Chapter 10MARKETING

GOODS AND SERVICES

Prepared by Robin RobertsGriffith University

Learning objectivesAfter studying this chapter you should be able to:•Discuss the nature and processes of managing multinational product lines•Explain strategies for overcoming product piracy•Discuss the effects of a country of origin and identify strategies to accommodate these effects

Learning objectives

• Describe international good and service branding strategies

• Discuss the challenges and opportunities in marketing services globally and identify global service marketing strategies

Managing multinational product lines

• Product assort is described on two dimensions:– width and length

• Four possible product mix variations:– extension of a domestic line– a subset of the home market’s product line– a mix if local and non-local products– a completely localised product line

Managing multinational product lines

• Drivers that affect an international product line:– customer preferences

– price spectrum

– competitive climate

– organisation structure

– product’s history

Product piracy

• On-going problem– particularly in many parts of Asia

– Shijingshan Amusement Park in Beijing offers Disney trademarked characters• one of the slogans used states ‘Disneyland is too

far away’

• copied trade-marked characters include Mickey Mouse, Bugs Bunny and Hello Kitty

Combating piracy

Strategic actions against product piracy include:•Lobbying activities

•Legal action

•Customs

•Product policy decisions

•Communications options

Country-of-origin stereotypes

• Country of origin can have a powerful effect– German cars– Italian fashion– French wine

• Perceptions change over time– French wine loses out to ‘new world’ wines

Country-of-origin stereotypes

• Generally consumers prefer domestic products over imports– ‘Made in Australia’• Powerful locally

• Country of design and manufacture play a big part– Mercedes Benz assemble the C Class motor vehicle

in China but still manufacture in Germany

Country-of-origin stereotypes

Strategies to cope with country-of-origin stereotypes:•Product policy

•Pricing

•Distribution

•Communication

International branding strategies

• Global versus local branding

• Brand name changeover

• Spread of private label brands globally

• Co-branding

• Umbrella branding

• Protecting brand names

Global brands

• A brand that is marketed and recognised in most parts of the world

• The big question is:– ‘To global brand or not to global brand?’– Many of the previous arguments regarding

standardisation versus adaptation apply

Table 10.1 The top 20 global brands by value, 2009

Global brands

Global brands

Table 10.1 The top 20 global brands by value, 2009 cont’d

Global brands

Advantages of a global brand• Economies of scale, across dimensions– product design– communication strategies– distribution networks

• Global awareness could mean local awareness– global television programming and the

internet provide access to consumers

Global brands

How consumers value global brands:• Quality Signal– often believe that global brands have better

quality

• Global Myth– consider global brand engender cultural ideals

• Social Responsibility– consumers expect global players to be good

global citizens

Global brands

Inter-country differences in brand equity due to: •History– Some brands are stronger/weaker in some

local markets•Competitive climate– Few competitors in one country but many in another

•Marketing support– Communication strategy used varies

•Cultural receptivity to brands•Product category penetration

Local branding

• A global company can continue to market a local brand it owns– National Australia Bank continues to use

Bank of New Zealand as a brand in that country

• Sometimes a local brand is more powerful than a global brand– Jollibee versus McDonald’s in the Philippines

Local branding

• Sometimes language demands a local brand name

• In mainland China:– Perrier translates directly as ‘Paris Water’

(Bali Shui)– Hoegaarden Beer translates as ‘Belgian White

Beer’ (Bilishi Bai Pi)– Park Hyatt is ‘Bo Yue’ with Yue meaning

Imperial

Global or local brands?• Organisations need to consider their

brand structure (brand portfolio)• 4 types of branding approaches:– solo branding– hallmark branding– family branding– extension branding

• Brand architecture – guidelines for use of brand names

Global or local brands?

Figure 10.1 Dimensions of international brand architecture

Brand name changeover strategies• Transitioning from one brand name to

another– usually from a local to a global– fade in/fade out• The new global brand is tied with the existing

brand name in the host market and after a transition period the old name is dropped

HSBC’s strategy globally Midlands Bank UK becomes HSBC UK

Private-label branding

• In a number of industries, retailers have backward integrated brands into their retail brand– where once Nescafé and Illy commanded the

shelves at retail now sit Carrefour or Metro’s own brand of coffee

One of the most significant global phenomena of the last decade in retailing

Co-branding

• US company Unilever partners with Campbell's in Australia– Streets Ice-Cream (Unilever) in a Tim Tam

flavour (Campbell's)

• 20% of Unilever’s business in the US is made up of co-branded products

Umbrella (corporate) branding• A good corporate image has a positive

impact on a consumer’s decision about a product’s attributes– particularly if little other information is

available

• Corporate branding facilitates brand-building efforts over a range of products– the Sony brand as an umbrella for their

product range

Protecting brand names

• Difficult in some places – different view between developed and

developing nations• litigation does not work in many Asian locations• mediation is often encouraged

• Requiring membership of the WTO has helped enforce some codes

• Best protection is to continually innovate

Global marketing of services

Challenges in marketing services internationally:

•Protectionism

•The face-to-face nature of service

•Difficulty in measuring customer satisfaction internationally

Opportunities in the global service industries:

•Deregulation of service industries

•Increasing demand for premium services

•Increased value consciousness

Global marketing of services

Global service marketing strategies:

• Capitalise on cultural forces in the host market

• Standardise and customise

• Central role of information technologies

• Add value of differentiation

Global marketing of services

Summary

You should now have an understanding of:• The nature and processes of managing

multinational product lines• Strategies for overcoming product piracy• The effects of a country of origin and identify

strategies to accommodate these effects• International good and service branding

strategies• The challenges and opportunities in marketing

services globally and identify global service marketing strategies