Creating Products for
Consumers in Global
Markets
Developing an international
marketing strategy
 Segmenting
 Targeting
 Positioning
Properties of a Market Segment

Properties
–
–
–
–
–
–
Measurable
Sizable
Accessible
Actionable
Competitive Intensity
Growth Potential
Bases for Global Segments
 Geographic
 Demographic
 Psychographic
 Behavior
 Benefits
Average Monthly Expenditures for Chinese
Households National and Urban Areas - 1994
National
Urban Areas
$22.10
$38.00
Savings
11.40
17.00
Clothing
5.60
9.00
Child's Education
4.70
7.00
Home (includes Rent & Utilities)
4.30
8.20
Daily Goods other than Food
3.50
4.80
Medical Expenses & Drugs
2.30
4.00
Entertainment
1.30
3.20
Food (includes eating out)
SOURCE: Gallup China.
Y&R’s Cross-Cultural Consumer Characterizations (4Cs)
Group
Attitudes
Work
Lifestyle
Purchase Behavior
Resigned Poor
Unhappy
Distrustful
Unhappy
Dissatisfied
Happy
Belong
Unhappy
Labor
Unskilled
Labor
Craftsmen
Craftsmen
Teaching
Sales
Shut-in
Television
Sports
Television
Family
Gardening
Trendy Sports
Ambitious
Happy
Industrious
Rebellious
Liberial
White Collar
Managerial
Professional
Student
Health field
Inner growth
Improve world
Professional
Entrepreneur
Fashion magazines
Travel
Dining out
Arts/crafts
Special Interest
magazines
Reading
Cultural events
Staples
Price
Price
Discount Stores
Habit
Brand Loyal
Conspicuous
Consumption
Credit
Luxury
Quality
Impulse
Unique products
Struggling Poor
Mainstreamers
Aspirers
Succeeders
Transitionals
Reformers
Ecology
Homemade/grown
Global Scan Segmentation Study
100%
80%
Strivers
60%
Achievers
Pressured
40%
Traditionals
20%
Adapters
0%
Japan
USA
UK

Life Style
Exhibit : Typology of European Car Market
Roper Starch Worldwide Global
Study
40,000 consumers in 40 countries

Shopping Styles
– Deal Makers (29%) - love the buying process
– Price Seekers (27%) - place primary value on the
product that they are buying
– Brand Loyalists (23%) - purchase name brands and
remain true to them
– Luxury Innovators (21%) - seek new, prestigious
brands
How the World Shops
Price
S eekers
B ran d
L u xu ry
L o y alis ts In n o v ato rs
D eal
M akers
In d ia
7.4
34.6
35.8
22.2
S a u d i Ara b ia
8.9
14.8
34.4
40.3
M exic o
23.4
19.1
19.9
35.0
Ch in a
23.4
27.9
19.1
35.0
Czec h R ep u b lic
26.9
23.9
25.7
22.6
U.K .
27.2
28.7
17.5
25.5
S p a in
34.4
27.0
18.1
19.6
U.S .
36.0
11.3
17.0
37.0
Ja p a n
41.0
23.5
7.9
27.1
G erm a n y
43.7
16.9
15.7
21.9
F ra n c e
45.5
19.5
8.5
26.6
Source: “How the World Shops,” Advertising Age, June 5, 1995, p.3.
How the World Shops
L u xu ry
B ran d
In n o v ato rs L o y alis ts
Price
S eekers
D eal
M akers
Ja p a n
7.9
23.5
41.0
27.1
F ra n c e
8.5
19.5
45.5
26.6
G e rm a n y
15.7
16.9
43.7
21.9
U.S .
17.0
11.3
36.0
37.0
U.K .
17.5
28.7
27.2
25.5
S p a in
18.1
27.0
34.4
19.6
Ch in a
19.1
27.9
23.4
35.0
M e xic o
19.9
19.1
23.4
35.0
Cze c h R e p u b lic
25.7
23.9
26.9
22.6
S a u d i Ara b ia
34.4
14.8
8.9
40.3
In d ia
35.8
34.6
7.4
22.2
Source: “How the World Shops,” Advertising Age, June 5, 1995, p.3.
How the World Shops
D eal
L u xu ry
B ran d
M akers In n o v ato rs L o y alis ts
Price
S eekers
S p ain
19.6
18.1
27.0
34.4
G erm an y
21.9
15.7
16.9
43.7
In d ia
22.2
35.8
34.6
7.4
Czec h R ep u b lic
22.6
25.7
23.9
26.9
U.K.
25.5
17.5
28.7
27.2
F ran c e
26.6
8.5
19.5
45.5
Jap an
27.1
7.9
23.5
41.0
Ch in a
35.0
19.1
27.9
23.4
M exic o
35.0
19.9
19.1
23.4
U.S .
37.0
17.0
11.3
36.0
S au d i Arab ia
40.3
34.4
14.8
8.9
Source: “How the World Shops,” Advertising Age, June 5, 1995, p.3.
International Positioning Strategies
 Global
Positioning and Segmentation
Strategies
– Universal Segment / Uniform Positioning
Theme
– Universal Segment / Different Positioning
Themes
– Different Segment / Different Positioning
Themes
Global Positioning & Segmentation Strategies
International Product Trade Cycle Model
production
High Income Countries
consumption
Q
u
a
n
t
i
t
y
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
10
11
12
13
14
15
10
11
12
13
14
15
Medium Income Countries
1
2
3
4
5
6
7
8
9
Low Income Countries
1
2
3
4
New Product
5
6
7
8
9
Maturing Product
Standardized Product
Stages of Production Development
Time
Products and Culture

