CH.

13: PRODUCTS AND SERVICES FOR

CONSUMERS

Griselda Lopez & Betzy Matitico

LEARNING OBJECTIVES
The importance of offering a product suitable for intended market
The importance of quality and how quality is defined
Physical, mandatory, and cultural requirements for product
adaptation
The need to view all attributed of a product to overcome resistance
to acceptance
Country-of-origin effects on product image

GLOBAL PERSPECTIVE
CHINA- DISNEY ROLLS THE DICE
AGAIN

Anaheim, California
Hong Kong
Paris

PRODUCT ADAPTATION
The trend for larger firms is toward becoming global in orientation
and strategy
As important a task in a smaller firm's marketing effort as it is for
global companies
Competition for world markets intensifies and as market preferences
become more global, selling what is produced for the domestic market
in the same manner as it is sold at home is less effective
Barbie Mermaid- TV Commercial Adaptation to Gregorian
Community
https://www.youtube.com/watch?v=RsXFXP56elk

QUALITY
Global competition is placing new emphasis on the basic principles of
business
Shortening product life cycles and focusing on product quality,
competitive prices, and innovative products
Power in the marketplace is shifting from a sellers to a customers market
more companies are competing for their attention
Today the customer knows what is best, cheapest, and the highest quality,
largely due to the Internet
Cost and Quality of a product are among the most important criteria by
which purchases are made

WHAT IS QUALITY TO
YOU?

QUALITY IS DEFINED:
Two Dimensions
Market-perceived
Consumer perceptions of a quality product
Ex: Cost, timely service, frequency of flights, comfortable seating,
and performance of airline personnel from check-in to baggage claim
are all part of the customers experience that is perceived as good or
bad
Performance Quality
Viewed internally from the firms perspective
Ex: An airline has achieved quality by a safe flight and landing

 Products are not used in the

same ways in all markets
In this picture, a boy in an
eastern Mexican village is
prepared for a Jaguar
dance to bring rain
Clay, ashes, and the globally
known Coke bottle make for
the best cat costumes

QUALITY DEFINED
Quality is also measured in many industries by objective third parties
J.D. Power and Associates has expanded its auto quality ratings,
which are based on consumer surveys
Consumer Satisfaction indexes developed first in Sweden are now
being used to measure customer satisfaction
Fair Trade USA provides a certification that ensures that farmers in
emerging economies receive a fair price for the products they
produce, instead of selling at the lower market price to a
middleman

MAINTAINING QUALITY
Maintaining performance quality is critical, but frequently
a product that leaves the factory with performance quality
is damaged as it passes through the distribution chain
This is a problem for many global brands for which
production is distant from the market
Toyota located in Japan
In 2009, it suffered a quality maintenance problem
Sticky gas petals were associated with sudden
acceleration in Toyotas sold in the United States
This linked to 34 deaths
The length of time between Toyotas consumer
complaint handling and internal communications
between U.S. sales subsidiary decision makers in
Japan was an issue

PHYSICAL OR MANDATORY
REQUIREMENTS & ADAPTATION
A product may have to change in a number of ways to
meet the physical or mandatory requirements of a new
market, ranging from simple package changes to total
redesign of the physical core product
Product homologation: used to describe the changes
mandated by local product and service standards
Ex: outlet differences due to voltage restraints in
different countries
Ex. In China Oreos were re-introduced to the tastes of
Chinese consumers
https://www.youtube.com/watch?v=lAg8QC1
UQRQ

GREEN MARKETING AND

PRODUCT DEVELOPMENT
Green Marketing: used to identify concern with the
environmental consequences of a variety of marketing activities
The European Commission has passed legislation to control all
kinds of packaging waste throughout the European Union
Require recycling/ reusing of packaging material throughout
all levels of distribution
50-65% weight of packaging must be recovered
25-45% weight of the totality of packaging materials in
packaging waste will be recycled
Two critical issues that affect product development:
Control of the packaging component of solid waste
Consumer demand for environmentally friendly products
In the United States the Hummer has largely died because of
their environmental effects

