4 Product and Branding Decisions (Standardization Vs Adaptation)

Product Decisions: Standardization vs Adaptation
“When you sleep, keep your business run”
Mai The Cuong, PhD
© 2021 Mai The Cuong.

Agenda
1. Revision of last sessions
2. Product Decisions in International Markets

– Definition of product
– Product decisions
– Product decisions in international markets
2
REVISION
3
Marketing Plan
Content
Executive
Summary of main points
Summary
Current Situation: Basic information of the corporate current situation
in terms of market, product, distribution, promotion, competition, and
Situation macro environment
Analyses Opportunities: Basic information on market selection,
buyers/consumers, product considering competition and external
conditions
Financial objectives (profit, cash), marketing objectives (revenue,
Objectives sales volume, distribution network), and organizational objectives
from year 1 to year 3
Marketing
Strategy & Target market, positioning and elements of Marketing Mix (4Ps)
Marketing Mix
Action Plan &
5W2H
Budgets
Control Specify how to implement and monitor the action plan 4

Major Segmentation Variables
Segmenting Consumer Segmenting International
Segmenting Business Markets
Markets Markets
• Geographic (region, urban- • Combine several segmentation • Geographic
rural, density, climate) variables such as • Demographic (industry,
• Demographic (age, gender, company size, location,
family size, family cycle, • Geographic location nationality of mother company)
income, occupation, education, (ASEAN, Asia, EU, USA, • Operating characteristics
religion, generation, North America, South (technology, usage rate,
nationality) America, Africa, Middle demand size)
• Psychographic (social class, East) • Purchasing approaches
lifestyle, personality) • Political relations (centralized or decentralized
• Behavioral (occasions, • Economic development purchase, power structure,
benefits, user status, user rates, • Relationship with certain relationship with deciders,
loyalty status, readiness stage, communities (Vietnamese general procurement policy,
attitude toward product). oversea communities). purchasing standards)
• Situational factors (emergency,
special application, order
• Geographic segmentation assumes that nations close to one another quantity)
will have common traits and behaviors. • Personal characteristics
• Identifying segmentation variables depends also on degree of (common characteristics
between sellers and buyers,
international markets accession of the company. attitude toward risk, loyalty
• In the case of export, the company may want to consider operating with suppliers).
characteristics, modality of supply, and situational factors like
order quantity, requirements for delivery, providing information
and procurement standards. 5

Information sources and criteria to select
segmentation variables
• Information sources
– Get data directly from the market (survey)
– Actual activities of the company and its competitors (experts’ opinions)
• Evaluating the significance of each variable to customers so that

the company can select appropriate variables
• 5 criteria to select segmentation variables (MASDA)

– measurable
– accessible
– substantial
– differentiable
– actionable
6

Global marketing and segmentation
• Usually begin with geographic and economic criteria

• Later segment targets by demographic, behavioural
and psychographic criteria also.
• In practice these criteria are not mutually exclusive
• E.g. 18-30 year old, single, female, urban, working,
middle income, fashion conscious
Adapted from Christine Comrie (2019)

2 factors to evaluate market segments
• 2 main factors
– Market segment size
– Market segment growth
• Others
o Potential competition
o Feasibility & accessibility
o Actionability
• P/S toothpaste of Unilever in Vietnam
– Age segment: 25-45 years old
• Large size (accounts for 66% of total market in 2009), diversified needs
• Unilever can satisfy by several products.
• Unilever has ability to access and serve well.
– Rural market segment
• Rural population is higher than urban population (about 70% in 2009)
8
• Prices of P/S products are average (economic).
5 options to expand to international markets
• Selection and expansion to international markets

1. Focus on one product for one market
2. Selective specialization (targets several market segments with several offers for
each)
3. Product specialization (for all markets)
4. Market specialization (several products for one market)
5. Serve whole market Market
opportunities
Production >> establish choice
capability of opportunities
>> different
possibilities
• Example: 5 choices of a Vietnamese fruits & vegetable exporter in

international markets
1. Focus on banana for Russian market
2. Specialize in carrot and tomato for Ukraine and Poland
3. Specialize in canned pineapple for all markets
4. Specialize in fruits and vegetable for Japanese market
9
5. Serve all markets with all products.
International STP

Positioning
• Positioning is mapping, designing and developing image of

product, company in the mind of customers.
• Multinational Companies (MNCs): Position their products as

global product, foreign product or national culture related
product.
– Coca Cola positions its Coke as global drink.
– McDonald positions its products as culture related products like Kim
Chi McDonald in Korea or chicken burger in India.
– Honda, KFC?
11

5 steps in positioning process
1. Designing positioning map
2. Selecting positioning criteria
3. Selecting the right competitive advantages as the positioning

criteria
4. Deciding on approaches to promote positioning image
5. Deciding on measures to deliver the chosen positioning

image.
12

1 Positioning map
• Positioning map shows customers’

perception of company’s product and
that of competitors. Quality
5
4
Innov Design 3 Price
2 India
• Footwear industry: selection of 1

