Prodct Packing Labelling Nd Branding

8/11/2019 Prodct Packing Labelling Nd Branding

1/59

10-1

Chapter 10Product and

Brand Decisions


2/59

10-2

I ntroduction: What to Sell ?

The international marketer needs to

determine what the market offering should

be in a foreign market :

Defining the product offering

Products versus Services/Rights


3/59

10-3

The Product Offer ing

Core Benefit

Generic Product

Expected Product

Augmented Product

Potential Product

Source : Adapted from: P. Kotler, Marketing Management, 1994


4/59

10-4

Basic Product Concepts

A product is a good, service, or idea

Tangible Attributes

Intangible AttributesProduct classification

Consumer goods

Industrial goods


5/59

10-5

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 competitiveweapon ?

Product Service :

Service capability to accredit the firm withforeign suppliers

high investment in facilities, staffing, training,

and distribution network


6/59

10-6

Goods versus Services/Rights

Instead of marketing a product abroad, the

company may also sell rights or services in

a foreign market:

- rights : brand / trademark / patent

- services : management skills (hotel chain)


7/5910-7

Sales of Rights - Examples

Franchising business :

- Coca-Cola : use of its name to licensedbottlers around the world.

- Pilkington: licensing of the process of

float glass.- Other : Manpower, McDonald's, etc.


8/5910-8


Management Contracts :

- Sheraton Hotels : Management contract for hotels abroad Sale of consulting and management contracts

Little equity invested : Sheraton manages almost

400 hotels worldwide but has equity in only 40 ofthem.

Advantages : minimum risk & strong competitive

position.


9/5910-9


Turn-Key operations :

The firm is selling technical and engineering skills.The firm is training foreign nationals to run a plant.

The firm is supplying material and equipment.


10/5910-10

I nternational Product Strategies

StraightExtension

Product ProductAdaptation Innovation

The firm adopts the

same policy used inits home market.

The company caters

to the needs and wantsof its foreign customers.

The firm designs a

product from scratchfor foreign customers.

Source: W.J. Keegan, Multinational Product Planning: Strategic Alternatives,

Journal of Marketing, 33, 1969, pp.58-62


11/5910-11

Extend, Adapt, Create: Strategic

Alternatives in Global Marketing

Extensionoffering product virtuallyunchanged in markets outside of homecountry

Adaptationchanging elements of design,function, and packaging according to needsof different country markets

Creationdeveloping new products for theworld market


12/59

10-17

Standardization versus

Customization

Although the products sold abroad

generally are not identical to their domestic

counterparts, there is always a core ofexpertise that the firm can carry abroad.

Principle " All Business is local."


13/59

10-18

Reasons for Product Standardization

Economies of scale : Production, R&D, Marketing

Common Consumer

needs : Drinking patterns, car sizes

Consumer Mobility : Customer retention & Loyalty

American Express, Kodak, ...

Home Country Image : US jeans, French Perfumes,...

Impact of technology : B to B Markets


14/59

10-19

Convergence in Drinking Patterns


15/59

10-20

Convergence of Car Sizes


16/59

10-21

Reasons for Product Adaptation

Climate: US Air-conditioning equipment

Skill level of users : Computers in Africa

National consumer habits :- front-loading/top-loading washing machines

- car models : four-door (F) - two-door

(Germ.)

Government regulations on products,

packaging, and labels.

Company history and operations (subsidiaries)


17/59


18/59

10-23

Drivers of Product Adaptation

Example COLGATE Toothpaste(1) Differences in National Regulations

Triclosan forbidden in Germany

High fluorine content in local water (UK)

Obligation to sell high fluorine content

toothpaste in pharmacy (France)

Stringent clinical tests in France


19/59

10-24

Drivers of Product Adaptation

Example COLGATE ToothpastePackaging:

Ecological Stand-up tubes in Germany

Failure in France (Carrefour)

Distribution:

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

managing I t ti l M k ti Mi D i i


20/59

10-25

managing

marketing

2005 Dr.Gerard Ryan, Universitat Rovira i Virgili.

International Marketing Mix DecisionsStrategic Alternatives in international and

global marketing mix decisions. Managerial issues

What aspects of Product can be modified?