PRODUCTS AND CULTURE

A product is more than a physical item: it is a bundle of satisfactions (or utilities)
that the buyer receives
1. Facets of products include its form, taste, color, odor, and texture; its functions, the package,
the label, the warranty, after sales service, the prestige enjoyed by the brand and the
manufacturers reputation
2.The adoption of some products by consumers can be affected by how the product concept
conform with norms, values, and behavior patterns
3.Many facets of products are influenced by culture
4.When analyzing a product for a second market, the extend of adaptation required depends
on cultural differences in product use and perception between the market the product was
originally developed and the new market

Cola Turk
https://www.youtube.com/watch?v=6W_26ArnZHw

INNOVATIVE PRODUCTS
AND ADAPTION

An important first step product adaptation is to

determine the degree of newness as perceived by the
intended market.

INNOVATIVE PRODUCTS
AND ADAPTATION
An important first step product adaptation is to
determine the degree of newness as perceived by the
intended market
Any idea perceived as new by a group of people is an
innovation
Products new to a social system are innovations, and
knowledge about the diffusion (i.e., the process by
which innovation spreads) of innovation is helpful in
developing a successful product strategy

DIFFUSION OF
INNOVATIONS
Everett Rogers noted that crucial elements in the diffusion of
new ideas are:
an innovation
which is communicated through certain channels
over time,
among the members of a social system
Patterns of diffusion also vary substantially
At least three extraneous variables affect the rate of diffusion of
an object:
the degree of perceived newness
the perceived attributes of the innovation and
the method used to communicate the idea

PRODUCTION OF
INNOVATIONS:

ANALYZING PRODUCT
COMPONENTS FOR ADAPTATION

CORE COMPONENT:

SUPPORT SERVICES
COMPONENT:

MARKETING CONSUMER
SERVICES GLOBALLY

Services Opportunities in Global Markets:

BARRIERS TO ENTERING GLOBAL

MARKETS FOR CONSUMER
SERVICES:
Four Barriers gave consumer services marketers in
the global market place:
1. Protectionism: For example the Single
European Act created a quota for European
programs, requiring 50% of air time be devoted
to European Works; they argue that this is
necessary to preserve Europes cultural identity.
(40% of U.S. Film Industry profits come from
foreign revenues)
1.

BARRIERS TO ENTERING GLOBAL

MARKETS FOR CONSUMER
SERVICES:
2. Controls on transborder data flows: Concern
for privacy of an individuals information(income,
spending prefernces, debt repayments, medical
conditions, employment, etc). For example, the
commission proposed a new directive requiring
consent of individuals before data is collected or
processed

BARRIERS TO ENTERING GLOBAL

MARKETS FOR CONSUMER
SERVICES:
3. Protection of intellectual property:
trademarks, processes, copyrights, and patents
4. Cultural requirements for adaptation:
culture = a much bigger role in services than in
merchandise trade. For example, Europeans do not
expect an unhappy worker to put on a happy face
when dealing with customers.
Interpreted as : artificial or insincere.

BRANDS IN
INTERNATIONAL MARKETS
Global Brands: defined as the worldwide use of a
name, term, sign, symbol (visual and/or auditory),
design, or combination thereof intended to identify
goods or services of one seller and to differentiate them
from those competitors
National Brands: a different strategy followed by
nestle: group of country specific national brands in its
product line Country-of-Origin Effects and Global
Brands:

BRANDS IN
INTERNATIONAL MARKETS
Country-of-Origin Effects and Global Brands:
Country-of-Origin Effect (COE): defined as any
influence that country of manufacture, assembly, or
design has on a consumers positive or negative
perception of a product.
Private Brands: owned by retailers
For example: Britains biggest food retailer with 420
stores, reserves the best shelf space for its own brands