Global Product and Brand Decision

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Global Product and BrandDecision
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Localization and Adaptation

• Localization refers to the changes required for a
  product or service to function in a new country
• When products are adapted, changes are made to
  match customer tastes or preferences
• Localization is necessary for customers to even
  consider the product adaptation tries to make
  them prefer it over other choices

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Product Standardization

• A core product
• In automobiles this core is the platform
  chassis that forms the basic structure of the
  model
• A modular design the various features are
  prepackaged as modules that can then be assembled
  in different combinations to target different
  markets
• To offer slightly different models in different
  countries, not only to adapt to demand
  differences but also to discourage gray trade

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Service Standardization

• The standardization of services starts with a
  certain core service
• Most fast-food restaurants, following McDonalds,
  focus on the basic principles of friendliness,
  cleanliness of the premises, and quick service
• The back room aspects of the service
• The front line meeting of consumers
• The front-line personnel in even the most global
  service companies are usually natives, whose
  command of language and customs enables them to
  deliver the service appropriately

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A Framework for Choosing Products to Globalize
Initially
Low
1
2
Most Attractive
Degree Of local Adaptation required
Moderately Attractive
4
3
Less Attractive
High
Low
High
Expected pay-offs from Globalization
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Which Markets to Enter and When
Low
1
2
Phased-in entry (create beach- head first)
Rapid entry
Strategic importance of market
4
3
Opportunistic entry
No entry
High
Low
High
Firms ability to exploit the market
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Global Product Planning
Product Extension, Communications Adaptation
Different
Dual Adaptation
Product Invention
Communications
Product Adaptation, Communication Extension
Same
Dual Extension
Same
Adapt Product
Develop New Product
Product
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Issues of Country of Origin

• Stereotyping
• Product Evaluation
• As a halo construct
• As a summary construct
• As an informational argument
• As a simple peripheral cue for inferring
  product quality
• Activate concepts and knowledge that bias
  information processing
• Affect the extent of the attribute information
  provided

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National stereotyping

• Customers stereotype the quality, suitability and
  attractiveness of products coming from certain
  countries and regions
• They associate product quality with images of the
  economic and social conditions of the COO
• Consequently they show stronger purchase
  intentions for goods from countries about which
  they have favorable images
• Generally, developed countries are ranked higher
  than developing countries and customer evaluate
  products differently that are identical in all
  aspects except for COO

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National Culture and COO beliefs

• Collectivist cultures evaluate home country
  products more favorably regardless of product
  attributes, whereas individualist cultures do so
  only when products are clearly superior
• Preferences motivated by cultural affinity could
  encourage consumers to buy products from
  ethnically-affiliated countries, especially if
  there are intra-national variations in culture

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Inter-Country COO Beliefs

• Inter-country differences in national
  stereotyping, sometimes described as halo
  effects
• Customers in advanced countries consider
  domestically produced brands to be superior to
  those from developing countries
• Customers in less developed countries consider
  imports from developed countries superior to
  products made in the home country
• Customers in under-developed countries consider
  products from developed countries to be superior
  to imports form other under-developed countries
• Nevertheless, South African Blacks believe South
  African products to be better adapted to loacl
  conditions and expect local beauticians to have
  more knowledge about South African product than
  those from the USA

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COO Beliefs Across Products

• Customers consciously or unconsciously use COO
  cues when making judgments about product quality
• COO beliefs can vary for different products from
  one source countryElectronic products form Japan
  are perceived to be high quality whereas Japanese
  food products do not engender the same level of
  positive beliefs
• Customers accept new brands or products more
  readily from countries with favorable COO images
• Identification with favorably perceived countries
  enables marketers to adopt premium pricing and
  product positioning strategies

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COO Effects Across Product-Market Segments

• Younger consumers and individuals from lower
  income classes hold more favorable beliefs
  regarding foreign products
• COO is stronger among the elderly
• COO was stronger among the less educated
• Customers may prefer to purchase domestic
  products even if prices are higher because of
  national pride and patriotism, in the belief that
  the domestic economy would be threatened by
  imports, on account of expectations regarding
  potential standards of after sales service, or
  simply because of unfamiliarity with foreign
  products and brands

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COO Effects Across Brands and Hybrid Products

• The effect of branding on product beliefs and
  quality and evaluations can be more pronounced
  than COO effects
• Positive brand images can be diminished if the
  product is designed or assembled in a country
  that has a negative COO image
• Purchase intentions of high value and luxury
  products such as cars tend to be influenced both
  by brand and COO beliefs
• A stronger brand can reduce the strength of COO
  beliefs
• Customers do not distinguish between where the
  product is designed and where it is made

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COO Effects and Price Elasticity

• Customers expect to pay lower prices for products
  that originate from countries with less favorable
  country images
• Favorable COO image reduces the tendency of
  customers to associate higher prices with better
  quality products

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COO Effects and Buyers Decision Process

• Knowledge and familiarity with products reduce
  the use of COO as an informational cue
• In low-motivation situations, images provided by
  dispersed information affect the COO beliefs of
  customers
• In high-motivation situations, COO is unlikely to
  be used in product evaluations
• COO effects are greater for high-involvement
  product than for low-involvement products
• COO effects are less pronounced where products
  are homogeneous and standardized and more
  pronounced when they are highly differentiated
• COO effects exert greater influence in the buying
  of agricultural products than manufactured goods

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Elaboration Likelihood Model of Persuasion
Motivation to Elaborate
Ability to Elaborate
Amount of Elaboration
Low
High
Central Route to Persuasion
Peripheral Route to Persuasion
Message Arguments Determine Persuasion
Peripheral Cues Determine Persuasion
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Global Consumer Segments

• Global citizens (55) rely on the global success
  of a company as a signal of quality concerned
  whether companies behave responsibly on issues
  like consumer health, the environment, and worker
  rights
• Global dreamers (23) less discerning about, but
  more ardent in their admiration of, Transnational
  companies see global brands as quality products
  and readily buy into the myths they author
• Antiglobals (13) skeptical that transnational
  companies deliver higher quality dislike brands
  that preach American values and dont trust
  global companies to behave responsibly
• Global agnostics (8) dont base purchase
  decisions on a brands global attributes
  evaluate a global brand by the same criteria they
  use to judge local brands and dont regard its
  global nature as meriting special consideration

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A Brand Is More Than A Product
Brand
Brand Personality
Organizational associations
Product

• Scope
• Attributes
• Uses
• Quality/Value
• Functional benefits

Symbols
Country of Origin
Brand/Customer Relationship
User Imagery
Self-expressive benefits
Emotional benefits