Global Marketing

Tenth Edition, Global Edition Learning Objectives

10.1 Review the basic product concepts that underlie a successful
global marketing product strategy.

Chapter 10 10.2 Compare and contrast local products and brands, international
products and brands, and global products and brands.
10.3 Explain how Maslow’s needs hierarchy helps global marketers
Brand and Product
understand the benefits sought by buyers in different parts of the world.
Decisions in Global
Marketing 10.4 Outline the importance of “country of origin” as a brand element.
10.5 List the five strategic alternatives that marketers can utilize during
the global product planning process.
10.6 Explain the new-product continuum and compare and contrast the
different types of innovation.

Copyright © 2020 Pearson Education Ltd. All Rights Reserved. Copyright © 2020 Pearson Education Ltd. All Rights Reserved.

Basic Product Concepts Product Warranties

• A product is a good, service, or idea • An Express Warranty is a written guarantee that assures
– Tangible Attributes the buyer is getting what he or she paid for or provides a
remedy in case of a product failure
– Intangible Attributes
• Product types • Warranties can be used as a competitive tool to position a
company in a positive way
– Consumer goods
– Industrial goods

Copyright © 2020 Pearson Education Ltd. All Rights Reserved. Copyright © 2020 Pearson Education Ltd. All Rights Reserved.
Packaging Labeling
• Consumer Packaged Goods are a variety of products • Attracts attention, supports product positioning, persuades
whose packaging protects or contains the product from consumers to buy
production to the end user
• Provides consumers with various types of information
• Eco-packaging addresses environmental issues like
• Regulations differ by country regarding various products
recycling, biodegradability, & sustainable forestry
– Health warnings on tobacco products
• Must engage the senses, make an emotional connection,
– American Automobile Labeling Act clarifies the country
& enhance the brand experience of origin, and final assembly point
– Examples: Absolut Vodka, Altoids breath mints,
– European Union requires labels on all food products
Godiva Chocolates, Corona Extra, Coca-Cola, Grey
that include ingredients from genetically modified crops
Goose, Aquafresh

Copyright © 2020 Pearson Education Ltd. All Rights Reserved. Copyright © 2020 Pearson Education Ltd. All Rights Reserved.

Aesthetics Basic Brand Concepts

• Global marketers must understand the importance of • A brand is a bundle of images and experiences in the
visual aesthetics customer’s mind
• Aesthetic styles (degree of complexity found on a label) • A promise made by a particular company about a
differ around the world particular product
• Some colors may be standardized around the world (John • A quality certification
Deere’s green, Marlboro’s red, Caterpillar’s yellow)
• Differentiation between competing products
• Other colors must be changed in response to local culture
• The sum of impressions about a brand is the Brand Image
– In Asian countries white is associated with death and
– Steve Jobs’ constant media presence and Apple
bad luck

Copyright © 2020 Pearson Education Ltd. All Rights Reserved. Copyright © 2020 Pearson Education Ltd. All Rights Reserved.
Brand Equity Brand Equity Benefits
• Brand equity is the total value that accrues to a product as a • Greater loyalty
result of investments in the marketing of the brand.
• Less vulnerability to marketing actions
• An asset that represents the value created by the relationship
between the brand and customer over time. • Less vulnerability to marketing crises
• Seen as a protective moat around economic castles according • Larger margins
to Warren Buffet.
• Logos, packaging, other communication devices provide a visual • More inelastic consumer response to price increases
representation of the brand.
• More elastic consumer response to price decreases
• A Word Mark logo is like the distinctive script of Coca-Cola
• Increased marketing communication effectiveness
• A nonword mark logo, or brand symbol, is like McDonald’s
golden arches, Nike’s swoosh, or Mercedes’ three-pronged star

Copyright © 2020 Pearson Education Ltd. All Rights Reserved. Copyright © 2020 Pearson Education Ltd. All Rights Reserved.

Local Products and Brands International Products and Brands

• Brands that have achieved success in a single national • Products and brands offered in several markets in a
market particular region
– Coca-Cola has products only for the Japanese market – “Euro brands”
• Represent the lifeblood of domestic companies – Daimler’s Smart Car
– Honda 5-door hatchback auto is known as Fit in
• Entrenched local products/brands can be a significant Japan, and Jazz in Europe; Fit was rolled out to
competitive hurdle to global companies Australia, South America, South Africa, China, U.S.

