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International Marketing
16th 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
13
• 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
13
• Quality
• Products and culture
– Innovative products and culture, diffusion of
innovations, and production of innovations
• 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
13
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 (2015)
•
•
•
•
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Quality
•
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•
•
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Shift to a customer’s market
Increased customer knowledge
The customer defines quality
The cost and quality of a product
– Among the most important criteria by which purchases are
made
• Most consumers expect performance quality
• In many industries quality is measured by third parties
– JD Power and Associates
Roy Philip
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International Marketing
16th edition
McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
Quality
13
• Conformance to customer specifications and
expectations.
Roy Philip
13-7
International Marketing
16th edition
McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
Quality
13
• defined on two dimensions
– Market-perceived quality
– Performance quality
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Maintaining Quality
13
• Damage in the distribution chain
– Russian chocolate
• 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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13-10
International Marketing
16th edition
McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
Physical or Mandatory
13
Requirements and Adaptation
• Product homologation
• Product adaptation requirements
–
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–
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Legal
Economic
Political
Technological
Climate
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Green Marketing
and Product Development
13
• 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
Roy Philip
13-13
International Marketing
16th edition
McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
Products and Culture
13
• 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
– Norms
– Values
– Behavior patterns
Roy Philip
13-15
International Marketing
16th edition
McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
Innovative Products
and Adaptation
13
• 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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Diffusion of Innovations
13
• 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
– Degree of perceived newness
– Perceived attributes of the innovation
– Method used to communicate the idea
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Production of Innovations
13
• Inventiveness of companies and countries
• Expenditures
• Japanese solutions
– American-style education programs
– American design centers
• New ideas come from a variety of sources
– Countries
– Acquisitions
– Global collaborations
Roy Philip
13-19
International Marketing
16th edition
McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
Five Characteristics
of an Innovation
•
•
•
•
•
13
Relative advantage
Compatibility
Complexity
Trialability
Observability
Roy Philip
13-21
International Marketing
16th edition
McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
Analyzing Product
Components for Adaptation
13
• 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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Product Component Model
13
Exhibit 13.1
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Core Components
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• Product platform
• Design features
• Functional features
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Packaging Component
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Price
Quality
Packages
Styling
Trademark
Brand name
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Support Services Component
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•
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Deliveries
Warranty
Spare parts
Repair and maintenance
Installation
Instructions
Other related services
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International Marketing
16th edition
McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
Marketing Consumer
Services Globally
13
• More than half of Fortune 500 companies are
primarily service providers
• Consumer services characteristics
–
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–
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Intangibility
Inseparability
Heterogeneity
Perishability
• A service can be marketed
– As an industrial (business-to-business)
– A consumer service
Roy Philip
13-29
International Marketing
16th edition
McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
Services Opportunities
in Global Markets
•
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•
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13
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:
–
–
–
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Protectionism
Restrictions on transborder data flows
Protection of intellectual property
Cultural barriers and adaptation
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International Marketing
16th edition
McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
Brands in
International Markets
13
• A global brand is the worldwide use of a name,
term, sign, symbol, design, or combination
– Intended to identify goods or services of one
seller
– To differentiate them from those of competitors
• Importance is unquestionable
• Most valuable company resource
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Top Twenty Brands
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Exhibit 13.2
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Top Twenty Brands
(continued)
13
Exhibit 13.2
Best Global
Brands in 2012
Best Global
Brands in 2013
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Global Brands
13
• 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
Roy Philip
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International Marketing
16th edition
McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
National Brands
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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)
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• 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
• 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)
13
• Countries are stereotyped
– On the basis of whether they are industrialized
– In the process of industrializing
– In process of developing
• 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
13
• 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)
13
• 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)
13
• 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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