Italy
China
0
positioning criteria Flex Large Orders Resp Time
– Quality
– Price Flex Small Orders Punctuality
– Response time Source: Alfons Eiligmann & Mai Thế Cường (2009), “Export Marketing Plan:
How to increase marketing success”, training materials to Vietnamese
– Punctuality exporters, Vietnam Trade Promotion Agency (Vietrade).
– Flexibility in small orders

– Flexibility in large orders
– Innovative design
13

5 Deciding on measures to deliver the chosen
positioning image
• Delivering positioning is NOT only by a statement or a few
measures.
• Positioning requires the company to implement a consistent
system of measures.
• Measures for positioning slogan: “We guarantee on time
delivery and flexibility with any change”.
– On time delivery
– Ability of designing team in response to customers’ designing changes
– Other components of marketing mix
– Processes for payment and documentation of orders
– Price calculation
– Consistent communication and actions from all company’s directors and staff
14

Tool 14. The Porter Diamond Model:
Competitiveness of a Nation
Porter’s diamond
The characteristics of the ‘home base’
play a central role in explaining the
international competitiveness of the
firm – the explaining elements consist of
factor conditions, demand conditions,
related and supporting industries, firm
strategy – structure and rivalry,
government and chance.
Understanding the firm’s home base

then applying to international markets.
Can the firm leverage its success in 15
international markets? © 2021 Mai The Cuong.

Tool 16. Defining Competitive Advantage*****
PESTLE What brings

you profit?
Internal
Competencies
What you
What you
passionate
do best
about Analysis of company competitive
advantage using models such as Porters
value chain
Relative competitive advantage compared
with competitors in the market.
COMPETITIVE
ADVANTAGE
CSA – Country Specific Advantage

FSA – Firm Specific Advantage
© 2021 Mai The Cuong. 16

DEFINITION OF PRODUCT
18
What Is a Product?
• Products in marketing: anything that can be offered to the

market to exchange, to bring values and satisfaction to
customers.
19

What Is a Product?
3 levels of Product and Services

• Thị trường nội địa hay thị trường quốc
tế: 3 cấp độ
– Giá trị cốt lõi đối với khách hàng (core
customer value) ➔ What is the buyer really
buying?
– Sản phẩm hiện thực (actual product)
– Sản phẩm hoàn chỉnh (augmented product).
What Is a Hotel?
Credit card, online payment
Airport Pick-up
Expected benefits: Sight seeing, shuttle bus

Clean beds, air pool
conditioners, shower,
hot water, quiet,
private bathroom.
Fresh Flowers,
Safety box, TV cookies
Gambling
Buildings
Serenade Hotel
Kid zones,
Entertainment
A Place for
Sleep
PRODUCT DECISIONS
22
Products Decisions in International Markets
• Products in marketing: anything that can be offered to the

market to exchange, to bring values and satisfaction to
customers.
• Product Decisions
1. Decisions on product standardization or adaptation.
2. Decisions on product benefits (attributes-branding-packaging-
labeling-support services).
3. Decisions on product line & product mix.
4. Decisions on branding.
5. Decisions on packaging & labeling.
23

1 Decisions on product standardization or
adaptation
24

Typical global-localisation of the mix
Adapted from Doole & Lowe (2008 cited 2019)

Why do companies standardise products?
Benefits Justification
– Cost effective – Economies of scale
– One design to track – Efficient stock control
– Uniform positioning
– Consumer
recognition – Focused R & D
– Markets < homogeneous
– Improved quality
– Transnational consumer
segments
– Consumers < mobile

Adaptation
Benefits Justification
– Precisely Satisfy – Political, economic legal,
customer needs/ climatic, environmental,
preferences infrastructural, technical
– Overcome macro/ micro- issues
environmental issues – Influence of culture on
which → less customer behaviour
competitive – Strong local competition

In reality… Not a Dichotomy

Glocalisation – Coca Cola
Standardisation Adaptation
• Global standardised • Modify product for:
branding strategy » Particular
• Core message and consumer
visuals standardised segments
» Diet
» Caffeine free
• Modify sweetness for
different national tastes

Impact of cultural variables
Chemicals,
Aerospace,
Food , Computers, metals,
Beverages, Telecoms.
Personal Household appliances
Products, Petroleum
Clothing Pharmaceuticals
Electronics
ADAPT Standardise
Highly influenced by Barely influenced by

cultural variables cultural variables
Localisation vs Adaptation
Localisation
(mandatory changes) Adaptation
Local regulations/ Changes made to
restrictions/ standards: suit consumer
Effects 90% products preferences,
marketed in developing physical
markets differences or
tastes

Reasons to adapt - usage

Reasons to adapt – Consumer Attitudes

Consumer preference
OREO CHINA TVC
• Very competitive market

• Oreo’s too sweet
• Price (packaging added to much cost )
• Different flavours – green tea

• Wafer market – wafer stick
• Smaller sizes
• Distribution to small
neighbourhood stores
© 2021 Mai The Cuong. Adapted from Christine Comrie (2019)

