7.01

1. 7.01 Discuss standardization-versus-adaptation decisions, and how companies create global brand positions & equity

2. International products • Something offered to an international market that satisfies a want or a need. Products can contain both tangible and intangible parts • Tangible: Parts of a product that can be seen and felt • i.e. packaging, brand name, quality, design • Intangible: Parts of a product that cannot be seen or felt. • i.e. warranty, delivery, credit, installation; services are mostly intangible

3. Standardization versus adaptation • Four choices for marketers when moving products into new markets • keep their home country products the same • adapt an existing product for new markets • design new products for new markets • design one product for a global marketplace

4. Why design a standardized global product? • Standardized products can create economies of scale in research & development, production, and marketing • A global product with a global brand image allows companies to compete against other global marketers

5. Why adapt instead of standardize? • Products may be used in different political & legal environments • Consumers may have different cultural needs • Local competition in foreign markets may be different than domestic • Product customization may be necessary

6. Standardization-verses-adaptation • Companies need to evaluate the following in order to make choice between standardization-verses-adaptation • market characteristics: • political and legal regulations, customer characteristics and preferences, purchasing patterns, and distribution systems • product characteristics: • nature of the product, the ability to create a global brand, and the purpose for which the product is used, perception of product quality, perception of the product’s country of origin, and required after-sale service. • company characteristics: • financial resources, international orientation of management

7. Global brands • Brand: name, word, or design that identifies a product, service, or company • Creates a certain expectation in the minds of customers • Global brands need a competitive advantage when competing with local brands in local markets • Can be subject to country-of-origin effect • i.e., in the 1950’s “Made in Japan” meant low-quality to consumers • Today “Made in China” can mean low quality, while Japanese products signal high quality

8. Product positioning • Using a brand to create an image • BMW usually signifies quality engineering, and a fast, sporty automobile • Disney suggests wholesome family entertainment • Companies used to rely on TV advertising to create brand image • Today they are shifting to the Internet, live events, cell phones, and movies • http://www.bmwusa.com/Standard/Content/uniquely/TVAndNewMedia/BMWfilms.aspx • http://www.youtube.com/watch?v=tEfqB-d3QJo • http://www.youtube.com/watch?v=e-BHzHAmCCk The Ambush and Devil

9. Brand equity • The additional value that a brand name brings to a product or company • Coca-cola estimated at over $67 billion • Counterfeits, forgeries, and grey markets can diminish brand equity—may cause product to be viewed as cheap/poor quality • Grey markets exist when products are sold outside an authorized distribution system • http://www.interbrand.com/en/BestRetailBrands/2013/Best-Retail-Brands.aspx • Interbrand top 50 brands • http://www.youtube.com/watch?v=BBlAe8yuGvk • http://www.youtube.com/watch?v=gAlFiPw9H18 • Brand Equity defined

10. Packaging and Design • Can have a strong impact on product image • Logos and trademarks are intangible assets with a dollar value or brand equity • Should translate well across cultures

11. Global brand names • Must be unique to the product and its market • May not be used by any other product or company • Should not have undesirable meaning across languages • Family brand: typically the brand name of a company that also have individual product brands • Ford Motor Company (family) sells Mustang (individual) • Kelloggs (family) sells Rice Krispies (individual)