demographics
• Deviding buyers: psychological/personality traits, lifestyle, or values,
etc.
Behavioral Segmentation Breakdown
Marketing Funnel
Evaluating & Selecting the Market Segments

• Possible Levels of Segmentation

Microsoft, microscope Porsche – sports

Coca-Cola I love Kem
Volkswagen - small
 Positioning
• (1) choosing a frame of reference: identifying
• the target market,
• relevant competition
• (2) identifying the optimal
• points-of-parity
• points of-difference
• (3) creating a brand mantra
32
Value proposition
 Competitive Frame of Reference

• Competitive frame of reference

• Defines which other brands a brand competes with and which should thus be
the focus of competitive analysis
• Identifying and analyzing competitors

VS
 Competitive Frame of Reference

E = excellent, G = good, F = fair, P = poor

 Points-of-Difference
and Points-of-Parity

• Points-of-difference (PODs)
• Attributes/benefits that consumers strongly
associate with a brand, positively evaluate,
and believe they could not find to the same
extent with a competitive brand
 Points-of-Difference and Points-of-Parity

• POD criteria
Desirable

E.g.:
Deliverable speed
delivery

Differentiating
 Points-of-Difference and Points-of-Parity
• Points-of-parity (POPs)
• Attribute/benefit associations that are not necessarily unique to the brand but may in
fact be shared with other brands
Points-of-Difference and Points-of-Parity
• POP forms

Category
(attributes or benefits that represent necessary—but not
sufficient— conditions for brand choice.)

Correlational
(potentially negative associations that arise from the existence of
positive associations, e.g.: price & quality)

Competitive
Pop vs. pod
Pop vs. pod
 Pop vs. pod

• Multiple Frames of Reference

• ↑categories => ↑ FoR
• Straddle Positioning
• E.g. BMW positioned as both
luxury & performance
• Compare to normal US cars:
POP = per.; POD = lux
• Compare to luxury US cars
(Cadillac): POP = lux; POD =
per
 Points-of-Difference
and Points-of-Parity

• Choosing specific POPs

and PODs
• Competitive advantage
• Means of differentiation
• Perceptual map
• visual representations
of consumer
perceptions and
preferences
• Emotional branding
 Points-of-Difference
and Points-of-Parity

• Brand mantras:
• a three- to five-word Communicate
articulation of the heart
and soul of the brand
• McDonald: “Food, Folks,
and Fun”
• Nike: “authentic athletic Simplify
performance”
• Disney: “fun family
entertainment”

Inspire
Brand-positioning bull’s-eye
Thank you!