Copyright © 2020 Pearson Education Ltd. All Rights Reserved. Copyright © 2020 Pearson Education Ltd. All Rights Reserved.
Global Products and Brands (1 of 2) Global Products and Brands (2 of 2)
• Global products meet the wants “A multinational has operations in different countries. A global company
and needs of a global market and views the world as a single country. We know Argentina and France are
are offered in all world regions at different, but we treat them the same. We sell them the same products,
each stage of development we use the same production methods, we have the same corporate
policies. We even use the same advertising-in a different language, of
• Global brands have the same course.”
name and similar image and
positioning throughout the world - Alfred Zeien, Former Gillette CEO
– BMW : Ultimate Driving
Machine In any language Gillette’s
– GE: Imagination at Work trademarked brand promise is
easy to understand.
– Visa: Life takes Visa
– Harley-Davidson: An
American Legend

Copyright © 2020 Pearson Education Ltd. All Rights Reserved. Copyright © 2020 Pearson Education Ltd. All Rights Reserved.

A Localized View Global Brand Characteristics

“We believe strongly that there isn’t a so-called global consumer, at • Quality signal-allows a company to charge premium price
least not when it comes to food and beverages. People have local in a highly competitive market
tastes based on their unique cultures and traditions-a good candy bar in
Brazil is not the same as a good candy bar in China. Therefore, • Global myth-marketers can use global consumer culture
decision making needs to be pushed down as low as possible in the positioning (GCCP) to link the brand identity to any part
organization, out close to the markets. Otherwise, how can you make
good brand decisions? A brand is a bundle of functional and emotional
of the world
characteristics. We can’t establish emotional links with consumers in • Social responsibility-shows how a company addresses
Vietnam from our offices in Vevey.”
social problems
Peter Brabeck-Letmathe, former CEO of Nestlé

Copyright © 2020 Pearson Education Ltd. All Rights Reserved. Copyright © 2020 Pearson Education Ltd. All Rights Reserved.
Branding Strategies Brand Extension
• Global product = personal stereos • Brand acts as an umbrella for new products
– Example: The Virgin Group
• Global brand = Sony Combination or tiered branding allows
▪ Virgin Active
marketers to leverage a company’s reputation while
▪ Virgin Mega-stores, Virgin Books
developing a distinctive identity for a line of products
▪ Virgin Wine
– Sony Walkman ▪ Virgin Radio
• Co-branding features two or more company or product ▪ Virgin Pure (water purification)
brands ▪ Virgin Health
– NutraSweet and Coca-Cola ▪ Virgin Hotels, Virgin Casinos
▪ Virgin Vacations, Virgin Balloon Holidays, Virgin Galactic,
– Intel Inside Virgin Trains

Copyright © 2020 Pearson Education Ltd. All Rights Reserved. Copyright © 2020 Pearson Education Ltd. All Rights Reserved.

Product/Brand Matrix World’s Most Valuable Brands, 2017

Table 10-1 Product/Brand Matrix for Global Marketing. Table 10-2 The World’s Most Valuable Brands

Rank Value ($millions)

Blank Blank Product Product Apple 184,154
Blank Blank Local Global Google 141,703
Brand Local 1. Local product/local brand 2. Global product/local brand Microsoft 79,999
Brand Global 3. Local product/global brand 4. Global product/global brand Coca-Cola 69,733
Amazon 64,796
Samsung 56,249
Toyota 50,291
Facebook 48,188
Mercedes 47,829
IBM 46,829

Copyright © 2020 Pearson Education Ltd. All Rights Reserved. Copyright © 2020 Pearson Education Ltd. All Rights Reserved.
Global Brand Development (1 of 4) Global Brand Development (2 of 4)
• Questions to ask when management seeks to build a • Global Brand Leadership
global brand: – Using organizational structures, processes, and
– Does this move fit the company and/or its markets? cultures to allocate brand-building resources globally,
– Will anticipated scale economies materialize? to create global synergies, and to develop a global
– How difficult will it be to develop a global brand team? brand strategy that coordinates and leverages country
brand strategies
– Can a single brand be imposed on all markets
successfully?

Copyright © 2020 Pearson Education Ltd. All Rights Reserved. Copyright © 2020 Pearson Education Ltd. All Rights Reserved.

Global Brand Development (3 of 4) Global Brand Development (4 of 4)

1. Create a compelling value proposition, beginning with 4. Develop a consistent planning process across markets
the home-country market. & products. Make a process template available to
managers in all markets.
2. Think about all elements of brand identity and select
names, marks, and symbols that have the potential for 5. Assign specific responsibility for managing branding
globalization. issues to ensure local brand managers accept global
best practices.
3. Develop a company-wide communication system to
share & leverage knowledge and information about 6. Execute brand-building strategies that leverage global
marketing programs & customers in different markets. strengths & respond to relevant local differences.

