Ch13 - Product v3

Chapter 13
Modifying products
for international
markets
What is a product?
• A product is a collection of attributes – physical,
service or symbolic – which yield satisfaction to the
buyer or end-user
• Products can be classified based on their local versus
international appeal
• Products can be conceptualised at five different levels
or as consisting of five elements
Copyright ©2014 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442560833/Fletcher/International Marketing/6e
2
Product classifications
• Local products: have potential in only one
market
• International products: have the potential to
be extended from the domestic market to a
number of overseas markets
• Multinational products: offered to many
international markets but adapted to suit the
needs of each market
• Global products: designed to meet the needs
of market segments that are the same the
world over
3
Five product elements
1. Core product: benefit or service the
customer is buying e.g., transport not a car
2. Basic product: item actually purchased and its
functional features e.g., the model of the car
3. Expected product: attributes the buyer expects to
receive when purchasing the item e.g., key safety
features, air-conditioning
4. Augmented product: items that exceed
customer expectations e.g., warranties
5. Potential product: possible changes in the
future e.g., new style and safety features, updated models
4
Internet product categories
• Physical products
• Transaction-related products
• Virtual products
5
Think about
Airbnb and regulation
Airbnb, a product of the shared economy, is a C2C
platform that offers holiday accommodation. View the
news article and answer the following questions:
http://www.businessinsider.com.au/airbnb-is-pushing-for-national-rules-on-holiday-rentals-2015-7
1. What other support innovations and new behaviours

has Airbnb generated?
2. Why are authorities in Australia and the USA

scrambling to consider regulations
on short term rentals?
http://www.washingtonpost.com/blogs/the-switch/wp/2014/03/31/apple-and-samsung-
head-back-to-court-again/
6
International product strategies:
Diffusion and adoption
• Diffusion refers to the movement of new products to
and within international markets
• Adoption typically involves a number of stages:
awareness, interest, evaluation, trial and adoption
• Propensity for consumers to adopt new products varies
from market to market
Redefining the business
hedonic
utilitarian
• Businesses are defined by:
• Customer benefits - low/high product
purchase involvement; economy?
• Customer segments - new markets;
similar to domestic segments?
• Technology - degree of product
sophistication, education, infrastructure,
culture?
• Value chain - in which value creation
activities to participate?
The physical value chain
9
Redefining the business:
Product life cycle
• Local innovation: production
• International involvement: local product becomes an
‘overseas innovation’
• Maturity: overseas local production
• Worldwide imitation: no new export markets
• Reversal: developing countries produce
Innovation diffusion
in Western and Eastern
markets
Modifying products
for overseas markets
• Product standards and
regulations
• Measures
• Trademarks
• Climate and usage
• Language and symbolism
• Style, design, taste
• Technology and performance

standards
• Warranty and service issues

Developing products for overseas
markets: Stages
1. Generating ideas
2. Screening ideas
3. Business evaluation
4. Product development
5. Test marketing
6. Product introduction
Standardisation versus adaptation
• Standardisation • Adaptation
• Common product - • Marketing concept
national, regional, • Customer markets are very
worldwide discriminating
• Only way to compete • Encouraged by:
globally or internationally • Variation in needs and
• Encouraged by: tastes
• Economies of scale, • Differing conditions for use
manufacturing, marketing, • Variations in affordability
research and development • Influence of government
• Convergence of tastes • Legal requirements
• Economic integration • Physical environment
• Absence of competition • Level of support systems
Standardising products
• Common product - national, regional,
worldwide
• Only way to compete globally or internationally
• Encouraged by:
• Economies - scale, manufacturing, marketing,
research and development
• Convergence of tastes
• Economic integration
• Absence of competition
15
Modifying products:
Adaptation
• Discriminating customer
markets:
• Variation in needs and tastes
• Differing conditions for use
• Variations in affordability
• Influence of government
• Legal requirements
• Physical environment
• Level of support systems
16
Creating a global
product
• Design a product which can be
offered in overseas as well as
domestic markets virtually
simultaneously
• Products must not be culturally
sensitive
• ‘Born global’
• Transnational companies
Country-of-origin
• Influenced by country image which constitutes descriptive,
inferential and informational beliefs about a particular country
• Encapsulates a country’s:
• Products
• Economic and political situations
• Historical events
• Degree of industrialisation
• Culture and technological virtuosity
• People
• Provides cues that serve as evaluative criteria
• Differs from country of production
Source: Sean Lee, 2014: PhD Candidacy

