INTERNATIONAL MARKETING 6e Chapter 10 Production Adaptation Copyright 2001 by Harcourt, Inc.. All rights reserved. Requests for permissions to make copies of any part of the work should be mailed to the following address: Permissions Department, Harcourt, Inc, 6277 Sea Harbor Drive, Orlando, Florida 32887-6777
Copyright © 2001 by Harcourt, Inc.. All rights reserved. Requests for permissions to make copies of any part of the work should be mailed to the following address: Permissions Department, Harcourt, Inc., 6277 Sea Harbor Drive, Orlando, Florida 32887-6777. INTERNATIONAL MARKETING 6e Production Adaptation Chapter 10
Production Adaptation Marketing and Materialism Marketing actions are basically undertaken in the belief that more and better goods will bring an increase in consumers' standards of living, an increase in their satisfaction, and perhaps even more happiness When anticipating customers' reactions to new products and increased product choices, it is important to note the limits on the causal relationship between material affluence and personal happiness The psychologically effective impact of risking income is that of the relative income not the absolute income Copyright 2001 by Harcourt, Inc. All rights reserved 10-2
Copyright © 2001 by Harcourt, Inc. All rights reserved. 10-2 Production Adaptation Marketing and Materialism • Marketing actions are basically undertaken in the belief that more and better goods will bring an increase in consumers’ standards of living, an increase in their satisfaction, and perhaps even more happiness • When anticipating customers’ reactions to new products and increased product choices, it is important to note the limits on the causal relationship between material affluence and personal happiness • The psychologically effective impact of risking income is that of the relative income, not the absolute income
Defining International product The difference between domestic and international product the difference between physical and total product Total Product · The core product °7he7 angible Product The Augmented Product Copyright 2001 by Harcourt, Inc. All rights reserved
Copyright © 2001 by Harcourt, Inc. All rights reserved. 10-3 Defining International Product The difference between domestic and international product = the difference between physical and total product Total Product : • The Core Product • The Tangible Product • The Augmented Product
Product Variables(components) The Core product a product or services that is essentially the same as that of competitors The Tangible Product a product or service that is differentiated composition, origin, or tangible features from competing products The Augmented product a product or service which is serviced after the sale and carries a warrantee from the producer, producing a continuing relationship with the seller. Copyright 2001 by Harcourt, Inc. All rights reserved
Copyright © 2001 by Harcourt, Inc. All rights reserved. 10-4 Product Variables (components) The Core Product • a product or services that is essentially the same as that of competitors The Tangible Product • a product or service that is differentiated composition, origin, or tangible features from competing products The Augmented Product • a product or service which is serviced after the sale and carries a warrantee from the producer, producing a continuing relationship with the seller
Product Variables Augmented Product Installation Tangible Packaging Product Core Core Delivery Brand Benefit lingAfter Product Name or and Service Sale Credit Service Quality Features Warranty Source: Adapted from Phillip Kotler, Marketing Management, 10th edition, 2000 p. 395. Reprinted by permission of Prentice Copyright 2001 by Harcourt, Inc. All rights reserved Hall, Inc, Englewood Cliffs, New Jersey
Copyright © 2001 by Harcourt, Inc. All rights reserved. 10-5 Product Variables Core Product Tangible Product Augmented Product Installation Brand Name After Sale Service Delivery and Credit Warranty Features Packaging Styling Core Benefit or Service Quality Source: Adapted from Phillip Kotler, Marketing Management, 10th edition, 2000 p. 395. Reprinted by permission of PrenticeHall, Inc., Englewood Cliffs, New Jersey
Standardization versus adaptation The fundamental international product decision after the decision to internationalize International market approach alternatives to adaptation Sell the product as it is internationally Modify product for different countries or regions Design new products for foreign markets Incorporate all differences into one product and introduce it globally Copyright 2001 by Harcourt, Inc. All rights reserved
Copyright © 2001 by Harcourt, Inc. All rights reserved. 10-6 Standardization versus Adaptation The fundamental international product decision after the decision to internationalize. International market approach alternatives to adaptation • Sell the product as it is internationally. • Modify product for different countries or regions. • Design new products for foreign markets. • Incorporate all differences into one product and introduce it globally
Factors Encouraging Standardization) SN. o Economies of scale in production Economies in product R&D Economies in marketing Shrinking of the world marketplace and increasing economic integration Global competition Global market(taste) Global advertisement (MTV Copyright 2001 by Harcourt, Inc. All rights reserved
Copyright © 2001 by Harcourt, Inc. All rights reserved. 10-7 Factors Encouraging Standardization Economies of scale in production Economies in product R&D Economies in marketing “Shrinking” of the world marketplace and increasing economic integration Global competition Global market (taste) Global advertisement (MTV)
K actors Encouraging adaptation o Differing use conditions Government and regulatory influences Differing consumer behavior patterns Local competition True to the marketing concept Copyright 2001 by Harcourt, Inc. All rights reserved
Copyright © 2001 by Harcourt, Inc. All rights reserved. 10-8 Factors Encouraging Adaptation Differing use conditions Government and regulatory influences Differing consumer behavior patterns Local competition True to the marketing concept
Strategic adaptation to Foreign Markets High Need for Adaptation Degree of Cultural Grounding Lo Industrial/ Technology Intensive Consumer Nature of Product Copyright 2001 by Harcourt, Inc. All rights reserved
Copyright © 2001 by Harcourt, Inc. All rights reserved. 10-9 Strategic Adaptation to Foreign Markets Low High Industrial/ Technology Intensive Consumer Need for Adaptation Degree of Cultural Grounding Nature of Product
Strategic adaptation to Foreign Markets High quality Need for Adaptation Type of product quality Adaptation process Copyright 2001 by Harcourt, Inc. All rights reserved
Copyright © 2001 by Harcourt, Inc. All rights reserved. 10-10 Strategic Adaptation to Foreign Markets Low quality High quality Need for Adaptation Type of product Adaptation process