Attributes

Brand (Global vs. Local)

Packaging

Quality

Services (after-sale services, support)

Positioning

managing I t ti l M k ti Mi D i i


21/59

10-26

managing

marketing

2005 Dr.Gerard Ryan, Universitat Rovira i Virgili.

International Marketing Mix DecisionsStrategic Alternatives in international and

global marketing mix decisions. Managerial issues

Advantages and Disadvantages of International Brands

Strong customer recognition/reassurance

Economies of scale and scope

Leverages power with retailers

Consolidates efforts across countries

Potential for extension

Not locally responsive Demotivating for country managers

Difficult to manage

Need to maintain consistency across

countries and product-lines


22/59

10-27

Product Types

Buyer orientation

Amount of effort expended on purchase

ConveniencePreference

Shopping

Specialty


23/59

10-28

Brands

Bundle of images and experiences in thecustomers mind

A promise made by a particular companyabout a particular product

A quality certification

Differentiation between competing products

The sum of impressions about a brand is theBrand Image


24/59

10-29

Brands


25/59

10-30

Brands

The added value that accrues to a product as

a result of investments in the marketing of

the brand

An asset that represents the value created by

the relationship between the brand and

customer over time


26/59

10-31

Brands

We have to shift to high value-

added products, and to do that we

need to improve our brand.- Noboru Fujimoto, President Sharp Electronics

Corporation


27/59

10-32

Local Products and Brands

Brands that have achieved success in a

single national market

Represent the lifeblood of domesticcompanies

Entrenched local products/brands can be a

significant competitive hurdle to globalcompanies


28/59

10-33

International Products and Brands

Offered in several markets in a particular

region

Euro-brands


29/59

10-34

Naming your product

Alu-Fanny: French Foil wrap

Crapsy Frui t: French cereal

Kum Onit: German pencil sharpeners

Plopp: Scandinavian chocolate

Pschit t: French lemonade

Atum Bom: Portuguese tuna

Kack: Danish sweets

Mukk: Italian yogurt

Pocari Sweat: Japanese sport drink

Poo: Argentine curry powder


30/59

10-35

Naming your product

Phonetic Problems with Brand Names

- Bardok (Sounds like Brothel in Russian)

- Misair (Sounds like Misery in French)

Translations

Intent Translation

- Stepping Stone - Stumbling Block

- Car Wash - Car Enema

- Highly Rated - Over Rated

Symbols

- Owl - Bad Luck in India

Other Countries make mistakes too

- Zit (Chocolate from Germany)

- Koff (Beer)


31/59

10-36

Global Products and Brands

Global products meet the wants and needs

of a global market and is offered in all

world regions

Global brands have the same name and

similar image and positioning throughout

the world


32/59

10-37

Global Products and Brands

A multinational has operations in different countries.

A global company views the world as a single

country. We know Argentina and France are

different, but we treat them the same. We sell themthe same products, we use the same production

methods, we have the same corporate policies. We

even use the same advertisingin a different

language, of course.

- Alfred Zeien Former Gillette CEO


33/59

10-38

Family Brands

Family Brand

Volkswagen

USA Europe Mexico

" Rabbit" " Golf" " Caribe"

-> lightness -> prestige -> avoid negative

connotation


34/59

10-39

Private Label Branding

Large retailers are moving increasingly into

their own brand, i. e. Marks &Spencer.

They try to obtain greater control and highermargins.

Private branding can be an effective way to

break into foreign markets.(Asian TV manufacturers)


35/59

10-40

European Consumer Preferences

Regarding Private Labels

Product Category Fr. All. It. Es. GB

Edible Oils

Pasta

Yoghurt

Frozen Vegetables

Fresh Pasta

Breakfast Cereals

Instant Soups

Icecream

Whiskey

Smoked Salmon

Champagne

19

16

14

5

3

4

3

6

3

3

3

20

24

14

11

7

8

9

10

1

4

4

10

12

6

5

4

2

0

4

2

1

2

11

12

6

6

3

2

2

2

1

1

3

27

24

12

34

5

18

14

21

4

2

6

Private labels per product category (% of sales in qunqtities in hypermarkets and supermarkets)Source: Secodip International, 1998


36/59

10-41

European Households Judging

Credibility of Private Labels

Private labels per product category (% of sales in qunqtities in hypermarkets and supermarkets)

Source: Secodip International, 1998

Europe Germ. Spain France Italy UKCriteria3

19

78

3

12

85

3

26

72

3

29

68

1

13

86

More expensive

Same

Less expensive

2

16

835

78

17

2

90

8

3

78

19

7

71

22

4

77

18

Higher quality

Same

Lower quality

6

73

21

6

74

21

3

84

12

4

73

23

10

66

24

5

74

21

More confidence

Same

Less confidence

7

71

22


37/59

10-42

Country of Origin effect

Country-of-Origin (COO) Influences on Consumers For many products, the made in label matters a

great deal to consumers.

