Global Marketing Management

Masaaki Kotabe & Kristiaan Helsen

Third Edition
John Wiley & Sons, Inc., 2004
Chapter 12 Kotabe & Helsen's Global Marketing 1
Management, Third Edition, 2004
 Chapter 12

Global Product Policy Decisions

II: Marketing Products and
Services

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Management, Third Edition, 2004
 Chapter Overview

1. Global Branding Strategies

2. Managing Multinational Product Lines
3. Product Piracy
4. Country-of-Origin (COO) Effects
5. Global Marketing of Services

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 Introduction

Companies that brand their products have various

options when they sell their goods in multiple
countries.

More and more companies see global (or at least
regional) branding as a must.

Multinational product line management entails
issues such as:
– What product assortment should the company
launch when it first enters a new market?

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Management, Third Edition, 2004
 Introduction (contd.)

– How should the firm expand its multinational

product line over time?
– What product lines should be added or
dropped?

Global marketers also face the issue of global
piracy.

In global marketing, firms have to use a multitude
of strategies to handle the negative country-of-
origin stereotypes.

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 1. Global Branding Strategies

Global Brands (see Exhibit 12-1)

– A truly global brand is one that has a consistent
identity with consumers across the world.
– The development costs for products launched
under the global brand name can be spread over
large volumes.
– A global brand has much more visibility than a
local brand.
– The fact of being global adds to the image of a
brand country.
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Management, Third Edition, 2004
 1. Global Branding Strategies (contd.)

– Global brands are also able to leverage the

country association for the product.
– The value of a global brand (brand equity)
usually varies a great deal from country to
country.
– Inter-country gaps in brand equity may be due
to any following factors:
» History
» Competitive climate
» Marketing support
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Management, Third Edition, 2004
 1. Global Branding Strategies (contd.)

» Cultural receptivity to brands

» Product category penetration

Local Branding
– Examples: Interbrew has a portfolio of 200
local and regional brands across the globe;
Mecca Cola from France

Global or Local Brands?
– Solo branding, hallmark branding, family
branding, and extension branding.

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 1. Global Branding Strategies (contd.)

– A firm’s global brand is shaped by three types

of factors:
» Firm-based drivers
» Product-market drivers
» Market dynamics

Brand Name Changeover Strategies
– Fade-in/fade-out

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 1. Global Branding Strategies (contd.)

– Co-branding
– Umbrella branding
– Transparent forewarning
– Summary axing

Private Label Branding (“Store Brands”):
Factors explaining success of private labels:
1. Improved quality of private-label products
2. Development of premium private-label brands

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Management, Third Edition, 2004
 1. Global Branding Strategies (contd.)

– A system where a single banner brand is used

worldwide, often with a sub-brand name, for
almost the entire product mix of the company.
3. Shift in balance of power between retailers and
manufacturers
4. Expansion into new product categories
5. Internationalization of retail chains
6. Economic downturns

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 1. Global Branding Strategies (contd.)

Umbrella (Corporate) Branding

– Umbrella branding facilitates brand-building
efforts over a range of products.
– Umbrella branding makes it easier to add or
drop new products.

Protecting Brand Names
– Brands are vital assets to brand owners.

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 1. Global Branding Strategies (contd.)

– In the area of brand protection, the oldest treaty

is the Paris Convention for the Protection of
Intellectual Property.
– The difference in opinion held by industrialized
and developing countries on intellectual
property (see Exhibit 12-6)
– Many elements of the brand franchise may
require protection.

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2. Managing Multinational Product Lines

The product assortment is usually described on

two dimensions: the width and the length.

Drivers affecting the composition of a firm’s
international product line:
– Customer Preference
– Price Spectrum
– Competitive Climate
– Organizational Structure
– History
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Management, Third Edition, 2004
2. Managing Multinational Product Lines
(contd.)

Categories of product lines:
– Core products
– Niche products
– Seasonal products
– Filler products

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 3. Product Piracy

Any aspect of the product is vulnerable to piracy,
including the brand name, the logo, the design,
and the package (see Exhibit 12-10).

Strategic Options Against Product Piracy:
– Lobbying Activities
– Legal Action
– Customs
– Product Policy Options
– Distribution
– Communication Options
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Management, Third Edition, 2004
 4. Country-of-Origin Stereotypes

Country-of-Origin (COO) Influences on
Consumers
– For many products, the “made in” label matters
a great deal to consumers.
– Key research findings of COO effects:
» COO effects are not stable
» Consumers prefer domestic products over
imports
» Both the country of design and the country
of manufacturing/assembly play a role in
consumer attraction.
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4. Country of Origin Stereotypes (contd.)

» COO particularly influences the elderly, less

educated, and politically conservative;
consumer expertise also makes a difference.
» Cultural orientation play a role.
» Consumers are likely to use the origin of a
product as a cue when they are unfamiliar
with the brand name carried by the product.
» COO effects depend on the product category.

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Management, Third Edition, 2004
4. Country of Origin Stereotypes (contd.)

Strategies to Cope with COO Stereotypes (see

Exhibit 12-11):

Product Policy
– Pricing
– Distribution
– Communication

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Management, Third Edition, 2004
 5. Global Marketing of Services

Challenges in Marketing Services Internationally:

– Protectionism
– Immediate Face-to-Face Contacts with Service
Transactions
– Difficulties in Measuring Customer Satisfaction
Overseas

Opportunities in the Global Service Industries:
– Deregulation of Service Industries
– Increasing Demand for Premium Services
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Management, Third Edition, 2004
5. Global Marketing of Services (contd.)
– Increased Value Consciousness

Global Service Marketing Strategies:
– Capitalize on Cultural Forces in the Host
Market
– Standardize and Customize
– Give Information Technologies (IT) a Central
Role
– Add Value by Differentiation
– Establish Global Service Networks
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 Copyright © John Wiley & Sons, Inc. 2004

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Management, Third Edition, 2004