2/OCT/2014

New Products-Global Marketing

New product
o Company: Point of view (it may be innovative to the company but not
for my client)
o Consumer: Point of view
Ideas
o Clients: (we need to detect desires before consumers knows)
because we detect trends.
o Suppliers: Suppliers know trends before a lot of people.
o Competitors: Temptation to copy competitor. I need to know the IDEA
that competitor is following and I need to adopt it to my resources.
o Company: Taking ideas from another departments (example: post it)
o Observation: Know how my consumer is behaving and why (watch
TV. Magazines, weather consumers at ?
Renovation and innovation: Something that has not been in the market
before, it may be something similar. Creating expectations is very
dangerous in global marketing. All of one following are renovations
o Discontinuous innovation: New patterns of consumption and new
markets =learning (a very important innovation, I need to lead my
consumer how to use the product Im offering. My consumer will need
to learn how to use my product. Example: Apple TV
o Dynamic continuous innovations: Past attributes + new features
(Small Changes). Changes to a product that my consumer already
knows how to use. Enhance the new features, Example: IPhone and
ipad, its different but you dont need to learn new things to use it.
(Life cycle of the category) with this we buy time.
o Continuous innovation: New and improved version
Renovation: Brand extension
Only changing characteristics to move the product look more
current, modern, fashionable. The consumer fuels the need to
keep up with the innovations of the brand. Example: IPhone 5,
5s. (life cycle of the product).
Renew: Do better things with the exiting assets. My investment when doing
renovation must be little.
Core Capabilities: based on knowledge, experience, resources and people
(knowing how to use my assets to renew).
o 1 of 58 new products is successful, and failure means profit losses
o Renewal: Cure for death, when we are facing decay in the product
life cycle may save us. But renovation might be a fast way to kill a
brand.
o Negative branding of the company
Items that doesnt need renovation
 Renewal premature (when I make renewals when I dont need
them I am felling my consumer that I only care about profits). It
is the best way to kill a brand.

Innovation errors
o Focus on wrong core competencies: Getting in the wrong field. For
example: Boing bringing out plain
o Forger brand essence: Cant change it, it can change what you are. If
I am not repositioning I need to stick to my essence.
o Creativity at any price: Never forget the target, be sure the target
wants your product. It may be expensive and my consumer will not
really know what the renovation was for. Example: Post it pen
(always remember the target).
o Create new products instead of creating new value for consumers:
New value (improve the service, enchasing the experience, improve
or change the experience, provide new uses [Coca-Cola with rum].
Creating new ways to use the product to create value, but keeping
my brand uses. Always ask: What do consumers want? (Not what I
think, expect, or want form them to want).
Positioning: Our brand, product or service; prospects perceptions about the
bran. Positioning=strategy that you have at the beginning, everything comes
from the strategy. Perception about the brands. How consumer see me, the
idea they love of me, my consumer cant think anything besides why I want
them to think.
Re-positioning: Changing our identity
De-positioning: Attempt to change competitors. If it means that I as a brand I
am completely vulnerable to competitors. The idea of my consumer will be
controlled by other aspects that I cant control. Example: Toyota, rumors
about the breaks of the car. American car companies created the rumors.
Toyota attacked it telling the consumer that if you had problems with your
car you could change it for free. I need to have a very strong brand essence
so de-positioning wont work. Example: Starbucks with coffee quality.
The best way to avoid deposition is to have a very established brand
essence.

Brand stretching & Products extensions

New products marketed by the company brand in existing or new categories

We are talking about one single brand and a lot of products from them.
Providing options and making a carnival brand. The options I am providing
need to be meaningful for my consumers
o Spin off
 o Less financial risk
o Modification program
o Depends?
o I cant make a product extension if my main product will be harmed. I
also need to change my market strategy sometimes.
o Brand stretching; with the same assets I am going to provide a
different brand to target different consumers and changing bran
essence. Example: Smint target: young adults, Chupa-Chups
(teenagers). Smint confidence, chupa-chups fun (they ate from same
company)
7/OCT/2014

There is no universally accepted approach to address the ethics of marketing

Two codes of ethics

- code of ethics: AMA (American marketing association)
- Code of ethics: ESOMAR ( European society for opinion and marketing
reasearch)

Homework:

-How they can be transformed in opportunities to be better (strong) positioned in

the market (global or international brand).
-Using the essence of these codes.

