Chapter 10

Marketing goods and services

Prepared by Nicole Feetham

University of South Australia
 Learning objectives

After studying this chapter you should be able to:

• Discuss the nature and processes of managing
multinational product lines
• Explain strategies for overcoming product piracy
• Discuss the effects of a country of origin and identify
strategies to accommodate these effects
 Learning objectives

• Describe international good and service branding

strategies
• Discuss the challenges and opportunities in marketing
services globally and identify global service marketing
strategies
 Managing multinational product lines

• Product assortment is described on two dimensions:

– width and length

• Four possible product mix variations:

– extension of a domestic line
– a subset of the home market’s product line
– a mix if local and non-local products
– a completely localised product line
 Managing multinational product lines

• Drivers that affect an international product line:

– customer preferences
– price spectrum
– competitive climate
– organisational structure
– product’s history
 Product piracy

• On-going problem
– particularly in many parts of Asia
– Shijingshan Amusement Park in Beijing offers Disney
trademarked characters
• one of the slogans used states ‘Disneyland is too far away’
• copied trade-marked characters include Mickey Mouse,
Bugs Bunny and Hello Kitty
 Combating piracy

• Strategic actions against product piracy include:

– lobbying activities
– legal action
– customs
– product policy decisions
– communications options
– online searches
 Country-of-origin stereotypes

• Country of origin can have a powerful effect

– German cars
– Italian fashion
– French wine

• Perceptions change over time

– French wine loses out to ‘new world’ wines
 Country-of-origin stereotypes

• Generally consumers prefer domestic products over

imports
– ‘Made in Australia’
• powerful locally
• Country of design and manufacture play a big part
– Mercedes Benz assemble the C Class motor vehicle in
China but still manufacture in Germany
 Country-of-origin stereotypes

• Strategies to cope with country-of-origin stereotypes:

– product policy
– pricing
– distribution
– communication
 International branding strategies

• Global versus local branding

• Brand name changeover
• Co-branding
• Umbrella branding
• Protecting brand names
 Global brands

• A brand that is marketed and recognised in most parts

of the world
• The big question is:
– ‘To global brand or not to global brand?’
– many of the arguments regarding standardisation
versus adaptation apply
 Global brands

Advantages of a global brand

• Economies of scale, across dimensions
– product design
– communication strategies
– distribution networks
• Global awareness could mean local awareness
– global television programming and the internet
provide access to consumers
 Global brands

• How consumers value global brands:

– quality signal
• often believe that global brands have better
quality
– global myth
• consider global brand engender cultural ideals
– social responsibility
• consumers expect global players to be good
global citizens
 Global brands

• Inter-country differences in brand equity due to:

– history
• some brands are stronger/weaker in some local markets

– competitive climate
• few competitors in one country but many in another

– marketing support
• communication strategy used varies

– cultural receptivity to brands

– product category penetration
 Local branding

• A global company can continue to market a local

brand it owns
– National Australia Bank continues to use Bank of
New Zealand as a brand in that country

• Sometimes a local brand is more powerful than a

global brand
– Jollibee versus McDonald’s in the Philippines
 Local branding

• Sometimes language demands a local brand name

• In mainland China:
– Perrier translates directly as ‘Paris Water’ (Bali
Shui)
– Hoegaarden Beer translates as ‘Belgian White Beer’
(Bilishi Bai Pi)
– Park Hyatt is ‘Bo Yue’ with Yue meaning Imperial
 Global or local brands?

• Organisations need to consider their brand structure

(brand portfolio)
• Four types of branding approaches:
– solo branding
– hallmark branding
– family branding
– extension branding
• Brand architecture
– guidelines for use of brand names
 Global or local brands?

Figure 10.1
 Brand name changeover strategies

• Transitioning from one brand name to another

– usually from a local to a global
– fade in/fade out
• The new global brand is tied with the existing
brand name in the host market and after a
transition period the old name is dropped
 HSBC’s strategy globally
 Midlands Bank UK becomes HSBC UK
 Co-branding

• US company Unilever partners with Campbell's in

Australia
– Streets Ice-Cream (Unilever) in a Tim Tam flavour
(Campbell's)

• 20% of Unilever’s business in the US is made up of co-

branded products
 Umbrella (corporate) branding

• A good corporate image has a positive impact on a

consumer’s decision about a product’s attributes
– particularly if little other information is available

• Corporate branding facilitates brand-building efforts

over a range of products
– the Sony brand as an umbrella for their product
range
 Protecting brand names

• Difficult in some places

– different view between developed and developing
nations
• litigation does not work in many Asian locations
• mediation is often encouraged
• Requiring membership of the WTO has helped enforce
some codes
• Best protection is to continually innovate
 Global marketing of services

Challenges in marketing services internationally:

• Protectionism

• The face-to-face nature of service

• Difficulty in measuring customer satisfaction

internationally
 Global marketing of services

Opportunities in the global service industries:

• Deregulation of service industries

• Increasing demand for premium services

• Increased value consciousness

 Global marketing of services

Global service marketing strategies:

• Capitalise on cultural forces in the host market
• Standardise and customise
• Central role of information technologies
• Add value by differentiation
• Establish global service networks
 Summary

You should now have an understanding of:

• The nature and processes of managing multinational
product lines
• Strategies for overcoming product piracy
• The effects of country of origin and identify strategies
to accommodate these effects
• International good and service branding strategies
• The challenges and opportunities in marketing
services globally and identifying global service
marketing strategies