Country-of-origin examples
Source: Sean Lee, 2014: PhD Candidacy

Branding for international markets
• Brand names - critical element
in making an impact on the
customer
• Building global brands
• Standardised product
• Economies
• Access to distribution channels
and intermediaries
• Decide appropriate brand image to
project
Measures to determine
if a brand is global
1. Dominates the domestic market,
which generates cash flow to enter
new markets
2. Meets a universal consumer need
3. Demonstrates balanced country-
market coverage
4. Reflects a consistent positioning
worldwide
5. Benefits from positive country-of-origin
image
6. The focus is on the product category
Think about
Cirque du Soleil’s brand emotion
Cirque du Soleil explains the importance of brand

emotion on international brand identity. View the
video and answer the following questions:
http://www.youtube.com/watch?v=jXP4eTDdsPU
1. How has Cirque du Soleil utilised

emotion as a universal language?
2. Explain how Cirque du Soleil humanises

its brand to both adults and children.
22
Modifying international brands
• Modification of brand names:
• Translation
• Transliteration
• Transparency
• Transculture
Modifying international brands
• Brand name strategies:
• Use the same brand name worldwide
• Modify the brand name in each market
• Different names in different markets
• Company name as a brand name
Brand strategies (that work)
• Brand extension
• Brand diversification
• Co branding
Brand strategies (that don’t work)
• Brand extension
• Brand diversification
• Co branding
Think about
Coca Cola’s makeup line
Coca Cola has diversified by creating a makeup line with

Korean beauty brand, The Face Shop. View the news
article and answer the following questions:
https://metro.co.uk/2018/06/14/coca-cola-launches-limited-edition-makeup-line-south-korea-7630103/
1. Review the core, basic, expected and augmented

products in Coca Cola’s makeup line.
2. From your review, do you think

Coca Cola’s diversification
strategy will be a success?
27
Brand strategy success
Prototypical brands
• A prototype prescribes to shared beliefs, attitudes,
norms, values and behaviour (van Knippenberg and
van Knippenberg 2005)
• Prototypical members are those that represent the
truest examples of a group or category (Groenland et
al. 1996)
• May be, but not necessarily is a pioneer product
• A prototypical leader is often used as a generic
reference to a product category
• Adopted in everyday language
Prototypical brands examples
Me-too brands
• A me-too brand represents the competition’s response
to a prototypical brand in the marketplace (Carpenter and
Nakamoto 1989)
• Propelled by technology, the competition’s response to

a prototype can be faster, allowing the me-too brands
to appear soon after the launch of a prototypical brand
• This shortens the phase in which a unique concept can
expect to reap premium prices and high margins
(Centaur Communications Limited 2007a, 2007b)
Me-too brands examples
Packaging and labeling
• Main functions of packaging:
• Protection
• Travels longer distances, handled and
transferred more frequently
• Involves change in climate and temperature
• High incidence of pilfering
• Promotion
• Vehicle for promotions
• Cultural sensitivities
• Convenience
• Applies for intermediaries and consumers
• Compatible to storage facilities and user’s
household
Packaging and labeling (1)
http://
tenplay.com.au/news/national/latest-news/latest-news/poor-hygiene-in-china-the-
suspected-cause-of-hepatitis-a-outbreak-from-frozen-berries
Think about
Environmental packaging
As environmental concerns become a global issue,

sustainable packaging is increasing in importance. View
the video and answer the following questions:
https
://www.bing.com/videos/search?q=Sustainable+Food+Packaging&&view=detail&mid=DB9
6F18C1BA233F63D41DB96F18C1BA233F63D41&&FORM=VRDGAR&ru=%
2Fvideos%2Fsearch%3Fq%3DSustainable%2BFood%2BPackaging%26FORM%3DVRM
HRS
1. Explain the circular solution to food packaging

consumption.
2. What are the benefits to recycling food products, such
34

Ch13 - Product v3

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Ch13 - Product v3

Uploaded by

Copyright:

Available Formats

Chapter 13

1. What other support innovations and new behaviours

2. Why are authorities in Australia and the USA

• Climate and usage

• Language and symbolism

• Style, design, taste

• Technology and performance

• Warranty and service issues

Source: Sean Lee, 2014: PhD Candidacy

Source: Sean Lee, 2014: PhD Candidacy

Cirque du Soleil explains the importance of brand

1. How has Cirque du Soleil utilised

2. Explain how Cirque du Soleil humanises

• Modify the brand name in each market

• Different names in different markets

• Company name as a brand name

Coca Cola has diversified by creating a makeup line with

1. Review the core, basic, expected and augmented

2. From your review, do you think

• Propelled by technology, the competition’s response to

As environmental concerns become a global issue,

1. Explain the circular solution to food packaging

You might also like