Global competitors

Competitive environment Porter

Direct competition- same target as me, you have to establish clearly what are the
functional and emotional needs of the product so you can know clearly who is your
target (coca cola: thirst, energy and easy to get, so the competition can be
Starbucks)

Must target the same segment

Must fulfill the same needs and desires

Product- full filing the same needs and desires -> if not the. There's not direct
competition

Looking at you desires and needs you can observe that we don't have as much
direct competition as we thought so then we go to

Indirect competition:

- we are going to be targeting the same segment but the needs and desires
will differ
- Same segment but some differences in the way we are attending needs and
desires.
Substitute products: You will be able to exchange brands with substitute products.
If we have economic crisis growth, we need to take care of substitute products.

Third idea- when you are becoming a substitute product

In crisis it is very likely that I will be substituted what will be pushing my consumer
to change:

When I am not fulfilling my brand promise

When I am not living up to the expectations of the consumer, unless we are
in the stage of investment we cant stop providing what my consumer wants.
If you open a demand and you cant fulfill it. When the consumer goes to the
selling points and they cant find you.
Substitute products vary from market to market

Potential competition: Brands that are not in my competitive environment. The

ones that are not present in the market. Do not have market share, but they could
be. (May have everything necessary to enter our market) They ate the most
important threat.

Competitor analysis
o Identify goals
o Identify strategy
 To establish one stage of the life cycle
o Knowing patterns of reaction
Which pattern my competition is going to be shown
o SWOT

With theses we need to identify which of our competitors are a real threat right
now. You have to know how my competitor will react.

Business intelligence

Success Factors

International competitors

Reaction
o Aggressive (slightest action; no matter what we do they react)
o Slow (decision taking process) I could be confused and think they
dont care.
o No reaction (Because we are very sure of what we are, they are very
sure of the connection they have to me consumer that dont care
what you do)
That brand is not going to be reacting at anything. At one
aspect it would be a good opportunity for us but in the other
side
They will be so connected to the consumers that we won't be
able to do anything
o Random (we cant know they will be reacting)
For my company I should use this technique so my
competitors will not know how we will be behaving

Competition information

Ways of getting information

Ethics (the important thing it's how you handle the information after the
analysis)
o Client: it's ethical to ask the client information because everything
that's out there is public information.
o Market research
o Public information
Make a good analyisis fo this information

Unethical
 o Staff: double agents (direct ways), doing an interview with someone
of the staff of the company you need information as you are offering a
job.
o Suppliers: knows our advantages, unethical because you are laying
to them offering them a job (trying to them to provide information)
o Distributors
o Espionage
The only way to beat the competition is to stop trying to overcome

By doing these you can ruin your image, the moment that we focus on the
competition we forget our client. The only way to beat the competition is to
stop to overcome it. Need to love the bran to convince the client to buy your
brand.
Avoid

Blue Ocean Strategy

Chan Kim and Mauborgne

o Safe spaces in the market
Working with a very specific segment. I am going to be the
only one to know what kind of target what target I will be
working with. Therefore I will be the only one knowing my
targets needs and desires
o The competition is not important
o Increase size of demand
Fighting to connect with the same segment,
The blue ocean consists on getting ideas in innovation or renovation so that you
don't have competitors and you can focus...

The main idea of this one is to reach the target I already know.

1 Renovating in perfect balance: Without touching my segment I need to find

a way to work that is not that important a for my consumers to learn it but it's
not that irrelevant that they don't care.
2 Adding psychological value- we do it though promotion (advertising)
establishing how my consumer will live better getting more of my product
(brand)
3 Providing my consumer functional characteristics that will help them realize
life is easier
4 Providing my consumer all the uses of the product. They will open their point
of view of all the benefits that my product will provide
5 Product extensions: is only going to be attacking needs and desires of that
segment.
*We do not change our advertising strategy unless we are repositioning

Disadvantages
o Sooner or later someone is going to copy your product
o It's very expensive always to be renovating or innovating your
products

How I'm going to increase the demand without increasing or changing my

segment:

1 Providing new value for my consumer in functional aspects, change

packaging. Offer the same product in different ways (example: bottle of
water=sport, little, large).
2 Promotion: more psychological value trough advertising
3 Product extension: not brand stretching
4 Different uses for the same product
5 Renovation: perfect balance with something profitable and not so hard to
learn, good reason to keep buying the product.

