INTERNATIONAL MARKETING 200094
IM
200094
CHAPTER 10
Product and brand
management in international
markets
Learning objectives
1. Explain and discuss brand portfolio
management, with particular reference to brand
strategy decisions and private brand policies.
2. Discuss product and brand portfolio
management, with particular reference to the
advantages and disadvantages of the product
portfolio approach.
3. Outline the research and product development
process of new and modified products.
Managing the brand portfolio
• Brands shape customer decisions
• Brands create economic value
• A strong brand:
– simplifies choice
– reduces risk in complex buying decisions
– provides emotional benefits
– offers a sense of community
– can be exploited in new markets/product
categories
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BRANDED YOUR BRAIN
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Brand strategy decisions
• Global brands have a single worldwide
identity
• Global brands are a popular choice:
– carry a quality signal
– compete on emotion
– represent how the firm conducts its
business
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Brand strategy decisions
• Corporate name
• Family brands
• Individual brands
• Strategic alliance:
– option to co-brand
Nestlé’s
branding
tree
Nestlé’s
branding
tree
Private-brand policies
• Private brands of intermediaries;
for example, Woolworths Essentials
• Umbrella branding
• Separate brand names
• Strong intermediaries
• Increasing price sensitivity
• Decreasing brand loyalty
Private-brand success
• Economic conditions
• Self-interest of retailers
• Internationalisation of retailers
• Improved quality of products
• Mass customer acceptance
Private-brand strategies
Managing the product portfolio
• Product and market portfolios must be
balanced:
– new, growing and mature
• Sustainable competitive advantage
Analysing the product portfolio
• Growth rates
• Market share positions
• Used to access interlinkages:
– market
– product
– business
Advantages of the product
portfolio approach
• Global view
• Strategy development guide:
– based on scarce resources allocation
• Marketing objectives guide:
– based on product lines in markets served
• Visual communication goal
Disadvantages of the product
portfolio approach
• International competition follows different
rules
• Marketing environment
• Local laws
• Country-of-origin effects
R&D of new and modified products
• Internal and external sources of idea
generation
• The heart of the global marketing process
• Corporate objectives (feasibility, profitability)
must be satisfied
• Worldwide appeal
• Build adaptability into products
The product development process
• Idea sources include franchisees, competitors
and customers
• Lead users
• Online sources
• Open innovation (crowdsourcing)
The product development process
• Key questions:
– market characteristics
– product production
– profitability
The product development
process: phases
• Idea generation
• Screening
• Product and process development
• Scale-up
• Commercialisation
The managing unit
• Single-point worldwide technical
development and design of a new product
• All other activities necessary to plan, develop,
manufacture, introduce and support the
product
• Direction and support to affected units
• Integration and coordination of all global
program activities
The product development process:
the affected units
• Product goals and specifications
• Plan, manufacture, introduce and support
• Identification of any non-concurrence
Global
business
management
The location of product
development activities
• Establish new research units in foreign
markets to stay closer to consumers
• Aid transfer from parent to subsidiary
• Develop new and improved products expressly
for foreign markets
• Develop new products and processes for
simultaneous application in world markets
The location of product
development activities
• Generate new technology of a long-term
exploratory nature
• Which technical centre has the greatest
expertise?
• Regionalised R&D
• Desired by host governments
The highest-spending
companies on R&D
The organisation of global
product development
• Tough scrutiny
• Input from affected functional areas
• Input from customers
• R&D consortia
The testing of new product concepts
• Four Ps mix is tested
• Market acceptance
• Reliability tests to mini-launches
• Product failure is high
The testing of new product concepts:
reasons for failure
• Reliance on instinct
• Lack of product distinctiveness
• Technical problems
• Mismatch between functions
The testing of new product concepts
• Laboratory test markets
• Microtest marketing
• Forced distribution tests
The global product launch
• Introducing a product into countries in three
or more regions within a narrow timeframe
• Country managers
• Localisation
• Translation requirements
• Increased sales channel education
The global product launch: benefits
• Simultaneous technology showcase
• Simultaneous product replacement:
– ‘lame duck’ dilemma
• Lucrative margins
• Added publicity
HOW TO BUILD A GLOBAL
BRAND: JIM BEAM
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