Products and Services Branding Decisions in International Markets

Products and Services: Branding Decisions in International Markets Dana-Nicoleta Lascu Chapter 9 Copyright Atomic Dog Publishing, 2002

Chapter Objectives • Describe drivers for international standardization and off an overview of the international standardizationlocal adaptation continuum and respective company strategies • Examine country-of-origin effects on brand evaluations in relation to product stereotypes and consumer ethnocentrism • Examine challenges faced by service providers in international markets • Address issues related to brand name protection and the reasons behind widespread international counterfeiting Copyright Atomic Dog Publishing, 2002

Standardization versus Adaptation • Global Standardization: standardization of products across markets and standardization of the marketing mix worldwide § § Addresses needs of global consumers (homogeneous consumer groups sharing similar interests and product/ brand preferences) International travel (brand awareness built through exposure to identical communication worldwide) Consumer preference for higher quality and lower price Allows for global branding – using the same brand name, logo, image, and positioning everywhere in the world Copyright Atomic Dog Publishing, 2002

Standardization versus Adaptation, continued • Regional Standardization • Global Localization § § Modular Adaptation Core Product Strategy • Regional Standardization: Using a uniform marketing strategy in a particular region Copyright Atomic Dog Publishing, 2002

Standardization versus Adaptation, continued • Global Localization: The practice of global branding and localized marketing adaptation to differences in local culture, legislation, etc. § § Modular Adaptation: Offer parts (modules) that can be assembled worldwide in different configurations, depending on market needs Core Product Strategy: Involves using a standardized strategy for the core product worldwide, but varying certain aspects of the offering (product ingredients, advertising, for example) from market to market Copyright Atomic Dog Publishing, 2002

Standardization versus Adaptation, continued • Mandatory Adaptation: § Adapting products to local requirements so that they can legally and physically operate in the respective countries – for example: Left-hand driving in the United Kingdom • Local Non-Mandatory Adaptation: § Adapting a product to better meet the needs of the local market, or developing new brands for individual local markets, even though such adaptation is not required Copyright Atomic Dog Publishing, 2002

Private Label (Retailer) Brands • Compete effectively with multinational corporations because they: § § § Offer premium store brands perceived by local markets as high-quality Are innovative Appeal to consumers during economic downturns, and in general, since consumers today demand high quality at lower prices Copyright Atomic Dog Publishing, 2002

Global Branding • Country of Origin § Country with which good/service is associated • Country of Manufacture § § Country where the product is manufactured (for products) Country where the headquarters are located (for services) • In the absence of other product information, country of origin impacts consumers’ product evaluations Copyright Atomic Dog Publishing, 2002

Stereotypes • Product-country stereotypes • Service stereotypes Copyright Atomic Dog Publishing, 2002

Ethnocentrism • The belief that purchasing foreign products hurts the local economy by causing loss of jobs, and that it is morally wrong and unpatriotic • Leads to the rejection of foreign products BUY AMERICAN! Copyright Atomic Dog Publishing, 2002

Service Entry Barriers • Represent a manifestation of protectionism at the § Firm level Government level § Consumer level § • Examples: § § § Requirement to use national service providers Prohibition against employment of foreign nationals Direct competition from government providers Restrictions on movement Tariffs on international services Copyright Atomic Dog Publishing, 2002

Products, Services, Culture Service encounters are primarily social encounters, and rules and expectations related to services vary from culture to culture. Copyright Atomic Dog Publishing, 2002

Protecting Brand Names • Addressed first by GATT; now under WTO umbrella • Counterfeiting § § Design Brand Name Copyright Atomic Dog Publishing, 2002

Counterfeiting Factors • Consumer Factors: § § Willingness to purchase counterfeit goods Prevalent for products where risk is low and prestige gains are high Prevalent for products that are consumed publicly Consumers and retailers in developing countries might notice the difference Copyright Atomic Dog Publishing, 2002

Counterfeiting Factors, continued • Technology factors § § Affordable, quality copying technology Local partners of multinational have access to knowhow and other technology Copyright Atomic Dog Publishing, 2002

Counterfeiting Factors, continued • Distribution factors § § Supply chains are not adequately controlled Traders may use Internet chat rooms and unauthorized dealership Copyright Atomic Dog Publishing, 2002

Counterfeiting Factors, continued • Local government factors § § § Governments may not interfere, especially where government enterprises run the counterfeiting operations Cracking down would lead to loss of jobs and unrest Customs representative and other enforcement officials may not be familiar with authentic brands Copyright Atomic Dog Publishing, 2002

Combating Counterfeiting • Lobbying the U. S. government • Lobbying other governments involved • Change product’s appearance to differentiate the authentic brands from copies • Key: Cooperation with the local government Copyright Atomic Dog Publishing, 2002

Chapter Summary • Addressed the drivers for international standardization • Examined the standardization-adaptation continuum and the related strategies of international companies • Examined country-of-origin effects on brand evaluations • Examined entry barriers faced by service providers • Addressed issues related to brand name protection Copyright Atomic Dog Publishing, 2002