To know what I'm doing right and wrong I need to focus on the six basic
approaches:

o First way: direct and indirect competition and sellers do not take into
account customers behavior. Not research him.
o Second way: decision to buy customers. Facts that I'm really pulling social
psychology,
o Third way: proposed comprehensive attractive value for each stakeholder
group. To prevent your strategy to be crashing communicate to the
stakeholder to have someone to support you.
o Fourth way: all services and products are interrelated. Offer a
comprehensive product or service.
o Fifth way: a balance between emotion and reason in products or services.
Need to know how my customer is.
o Sixth way: the trend points the way to identify value propositions that seeks
customers. Focus on trends not fashion. Trend is everlasting. Trend
=lifestyles: trend will be fulfilled by fashion. Example: health and fitness -
fashion organic food.

Steps

1. Visual awakening: rethinking existing strategies. Establish the strategies that you
had and what you are following now, and compare. Establish the source of the
change.

2. Visual exploration: confronted with the reality about our products or services and
global customers

3. Visual fair strategy: Understanding that the buyers have a number of basic
needs and continually seeks how they fulfill them. Study the evolution of the
market; how they're change the way they see things and fulfill their needs focusing
in trends and fashions, I need to establish the basic needs and desires (changes).
Trends and fashions market the evolution.

4. Visual communication: the strategy developed in the previous paragraph must

be communicated clearly and concisely to all members of the company.
Communicate everything to everyone.

Destination Statement: Define how the consumer will think, feel and act in
rr with that brand. How the brand would be providing the consumers
information for them to establish an action, emotion and a thought about the
brand.
o Destination of the company:
Type of company (long-term, 5 years in marketing), the
objectives they are following, 5 kinds:
Innovation, they want to provide changes for the society
Providing basic needs and desires (Coca-Cola)
Providing quality only (Mercedes)
Main goal: improving society (universities)
Simplify life, a better way to do things
Who we will sell to
Attributes and benefits of the brand (functional)
Companys intangible attributes (emotional aspects of the
brand) (feeling, thinking, emotion)
How do you want customers to act with respect to the brand

o Do I need to be a global or an international brand? Why?

o Who am I going to be selling to? Work with my specific target. Global
segmentation?
o Attributes and benefits of the brand: rational, everything that rationally
I need to give to my consumers, something that my consumer
consider valuable.
o Companies intangible attributes: Emotional, ideas, visceral decisions.
Emotional response, why the consumer its going to be finding this
attributes important.
 o Establish how my consumers will be acting towards my brand.

Apple example of the above

- Feel of belonging, trying to provide the sense of identity, uniqueness (type of

company Apple wants to be)
- 4. Creativity, feeling or emotion.
- 5. Consumers want to feel connected with my brand, they want to feel unique

Destination statement of Apple

They are going to feel unique, excited, accepted, satisfied

They are going to be thinking speed, fast, satisfaction, innovative
They are going to be acting always moving, multitasking

Target Areas (Miller):

1 Brand Compass: (internal aspect) Direction we need to follow. Repeating

objectives from destination of the company A global innovative and
prestigious brand
a Direction (objectives): What kind of objectives I have as a brand or
company. What kind of brand we want to be known for.
b Attitude (to target): What would be the attitude towards the consumer.
Every kind of connection we are having from the brand. Direct
contact (through people) indirect (promotion)
how am I going to behave with my consumer, how I am going
to be behaving so my consumer knows I am 'innovative', etc
(quick and functional, they give you your space, employee are
young, helpful, every aspect of Apple that is going to be
related with the consumer)
c Conviction (reaffirming beliefs): How am I going to connect, what I am
standing for as a brand, what I am as a brand.
how everyone related to brand is going to feel completely
convinced of what they are doing, it's important for the external
image, consumers are going to be perceiving it

