Review and Discussion Questions
Enhance your understanding further with the following review and discussion questions.
1. Define the term product and name the three elements that are part of a product.
a. A product consists of a bundle of attributes that provide value for exchange partners. A product can be either a good or a service.
b. Tangible elements
c. Intangible elements
d. Symbolic elements
2. What are the three categories of products?
3. What are the three key dimensions of a product?
a. The core product
c. Auxiliary dimensions
4. What is meant by the total value concept?
Answer: It is the complete set of values a consumer receives from the product. This can include the core benefits of a product, but also other things that occur when consuming the product – such as family bonding at the amusement park.
5. What is the difference between a product line and a product mix?
Answer: Product lines are groups of similar products within a particular category, whereas the product mix refers to the total number of products that a firm carries – these products don’t have to be similar.
6. How do the main elements of packages affect international marketing programs?
a. Packaging facilitates the movement of products through the distribution channel – from factory to consumer. Packaging can become an aspect of a brand's identity, thereby affecting the relationship between the customer and the brand. Packaging should be adapted to individual markets based on consumer tastes, preferences, and culture. Matching the package to the market can become the deciding factor in a product's success, because many purchases decisions are actually made at the point of purchase. Packaging also protects the products until they reach the consumers. They offer opportunities for innovation.
b. Labeling serves several communication purposes. Cultural factors also affect designs of labels, including the use of art, various colors, images, and wording. Marketers respond to these variations in taste by changing labels.
c. Aesthetics are important to marketing programs and companies change these based upon countries. What is considered beautiful is different in every country and requires adaptation.
d. Label requirements are changed based on countries – different governments have different rules.
7. What are the main categories of international business products?
a. Raw materials
b. MRO supplies
c. Component parts
d. Accessory equipment
e. Business services
f. Process materials
8. How can remanufactured products become part of an international marketing program aimed at the bottom-of-the-pyramid?
Answer: Remanufactured products, used products that have been refurbished through manufacturing processes in order to be restored to acceptable functioning, often fit with the needs of bottom of the pyramid consumers. Discarded or used products are part of this category. Given that millions of computers, televisions, and cell phones are discarded in developed countries each year, this represents a realistic opportunity for marketing to bottom-of-the-pyramid consumers. Marketers can target these products to bottom of the pyramid customers at an affordable price.
9. What roles do international product supports play in reaching target markets?
Answer: International product supports include installation, maintenance, servicing and repair, providing credit, answering questions by telephone or over the Internet, assisting businesses with inventory management, and more general activities such as providing market information. Companies often have to perform these activities in order to reach their target markets.
10. What is the role of the service sector in international marketing?
Answer: Services play a huge role in international marketing. Services are intangible products that are based around some act or performance that delivers value. Services play a larger role in more developed countries. Tourism is a big part of the service sector in international marketing.
11. Describe the product life theory and explain how the concept applies to international marketing.
a. The product cycle theory explains how products and production move from developed countries to lesser developed countries. The theory separates regions into: (1) lead innovation nations, (2) developed nations, and (3) developing nations. According to this theory, a new product is first developed, produced, and consumed in a lead innovation nation, such as Japan. Over time, as the product becomes widely accepted and production efficiencies are realized, foreign demand for the product emerges. The product will then be exported to other developed nations or regions that exhibit sufficient demand, such as the European Union. Production gradually shifts to these overseas markets and eventually the product will be exported from these markets to both the original market and to lesser developed countries. Finally, production again shifts, to lesser developed or developing nations. Then companies from the original, developed countries devote capabilities to new innovations.
b. Companies that are international in scope from their inception are born-global firms. Product cycle theory does not appear to fit product introductions by these firms.
c. Even with these criticisms, product cycle theory does explain some patterns of international trade over time.
12. How are the strategies that make up the market/product matrix used in international marketing?
a. Market penetration – A firm uses a market penetration strategy when it attempts to increase sales of existing products in existing markets. In international settings firms can try to give consumers more ways to use their product. They can also try to reposition their product to give consumers a better impression of the brand.
b. Product development – Product development plays a huge role in international marketing – firms are always doing this to reach new consumers. Product development strategies take place when the marketing team attempts to introduce new products to existing markets or to enhance existing products with new features or options.
c. Diversification – Firms employ a diversification strategy by marketing new products in new markets. In international marketing firms can invent new product to meet unique needs in other countries.
d. Market development – A market development strategy occurs when a firm attempts to market existing products in new markets. The strategy is especially important for international marketers because it allows them to minimize problems with local or domestic market saturation by expanding into new countries or regions.
13. Describe brands, brand names, brand marks, and service marks.
a. Brands – The name, sign, symbol, and / or design that identifies the products of a firm and distinguishes it from competition is the company's brand, which is a name, sign, symbol, or design, or some combination of all, that identifies the products of a firm and distinguishes them from competition.
b. Brand names – is the verbal part of a brand that can be spoken.
c. Brand marks – comprised of the non-verbal elements that signifies the brand.
d. Service marks – is a legally protected service name.
14. Describe the concepts of family branding and individual branding in relation to international brand management.
a. Family branding – Family branding means a number of products in a line or mix share the same brand name worldwide. In international marketing this strategy would mean in all markets the products share the same name.
b. Individual branding – An individual branding strategy involves creating distinct brand names for the individual products created by a company. An individual branding strategy works when the brands do not share common features or uses. In international marketing, distinctive brands are developed for individual countries. In international marketing, individual branding allows for more specific targeting of a name that matches a specific geographic region or culture.
