Ch 13-- Products and Services for Consumers Flashcards
What is a global brand?
One you use everywhere
Ex: Netle
What are advantages of using a global brand?
Brand image
Economies of Scale
What is “country of origin effect (COE)”?
The image that a product gets from the country in which its manufactured
How does ethnocentrism affect COE?
if a country is ethnocentric (when a culture thinks their culture is superior) they will not purchase your items if you are foreign
How does degree of industrialization affect COE?
if you have a lower degree of industrialization the Country of Origin Effect may give your country a worse look when it comes to quality of products and vice versa
Ex: Volkswagen Mexico vs Volkswagen Germany
What is a private brand?
A brand that is owned/belongs to a distributor
What are 3 reasons that make private labels formidable competitors?
- A provide retailer with high margins
- receive preferential shelf space and strong in-store promotion
- Quality products at low prices
Fill in the blanks: A product is more than a physical item; it is a bundle of ___?_____ the buyer receives.
Satisfaction and benefits
What are some of the satisfactions (or utilities) a buyer receives from a product (1)? Which ones of these are influenced by culture (2)?
- ASK PROF
- All of them are influences by culture
How would you define innovation from a sociological point of view?
Any idea perceived as new by a group of people Is an innovation
** perception is key
What is diffusion of innovations
Process by which the adoption of an innovation spreads through the population
What are the 3 extraneous variables that affect the rate of diffusion of an object?
- Perceived degree of newness
- Perceived attributes of the innovation
- Method used to communicate the idea
What are the 4 different categories of degree of newness as perceived by a market?
- Congruent Innovation
- Continuous Innovations
- Dynamically Continuous Innovations
- Discontinuous Innovations
What is congruent innovation
NOT an innovation at all because it causes absolutely NO DISRUPTION of established consumption patterns
ex: substituting cane sugar for beet sugar
What is continuous innovation
LEAST disruptive of consumption patters; involves the alteration of a product resulting in a perceived improvement “new and improved” version of products
ex: fluoride toothpaste, disposable razors
What is dynamically continuous innovations
SOME disruption of consumption patterns
ex: electric toothbrushes, cell phones
What is discontinuous innovations
involves ESTABLISHMENT of new consumption patterns; creation of new previously unknown products that FUNDAMENTALLY CHANGE the way things are done
ex: VCR, personal computer
How disruptive of established consumption patterns is a congruent innovation and why?
NONE, not a big difference between products
ex: cane sugar v. beet sugar
How disruptive is a continuous innovation?
LEAST disruptive
What does a continuous innovation almost always involve?
New and improved products
How disruptive is a dynamically continuous innovation?
Generally disruptive
What is the reaction from consumers towards dynamically continuous innovation? Why?
RESISTED, the more a product is innovative, the more it’s going to be resisted bc people are creatures of habits
What are the 5 characteristics of an innovation as perceived by the intended market?
- Relative advantage
- Compatibility
- Complexity
- Trialability
- Observability
What is relative advantage?
Perceived marginal value of the new product relative to the old
What is compatibility?
In regards to acceptable behavior, norms, values, etc
What is trialability?
Perceived degree of economic or social risk associates w. product use–> degree to which it can be tried
What is observability?
How easily can product benefits be communicated
What are the 3 components of a product?
- Core component
- Packaging component
- Support services component
What is included in the core component of a product?
Product platform— performs the basic benefit
Design features
Legal
What are the elements in the packaging component of a product?
Trademark
Brand name
Price
Quality
Package
Styling
What is under the support services component of a product?
Warranty
Delivery of product
What kind of strategic alternative for geographic expansion does the global launch of the Gillette Sensor shaving system represent?
Product and Communication Extension (DUAL EXTENSION)
Success ex: Pepsi CO, Gillete “best man can get”
What is product and communication extension
To sell in world markets EXACTLY the same product, with the SAME advertising and promotional appeals used in the home market
What kind of strategic alternative for geographic expansion is the sale of USA bicycles, motor scooters and outboard marine motors in overseas markets? Of USA lawn and garden power equipment? Of Perrier mineral water in the USA?
Product extension/communication adaptation
- Same physical product as the home country but different marketing strategy results in product transformation
successes: motorcycle
What kind of strategic alternative for geographic expansion is the use of different formulations overseas but the same “Put a Tiger in Your Tank” appeal for Exxon gasoline?
Product adaptation/ communication extension
- Same ADVERTISING appeal but product is adapted to local needs and tastes.
Successes: Exxon gasoline (different formulations, but same “put a tight in your tank” appeal)
Kellogg’a Mueslix cereal (same health appeal, but different formulation in USA)
What kind of strategic alternative for geographic expansion is the development by Hallmark of new greeting cards in Europe with no prepared message and cellophane wrapping?
Product adaptation/ Communication Adaptation (dual adaptation)
- Local condition preferences, function, and receptivity to advertising appeals differ from home country
Successes: Ex: Hallmark greeting cards in Europe: no prepared message, card wrapped in cellophane
What kind of strategic alternative for geographic expansion is the development by Colgate of their new global toothpaste Total?
Product Invention:
Adapted products may work well but satisfying the needs of global customers may require the creation of an entirely new products, and its promotion through a global advertising campaign.
Successes: Colgate’s new TOTAL toothpaste for global markets (perceived as a global brand)