When I have this perfectly established I go to the external aspects

2 The visceral response we seek from consumers: Emotions,

a Passion (to speak and defend the brand): No matter what, our
consumer will stand up and defend our brand.
Never forget the needs and desires, when you stop satisfying
them passion goes away. To build this passion always
providing brand essence that is related with the universal
 values. (Main value of Starbucks: satisfaction, and it is no the
brand essence) I have to establish/ provide my consumer so
they will feel proud trying to provide the consumer the idea
they do not only want profits, but the care about the consumer
b Commitment (loyalty): Be constant, connected with my consumers
needs and desires.
Keep up building this passion, everything that I achieve in this
passion I will keep achieving it all the time.
c Connection (consumer rr): Relation that my consumer has towards
the brand.
Through service they never lose the link between the brand
and the consumer. No matter what the consumer wants to tell
me I will always listen

And now we talk about brand essence

Branding: The whole development of the strategy to establish a good reason for
our consumers to prefer us. At the same time we will be building our image
according to our consumer needs and desires.

3 Outputs of the branding effort:

a Identity (brands distinctive message): Brand essence, whats
distinguishing me, uniqueness.
Brand essence. The message that you try to give your client
and makes you different.
b Personality (traits associated with the brand)
Lo que te hace diferente y hace que el cliente te quiera
comprar.
c Meaning (value proposition to expand the meaning of the brand):
what it is, what it does, what its expected to do (what would it be).
Brand essence + Brand promise + competitive advantage =
how it is going to be mixed with my client. Emotional or
functional. It has to be connected with my client
d Relevance (define the purchase decision): What kind of importance in
our daily life my consumer its going to give to my brand. Able to
provide to my consumer a link to functional and emotional with daily
life.
Luxury, need, special occasions, daily need.
e Acceptance (pride and therefore sense of belonging when buying our
brand): No matter anything our consumers will accept their belonging
to our brand.
How will I establish my brand so my consumer will always feel
proud to buy me?

Single platform: adaptive characteristics and unique elements. Changing

 something very little but very important. Will provide some value to my
consumer.
- That characteristics that we adapt to reduce time.
- It's a characteristic that is relevant but not significant that you will change
- Everything we do is wrong we have a disconnection so this platform buys
us time to arrange this
- We use it as a tool
o Fast (changing fast)
o Inexpensive
o Suitable
=Core competencies (what you are good at, know what to do) my know how
and my expertise.
Everything that I will be changing needs to have those three characteristics.
This is why you have to list perfectly your definition statement if not you will
not know how to use the platform.

Self Reference Criteria:

An unconscious reference to our own cultural values, experiences and

knowledge as a basis for making their own decisions Cateora

Unconscious
Ethnocentrism (everything
that you see, youll see it
Solution?
according to your own
culture, you dont open your
mind. The majority of this

This will lead to

Rejection and I will

not know why I
was rejected

- Most important concept in GM

- Unconscious ethnocentrism

- Some ideas we are not sure is because we are Mexicans or human beings, I will
not realize that I am taking it for granted
- My whole strategy maybe will not be working because the strategy is not feeding
what that market wants.

- Some thing from my own culture but I do no realize it is in my strategy (you are
taking it for granted)

- I am not able to decide if it is for my culture only or it will be working for other
cultures

Best solution is to identify it: We have four steps to overcome self reference criteria

1. Consider strategy I am working with, and I will analyze it with my own culture
(ex: everything that makes me think of Mexico) ideas, concepts.

2. I have to research about the culture I want to reach

3. Make a comparison between my cultures. The highlights of step 1 and results of

step 2

4. Establish again another strategy that will include the analysis of step 3

If we want to work with GM you have to know what kind of aspects you company
has.

We need to identify unconscious ethnocentrism through hofstedes values and I

need to:

1 Research (work with the strategy)

2 Comparison between the strategy before the research and the strategy after
the research (the one according to the research).
3 Compare them both (strategies)
4 Highlight the differences
Never do this analysis under pressure

Related to this sometimes, the more often we work with this we will identify more
easily the unconscious ethnocentrism.

