12 - 1 Products and Culture A product is the sum of the physical and psychological satisfactions it...
12
12 - 1 Products and Culture • A product is the sum of the physical and psychological satisfactions it provides the user. - Primary function - Psychological attributes • The need for cultural adaptation is often necessary, affected by how the product conforms with: - Norms - Values - Behavior patterns
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Transcript of 12 - 1 Products and Culture A product is the sum of the physical and psychological satisfactions it...
12 - 1
Products and Culture
• A product is the sum of the physical and psychological satisfactions it provides the user.
- Primary function- Psychological attributes
• The need for cultural adaptation is often necessary, affected by how the product conforms with:
- Norms- Values- Behavior patterns
12 - 2
Innovative Products and Adaptation
• 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
12 - 3
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
• The element of time• Variables affecting the rate of diffusion of an object:
- The degree of perceived newness- The perceived attributes of the innovation- The method used to communicate the idea
12 - 4
Five Characteristics of an Innovation
1. Relative advantage
2. Compatibility
3. Complexity
4. Trialability
5. Observability
12 - 5
Analyzing Product Components for Adaptation
• Insert Exhibit 12.1 – Product Component Model
Exhibit 12.1
12 - 6
Brands in International Markets
• Very important• Most valuable resource a company has
A global brand is defined as the worldwide use of a name, term, sign, symbol, design, or combination thereof intended to identify goods or services of one seller and to differentiate them from those of competitors.
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Top Twenty BrandsRank 2005/2004 2005 Brand Value
(millions)2004 Brand Value (millions)
Change (%)
Country of Ownership
1/1 Coca Cola $67,525 $67, 394 0% U.S.
2/2 Microsoft 59,941 61,732 -2 U.S.
3/3 IBM 53,376 53, 791 -1 U.S.
4/4 GE 46, 996 44,111 7 U.S.
5/5 Intel 35,588 33,499 6 U.S.
6/8 Nokia 26,452 24,041 10 Finland
7/6 Disney 26,441 27,113 -2 U.S.
8/7 McDonalds 26,041 25,001 4 U.S.
9/9 Toyota 24,837 22,673 10 Japan
10/10 Marlboro 21,139 22,128 -4 U.S.
12 - 8
Top Twenty Brands (continued)Rank 2005/2004 2005 Brand Value
(millions)2004 Brand Value (millions)
Change (%)
Country of Ownership
11/11 Mercedes-Benz
$20,006 $21,331 -6 Germany
12/13 Citi 19,967 19,971 0 U.S.
13/12 HP 18,559 17,683 5 U.S.
14/14 Am Ex 18,534 16,723 5 U.S.
15/15 Gillette 17,534 16,723 5 U.S.
16/17 BMW 17,126 15,886 8 Germany
17/16 Cisco 16,592 15,948 4 U.S.
18/44 L Vuitton 16,077 NA NA France
19/18 Honda 15,788 14,874 6 Japan
20/21 Samsung 14,956 12,553 19 S. Korea
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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 Effect and Global Brands
• Consumers have broad but somewhat vague stereotypes about specific countries and specific product categories that they judge “best.”
• Ethnocentrism• Countries stereotyped on the basis of whether they are industrialized, in
the process of industrializing, or developing• The more technical the product, the less positive is the perception of one
manufactured in a less-developed or newly industrializing country• Fads often surround product from particular countries or regions
Country-of-origin effect (COE) can be defined as any influence that the country of manufacture, assembly, or design has on a consumer’s positive or negative perception of a product.
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Private Brands
• 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
• Must be competitively priced and provide real consumer value
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Summary
• 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.
• 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.