15. What three forms of co-branding can be used in domestic and international marketing?
Answer: Co-branding strategies can follow ingredient, cooperative, or complementary approaches.
16. Describe brand equity and brand parity.
a. Brand equity – The unique benefits a product gains solely due its brand name create brand equity for the company. Much of brand equity results from brand image, or the perceptions consumers have of the brand.
b. Brand parity – when consumers believe all products in a category are essentially the same, regardless of brand. Brand parity often leads to competition solely based on prices, discounts, and other consumer promotions.
17. Define brand loyalty and name the factors that influence it.
a. Brand loyal customers seek out a specific name and often are willing to pay a higher price for the product that what the competition charges. Brand loyal customers are less likely to switch brands or be enticed to try other brands due to marketing tactics such as coupons, discounts, bonus packs, and other methods.
b. Brand preference has become an important concept in international marketing as global competition intensifies. Brand preference goes beyond simple liking to a mental ranking in which the brand's attractiveness is foremost in the consumer’s mind.
c. Brand insistence – In order to maintain brand loyalty, international marketers seek to instill brand insistence in customers. As the term implies, it occurs when the customer accepts no substitutes for the preferred brand.
18. How does the concept of brand valuation relate to international marketing?
Answer: It is the process of estimating the value of a brand. the ISO (International Standards Organization) produced ISO Standard 10668 in 2010 as an effort to reach agreement on how brand valuation should be reached. According to the ISO approach, three types of analysis are required for brand valuation: legal analysis (including assessments of the legal protections of the brand), behavioral analysis (including the contribution of the brand to purchase decisions as well as the attitudes of all stakeholder groups), and financial analysis (market values, cost, and income figures).
19. What ethical issues are present in international product marketing?
a. Companies are sometimes criticized for knowingly dumping unsafe or even recalled products to foreign segments in order to increase international sales or to offset sagging domestic sales.
b. Your products may be unsafe for consumers in some countries – you should not try to make money off of these consumers.
c. Packaging itself can be an ethical concern. If wasteful or used to mask the contents, packaging can come under attack. The use of air to make packages seem fuller and the waste associated with plastic bottles of water are two recent examples. Using imagery on the package that targets children when the product may not be appropriate for that age group can be another packaging issue.
d. When testing products, companies should treat animals ethically.
e. The product line itself may be an ethical issue. Companies may chose not to sell the full product line in certain markets denying those consumers access to the benefits from those products. If medicines, healthier foods, or similar products are involved, it may appear that companies are wrongly selecting which consumers have better health or other positive outcomes.
1. Explain how international marketers can utilize the total value concept in marketing the following products:
- A theme park in Brazil – they can market not only the rides and attractions, but the family time and bonding, and the memories created there. They can have special days for kids, seniors, etc.
- A rock concert in Ireland – this would not only be the music the concert goers get to listen to, but also the atmosphere, a rare experience, and a place to spend time with friends.
- An online newspaper in the Middle East – this could not only be the chance to read news articles, but a place where individuals can share their thoughts and feelings and read about how others feel about the articles. They can allow classified listings too.
- A bicycle in Japan – the bike could not only be used for transportation purposes, but can save people money and possibly time, the bike can be used to take scenic rides, and can be fun kids and teenagers.
2. Discuss how international companies can use market penetration and market development strategies for the following products in developing countries:
- Hand soap
- Market penetration – in developing countries marketers can try to establish habits of making people wash their hands more often and they can propose other uses for the soap, such as washing their pets.
- Market development – They can enter into countries that don’t currently use hand soap.
- Paper towels
- Market penetration – create more uses for paper towels – if people currently use hand towels in the bathroom or kitchen you could convince them to use paper towels. Or create uses for using paper towels for cleaning purposes.
- Market development – Enter into markets that currently don’t use paper towels.
- Market penetration – give consumers new uses for shampoo – shampooing the dog, using as body wash, etc.
- Market development – Enter into markets that don’t have shampoo or something like dry shampoo.
- Glass cleaners
- Market penetration – find new uses for glass cleaner – cleaning eye glasses, using to clean appliances, and using on cars.
- Market development – find markets that don’t have glass cleaners and introduce the product.
- Market penetration – convince people to brush their teeth more often, 3 times a day, after every meal and find new uses for toothpaste.
- Market development – Find markets that don’t use toothpastes or use different types of toothpaste.
3. How could the product life cycle be extended internationally for the following products?
- Cassette recorders – marketers could find new customers to market the products to – maybe markets with low technology.
- Coffee percolators – marketers could find new uses for the percolators, such as making tea as well as coffee.
- 35 mm-based cameras – they can try to increase the use of these cameras, make improvements on these cameras or add new features to make them more attractive.
- Typewriters – marketers could try to target new markets – in under developed nations where power is a problem. They could also modify the product to work with computers in areas where power is often questionable, allowing consumers to use the typewriter when power is questionable.
- Videocassette recorders – marketers can introduce these into new markets or add new features to increase usage.
4. Would you use family branding or individual branding for each of the following product categories? Defend your answer.
- Canned foods – family branding – if consumers like one type of the company’s canned food, they may be more likely to try the other canned items because the trust will carry over to the different foods.
- Insurance products – individual branding – different names for each type of insurance targeting different industries and areas, make your name memorable for each specific type of insurance.
- Mobile phones – family branding – these products are very similar to each other and they can capitalize on the single name, not causing confusion among consumers.
- High-end wedding gowns – individual branding – allows for more specific targeting of a name that matches a specific geographic region or culture. Also consumers want a unique item for a high-end wedding gown – this can create prestige.