International Marketing 15th edition

Philip R. Cateora, Mary C. Gilly, and John L. Graham
McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction

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• The opportunities and challenges for international marketers of consumer goods and services today have never been greater or more diverse • The lack of distinction between “goods” and “services” has led to the invention of new terms encompassing both products and services, such as “market offerings” and “business-toconsumer marketing” • The trend for larger firms is toward becoming global in orientation and strategy
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Overview
• Quality • Products and culture
– Innovative products and culture, diffusion of innovations, and production of innovations

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• Analyzing product components for adaptation
– Core component, packaging component, and support services component

• Marketing consumer services globally • Brands in international markets
– Global brands, national brands, country-of-origin effects and global brands, and private brands
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Global Perspective China – Disney Rolls the Dice Again
Tokyo Disneyland – successful EuroDisney – disaster Hong Kong Disneyland – open for business Opportunities and challenges for international marketers of consumer goods and services are great and diverse • Any marketing firm’s goal should be quality products and services that meet the needs and wants of consumers at an affordable price • 2009 – new Disney park in Shanghai • • • •
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Quality
• • • • Shift to a customer’s market Increased customer knowledge The customer defines quality The cost and quality of a product

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– Among the most important criteria by which purchases are made

• Quality can be defined on two dimensions
– Market-perceived quality – Performance quality

• Most consumers expect performance quality • In many industries quality is measured by third parties
– JD Power and Associates
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Maintaining Quality
• Damage in the distribution chain
– Russian chocolate

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• Quality is essential for success in today’s competitive global market • The decision to standardize or adapt a product is crucial in delivering quality

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Physical or Mandatory 13 Requirements and Adaptation
• Product homologation • Product adaptation requirements
– – – – – Legal Economic Political Technological Climate

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Green Marketing and Product Development

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• Green marketing concerns the environmental consequences of a variety of marketing activities • Critical issues affecting product development
– Control of the packaging component of solid waste – Consumer demand for environmentally friendly products

• European Commission guidelines for ecolabeling • Laws to control solid waste

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Products and Culture
• A product is the sum of the physical and psychological satisfactions it provides the user
– Primary function – Psychological attributes

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• The need for cultural adaptation is often necessary, affected by how the product conforms
– – – – Norms Values Behavior patterns http://www.bloggingstocks.com/2009/01/10/14make-or-break-new-products-for-2009/
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Innovative Products and Adaptation

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• Determining the degree of newness as perceived by the intended market • Diffusion • Established patterns of consumption and behavior • Foreign marketing goal
– Gaining the largest number of consumers in the market • In the shortest span of time – Probable rate of acceptance
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Airbus A380
http://www.airbus.com/en/myairbus/a380_wow

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To see images go to http://www.airbus.com/en/myairbus/a380wow

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Boeing 787 Dreamliner 13 http://www.boeing.com/commercial/787family/

To see images go to http://www.boeing.com/commercial/787family/

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Geox Shoes

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Airbus 380

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Airbus 380

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Airbus 380

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Airbus 380

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Boeing 787 Dreamliner

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Boeing 787 Dreamliner

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Boeing 787 Dreamliner

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Boeing 787 Dreamliner

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Boeing 787 Dreamliner

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Diffusion of Innovations
• Crucial elements in the diffusion of new ideas
– – – – An innovation Which is communicated through certain channels Over time Among the members of a social system

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• The element of time • Variables affecting the rate of diffusion of an object
– Degree of perceived newness – Perceived attributes of the innovation – Method used to communicate the idea
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Production of Innovations
• Inventiveness of companies and countries • Expenditures • Japanese solutions
– American-style education programs – American design centers

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• New ideas come from a variety of sources
– Countries, – Acquisitions – Global collaborations
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Five Characteristics of an Innovation
• • • • • Relative advantage Compatibility Complexity Trialability Observability

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Analyzing Product Components for Adaptation
• Product is multidimensional • Sum of its features determines the bundle of satisfactions (utilities) received by consumer • Three distinct components
– Core – Packaging – Support services

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– http://www.businesspundit.com/25-most-promisingnew-products-for-2010/

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Product Component Model
Exhibit 13.1

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Core Components
• Product platform • Design features • Functional features

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Packaging Component
• • • • • • Price Quality Packages Styling Trademark Brand name

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Support Services Component
• • • • • • • Deliveries Warranty Spare parts Repair and maintenance Installation Instructions Other related services

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Marketing Consumer Services Globally
• More than half of Fortune 500 companies are primarily service providers • Consumer services characteristics
– – – – Intangibility Inseparability Heterogeneity Perishability

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• A service can be marketed
– As an industrial (business-to-business) – A consumer service
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Services Opportunities in Global Markets
• • • • • • • • Tourism Transportation Financial services Education Communications Entertainment Information Health care

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Barriers to Entering Global 13 Markets for Consumer Services
• Four kinds of barriers face consumer service marketers:
– – – – Protectionism Restrictions on transborder data flows Protection of intellectual property Cultural barriers and adaptation

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Brands in International Markets
– Intended to identify goods or services of one seller – To differentiate them from those of competitors

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• A global brand is the worldwide use of a name, term, sign, symbol, design, or combination

• Importance is unquestionable • Most valuable company resource

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Top Twenty Brands
Exhibit 13.2

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Top Twenty Brands (continued)
Exhibit 13.2

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Global Brands

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• The Internet and other technologies accelerate the pace of the globalization of brands • Ideally gives the company a uniform worldwide image • Balance • Ability to translate

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National Brands
• • • • Acquiring national brand names Using global brand names Nationalistic pride impact on brands Use global brands where possible and national brands where necessary

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Country-of-Origin Effects and Global Brands (1 of 2)
• Country-of-Origin effect
– Influences that the country of manufacture, assembly, or design • Has on a consumer’s positive or negative perception of a product

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• Consumers have broad but somewhat vague stereotypes about specific countries and specific product categories that they judge “best” • Ethnocentrism

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Country-of-Origin Effects and Global Brands (2 of 2)
• Countries are stereotyped
– On the basis of whether they are industrialized – In the process of industrializing – In process of developing

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• Technical products
– Perception of one manufactured in a lessdeveloped or newly industrializing country less positive

• Fads often surround product from particular countries or regions
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Private Brands

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• Growing as challengers to manufacturers’ brands • Private labels
– Provide the retailer with high margins – Receive preferential shelf space and in-store promotion – Are quality products at low prices

• Manufacturers brands must be competitively priced and provide real consumer value

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Summary (1 of 2)

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• The growing globalization of markets must be balanced with the continuing need to assess all markets for those differences that might require adaptation for successful acceptance • In spite of the forces of homogenization, consumers also see the world of global symbols, company images, and product choice through the lens of their own local culture and its stage of development and market sophistication

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Summary (2 of 2)

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• Each product must be viewed in light of how it is perceived by each culture with which it comes in contact • Analyzing a product as an innovation and using the Product Component Model may provide the marketer with important leads for adaptation

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