International Marketing Strategies

International Product Decisions

udayyadkikar@gmail.com
 Creating Products and
Brands for Consumers in
Global Markets
Product Components

Core Component

Packaging Component

Support Services Component

 Product Component Model
SUPPORT SERVICES
COMPONENT

PACKAGING
COMPONENT

Repair and
maintenance Trademark CORE  Deliveries
COMPONENT  Price

Installation  Product platform  Quality  Warranty

 Brand  Design features
name  Functional features
Instructions  Package
 Spare parts
 Legal
 Legal
 Styling
 Other related
 Legal
services
International Product Decision
International Product Strategies

Straight Product Product

Extension Adaptation Innovation

The firm adopts the The company caters The firm designs a
same policy used in to the needs and wants product from scratch
its home market. of its foreign customers. for foreign customers.

10-6
Identifying New Product Ideas

• What is a new Product?

• New to those who use it or buy it
• New to the organization
• New to a market

10-7
Characteristics of Innovations
 Relative Advantage

 Compatibility

 Complexity

 Trialability

 Observability
 Considerations in adapting products

Macro- Government
Target Market Competition
environment Regulations

 Who buys  Geography  Tariffs  Price

the product?  Climate  Labeling  Performance
 Who uses  Economic  Patents/  Design or
the product?  Socio- trademarks style
 How is it cultural  Taxes  Patent
used?  Political/  Other protection
 Where/ why/ legal  Brand name
when is it  Package
bought?
 Services

9
 4 Ps - Product
• Product decisions are all decision which relate to the physical
product and/or service offering, including its name, packaging,
warranty, and availability. Product dimensions include:
• Size of the product
• Color(s) of product
• Scent of the product
• Materials/ composition of the product
• Design of the product
• Packaging materials
• Package colors and package design
• Brand name
• Warranty
• Availability of options
• Customizing services
• After-sale service offerings
• Inventory levels
Product Warranty and Service
• Product Warranty :
• Should a company keep the same warranty for all
markets or adapt it country by country ?
• Should the firm use warranty as a competitive weapon ?
• Product Service :
• Service capability to accredit the firm with foreign
suppliers
• high investment in facilities, staffing, training, and
distribution network

10-11
The International Marketing Dilemma

Product Product
VS.
Standardization Adaptation
Benefits of Product Standardization

+ Lower manufacturing costs

+ Lower input costs

+ Cost savings due to elimination of product

adaptation efforts

+ Fast global roll-outs are possible

Benefits of Product Standardization

+Product available for global customers

+Enhance consumer perceptions of global

brand
PRESSURES FOR PRODUCT ADAPTATION
Competitive offerings
Climate, geography, & infrastructure
Government regulations & international standards
Customer expectations, preferences, & buyer behavior
 Factors Influencing Product
Adaptation vs. Standardization

Stage in Product Life Cycle

Legal/Standards Constraints

Product Innovativeness

Cultural Differences
Types of Product Adaptation
• Mandatory
• Necessary for product to be sold in a local market
• Discretionary
• Not necessary but may be beneficial
Drivers of Product Adaptation
Example COLGATE Toothpaste

•• Packaging:
Differences in National Reglementation :
•• Triclosan
Ecologicalforbidden
Stand-up in Germany
tubes in Germany
•• High fluor
Failure content(Carrefour)
in France in local water (UK)
• Obligation to sell high fluor content toothpaste in pahrmacy (France)
• Distribution:
• Stringent clinical tests in France
• Role of pharmacy in Italy and Spain
• Role of drugstore in UK
• Communication:
• Medical in Italy and Spain (recommended by dentist)
• Non-medical in UK
Benefits of Product Adaptation
+Penetrate otherwise closed markets

+Able to use products in different climates &

infrastructures

+Better product performance in different use

conditions

+Decreased costs due to varying local inputs

Benefits of Product Adaptation
+Decreased costs due to feature elimination

+Increased sales due to better meeting

industry norms or cultural preferences
Packaging
• Consumer Packaged Goods when the packaging is designed to protect
or contain the product during shipping
• Eco-Packaging because package designers must address
environmental issues
• Offers communication cues that provide consumers with a basis for
making a purchase decision

10-21
Exploiting Product Lifecycles
What is a brand?
• A name, term, sign, symbol, or design, or combination of them which
is intended to identify the goods and services of one seller or group of
sellers and to differentiate them from those of competitors (Kotler,
1991)
Brand Strategies

Global Brands

National Brands

Global/National Brand Mix

Private Brands
 Global v. Local Brands
• Global brands provide:
• Scale economies in the
Development of
advertising, packaging,
promotion, etc.
• Exploitation of:
• Media overlap
• Exposure to customers who
travel
• Associations
• of a global presence
• of the “home” country
• Local brands provide:
• Names, symbols, and
associations that can be:
• Developed locally
• Tailored to local market
• Selected without the constraints
of a global brand
• Reduced risk from “Buy
Local” sentiments
Developing A Framework For Generic Brands Based on Brand
Knowledge

Components of Brand Knowledge

• Brand Awareness
• Recognition
• Recall
• Brand Image
• Type
• Strength
• Favorability of Brand Associations
• Uniqueness
Packaging & Labeling Adaptations
• Size, shape, materials
• Product packaging norms
• Existing standards
• Economic development
• Environmental concerns
• Color & text
• Promotional strategy
• Cultural meaning &
implications
• Government regulations
• Language issues
Additional Product Considerations

• Product decisions and social responsibility

• Government regulation
• Food and product safety
• Pricing and advertising
• Labelling, weights, and measures
• Product Liability
• Hazardous products

• International product and service marketing

• Standardization versus local adaptation
• Electrical standards, packaging
• Cultural differences in meaning
• Barriers to trade
Organizational Architecture
Additional Considerations
• International product and service marketing:
• Must determine which products and services to introduce in which countries,
and how much to standardize or adapt the offering.
• Packaging presents new challenges for international marketers.
• Many service businesses are global.
Additional Considerations
• Product decisions and social responsibility:
• Consider public policy issues, regulations regarding acquiring or dropping
products, patent protection, product quality and safety, and warranties.
International Product Decisions