Chapter global product policy decisions. After studying this chapter you will be able to understand: The reasons for economic union, patterns of international cooperation, the evolution of the European Union, evolving patterns of trade as eastern Europe and the former Soviet states embrace free-market systems, strategic implications for marketing in the region, the size and nature of marketing opportunities in the European/African/Middle East regions.
GLOBAL MARKETING MANAGEMENT Seventh Edition MASAAKI KOTABKE | KRISTIAAN HELSEN Chapter 11 PowerPoint Global Product Policy Decisions II: Marketing Products and Services Chapter Overview Global Branding Strategies Management of Multinational Product Lines Product Piracy Country-of-Origin (COO) Effects Global Marketing of Services Chapter 11 Copyright © 2017 John Wiley & Sons, Inc Introduction • Companies that brand their products have various options when they sell their goods in multiple countries • More and more companies see global (or at least regional) branding as a must Chapter 11 Copyright © 2017 John Wiley & Sons, Inc Introduction • Multinational product line management entails issues such as: – What product assortment should the company launch when it first enters a new market? – How should the firm expand its multinational product line over time? – What product lines should be added or dropped? • Global marketers also face the issue of global piracy • In global marketing, firms have to use a multitude of strategies to handle the negative country-of-origin stereotypes Chapter 11 Copyright © 2017 John Wiley & Sons, Inc Global Branding Strategies • Global Brands (Exhibit 11-1) – A truly global brand is one that has a consistent identity with consumers across the world – The development costs for products launched under the global brand name can be spread over large volumes – A global brand has much more visibility than a local brand – The fact of being global adds to the image of a brand country Chapter 11 Copyright © 2017 John Wiley & Sons, Inc Exhibit 11-1: World’s Top 20 Most Valuable Brands (2012) Chapter 11 Copyright © 2017 John Wiley & Sons, Inc Global Branding Strategies – Global brands are also able to leverage the country association for the product – The value of a global brand (brand equity) usually varies a great deal from country to country (three key value dimensions: quality signal, global myth, and social responsibility) – Inter-country gaps in brand equity may be due to any following factors: • • • • • Chapter 11 History Competitive climate Marketing support Cultural receptivity to brands Product category penetration Copyright © 2017 John Wiley & Sons, Inc Global Branding Strategies • Local Branding – Example: Coca Cola owns numerous local and regional brands across the globe such as Thums Up in India • Global or Local Branding? – Solo branding, hallmark branding, family branding, and extension branding – A firm’s global brand is shaped by three types of factors: • Firm-based drivers • Product-market drivers • Market dynamics Chapter 11 Copyright © 2017 John Wiley & Sons, Inc Exhibit 11-2: Ab-Inbev’s Local Champions Chapter 11 Copyright © 2017 John Wiley & Sons, Inc Exhibit 11-3: Dimensions of International Brand Architecture Chapter 11 Copyright © 2017 John Wiley & Sons, Inc 10 Management of Multinational Product Lines • • • • Width of product line refers to the number of different product lines of the firm Length of product line is the number of different products within a single line Firms with a narrow product assortment usually extend the domestic lines Large companies select a subset for international dispersal Chapter 11 Copyright © 2017 John Wiley & Sons, Inc 14 Management of Multinational Product Lines • Adaptations of products introduced in foreign markets are driven by: 1) 2) 3) 4) 5) Chapter 11 consumer preferences price spectrum competitive climate organizational structure history Copyright © 2017 John Wiley & Sons, Inc 15 Exhibit 11-6: How McDonald’s Customizes Its Menu Chapter 11 Copyright © 2017 John Wiley & Sons, Inc 16 Exhibit 11-7: Coca Cola Local Brands in Japan Chapter 11 Copyright © 2017 John Wiley & Sons, Inc 17 Exhibit 11-8: The Geely GE Has Been Branded a Knock-Off of the Rolls Royce Phantom Chapter 11 Copyright © 2017 John Wiley & Sons, Inc 18 Exhibit 11-9: Guidelines for IP Protection in China Chapter 11 Copyright © 2017 John Wiley & Sons, Inc 19 Product Piracy • • • • • Sales losses due to bogus products is staggering China is a major counterfeit product nation Counterfeiting depresses profits directly Bogus goods damage brand images Any aspect of the product is vulnerable to piracy, including the brand name, the logo, the design, and the package Chapter 11 Copyright © 2017 John Wiley & Sons, Inc 20 Product Piracy • Options against Product Piracy – – – – – – – Lobby Take legal action Customs seizures Product protection options like holograms Change the distribution strategy Cut prices Launch educational campaigns against piracy Chapter 11 Copyright © 2017 John Wiley & Sons, Inc 21 Exhibit 11-10: Quality Image of Products Made in Various Countries Chapter 11 Copyright © 2017 John Wiley & Sons, Inc 22 Country-of-Origin (COO) Effects • Country-of-Origin (COO) Influences – Product quality – Symbolic or emotional sentiments – Normative: doing the “right” thing Chapter 11 Copyright © 2017 John Wiley & Sons, Inc 23 Exhibit 11-11: Product-Country Matches and Mismatches: Examples and Strategic Implication Chapter 11 Copyright © 2017 John Wiley & Sons, Inc 24 Country-of-Origin (COO) Effects – Key research findings of COO effects: • COO effects change over time • Both the country of design and the country of manufacturing/assembly play a role in consumer attraction • COO influences are greater among elderly, less educated and politically conservative • Emotions affect COO use • Culture affects COO outcomes • Brand-name familiarity • COO varies with product category Chapter 11 Copyright © 2017 John Wiley & Sons, Inc 25 Country-of-Origin (COO) Effects • Strategies to Cope with COO Stereotypes: • Product Policy – Pricing – Use highly respected distribution channels – Communication • Improve the country image • Bolster the brand image Chapter 11 Copyright © 2017 John Wiley & Sons, Inc 26 Global Marketing of Services • Challenges Marketing Services Internationally – Protectionism – Immediate Face to Face Contacts with Service Transactions – Difficulties in Measuring Customer Satisfaction Overseas • Opportunities for Global Services – Deregulation of Service Industries – Increasing Demand for Premium Services – Increased Value Consciousness Chapter 11 Copyright © 2017 John Wiley & Sons, Inc 27 Global Marketing of Services • Global Service Marketing Strategies: – – – – – Capitalize on Cultural Forces in the Host Market Standardize and Customize Give Information Technologies (IT) a Central Role Add Value by Differentiation Establish Global Service Networks Chapter 11 Copyright © 2017 John Wiley & Sons, Inc 28 ... Product-market drivers Market dynamics Chapter 11 Copyright â 2017 John Wiley & Sons, Inc Exhibit 1 1- 2: Ab-Inbev’s Local Champions Chapter 11 Copyright © 2017 John Wiley & Sons, Inc Exhibit 1 1- 3:.. .Chapter Overview Global Branding Strategies Management of Multinational Product Lines Product Piracy Country-of-Origin (COO) Effects Global Marketing of Services Chapter 11 Copyright... Exhibit 1 1- 8: The Geely GE Has Been Branded a Knock-Off of the Rolls Royce Phantom Chapter 11 Copyright © 2017 John Wiley & Sons, Inc 18 Exhibit 1 1- 9: Guidelines for IP Protection in China Chapter 11