McGraw-Hill/Irwin International Marketing, 13/e

1. Chapter 12 Products and Services for Consumers Modular: AfjalHossain Assistant Professor, Department of Marketing PSTU McGraw-Hill/Irwin International Marketing, 13/e

2. Introduction • The opportunities for international marketers of consumer goods and services today have never been greater • New consumers are springing up in many emerging markets, which promise to be huge markets in the future • In the more mature markets consumers’ tastes become more sophisticated and complex due to increases in purchasing power • The difference between tangible products and services • The difference between business-to-consumer and business-to-business markets

3. Quality • Intense global competition is placing new emphasis on manufacturing quality products • Quality, as a competitive tool, is the deciding factor in world markets • Quality can be defined on two dimensions: • market-perceived quality and • performance quality • Quality is associated with customer satisfaction • Quality is also measured in many industries by objective third parties such as JD Power and Associates • Customer satisfaction indexes developed are now being used to measure satisfaction across a wide variety of consumer products and services

4. Physical or Mandatory Requirements and Adaptation • Products may have to change in a number of ways to meet the physical or mandatory requirements of a new market, ranging from simple package changes to total redesign of the physical core product • Product homologation is used to describe the changes mandated by local product and service standards • Legal, economic, political, technological, and climatic requirements of the local marketplace often dictate product adaptation • Changes may also have to be made to accommodate climatic differences

5. Green Marketing and Product Development • At the forefront of the “green movement,” with strong public opinion and specific legislation favoring environmentally friendly marketing and products • Green marketing is a term used to identify concern with the environmental consequences of a variety of marketing activities • The designation that a product is “environmentally friendly” is voluntary, and environmental success depends on the consumer selecting the eco-friendly product • In some countries each level of the distribution chain is responsible for returning all packaging, packing, and other waste materials up the chain

6. Products and Culture • A product is more than a physical item: It is a bundle of satisfactions (or utilities) that the buyer receives • Facets of products include its form, taste, color, odor, and texture; how it functions in use; the package; the label; the warranty; manufacturer’s and retailer’s servicing; the confidence or prestige enjoyed by the brand; the manufacturer’s reputation; • The adoption of some products by consumers can be affected as much by how the product concept conforms with norms, values, and behavior patterns • Thus, many facets of products are influenced by culture, which markets must pay attention to

7. Analyzing Product Components for Adaptation • A product is multidimensional, and the sum of all its features determines the bundle of satisfactions (utilities) received by the consumer (1) core component, (2) packaging component, and (3) support services component • The many dimensions of products can be divided into three distinct components: • These components include all a product’s tangible and intangible elements and provide the bundle of utilities the market receives from use of the product

8. The many dimensions of a product can be divided into three distinct components as illustrated in the model below:

9. Marketing Consumer Services Globally • Advice regarding adapting products for international consumer markets also applies to adapting services or intangible products • However, many consumer services are distinguished by four unique characteristics: • intangibility, • inseparability, • heterogeneity, and • perishability • There are several services opportunities in global markets from travel and tourism, TV, movies, to financial services

10. Barriers to Entering Global Markets for Consumer Services • Most services are inseparable and require production and consumption to occur almost simultaneously; thus, exporting is not a viable entry method for them • protectionism, • controls on transborder data flows, • protection of intellectual property, and • cultural requirements for adaptation • Globally, consumer services marketers face the following four barriers:

11. Brands in International Markets • A global brand is defined as the worldwide use of a name, term, sign, symbol (visual and/or auditory), design, or combination thereof intended to identify goods or services of one seller and to differentiate them from those of competitors • A successful brand is the most valuable resource of a company • Brand image is at the very core of business identity and strategy • Global brands such as Kodak, Sony, Coca-Cola, McDonald’s, Toyota, and Marlboro play an important role in that process • Perceived brand “globalness” leads to increases in sales

12. Brands in International Markets

13. Country-of-Origin Effect and Global Brands • Brands are used as external cues to taste, design, performance, quality, value, and prestige • Many factors affect brand image, but one factor of great concern is the country-of-origin effect on the market’s perception of the product • Country-of-origin effect (COE) can be defined as any influence that the country of manufacture, assembly, or design has on a consumer’s positive or negative perception of a product • When the customer becomes aware of the country of origin, there is the possibility that the place of manufacture will affect product or brand image • The country, the type of product, and the image of the company and its brands all influence whether the country of origin will engender a positive or negative reaction