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Dr. Wolfgang Ulaga

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— ntroduction: What to Sell ?
— nternational Product Strategies
— Standardization versus Customization
—
iming of Foreign Entry
— anaging an nternational Brand Portfolio
— Product Packaging and Labeling
— anaging nternational Product Lines
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—
he international marketer needs to determine

what the market offering should be in a
foreign market :

± Defining the product offering

± Products versus Services/Rights
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— 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 competitive
weapon ?
— Product Service :
± Service capability to accredit the firm with
foreign suppliers
± high investment in facilities, staffing, training,
and distribution network
 
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— nstead 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)

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— Franchising business :

- Coca-Cola : use of its name to licensed

bottlers around the world.
- Pilkington: licensing of the process of
float glass.
- Other : anpower, cDonald's, etc.
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— anagement Contracts :

- Sheraton Hotels :
— anagement 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 of
them.
— dvantages : minimum risk & strong competitive
position.
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—
urn-Key operations :

±
he firm is selling technical and engineering

skills.
±
he firm is training foreign nationals to run a
plant.
±
he firm is supplying material and equipment.
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he firm adopts
he company caters
he firm designs a

the same policy to the needs and wants product from scratch
used in its home of its foreign customers. for foreign customers.
market.

Source: W.J. Keegan, ultinational Product Planning: Strategic lternatives,

Journal of arketing, 33, 1969, pp.58-62
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nternational Product Consumer Need Product Strategy Communication Strategy
Product Strategy Example Satisfied
Strategy 1
Product and Gillette Disposable, easy to use Extension Extension
Communication Razor product
Extension
Strategy 2
Product Extension Wrigley US: Substitute for Extension daptation
Communication Chewing Gum Smoking
daptation Europe: Dental benefits

Strategy 3
Product daptation cDonalds Fast-Food daptation: Extension:
Communication dding local products to Using global campaign
Extension range
Strategy 4
Product and Slim Fast dentical: daptation: daptation:
Communication Lose Weight Consumer preferences Celebrity in Germany,
daptation for different flavors
eacher in UK
Strategy 5
Product nvention Buckler Beer Non-alcoholic beer nvention Develop new
communication

Source: W.J. Keegan

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— lthough the products sold abroad generally
are not identical to their domestic counterparts,
there is always a core of expertise that the firm
can carry abroad.

— Principle " ll Business is local."

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— Economies of scale : Production, R&D, arketing
— Common Consumer
needs : Drinking patterns, car sizes

— Consumer obility : Customer retention & Loyalty

merican Express, Kodak, ...

— Home Country mage : US jeans, French Perfumes,...

— mpact of technology : B to B arkets

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— Climate: US ir-conditioning equipment
— Skill level of users : Computers in frica
— 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)
 
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— arket Size in France: — Competitors in France :
FF 1,8 Bill. (1996) ± Unilever 33%
—
rends: ± Colgate 22,5%
± ultiple number of ± Henkel 19%
toothpastes/family ± Smithkline B. 12%
±
herapeutic / ± P&G 0%
sophisticated products
± Cosmetic products
± Volume
± Price
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— (1) Differences in National Reglementation :
±
riclosan forbidden in Germany
± High fluor content in local water (UK)
± Obligation to sell high fluor content toothpaste
in pahrmacy (France)
± Stringent clinical tests in France
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— ! :
± Ecological Stand-up tubes in Germany
± Failure in France (Carrefour)
— (#
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± Role of pharmacy in taly and Spain
± Role of drugstore in UK
—  
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± edical in taly and Spain (recommended by dentist)
± Non-medical in UK
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— Waterfall Strategy:

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± arlboro: 35 years
± c Donald¶s: 22 years
± Coca-Cola: 20 years
— Sprinkler Strategy:
± icrosoft Windows 95 - Global roll out:
4-6 million customers worldwide bought the operating
system in the first three weeks after the launch

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— .%&
:
± Colgate
otal (104 countries)
—  %&
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± Sensation (10 countries)
— 2
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:
± Stand-up¶s in Germany (specific local need)
± Liquid toothpaste in Spain (follow Henkel)
±
onygencyl in France (maintain local brand)
— 0

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± Sensation in UK and taly
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— Brand µ Nestle Pure Life¶
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— Local source 

— Universal quality standard Ą ÄÄ



— ain target: 
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emerging markets
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± Pakistan (Dec.1998) Ä 

± Brazil (July 1999) 
± China 


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± etc.
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—
he firm must evaluate each market / brand
whether to seek protection.
(Blue Bell nc. - trademark Wrangler registered in
135 countries)
— Global brands versus national brands :
Priority in Use <-> Priority in Registration
(Ford ustang in Germany renamed
aunus)
— Brand piracy : local imitation or deliberate
registration
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— Large retailers are moving increasingly into
their own brand, i. e. arks &Spencer.
—
hey try to obtain greater control and higher
margins.
— Private branding can be an effective way to
break into foreign markets.
(sian
V manufacturers)
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Private labels per product category (% of sales in qunqtities in hypermarkets and supermarkets)
Source: Secodip nternational, 1998
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Private labels per product category (% of sales in qunqtities in hypermarkets and supermarkets)
Source: Secodip nternational, 1998
  

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Climate

ransport & Handling
Buyer's slow usage rate
Lack of storage facilites


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erchandising ( income level, shopping habits) Recycling of Packaging

inimum breakage / theft (Duales System, Eco-Emballage)
Ease of handling Regulations on consumer info.
ultilingual Labels to Convey an nternational (Origin, weight, ingredients)
mage (Zara, Hollywood Chewing Gum)
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— Deciding on the right individual product for

world markets is only one aspect of product
policy.

—
he next step is to decide what family of

products should be offered
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—
he foreign product line is frequently #

than the domestic line because of financial
and market limitations.

— By introducing a limited product line into

foreign markets the firm can
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before taking a bigger plunge.