Barriers- Prices

How will I be entering the market?

Protectionism: An obstacle for us to enter to the market

o Immature industry: My brand is a risk
o Local Market: The local market is too sensitive, they are not
competitive and foreign brands are dangerous.
 o Money within a country: They will say you are only using the
consumers.
o Way of living: Only brand would harm the nature
o Natural resources: My brand would harm natural resources
o Employment/ Unemployment
o National Defense
o Industrialization
The world trade organization condemns protectionism so it establish if is
legitimate or not.
Dumping: Sale at a lower price in the foreign market than in other markets
o Dumping will be proved when the price is lower to the minimum
permitted established by the industry when its lower beneath the
estandar and the brand is surviving we know they are being helped
by someone, like the government. (To be competitive).
o NEVER consider to establish our fine
International Prices
o Factors that affect
Technology and competition: (establish your price according to
competition; if I have better technology than the competition
and I can prove it I can have a better price).
- If I am going to be in an environment that is highly technological, it is going
to be
- Relates with competition because it will always be establishing a price.
- We have the lowest price that we can use, you cannot lower it, this was an
agreement (I will not be gaining and I will not be losing)
- Factor we need consider because we alone can't establish a price, we need
the competition
Fluctuating exchange rates
- Currency is different in every part; we need to establish a weak or strong
currency. It depends with who you are competing your currency is weak or
strong

- Establish which kind of relation we are going to have we the market we get
into.

- It is important to consider in our prices- currency is different in every part, we

need to establish a weak or strong currency. It depends with who you are
competing your currency is weak or strong

- Establish which kind of relation we are going to have we the market we get
into.

- It is important to consider in our prices

Coordination between market prices

 - The whole region (Central Europe) I will have more market
opportunities
- In a particular way
Distribution Channels: (it is not the same arriving to Mexico
than to China)
Price Fixing
- Pricing (technique), costing, cost
- Only in global marketing

Pricing

- When we are talking about pricing we have three types of strategies, firstly we
have to plan in three ways

- We always have to establish what is the lower that my brand can manage, and
what is the higher price (without harming the brand)

- If I can't fit the lower or higher I am in trouble

Calculate the price according foreign market

Three possible settings (no matter which strategy we use we have to
establish these)
Lower price

Higher price

Probable price
Budget

- You have to work with the budget and the settings in - if you establish a great
idea, but when you come to this you will have trouble if your prices do not fit.

- You have to establish it before making the strategy.

- What happens when we decide which strategy parallel; the budget has to be
related with those three, always before you start selling.

1. Extension strategy (ethnocentrism)

- I will always be working with one price (unit price), no matter where I am I am
going to be using my domestic market as reference
- It's bad If I want to have the same positioning always
- If you have as an objective to be a global brand you do not use these strategy.
- Unless I am a very luxurious brand, it will not be working with me.
- ferrari, dolce and gabana.

- Freight and tariffs absorbed by importer

- Advantage= simple (no matter how many countries we are targeting we are going
to be establishing the same price)
- Disadvantage= competitive conditions

2. Adaptation strategy (poly centric)

- Was popular in late 70, 80 and 90

- Depending on the number of markets I am going to be having the same number
of prices.
- Any price deemed appropriate by managers
- To consider the same positioning the price may change
- Depending the country and conditions I will change my price
- Disadvantage: I will not have control, it will be risky, no price coordination
- Brand, product, segment
- Advantage: always make a connection with consumer, sensitive to local
conditions
- If I am ready to sacrifice control this is my strategy

3. Geocentric

- Will mean that I will be finding a good balance of the first and second strategy
- the one that we prefer, because that I am going to be working with one price
world wide or one price per region.
-That price is going to be the average of the markets of the regions and country's I
will be working.
- If I am going to have in the same regions different behaviors of pricing, I will treat
the atypical market different
- Recognizes local factors taking into account the price coordination through the
experience of the company
- Advantage: providing the certainty that if I want to have to other markets that
behave similar it will be easy
- It's not risky, you have control, it adapts to conditions In every market
- Competitive
- Export of FDI