DEVELOPING GLOBAL MARKETING STRATEGIES

PRODUCTS AND SERVICES FOR CONSUMERS

CHAPTERS OBJECTIVES
The importance of quality in International Market. Cultural requirements for product adaptation. Country-of-origin effects on product image.

The need to view all attributes of product in order to

overcome resistance to acceptance. The relationship between product acceptance and the market into which it introduced.

QUALITY
Due to intense global competition, companies

emphasize and depend more on product quality, competitive price, and innovative products. Thus, quality aspect is very importance in marketing products in international market especially when firms market the products in advance and developing countries.

WHAT IS QUALITY
According to Cateora(2007), quality can be defined

into two dimensions: 1) Market-perceived quality (consumer perception on brand, price, design, packaging and etc.) 2) Performance quality (the ability of the product to perform a tasks that is supposed to.)

Mandatory Requirements and Adaptation

Most of the time the companies change its product in

a number of ways to meet the physical or mandatory requirements of the new market. Product Homologation is where the companies has to change its product mandated by the new market/country. Example: Change the wiring system to meet the voltage system, change the design to meet the safety standards, and etc.

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Legal factors, economic factors, political factors,

technological factors, and climate factors are among the factors that can force the company to change or adapt the product. Example: When market in poor country, cigarettes manufacturers change into small package or sell individual cigarettes. Example: When Proton export its car into Europe it fix the car with heater system.

GREEN MARKETING AND PRODUCT DEVELOPMENT

Green marketing is marketing activities that concern

and take consideration of the environmental impact. For example packaging that is biodegradable. Products that use aerosol that harm the ozone layer is taken out form the market. Thus companies need to develop new products that are environmentally friendly in international market due to this new concern.

PRODUCTS AND CULTURE

Cultural aspects do affect the products design and

product adaptation in international market. Usually it affects the brand name, size, color, design, price and other products attributes/features. The greater the cultural differences between the home country and the foreign country the greater the product adaptation. Example: Shisedo introduce its cosmetic products in USA. After a while the company has to modify the products to make it easy to use to suit with the American culture which do not have much time at home.

ANALYZING PRODUCT COMPONENTS FOR ADAPTATION

Most of the time companies adapt their products to

suit with the foreign regulations, culture, and the customers taste. The next question is which part of product that need to be adapted??? The brand? The packaging? The design? The additional services? The ingredients?

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To identify all the possible ways a product may be

adapted it is useful to separate product dimensions into three dimensions such as: 1) Core Component. 2) Packaging Component. 3) Support Services Component.

PRODUCT CORE COMPONENT

The core component of the product consist three

parts which are: 1) Product Platform (contains the essential technology). 2) Design features. 3) Functional features.

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Usually the company wont adapt the product

platform because it will involve high capital investment such as building new plant, new machine and new processing facility. However, the company can change the design, color, and other functional features to suit with the foreign culture, regulation and customer taste. Example: Proton includes the heater system in its automobile that it market in UK. Pizza Hut introduce curry flavor in its Malaysian restaurant

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This special coke can only be found in worlds exclusive club. Coca Cola change the design to meet the taste of its exclusive customers around the world.

PACKAGING COMPONENT
The packaging component includes style features,

packaging, labeling, trademarks, brand name, quality, price, and other aspects of packaging. Some parts of the packaging component must be adapted to suit with the foreign regulation. For example some countries require labels to be printed in more than one language. Plastic packaging cannot be used in USA and most of Europe. In Malaysia Nestle use Halal sign to suit with Muslim population.

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Procter & Gamble use Oil of Olay in USA but use Oil

of Ulan in Malaysia.

Exxon-Mobil use Exxon brand name in USA but use

Esso in Malaysia.

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ESSO IN MALAYSIA

EXXON IN USA

SUPPORT SERVICES COMPONENT

The support services component includes repair and

maintenance, instruction, installation, warranties, deliveries, and the availability of spare parts. Repair and maintenance are difficult problems in developing countries. Parts are also difficult problem in developing country which usually does not have many spare parts retailers and distributors. Instruction that the company provides in the packaging or instruction manual must be adapted according to education level.

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Pizza Hut deliver its pizza by using motorbike in Malaysia, China, and most of the Asian countries due to its traffic condition

MARKETING SERVICES GLOBALLY

Many types of services are also marketed all over the

world. Services such as Banking, Tourism, Hospital, Airlines, Insurance, Financial consulting, Hotel, Communication, Pay or Cable TV, Sporting events, are found all over the world.

Example of Foreign Services in Malaysia

Putrajaya Marriot Hotel

BARRIERS TO ENTER GLOBAL SERVICES MARKET

The vast majority of services enter foreign market

through licensing, franchising, or direct investment. Thus marketing services in foreign countries always meet with four kinds of barrier which are: 1) Protectionism. 2) Restriction on transborder data flow. 3) Protection of intellectual property. 4) Cultural barriers and adaptation.

BRAND IN INTERNATIONAL MARKET

When deciding the brand name of the products the

international company can choose to use global brand, national brand or private brand. Global brand is where the international company use the same brand for all countries. This give the company uniformity and easier to introduce other products later on by using the same name. Example of global brand are : Levis, Coca-Cola, MacDonald, KFC, IBM, Nokia, Apple, Playstation and many more.

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Another type of brand that the company could use is

the National Brand. This is the new brand that the company give to the products that the company market in international market. The international company might use specific brand for each country. Usually the company use national brand or country specific brand to accommodate with the foreign culture and preferences.

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Private brand is where the retailer use its own name

as the brand name to the products that it sell in its store. Retailing companies such as Tesco, Carrefour, Giant and Wallmart use its own brand on certain products. Customers can only buy the Tesco brand only at Tesco outlet.

COUNTRY OF ORIGIN
Country where the products are made also can affect

the consumer perception toward certain products. Consumer can have positive or negative perceptions toward the products by looking from where it were made. Certain country has its own image. For example: Japan is known as quality in electronic, ,camera robotic and sushi. USA is known as quality in Satellite technology, heavy industries, medical, and entertainment.

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Italy is known for its design and fashion. China is known for its silk. Malaysia is known for its rubber and palm oil.

Thus the international company has to be aware on

the effect of the country of origin on its brand. It may mentioned the country name on its label or it may not mentioned if the consumers have negative feeling. For example: Nike shoes which is made from Vietnam may not be very good compared to made from USA.

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