1、Chapter 13Products and Services for CustomersLearning Objectives 13-1 The importance of offering a product suitable for the intended market13-2 The importance of quality and how quality is defined13-3 Physical,mandatory,and cultural requirements for product adaptation13-4 The need to view all attrib
2、utes of a product to overcome resistance to acceptance13-5 Country-of-origin effects on product imageInternational MarketersEmerging Opportunities and Challenges New consumers in emerging markets Distinction between products and services Market offerings and business-to-consumer(B2C)marketing Produc
3、t adaptationQuality 1 of 5 Product life cycles becoming shorter and focusing on:Importance of quality Competitive prices Innovative productsPower is shifting from seller to buyer Customer defines quality in terms of own needs and resources Cost and quality among most important criteria for purchases
4、 in most global marketsQuality 2 of 5Quality Defined Market-perceived quality Consumer perceptions of quality Performance quality Firms perception of quality Expected as a given in competitive market Firms often misrepresent performance quality Customer satisfaction indexes“Fair trade”designation Ma
5、lcolm Baldrige Quality AwardQuality 3 of 5Maintaining Quality Performance quality is critical May be damaged as product passes through distribution chain Challenge for global brands;long distribution chains,less control Market-perceived quality matters Quality 4 of 5Physical or Mandatory Requirement
6、s and Adaptation Product homologation Changes mandated by local product and service standards Most often reason for adaptation;not out of choice Other factors Less economically developed markets require greater degree of adaptation for acceptance Climate differences must be accommodated Law,politics
7、,technologyQuality 5 of 5Green Marketing and Product Development Impacts product development Control of packaging component of solid waste Consumer demand for environmentally-friendly products Europe at the forefront Ecolabeling guidelines passed by European Commission in 1992 EU law requires recycl
8、ing or reuse of all packaging materialProducts and Culture 1 of 7 Product is more than physical item Bundle of satisfactions or utilities a buyer receives Sum of physical and psychological satisfactions,and cultural influences Psychological aspects may require adaptation of product Problems of adapt
9、ing a product to sell abroad similar to those associated with introducing new product domesticallyProducts and Culture 2 of 7 Innovative Products and Adaptation First step to adaptation:consider innovation Determine perceived newness of product in intended market Diffusion of innovation Goal is prod
10、uct acceptance by largest number of consumers in the shortest span of time New products not always readily accepted by culture May ultimately be accepted,but takes time and effort Diffusion research shows that probable rate of acceptance can be predicted and accelerated if necessaryProducts and Cult
11、ure 3 of 7 Diffusion of Innovations Diffusion according to Edward Rogers An innovation communicated through certain channels over time among members of a social system Element of time unique to diffusion research Goal to shorten lag between introduction and widespread adoption of idea or product Rat
12、es of product acceptance and diffusion vary Impacted by culture,technology,adoption from neighboring countriesProducts and Culture 4 of 7 Diffusion of Innovations continued Diffusion theory knowledge beneficial Predict diffusion time before making financial commitment Identify product features that
13、provoke resistance Provide opportunity to lessen resistance and hasten acceptance Extraneous variables that affect rate of diffusion Degree of perceived newness Perceived attributes of the innovation Methods used to communicate the dataProducts and Culture 5 of 7 Rate of acceptance or resistance can
14、 be predictedFive characteristics of innovation basis1.Relative advantage2.Compatibility3.Complexity4.Trialability5.ObservabilityAnalysts self-reference criterion may cause bias when interpreting characteristics of productProducts and Culture 6 of 7 Production of Innovations Diversity good for innov
15、ation;higher creative output Long-term study on the long-term impact on work team performance Diverse groups initially disadvantaged by communication issues Once issues overcome,diverse groups produced more ideasExhibit 13.1 Average Number of Ideas Put on the TableJump to long description.Products a
16、nd Culture 7 of 7 Production of Innovations continued Conflicting opinions on cultures role in innovation One study suggests that individualism enhances creativity Another suggests that corporate culture,training more important Research on“conversion-ability”Degree of success firms have when taking
17、inventions to market Three factors:patience,focus on few important innovations,experienceAnalyzing Product Components for Adaptation 1 of 4 A product is multidimensional Sum of all its features determines the bundle of satisfactions(utilities)received by consumer Product Component Model Helps to det
18、ermine how product might be adapted to market Separates many dimensions into three distinct components Support services,packaging,and core component Effects of cultural,physical,and mandatory factors can be focused on each componentExhibit 13.3 Product Component ModelJump to long description.Analyzi
19、ng Product Components for Adaptation 2 of 4 Core Component Consists of physical product Its design and functional features Variations can be added or deleted for different markets Alteration in design and function to fit cultural tastes May affect product processes;requires additional costs Some alt