Copyright © 2020 Pearson Education Ltd. All Rights Reserved. Copyright © 2020 Pearson Education Ltd. All Rights Reserved.
A Needs-Based Approach to Product
Planning Maslow’s Hierarchy of Needs
• Maslow’s Needs Hierarchy helps marketers understand Figure 10-1 Maslow’s Hierarchy of Needs
how & why local products go beyond the home-country
• Needs and wants aren’t the same thing
• Global giants like Coca-Cola, McDonald’s, and Sony
understand and build local products or products that fulfill
social functions

Copyright © 2020 Pearson Education Ltd. All Rights Reserved. Copyright © 2020 Pearson Education Ltd. All Rights Reserved.

Asian Hierarchy of Needs Country of Origin as Brand Element

Figure 10-2 Maslow’s Hierarchy: The Asian Equivalent • Perceptions about and attitudes toward particular countries
often extend to products and brands known to originate in
those countries
– Japan
– United States
– Finland
– Italy

Copyright © 2020 Pearson Education Ltd. All Rights Reserved. Copyright © 2020 Pearson Education Ltd. All Rights Reserved.
Extend, Adapt, Create: Strategic Global Product Planning: Strategic
Alternatives in Global Marketing Alternatives
• Extension - offering product virtually unchanged in Figure 10-3 Global Product Planning: Strategic Alternatives
markets outside of home country
• Adaptation - changing elements of design, function, and
packaging according to needs of different country markets
• Product Invention - developing new products for the
world market

Copyright © 2020 Pearson Education Ltd. All Rights Reserved. Copyright © 2020 Pearson Education Ltd. All Rights Reserved.

Strategy 2: Product Extension-

Strategy 1: Dual Extension Communications Adaptation
• Product-Communication Extension • Products may serve the same or different needs in
– May be very profitable, simple different markets
– Almost no adaptation • No product changes reduce expense
– Same advertising and promotional appeals
• Costs in market research advertising, sales promotion,
– Used with B2B or industrial products point-of-sale material
• Apple iPhone – Ex. Miller Genuine Draft is an international lifestyle
brand (GCCP) in Central Europe rather than an
• Loctite adhesives American brand (FCCP)
– Ben & Jerry’s changed packaging color in the U.K.
– John Deere tractors designed for India were marketed
to hobby farmers in the U.S.
Copyright © 2020 Pearson Education Ltd. All Rights Reserved. Copyright © 2020 Pearson Education Ltd. All Rights Reserved.
Strategy 3: Product Adaptation- Strategy 4: Product-Communications
Communications Extension Adaptation
• Adapt the product to local use but the message stays the • Dual Adaptation
same – Both may need to change for legal, cultural, or other
• Cadillac BTS in Sweden is 6¢¢ shorter that the CTS; environmental reasons
available in diesel – Regional managers may simply act independently

• Oreos in China failed until they were reformulated to be • Nike global shoes and “Just Do It” approach didn’t work in
less sweet and expensive China
• Less expensive shoes created in country and ads featuring
Chinese athletes in line with cultural principles of harmony
and respect for authority

Copyright © 2020 Pearson Education Ltd. All Rights Reserved. Copyright © 2020 Pearson Education Ltd. All Rights Reserved.

Strategy 5: Innovation How to Choose a Strategy?

• Important for reaching mass markets in less industrialized • Managers face two types of errors:
nations and certain segments in industrialized countries – NIH “Not Invented Here” and Ethnocentrism
– Instant Eyeglasses
• The product itself, defined in terms of the function or
– Hand-cranked radios for areas with no electricity need it serves
– Thermax, an Indian producer of small industrial boilers,
created new products for industrialized countries • The market, defined in terms of the conditions under
which the product is used, preferences of potential
customers, and ability to buy the product
• Adaptation and manufacturing costs the company will
incur

Copyright © 2020 Pearson Education Ltd. All Rights Reserved. Copyright © 2020 Pearson Education Ltd. All Rights Reserved.
 The International New Product
Identifying New Product Ideas Department
Figure 10-4 New-Product Continuum • How big is the market for this product at various prices?
• What are the likely competitive moves in response to our
activity?
• Can we market the product through existing structure?
• Can we source the product at a cost that will yield an
adequate profit?
• What is a new product?
– New to those who use it or buy it • Does product fit our strategic development plan?
– New to the organization
– New to a market

Copyright © 2020 Pearson Education Ltd. All Rights Reserved. Copyright © 2020 Pearson Education Ltd. All Rights Reserved.

Testing New Products

• When do you test a new product?
– Whenever a product interacts with human,
mechanical, or chemical elements because there is
the potential for a surprising and unexpected
incompatibility
• Test could simply be observing the product being used
within the market

Copyright © 2020 Pearson Education Ltd. All Rights Reserved.