Millward's Pearson on Global Brands

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Chapter 10:

Brand and Product Decisions in
Global Marketing

Overview

• The product is the most important element of a company’s marketing program. Global marketers face the challenge of formulating coherent product and brand strategies on a worldwide basis. A product can be viewed as a collection of tangible and intangible attributes that collectively provide benefits to a buyer or user. A brand is a complex bundle of images and experiences in the mind of the customer. In most countries, local brands compete with international brands and global brands. A local product is available in a single country; a global product meets the wants and needs of a global market.

• A global brand has the same name and a similar image and positioning in most parts of the world. Many global companies leverage favorable brand images and high brand equity by employing combination (tiered) branding, cobranding, and brand extension strategies. Companies can create strong brands in all markets through global brand leadership.

• Maslow’s hierarchy is a needs-based framework that
  offers a way of understanding opportunities to develop local and global products in different parts of the world. Some products and brands benefit from the country-of-origin effect. Product decisions must also address packaging issues such as labeling and aesthetics. Also, express warranty policies must be appropriate for each country market.
   
• Product and communications strategies can be viewed within a framework that allows for combinations of three strategies: extension strategy, adaptation strategy, and creation strategy. Five strategic alternatives are open to companies pursuing geographic expansion: product-communication extension; product extension-communication adaptation; product adaptation-communication extension; product-communication adaptation; and product invention (innovation). The strategic alternative(s) that a particular company chooses will depend on the product and the need it serves, customer preferences and purchasing power, and the costs of adaptation versus standardization. Product transformation occurs when a product that has been introduced into new country markets serves a different function or is used differently than originally intended. When choosing a strategy, management should consciously strive to avoid the “not invented here” syndrome.
   
• Global competition has put pressure on companies to excel at developing standardized product platforms that can serve as a foundation for cost-efficient adaptation. New products can be classified as discontinuous, dynamically continuous, or continuous innovations. A successful product launch requires an understanding of how markets develop: sequentially over time or simultaneously. Today, many new products are launched in multiple national markets as product development cycles shorten and product development costs soar.

Lecture Outline

 

Discussion Questions

1.

What is the difference between a product and a brand?

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2.

How do local, international, and global products differ? Cite examples.

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3.

What are some of the elements that make up a brand? Are these elements tangible or intangible?

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4.

What criteria should global marketers consider when making product design decisions?

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5.

How can buyer attitudes about a product’s country of origin affect marketing strategy?

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6.

Identify several global brands. What are some of the reasons for the global success of the brands you chose?

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7.

Each August, Business Week magazine features a survey of global brands as a cover story. The top-ranked brands for 2008 are shown in Table 10-2. Browse through the list and choose any brand that interests you. Compare its 2008 ranking with the most recent ranking, which you can find either by referring to the print version of Business Week or by accessing the article online. How has the brand’s ranking changed? Consult additional sources (e.g., articles from print media, annual reports, the company’s Web site) to enhance your understanding of the factors and forces that contributed to the brand’s move up or down in the rankings.

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8.

Hofstede’s social values framework can be used to help explain the Asian version of Maslow’s  hierarchy. Which dimension from Table 4-3 (p. 121) is most relevant? In Chapter 4, we also noted the differences between innovation diffusion processes in Asia and the West. Review the discussion on pages 129 and 130, paying particular attention to Figure 4-2. Can you relate it to Figure 10-3?

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Top left: Figure 4.2

Bottom left: Figure 10.3

9.

Briefly describe various combinations of product-communication strategies available to global marketers. When is it appropriate to use each?

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10.

Compare and contrast the three categories of innovation discussed in the chapter. Which type of innovation do flat-panel widescreen HDTVs represent?

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Test your knowledge
 

1.

  True

  False

Brand equity is an example of a tangible product attribute.

2.

  True

  False

The product P of the marketing mix is at the heart of the challenges and opportunities facing global companies today.

3.

  True

  False

Strong brand equity is more vulnerable to marketing crises and actions.

4.

  True

  False

Global brand is the same thing as global product.

5.

  True

  False

India's Suzlon Energy has become a major player in the wind-turbine industry due to an inefficient and inconsistent power distribution system.

6.

  True

  False

McDonald's golden arches have the great advantage of transcending language and therefore are very valuable to global marketers.

7.

  True

  False

Intangible attributes of a product includes the status associated with the product ownership.

8.

  True

  False

In countries like India and Vietnam, and other emerging markets, amenities such as refrigerators, flush toilets, and cell phones have now become necessities, and not status symbols, in much the same way as in Europe and North America.

9.

  True

  False

Gillette reaps economies of scale associated with creating a single ad campaign for the world and the advantages of executing a single brand strategy.

10.

  True

  False

A global brand has the same name and in some cases a similar image and positioning throughout the world.