20、erations may be mandated by marketAnalyzing Product Components for Adaptation 3 of 4 Packaging Component Frequently requires mandatory adaptations Country-of-origin labeling for food,size stipulations Laws vary from country to country Discretionary adaptations should be considered Check trademark fo
21、r unintended symbolic meaning Pay attention to translation of brand names and color use Consider climate of marketAnalyzing Product Components for Adaptation 4 of 4 Support Services Component Important not to neglect Many otherwise successful marketing programs fail here Repair and maintenance a cha
22、llenging feature Not as accessible or common in other countries Instruction manuals may need to be adapted Countries have varying literacy and education levelsMarketing Consumer Services Globally 1 of 3 Adaptation of Services Much of advice used for products can still be applied But,services are dif
23、ferent because they are intangible Intangibility results in three other important characteristics1.Inseparable:creation cannot be separated from consumption2.Heterogeneous:individually produced and is thus unique3.Perishable:must be consumed simultaneously with creationMarketing Consumer Services Gl
24、obally 2 of 3 Services Opportunities in Global Markets Tourism Transportation Financial services Education Telecommunications Entertainment Information HealthcareMarketing Consumer Services Globally 3 of 3Barriers to Entering Global Markets Services inseparable;exporting not an entry option Licensin
25、g,franchising,direct investment are main methods Four barriers:1.Protectionism2.Restrictions on transborder data flow3.Protection of intellectual property4.Cultural barriers and adaptationBrands in International Markets 1 of 5Global Brand Worldwide use of name,term,sign,symbol,design Used to identif
26、y goods and services of one seller Differentiates seller from its competitors Brand most valuable resource a company has Name encompasses years of advertising,goodwill,quality evaluations,product experience,and other attributes Image at very core of business identity and strategy Importance and impa
27、ct varies by cultureExhibit 13.4 Top Twenty Brands 1 of 2RankBrandCountrySector1AppleU.S.Technology2GoogleU.S.Technology3MicrosoftU.S.Technology4Coca-ColaU.S.Beverages5AmazonU.S.Retail6SamsungSouth KoreaTechnology7ToyotaJapanAutomotive8FacebookU.S.Technology9Mercedes-BenzGermanyAutomotive10IBMU.S.Bu
28、siness servicesSource:“Best Global Brands 2017,”http:/ 13.4 Top Twenty Brands 2 of 2RankBrandCountry Sector11GEU.S.Diversified12McDonaldsU.S.Restaurants13BMWGermanyAutomotive14DisneyU.S.Media15IntelU.S.Technology16CiscoU.S.Technology17OracleU.S.Technology18NikeU.S.Sporting Goods19Louis VuittonFrance
29、Luxury20HondaJapanAutomotiveSource:“Best Global Brands 2017,”http:/ in International Markets 2 of 5Global Brands Companies with strong brands try to globalize them Ideally gives company uniformly positive association worldwide Enhances efficiency and cost of introducing new products Internet and tec
30、hnology accelerates brand globalization Not all companies believe single global approach is best Those with already established country-specific brands might not want to abandon them;risky and costly Brand extensions in global markets are sometimes difficultBrands in International Markets 3 of 5Nati
31、onal Brands Country-specific brands Multinationals must consider cultural factors Increased nationalism in some countries impacts brand Acceptance varies across regions,within countries,and depending on knowledge of brandMany companies mix national and global brandingBrands in International Markets
32、4 of 5Country-of-Origin Effect(COE)and Global Brands Influence that country of manufacture,assembly,or design has on consumers perception of product Reaction influenced by country,product,and image of brands Ethnocentrism impacts attitudes toward foreign products Stereotypes against status of econom
33、y:industrial,developing Fads for attractiveness;“xenocentrism”Good marketing can overcome a negative COEBrands in International Markets 5 of 5 Private Brands Formidable competitors to manufacturers brands Particularly during recessions in target markets Consumers prefer less expensive,“more local”pr
34、ivate brands Global brands must be priced competitively to be successful Benefits to retailers Production outsourced while still getting advantages of local brand Retailer is provided with high margins,preferential shelf space and strong in-store promotions,quality products at low pricesAppendix of
35、Image Long DescriptionsAppendix 1 Exhibit 13.1 Average Number of Ideas Put on the TableData from the four-month study is divided by month.Numbers are approximate.Month 1:Diverse groups had 2.7 ideas while homogenous groups had 3.2 ideas.Month 2:The average amount of ideas increased in both groups.Di
36、verse groups had 3 ideas while homogenous groups had 3.4 ideas.Month 3:The average amount of ideas continued to increase steadily in homogenous groups to 3.6.Idea output in diverse groups rapidly increased to 4;surpassing that of the homogenous groups.Month 4:Ideas generated increased gradually for
37、both groups;diverse groups had 4.2 ideas,and homogenous groups had 3.7 ideas.Return to original slide.Appendix 2 Exhibit 13.3 Product Component ModelThe main components are arranged into three concentric circles.Core components are in the innermost circle and include:product platform,design features
38、,and functional features.Packaging components are in the next circle and include:trademark,brand name,price,quality,package,and styling.Support services are in the outermost circle and include:repair and maintenance,installation,instructions,deliveries,warranty,spare parts,and other related services.Return to original slide.
