Global Marketing

Management
A European Perspective

Product and Service Decisions

Warren J. Keegan
Bodo B. Schlegelmilch
 Overview
 Basic Concepts of Products and Services
 Positioning of Products and Services
 Product Saturation Levels in Global Marketing
 Product and Service Design Considerations
 Attitudes towards Country of Origin
 Geographic Expansion
 New Products and Services in Global Marketing
 Summary
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 Learning Objectives
 Know the differences between services and products and
global brands
 Learn several alternatives for positioning global brands
 Appreciate the importance of saturation levels
 Be aware of strategic alternatives for geographical
expansion
 Know why development of new products are keys to
survival and global growth

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 Product and Services: Important
Concepts
 Product
 Service
 Characteristics of Services
 National, International, Global Products and Services
 Global Brand
 Positioning
 Country of Origin Effects

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 Basic Concept of Products
 Products can be defined as a collection of physical,
psychological and symbolic attributes that can
collectively yield satisfaction, or benefit, to a buyer or
user.
 Products can also be defined by intangible attributes
 Products can be classified into consumer and industrial
goods
 Products can be classified by the way their are purchased
or their life-span
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 Basic Concept of Services
 Service can be defined as intangible benefits purchased
by customers that do not involve ownership
 Characteristics:
 Intangibility
 Perishability
 Variability
 Simultaneous Production and Consumption

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Product-Service Continuum

Oil & Grease

Office Supplies
Machinery
Computer
Telecommunication Systems
Tangible Meeting or Convention Hotel Intangible
Dominant Dominant
Advertising Agency
Plant janitorial and cleaning
Freight Forwarding
ManagementConsulting
University Class

Product-Related Equipment-Based People-Based

Source: Adopted from: G. Lynn Shostack, „Breaking Free from Product Marketing;“ Journal of Marketing 41 (April
1997): p.77

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 National, International and Global
Products and Services
 National products or services are offered in a single
national Market
 International products or services are offered in
multinational, regional markets
 Global products and services are offered in the global
market. They are international and multiregional

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 Positioning of Products and Services
 Attribute or Benefit
 Quality/Price
 Use/User
 High-Tech Positioning
 High-Touch Positioning

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 Product Saturation Levels in Global
Markets
 Many factors determine a product`s market potential
 Product saturation level increases as national income per
capita increases
 The presence or absence of a particular companion
product can be significant

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 Product and Service Design
Considerations
 Preferences
 Costs
 Laws and Regulations
 Compatibility

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 Attitude towards the Country of
Origin
 Stereotyped attitudes toward foreign products and
services can favour or hinder marketing efforts
 If the quality is perceived to be low
 Foreign origin of the product can be disguised
 Foreign identification of the product can be continued and
consumer attitudes towards the product can be changed
 In some market segments foreign products have a
substantial advantage because they are foreign

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Geographic Expansion-Strategic
Alternatives
Different

Strategy 2: Product Extension, Strategy 4: Dual Adaptation

Communications
Communications

Example: Greeting Cards

Adaptation
Example: Motorbikes

Strategy 1: Dual Expansion Strategy 3: Product Adaptation,

Communication
Example: Applications Software
Extension
Example: Electrical products
Same

Same Different
Product edlich

Global Product Planning: Strategic Alternatives for Expanding into Global Markets

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 Strategy 1: Product/Communication
Extension (Dual Expansion)
 Company sells exactly the same product or service with
the same advertising as used in the home country
 Company assumes that all markets are alike
 Dual Extension does not work in all markets
 Dual Extension is often used because it saves costs
 Example: Campbell Soup

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 Strategy 2: Product Extension,
Communications Adaptation
 If the product serves different needs in various
countries, only marketing communication may have to
be adapted
 Adaptation can happen by design or accident
 Cheap implementation because product does not change
 Example: Motorbikes

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 Strategy 3: Product Adaptation,
Communication Extension
 Product is adapted to the new market, but basic home
market communication strategy remains unchanged
 Product is adapted to the environment and the
preferences of the consumers in the new market
 Example: Mueslix

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 Strategy 4: Product/Communication
Adaptation (Dual Adaptation)
 Using Dual Adaptation the company must adapt the
product or service as well as the marketing
communication to the foreign market
 Example: Colgate

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 New Products and Services in
Global Marketing (1)
 New to consumer and company ( Product or service
innovation)
 New to consumer but not new to company
(Product/service or line extension)
 Not new to consumer but new to company (New product
or service duplication)

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 New Products and Services in
Global Marketing (2)
 New-product development process
 Permanent identification of new-product ideas
 Screening of these ideas and identification of candidates for
further investigation
 Stringent investigation and analysis of the selected new-
product ideas
 Organisation of sufficient resources
 The international new-product department
 Testing new products and services in national markets

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 Summary
 Product and services are the most important elements of
the marketing program
 Important factors: preferences, costs, laws and
regulations, and compatibility
 Five strategic alternatives for geographic expansion:
 Product/communication extension, product
extension/communications adaptation, product
adaptation/communications extension, dual adaptation and
product invention

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