Key research findings of

COO effects:COO effects are not stable

Consumers prefer domestic

products over imports

Both the country of design

and the country of

manufacturing/assembly play

a role in consumer attraction.


38/59

10-43

Branding Strategies

Combination or tiered branding: allows marketers

to leverage a companys reputation while

developing a distinctive identity for a line of

products Sony Walkman

Co-branding features two or more company or

product brands

NutraSweet and Coca-Cola

Intel Inside


39/59

10-44

Branding Strategies

Brand acts as an umbrella for new products

Example: The Virgin Group

Virgin Entertainment: Virgin Mega-stores and MGM Cinemas

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, Virgin

Holidays


40/59

10-45

Global Brand Development

Questions to ask when management seeks

to build 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?


41/59

10-46


Global Brand Leadership

Using organizational structures, processes, and

cultures to allocate brand-building resources

globally, to create global synergies, and to

develop a global brand strategy that coordinates

and leverages country brand strategies


42/59

10-47


Create a compelling value proposition

Think about all elements of brand identity and

select names, marks, and symbols that have the

potential for globalization

Research the alternatives of extending a national

brand versus adopting a new brand identity

globallyDevelop a company-wide communication system


43/59

10-48


Develop a consistent planning process

Assign specific responsibility for managing

branding issuesExecute brand-building strategies

Harmonize, unravel confusion, and

eliminate complexity


44/59

10-49

Local versus Global Products and

Brands: A Needs-Based Approach

Physiological

Safety

Social

External/InternalEsteem

Self-actualization


45/59

10-50

Country of Origin as Brand Element

Perceptions about and attitudes toward

particular countries often extend to products

and brands known to originate in those

countries

Japan

Germany

France

Italy


46/59

10-51

Packaging

Consumer Packaged Goods when thepackaging is designed to protect or containthe product during shipping

Eco-Packaging because package designersmust address environmental issues

Offers communication cues that provide

consumers with a basis for making apurchase decision


47/59

10-52

Product Packaging and Labeling

Protection

Legal ConstraintsPromotion

ClimateTransport & Handling

Buyer's slow usage rate

Lack of storage facilites

Merchandising ( income level, shopping habits)

Minimum breakage / theft

Ease of handling

Multilingual Labels to Convey an International

Image (Zara, Hollywood Chewing Gum)

Recycling of Packaging

(Duales System, Eco-Emballage)

Regulations on consumer info.

(Origin, weight, ingredients)


48/59

10-54

POM brand

Pomegranate

juice used a

distinctively

shaped bottle to

gain attention on

the grocery shelf


49/59

10-55

Labeling

Provides consumers with various types of

information

Regulations differ by country regarding various

products

Health warnings on tobacco products

American Automobile Labeling Act clarifies the

country of origin, and final assembly point

European Union requires labels on all food products

that include ingredients from genetically modified crops


50/59

10-56


51/59

10-57

As Americans become

increasingly concerned

about cholesterol, the

FDA (Food and Drug

Administration) has

responded by requiring

food manufacturers to

list trans fat (i.e., trans

fatty acids) on theNutrition Facts portion

of product labels,

effective 1/1/06.

Labeling


52/59

10-58


53/59

10-59

Aesthetics

Global marketers must understand the

importance of visual aesthetics

Aesthetic Styles (degree of complexityfound on a label) differ around the world


54/59

10-60

Product Warranties

Express Warranty is a written guarantee that

assures the buyer is getting what they paid

for or provides a remedy in case of a

product failure

Warranties can be used as a competitive

tool


55/59

10-61

New Products in Global Marketing

Pursue opportunities in competitive arenasof global marketplace

Focus on one or only a few businesses

Active involvement from seniormanagement

Ability to recruit and retain best employees

Understand the importance of speed inbringing product to market


56/59

10-62

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


57/59

10-63

The International New Product

Department

How big is the market for this product at variousprices?

What are the likely competitive moves in response

to our activity?Can we market the product through existingstructure?

Can we source the product at a cost that will yield

an adequate profit?Does product fit our strategic development plan


58/59

10-64

Testing New Products

When do you test a new product?

Whenever a product interacts with human,

mechanical, or chemical elements because there

is the potential for a surprising and unexpected

incompatibility

Test could simply be observing the product

being used within the market


59/59

Looking Ahead

Chapter 11 Pricing decisions

Prodct Packing Labelling Nd Branding

Documents

Transcript of Prodct Packing Labelling Nd Branding