L5: Product

What are the 4 Ps of the marketing mix?

Product, Price, Place, Promotion

What is a product?

A good, service, or idea with tangible or intangible attributes.

What are tangible product attributes?

Physical characteristics that can be seen or touched.

What are intangible product attributes?

Nonphysical characteristics, such as reputation, image, or service.

What are the two basic product types?

Consumer goods and industrial goods.

What is an express warranty?

A written guarantee that assures buyers they receive what they paid for or provides a remedy for product failure.

How can warranties be used competitively?

They build trust and help brands perceived as cheap overcome buyer skepticism.

What are consumer packaged goods (CPGs)?

Products whose packaging protects or contains them from production through delivery to the end user.

What is eco-packaging?

Packaging that addresses environmental concerns through recycling, biodegradability, or sustainable forestry.

What should effective packaging accomplish?

Engage the senses, create an emotional connection, and enhance the brand experience.

Why must global marketers understand aesthetics?

Visual styles and preferences differ across countries and cultures.

What are aesthetic styles in packaging?

Visual styles, including the degree of complexity found on a product label.

Who (How) did Corona initially target the U.S. market?

Immigrants and Americans who had vacationed in Mexico.

How did Corona distribute its beer in the U.S.?

It focused on the Southwest and Mexican restaurants while brewing in Mexico.

What themes did Corona use in its promotions?

Beach, sun, and fun.

What pricing strategy did Corona use in the U.S.?

An import premium similar to Heineken.

Why did Corona retain its distinctive clear bottle?

It displayed the beer's bright yellow color and reinforced its sunny image.

How does product labeling help consumers?

It provides information about products, ingredients, origins, and potential risks.

What does the American Automobile Labeling Act clarify?

A vehicle's country of origin and final assembly point.

What does the EU require for food containing genetically modified crop ingredients?

Labels identifying the relevant ingredients.

What is the buyer orientation framework?

A framework based on buyer effort, risk, and involvement.

What are the four types of consumer goods?

Convenience goods, shopping goods, specialty goods, and unsought goods.

What are convenience goods?

Products consumers buy frequently with minimal effort.

What are shopping goods?

Products consumers compare on factors such as price, quality, and style.

What are specialty goods?

Products with unique characteristics for which buyers make a special purchasing effort.

What are unsought goods?

Products consumers do not know about or do not normally consider purchasing.

What is a brand?

A bundle of images and experiences, a company promise, a quality signal, and a way to differentiate products.

What is brand image?

The sum of consumers' impressions about a brand.

What is brand equity?

The value a product gains from brand marketing investments and its relationship with customers over time.

What are the main benefits of brand equity?

Greater loyalty, less vulnerability to marketing actions and crises, larger margins, and more effective marketing communications.

How does brand equity affect price sensitivity?

Consumers become less sensitive to price increases and more responsive to price decreases.

What is country of origin as a brand element?

Consumers' perceptions of a country influence their attitudes toward products and brands from that country.

Which countries are examples of strong country-of-origin associations?

Japan, Germany, France, and Italy.

What are local products and brands?

Brands that have achieved success in a single national market.

Why can entrenched local brands challenge global companies?

They already have established customer loyalty and strong local market positions.

How can global companies compete with local brands?

Acquire established local brands or develop their own brands for local markets.

What is an example of a global company developing a local brand?

Coca-Cola's Sokenbicha tea in Japan.

What are international products and brands?

Products and brands offered in several markets within a particular region.

What is an example of an international brand variation?

Honda's Fit in Japan is called the Jazz in Europe.

What is the difference between a global product and a global brand?

A product is an offering that meets needs; a brand is its identifying name and image.

What is a global product?

A product that meets global market needs and is offered in all world regions.

What is a global brand?

A brand with the same name and similar image and positioning worldwide.

What are examples of global brands and their slogans?

BMW: Ultimate Driving Machine; GE: Imagination at Work; Visa: Life takes Visa; Harley-Davidson: An American Legend.

What are the three characteristics of global brands?

Quality signal, global myth, and social responsibility.

How does a global brand act as a quality signal?

It signals quality and can support premium pricing in competitive markets.

What is a global myth in branding?

Using global consumer culture positioning to link a brand identity to a broader global culture.

What is social responsibility in global branding?

Demonstrating how a company addresses social problems.

What is tiered branding?

Leveraging a company's reputation while creating a distinct identity for a product line.

What are examples of tiered branding?

Sony Walkman and Toyota Prius.