Cultural Influences

Innovative Products and Adaptation

Diffusion of Innovations

Degree of Newness

Characteristics of Innovations
Adopter Categories in Diffusion Process
Degree of Newness
Congruent Innovations
Continuous Innovation
Dynamically Continuous Innovation
Discontinuous Innovation
Characteristics of Innovations

Relative Advantage

Compatibility

Complexity

Trialability

Observability
Product Components
Core Component
Packaging Component
Support Services Component
Product Component Model
SUPPORT SERVICES
COMPONENT
PACKAGING
COMPONENT
Repair and
maintenance




Installation


Brand name


Instructions

Other related
services
Legal

Product platform
Deliveries
Price


Quality
Warranty
Design features
Functional features



CORE
COMPONENT
Trademark

Package

Legal

Spare parts
Styling

Legal
4 Ps - Product

Product decisions are all decision which relate to the
physical product and/or service offering, including its name,
packaging, warranty, and availability. Product dimensions
include:
–
–
–
–
–
–
–
–
–
–
–
–
–
Size of the product
Color(s) of product
Scent of the product
Materials/ composition of the product
Design of the product
Packaging materials
Package colors and package design
Brand name
Warranty
Availability of options
Customizing services
After-sale service offerings
Inventory levels
Factors Influencing Product
Adaptation vs. Standardization
Stage in Product Life Cycle
Legal/Standards Constraints
Product Innovativeness
Cultural Differences
Standardization versus Adaptation
 Factors
Encouraging Standardization
– Economies of scale in production
– Economies in product R&D
– Economies in marketing
– “Shrinking” of the world marketplace/
economic integration
Standardization versus Adaptation
 Factors
Encouraging Adaptation
– Differing use conditions
– Government and regulatory influences
– Differing consumer behavior patterns
– Local Competition
– True to marketing concept
Strategic Adaptation to Foreign
Markets
High
Degree of
Cultural
Grounding
Need for
Adaptation
Low
Industrial/ Technology
Intensive
Nature of Product
Consumer
Global v. Local branding
 In
1989, Mars changed the name of Kal
Kan cat food to Whiskas.
 Why?
– Sharing of ideas in global corporation
– Pet owners travel and might switch if their
familiar brand was not available somewhere.
– Two years earlier, Mars had created to other
global brands
Kan dog food  Pedigree in U.S.
 Mealtime dry dog food  Pedigree Mealtime
 Kal
– High market share in U.S.
– Brand associations
What is a brand?
 A name,
term, sign, symbol, or design, or
combination of them which is intended to
identify the goods and services of one
seller or group of sellers and to
differentiate them from those of
competitors (Kotler, 1991)
What is brand equity?
 A set
of brand assets linked to a brand, its
name and symbol, that add to or subtract
from the value provided by a product or
service to a firm and/or to that firm’s
customers.
Brand
Associations
What is customer-based brand
equity?
 The
differential effect of brand knowledge
on customer response to the marketing of
the brand.
Developing A Framework For Generic Brands
Based on Brand Knowledge
Components of Brand Knowledge (Keller, 1992)

Brand Awareness
– Recognition
– Recall

Brand Image
–
–
–
–
Type
Strength
Favorability
Uniqueness
of Brand Associations
Customer-Based Brand Equity
Decomposing Consumer Knowledge of
Brands
Recognition
Recall
Brand Image*
Brand Equity
Dominant
High
High
Strong
High
Sustaining
High
Moderate
Moderate
Moderate
Graveyard
High
Low
Weak
Low
* Brand Image = Strength, uniqueness, & favorability of associations
Brand Strategies
Global Brands
National Brands
Global/National Brand Mix
Private Brands
Global v. Local Brands

Global brands provide:
– Scale economies in the
Development of
advertising, packaging,
promotion, etc.
– Exploitation of:
Media overlap
 Exposure to customers who
travel

– Associations
of a global presence
 of the “home” country


Local brands provide:
– Names, symbols, and
associations that can be:
Developed locally
 Tailored to local market
 Selected without the constraints
of a global brand

– Reduced risk from “Buy
Local” sentiments