Product decisions - Standardisation v Adaptation

1. Product decisions - Standardisation v Adaptation • Three levels of product • Global products • Advantages/disadvantages of standardisation • Problems with standardisation • Brand globalisation potential

2. Augmented product Installation Actual product Packaging Core benefit or service Brand name Features Delivery and credit After- sales service Core product Quality Styling Warranty Three levels of product

3. Global Products • Localisation of a product or service to fit local regulation and usage requirements e.g. local voltages and safety laws • Adaptation fits the product to buyer preferences e.g. Air-conditioning in USA • Standardised global products are not adapted to local preferences, but must still be localised. E.g Coca-Cola obey local hygiene laws

4. Advantages of standardisation • Cost reduction - e.g. economies of scale • Improved quality - resources can be focussed • Enhanced customer preference - positive experiences lead to global brand loyalty • Global customers - uniform quality and services • Global segments - e.g. software, cameras.

5. Disadvantages of Standardisation • Lack of uniqueness - exclusivity may be behind purchase decision • Off-target - miss the customer target completely • Vulnerable to trade barriers - local production may be necessary, so economy of scale benefits are lost • Strong local competition - customisation by competitors, lack of local knowledge

6. Problems with global standardisation • Insufficient market research • Overstandardisation • Poor follow-up • Narrow vision • Rigid implementation

7. Polaroid SX-70 • Insufficient market research • Used US campaign/agency in European launch • TV testimonials from ‘unknown’ people • hence local lack of awareness

8. Canon AE-1 • Overstandardisation • First ‘positioned’ as the expert’s choice in all markets • Then endorsed by John Newcombe (Tennis Champion) • Created a much bigger market for single-lens reflex cameras world-wide

9. Henkel Pritt • Poor follow-up • Pritt stick launched as an umbrella brand • failed to capitalise on initial momentum • local business units were under resourced • weak results had to be turned around

10. Unilever - Domestos • Narrow Vision • Vision lead from HQ • UK took lead in promoting Domestos • In Germany positioned as dirt remover, not germ killer • UK ignored this - consumers confused

11. Lego Buckets • Rigid implementation • In US, competitor Tyco offered plastic buckets • Danish HQ refused to act • Denmark relented after market slide • Now use buckets world-wide

12. Brand globalisation potential • Does the brand name make sense outside of the country? Nokia from Finland is aware name sounds Japanese (same roots) • Does the name have a positive, country specific image? E.g GM’s Opel and Chevrolet • Is the name available legally in many countries? Dutch Philips, Phillips Oil registered in USA

13. Does the brand complement other global brands in the portfolio(or not)? E.g. Sony supports Aiwa at a lower price • Should the growth be limited to the creation of a regional brand? E.g. Strasbourg beer maker, ‘Kronenbourg’ in global markets, as ‘1866’ in S. Europe. Local brand can be difficult to remove. Johnny K. Johansson (1999)