What is co-branding?

Featuring two or more company or product brands together.

What are examples of co-branding?

NutraSweet and Coca-Cola; Intel Inside.

What is brand extension?

Using an established brand as an umbrella for new products or businesses.

What company is an example of extensive brand extension?

The Virgin Group, spanning entertainment, cola, radio, rail, media, hotels, and travel.

What questions should managers ask when developing a global brand?

Does it fit the company and markets? Will scale economies occur? Can a global team be built? Can one brand work worldwide?

What is global brand leadership?

Coordinating global brand resources, knowledge, and strategy while leveraging country-level strategies.

What are the six steps of global brand development?

Create value; select globalizable identity elements; share knowledge; standardize planning; assign responsibility; balance global strengths with local differences.

What is the first step in global brand development?

Create a compelling value proposition, beginning in the home-country market.

What should companies consider when selecting brand identity elements?

Choose names, marks, and symbols with potential for globalization.

Why create a company-wide brand communication system?

To share and leverage knowledge about marketing programs and customers across markets.

Why use a consistent brand planning process?

To provide a common process template across markets and products.

Why assign responsibility for global branding?

To ensure local brand managers adopt global best practices.

How should global brand-building strategies be executed?

Leverage global strengths while responding to relevant local differences.

How does Maslow's Needs Hierarchy help global marketers?

It explains how local products meet needs beyond those of the home country.

What is the difference between needs and wants?

Needs are underlying requirements; wants are specific ways people desire to satisfy them.

Why do global companies develop local products?

To satisfy local needs, preferences, and social functions.

What are the three strategic alternatives in global product planning?

Extension, adaptation, and product invention.

What is product extension?

Offering a product virtually unchanged in markets outside the home country.

What is product adaptation?

Changing product design, function, or packaging to meet different countries' needs.

What is product invention?

Developing new products for the world market.

What is dual extension?

Keeping both the PRODUCT and MARKETING communications essentially unchanged across markets.

What are the advantages of dual extension?

It can be profitable and simple because little or no adaptation is needed.

Which products commonly use dual extension?

B2B and industrial products; examples include Apple iPhone, Loctite adhesives, and Microsoft Windows 7.

What is product extension–communications adaptation?

Keeping the product unchanged while adapting the marketing message.

Why might communications need adaptation when products remain unchanged?

The same product may serve different needs or require different messaging across markets.

What are examples of product extension–communications adaptation?

Ben & Jerry's changed UK packaging color; Burger King is Hungry Jack's in Australia; Mr. Clean is Meister Proper in Germany.

What is product adaptation–communications extension?

Adapting the product for local use while keeping the marketing message the same.

What are examples of product adaptation–communications extension?

Changing steering-wheel placement for local roads and reformulating Oreos in China to be less sweet and expensive.

Why must cars be adapted for right-hand-driving markets?

Markets such as the UK and Japan require right-hand-side steering wheels.

Why did Oreos initially fail in China?

They were too sweet and expensive for local preferences.

What is product–communications adaptation?

Changing both the product and the marketing message for a foreign market.

What is another name for product–communications adaptation?

Dual adaptation.

Why might dual adaptation be necessary?

Legal, cultural, or other environmental differences may require product and communication changes.

What are two common managerial errors in global product decisions?

NIH (Not Invented Here) and ethnocentrism.

What does NIH mean in global marketing?

Not Invented Here: rejecting ideas or solutions because they originated elsewhere.

What is ethnocentrism in global marketing?

Assuming the home country's values and practices are superior or universally applicable.

What three factors help managers choose a global product strategy?

Product function or need; market conditions and buyer preferences; adaptation and manufacturing costs.

What should managers consider when defining the market for a product?

Usage conditions, customer preferences, and customers' ability to buy.

What can make a product new?

It is new to users or buyers, new to the organization, or new to a market.

What is the role of the international new product department?

Assess market potential, competition, distribution, costs, profitability, and strategic fit.

What questions does the international new product department ask about market size?

How large is the market at different prices?

What question does the department ask about competition?

What competitive responses are likely?

What question does the department ask about distribution?

Can the product be marketed through the existing organizational structure?

What question does the department ask about sourcing?

Can the product be sourced at a cost that produces adequate profit?

What question does the department ask about strategic fit?

Does the product fit the company's strategic development plan?

When should new products be tested?

Whenever interactions with human, mechanical, or chemical elements could cause unexpected incompatibilities.

How can a new product be tested?

Observe its use in a test market.