The chapter starts by examining the basic concept of a product including its physical features and its image features. Once the product is put into the design stage, the decision NAS to be made on I standardize or adapted to local conditions. TTS tort either to globally An international marketer needs to determine what the market offering should be n the foreign market by defining the product offering. A product is a good, service or idea with tangible and intangible attributes which can offer value to consumers. It can be classified into consumer goods and industrial goods.
In classifying a product whether it falls under consumer goods or industrial goods, they are several elements used such as: 0 Product Types – which determine buyer orientation in terms of effort, risk and involvement. Product warranties – important element in terms of product value proposition. 0 Packaging – Offers protection to product as well as serves important communication functions. Labeling – Can attract attention towards a product with various information and instruction. 0 Aesthetic – Includes perception towards color, shape or packaging.
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Branding on the other hand is a bundle of image and experiences in customer’s mind. A brand also a promise made by a company about their product by showing quality certification as well as serving differentiation between competing products in the market. A total impression regarding a brand can be called as brand image. Another aspect of brand is brand equity which is a value that accrues to the product as a result from investment in the marketing of a particular brand. This is also can be said as the value creation between brand and customer over time.
Brand equity can ensure loyalty, increase marketing communication effectiveness, lessen vulnerability in marketing action and crises, expand the margin and also may provide inelastic towards consumer response to price increase and elasticity towards price decrease. If a product has achieved success in a single nation, it can be called a local product with local brand. While international products and brands are offered in several market across the region such as “Asian brand” or “Euro brand”. The other category is a global product ND brands which normally meets the wants and needs of a global market.
The global brand has the same name and portray similar image throughout the world. Some characteristic of global brand are quality signal, global myth and social responsibility. Furthermore, combination in branding may allow company o become more reputable in line with the identity. Sometimes, co-branding strategy had been used to strengthen the product brands such as Intel Inside and Intrastate and Coca Cola. Brand extension for example can act as an umbrella for a company’s new product line such as Sony Group with it Sony Play station and Sony walkway.
In achieving greater success in brand development as well as strengthen the brand creation, brand leadership will be a useful element to be adopted. 2. 2 Moscow Hierarchy of Needs Impact on Global Buyers In finding the needs of the customer, there is one framework to be understand (Moscow Hierarchy of Needs) in order for the marketer to decide going global or not. This hierarchy of needs highlighted that there are five (5) levels of people’s needs namely physiological needs safety needs social needs, self esteem and self actualization needs.
By understanding these needs, marketers can easily decide or evolve the product with different value proposition to suit the needs of people locally or globally. The best example is Coca Cola; this product suits the lower basic needs across the globe . Toilette’s Parker Pen also understands the mid level to needs while developing a premium product to meet social respect. 2. 3 Country of Origin as Brand Element The strength of a brand also can be associated with a country of origin. This means a perception and attitude towards particular country normally often extend to products or brands originated from.
For example, German made car such as Mercedes and BMW were strongly associated with German. . 4 Strategic Alternative towards Global Product Planning Global marketing program involves extension where a company offering a product virtually unchanged in outside markets from home country, adaptation when some changes could be found in a product in terms of design, color, functions or packaging to suit different country needs and last but not least is creation/product invention when the new product was developed for the entire world market.
In addition there are five (5) strategic alternatives that the company can pursue in international marketing. Firstly product-communication extension which is very low cost and merely takes the same product and communication strategy into other market. An example for this is Gillette and Razor (same product and same communication strategy across the world). Secondly is extended product – communication adaptation, the product needs some adjustment in terms of communication strategy to serve the need of other countries consumer.
The third strategy is product adaptation – communication extension, this strategy focus on adapting the product to suit the market while maintaining the communication strategy. The next one is product adaptation – communication adaptation where both elements have to adapt for the market needs. Lastly the product invention, where the development of new product for the whole world to fit exclusive market condition. 2. 5 New Product in Global Marketing To choose a right strategy, marketers need to look into the product itself, the market conditions and adaptation or manufacturing cost.
In creating a new product that offer great value globally, marketers should also look on the opportunity to create global advertising to support their brand. New product ideas shall be generated in relation to the market needs. Cost also should be considered in terms of R&D. The new product continuum can be developed to address the degree of needed innovation (continuous, dynamic or discontinuous innovation). Finally, product testing also has to be executed in ensuring product introduction failure in the new market.
Product decisions are based on how much the company has to adjust the product on the standardization – adaptation continuum to differing market conditions. This results in the evolution of five basic strategic alternatives – extension; extension, adaptation; adaptation, extension; adaptation and invention. Extension is the nearest to a standardized reduce, communications strategy and Invention at the other end of the continuum, that is, an adaptation strategy. The more adaptive the policy the more costly it will be for the company. 2. Case Example The case of Thai Tuna is a good example of the fifth product strategy alternatives highlighted above. In 1 80 world canned tuna imports SST at some tons, world consumption was stagnant, prices depressed and rising operating costs were leading to the closure of the tuna processing facilities in the US, Japan and Europe. However, up to 1990, world tuna imports quadrupled to 437,000 tons with large scale inning operations shifting to several lower cost developing countries. No country experienced the dramatic development more than Thailand. In 1980 it did not export one single can.
In 1990, Thailand exported 225,000 tons (51% of world market share) with a gross value in 1989 of IIS$ 537 million. The Thai industry development was rapid and interesting because it was based on imported raw materials. Tuna landings by Thai vessels rarely exceeded 30,000 tons, whilst its imports of foreign tuna (mostly skipjack) have increased past the 250,000 ton mark. The reason for this was the shift in fishing patterns. Historically the eastern Atlantic and Pacific were the most important areas but in the sass, US vessels began to exploit the tuna shoals of the Western Pacific and European vessels the Indian Ocean.
The result was the increase of landings from 1, 7 million tons in 1980 to 2, 5 million tons in 1988, but a significant drop in prices accompanied this increase. Thailand was in a position to capitalize on these new low cost suppliers and in the early to mid sass several fruit and vegetable canners and other entrepreneurs invested in large modern processing facilities especially for fish. Their operating costs were kept low by efficient management, low cost labor, backward integration into production and the efficient use of by products from processing.