Unit 5 Flashcards
Core benefits
The main benefit of a product to a consumer is its core benefit. This core benefit can be very concrete, e.g. a car provides transport for a consumer, or abstract, e.g. lipstick makes a women feel more attractive. A product can have different core benefits for consumers but within specific segments of consumers, this core benefit is largely the same, e.g. for athletes, running shoes are important athletic equipment.
tangible benefit
The tangible benefits of a product go beyond its core benefit and can generally be subdivided into two categories: aesthetic benefit and prestige benefit. Aesthetic benefit means the satisfaction of one’s needs through a product’s aesthetic features e.g. product design, color, quality, etc. Prestige benefit represents a product’s social appeal. Prestige benefits are higher for products that are considered status symbols and social recognition arises from possession of them. Of all the types of product benefits, prestige benefit is most closely connected to a product’s branding e.g. possessing a Western brand-name product is a status symbol especially in developing and emerging countries (Batra, Ramaswamy, Alden, Steenkamp, & Ramachander, 2000).
Augmented benefit
A product’s augmented benefits refers to the customer service included with the product. It can be classified into the following elements: advice, cost estimates, finance options, assembling, maintenance and repair, delivery, returns and warranties, and training.
Product mix policy
developing different national markets also affects the product mix policy, which refers to all decisions on innovation, modification, differentiation, and elimination of products within and across national markets. Product mix policy tends to become more complex the more national markets are developed, especially when products have to be adjusted to suit individual markets.
Innovation and Product Policy
Assessing a product’s degree of innovation relative to a specific national market is a key element to consider when designing a company’s product policy
The four dimensions of innovation
Subject dimension: Which consumers will find this product innovative and new? It is critical to distinguish between products that are new for consumers and products that are only new for the supplier.
Intensity dimension: Just how innovative is the product? A product’s degree of innovation can be determined based on the novelty of its technology and the degree of benefit to consumers when compared with products already on the market.
Time dimension: When does innovation begin and when does it end? The international product life cycle concept illustrates that the period in which a product is considered innovative may vary from country to country.
Spatial dimension: Where is the product new? A product already sold in one domestic market may be considered innovative elsewhere.
5 typical stages of most products
Product awareness: The target consumers notice that Vega is available on the market but do not have any particular concrete information about it.
Product interest: The target consumers are interested in Vega and are looking for more specific information such as price, motor performance, etc.
Product evaluation: The target consumers examine, compare, and evaluate the Vega and decide whether they are for or against the new car model.
Product trial: The target consumers test the Vega, visiting a showroom or taking it for a test drive.
Product adoption: The target consumers decide to buy the Vega.
Innovators and early adopters
innovators and early adopters would likely be those who are very interested in technological and/or ecological issues and read professional journals.
These people are especially important for the Vega product, as they are often considered to be experts and opinion leaders.
They support the process of product adoption through providing good word-of-mouth. As such, a two-step process (addressing the innovators and early adopters followed by the majority) should be considered a promising strategy for introducing Vega on the market
International Product mix policy
International product mix policy is about determining the respective product range and deciding upon the number and type of products to be offered in particular national markets.
Transferring the existing product mix
Transferring the existing product mix in its entirety from one domestic market onto target foreign markets will result in a standardized product policy strategy across markets. Such an approach can only be chosen if the domestic market and the targeted foreign markets are very similar, especially in terms of legal norms and consumer preferences, needs, and buying behavior. This approach is possible for companies that:
are only active in a few, comparatively homogeneous national markets,
offer products that are not strongly connected to cultural features, and
whose product mix is relatively limited.
Types of Positioning
There are two basic types of positioning (Keller, 2008; Esch, 2011):
Point of difference positioning (differentiation strategy) focuses on what distinguishes the brand from its competitors and what makes it special.
Point of parity positioning (similarity strategy) focuses what is the same or similar relative to competing brands, benefitting from the spillover of consumers from strong brands.
key point about product policy
In many cases, a company’s international product range is smaller than its domestic one. This is especially true for first market entries and for companies with an orientation towards cultural specificity in their products. Often it is just a small range of successful products that act as the stimulus for initiating international business activities in the first place
BRAND ARCHITECTURE
Brand architecture refers to the different roles of products associated with a company’s brand and the relationship between these products. Internationally active companies have to make decisions about the structure of their brand portfolio or brand architecture.
FOUR BASIC TRADITIONAL BRAND STRATEGIES
Single-brand strategy: A distinct brand is created for each product. These brands each target specific market segments and the company name plays a less significant role (e.g. the confectionary company Ferrero brands Ferrero Rocher, Kinder Surprise, Nutella, and Raffaello).
Multi-brand strategy (also called parallel branding or multi-branding): One product sector has several brands operating within them and all of them are on the market simultaneously. Each brand addresses a specific market segment (e.g. in the clothes washing detergent market, Persil, Spee, and Terra Activ are all brands supplied by Henkel, and Dash and Ariel are brands supplied by Procter & Gamble).
Umbrella brand strategy (also called corporate branding or umbrella branding): All company products are bundled under one brand (e.g. BMW vehicles, Microsoft products). An established umbrella brand is characterized by brand affinity and in this way supports the products offered under it.
Family brand strategy (also called product line branding or range branding): Several products are offered under a consistent brand (e.g., Nivea and Dove body care products). This strategy is a hybrid of the single-brand and the umbrella brand strategy.
Aspects that are essential considerations in international branding
Branding should contribute to the desired positioning of products both across countries and on the individual national markets.
The brand name and the trade mark should employ good design principles, i.e. they should be simple and unique. This should make it easier to memorize the trademark and push brand recognition.
The brand name and the trademark should contribute to a differentiation from competitors. Furthermore, they should be designed in such a way as to avoid the confusion of this brand with competing brands.
The brand name should be easy to pronounce in all languages.
The brand name and the trademark have to be interpreted correctly, understood, and accepted in all relevant languages and cultures. Furthermore, they must comply with international trademarking requirements.
