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7/30/2019 Lecture Module 11
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A product is a bundle of utilities
e.g., Attributes of a Wine are flavor, taste,
quality as a thirst quencher, coolrefreshment etc.
But different wines have (emphasize)different product attributes intended to
meet the demands of particular marketsegments. These products are now brands.
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Bundle of images and experiences in thecustomers mind
A promise made by a particular companyabout a particular product
A quality certification An assurance of a certain level of quality(providing a level of satisfaction by use of acertain brand) Differentiation between competing products The sum of impressions about a brand is
the Brand Image
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The added value that accrues to a product asa result of investments in the marketing ofthe brand
An asset that represents the value created bythe relationship between the brand andcustomer over time
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A products perceived uniqueness that can beused as a competitive advantage..
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.
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A strategy that attempts to occupy a favorable space in the
consumers mind in relation to space occupied by othercompetitive products.
It is the most important decision made regarding direction fornew or existing products in the market
Combine aspects of both market segmentation and productdifferentiation in creating a unique product image
Its primary purpose is to create a perceived added valuedistinctive from that of competitive products
Advertising and sales promotion play significant roles insuccessfully positioning a product or a service
Positioning virtually influences all other marketing strategies
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To get the customer to respond to a givenproduct or service in a way the firm wants tothem to respond and not the way competitionwants them to.
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In global marketing when dealing with thefour Ps, one of the most important questionsto answer is whether to standardize orcustomize.
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Standardization offering a uniform producton a regional or worldwide basis. Minoralterations are usually made to meet localregulations and market conditions
Customization appropriate changes aremade to match local changes.
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Common customer needs Global customers
Scale of economies Cost savings
Worldwide production
Duplication of R&D costs
Ease of introducing products
EU and other regional market agreements
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High tech products such as TVs, VCRs,
Cameras, Computers High image products-such as cosmetics,
clothes-with strong associations offashionability, sensuality, wealth, status Service and Business to Business products
that emphasize corporate image in theirglobal marketing campaign (banks, airlines)
Brands positioned primarily on the basis oftheir country-of-origin (Coke, Levis Jeans)
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To meet local taste better Acquiring a strong local brand
Obligatory (mandatory) modifications
Need for local linkages
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Nature of the product Market development Cost/benefit relationship Legal requirements Competition Support systems Physical environment Market conditions
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All brands have been local at some point. Butthey all became global brands eventually.Key reasons:
-Added value to customers
-Differential attributes of the brand
-Ability to transfer key differentialattributes to local markets
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Consistent identity, message, and price-value
proposition
Same product/brand vision across countries(name, logo, who they are, why brand inbetter than competitors, clear message,credible, relevant (meaningful), communicate
to customers
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Economies of scale
Transfer of experience
Uniform global image Control and coordination
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Combination or tiered branding: allowsmarketers to leverage a companysreputation while developing a distinctiveidentity for a line of products Sony Walkman
Co-branding features two or more companyor product brands
NutraSweet and Coca-Cola Intel Inside
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Brand acts as an umbrella for new products Example: The Virgin Group
Virgin Entertainment: Virgin Mega-stores and MGMCinemas
Virgin Trading: Virgin Cola and Virgin Vodka Virgin Radio
Virgin Media Group: Virgin Publishing, Virgin Television,Virgin Net
Virgin Hotels
Virgin Travel Group: Virgin Atlantic Airways, VirginHolidays
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Questions to ask when management seeks tobuild a global brand: Will anticipated scale economies materialize?
How difficult will it be to develop a global brand
team? Can a single brand be imposed on all markets
successfully?
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Physiological
Safety
Social
External/InternalEsteem
Self-actualization
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Made in label matters a lot to somecustomers
Used a lot to evaluate products if the user isunfamiliar with the product
Consumer holds cultural stereotypes aboutcountries that will influence their productassessment
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COO effects are not stable: perceptionschange over time
Generally, consumers prefer domesticproducts over imports
The place of manufacturing is moreimportant than where the company islocated
Demographics make a difference Consumers use COO as a cue when they are
unfamiliar with a brand name COO effects depend on product category
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1. Favorable Match
Examples:
Japanese auto
German watch
Strategic Implications
Brand name reflect COO
Package includes COO information
Promote brands COO
2. Unfavorable MatchExamples:
Hungarian auto
Computer manufactured in Indonesia
Strategic Implications
Emphasize benefits other than COO
Joint venture with a favorable match
partner
3. Favorable MismatchExamples
Australian/Japanese Beer
Strategic Implications:
Alter importance of product category image
dimension
Promote COO a s a secondary benefit
4. Unfavorable MismatchExamples:
Taiwanese beer
Strategic Implications:
Ignore COO-such information not
beneficial
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Country Image Dimension
Positive Negative
CountryImageDimensionasaP
roductFeature
NotImportant
Important
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Conduct research to determine how much COO effect theproduct category (Can benefits or hurt a company)
Product Policy Select a brand name that disguises the COO or invoke a
favorable COO Pricing Low price attract value conscious customers who are less
concerned about COO Distribution Use a highly respected distribution channel if a product is
manufactured in a country where consumers have a negative
image Communications Alter consumer attitude about the product
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The Adoption ProcessAwareness> Interest> Evaluation> Trial> Adoption
Characteristics of Innovations
Relative advantage
Compatibility
Complexity
Divisibility
Communicability
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Adopter CategoriesInnovators > early adopters > early majority >
late majority > laggards
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Return
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E.g., Japan, S. Korea, Taiwan, India etc. Different cultural characteristics impact the diffusion process
- High Context- More Group oriented and risk averse
Impact
-Faster rates of diffusion than in the U.S.-Adoption would proceed more quickly in markets whereinnovations were introduced relatively late (gives more timeto assess relative advantage, compatibility and other productattributes)- because risk avoidance is high, fewer innovators but once
they see others use it, because of group mentality, no onewants to be left behind.
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Extension offering product virtuallyunchanged in markets outside of homecountry
Adaptation changing elements of design,
function, and packaging according to needsof different country markets Creation developing new products for the
world market
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Product
Same Different
Communication
Different
Same Strategy 1:
Dual Extension
Strategy 2:
Product ExtensionCommunication
Adaptation
Strategy 4:
Dual Adaptation
Strategy 3:Product Adaptation
Communication
Extension
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