Oreo in China
35

Reasons to adapt – Legal / cultural

Reasons to adapt – Environment
small space

Reasons to Adapt – preference/
environmental

2 Decisions on product benefits: standardization or
adaptation
39

Decisions on product benefits
3 levels of Product and Services

• Thị trường nội địa hay thị trường quốc
tế: 3 cấp độ
– Giá trị cốt lõi đối với khách hàng (core
customer value) ➔ What is the buyer really
buying?
– Sản phẩm hiện thực (actual product)
– Sản phẩm hoàn chỉnh (augmented product).
• Understand target customers

• Understand basic requirements & expectations of target customers
• Decide company’s product attributes based on:
• Basic requirements from customers ➔ MUST HAVE
• Competition: mostly on customers’ expectations ➔ SHOULD HAVE
Possibilities of standardizing elements of products
Hollensen (2016)

Adaptation of Core Product
In Kenya, cellphones are banks, so

dead batteries are not an option.
https://www.youtube.com/watch?v=5vTRIyV8dks

In Kenya, cellphones are banks!
43

Adaptation of Core Product
Mobile phones for Maasai Mara National Reserve -

an area of preserved savannah wilderness in
southwestern Kenya, along the Tanzanian border.
https://www.youtube.com/watch?v=7J2f8W43gwk

Cellphones in Masaai Mara
45

Adaptation of Actual product
• Packaging:
–Language
–Physical packaging
–Pack size
–Graphic design

Too much packaging in Japan
https://www.youtube.com/watch?v=E2QX6hJOuqI
47

Adaptation of the Augmented Product
– Personalised service functions

– After sales support may vary
– Product innovation / newness
– Adaptation more likely at this level

Challenges of global services marketing

3 Decisions on product line & product mix
51

Product Mix & Product Line
• Product Mix consists of all products

– Product Mix: all products that company can provide and satisfy customers’
needs.
– Product lines: serve same customer groups, same function.
• Product Mix of Samsung in the world

– Before 1990: food processing, textile and garment, insurance, stock, retail,
industrial products, construction, ship building
– After 1990: focus on electronics, mobile phones and semi conductor
• In Vietnam, Samsung product mix in electronics and mobile phones include 5 main lines (i)
mobile phones/tablets; (ii) TV/audio equipment; (iii) camera; (iv) office equipments; and
(v) home appliances.
52

Width, length, depth & consistency
of P&G’s product mix
Width (5) – number of lines
Detergent Toothpaste Hand soap Nappy Tissue
Length Ivory Snow 1930 Gleem 1952 Ivory 1879 Pampers 1961 Charmin 1928
(26) – the Dreft 1933 Crest 1955 Kirk’s 1885 Luvs 1976 White Cloud 1958
number
of items Tide 1946 Denquel 1980 Lava 1893 Puffs 1960
in product Cheer Camay 1926 Banner 1982
mix
Oxydol 1952 Zest 1952
Dash 1954 Safeguard 1963
Bold 1965 Coast 1974
Gain 1966
Era 1972
Solo 1979
Depth – number of versions offered for each product in the line.

Consistency – how closely product lines are in end use, production, distribution, etc. 53

Decisions in International Markets
• Length,width & depth of product mix: different market by market
Decisions based Options for

on companies
• Market needs • Line stretching

• Revenue & (Kéo dài danh
profit from mục sản phẩm)
each product • Line filling
• Company’s (Mở rộng danh
objectives in mục sản phẩm
each period hoặc rút ngắn,
thu hẹp danh
mục sản phẩm)
• Apple
– 2014: Apple has 5 product lines including MacBook, iPod, iPhone, iPad iWatch.
– Before 2014, there is no iWatch in Apple’s product lines.
54

Apple’s P&L Report & its decision on product mix
• The USA is the biggest market for Apple.

• Asia Pacific is the fastest growing markets.
• Revenue increases when company introduces new products,
especially iPhone.
• Sales Report
– MacBook: slightly increase in 2006 - 2014
– Revenue from iPod: decreases
– iPod: sold wel only in Quarter 1
• Apple does not focus on manufacturing iPod. It focuses more on

iPhone & iPad.
55

Product lifecycle and its implications to marketers
Source: Kotler & Amstrong (2012)
58

International PLC
Source : Onkvisit and Shaw (1993, p. 483) cited Hollensen (2016)
59

3 Branding Decisions in International Markets
63

Branding Strategy: Building Strong Brands
Brand represents the consumer’s perceptions and

feelings about a product and its performance. It is
the company’s promise to deliver a specific set of
features, benefits, services, and experiences
consistently to the buyers.
64

What does Mercedes stand for?
65
 German Quality  Grandfather‘s car

What does
 Expensive Old technology
„Mercedes“ 
stand for?  Long-lasting  Taxi

 Luxury/style  No sport
 Power
 Why do you buy it?

What is your
 What attracts you most?
favourite trade
mark?  Do you only buy it for its technical product features?
65

What are brands made of?
66
 Brand values
 Yin: the rational side: „hard“ product features
 Technical specifications
 Customer benefits
 Value for money
 Problem solving
 Brand personality
 Yang: the emotional side: „soft“ emotional attributes
 Roots/Heritage
 Character („soft“ values, slogan, type of customer)
 Visual identity (symbols, logos, faces)
66

Advantages of Strong Brands to Companies
• Brand Equity = Powerful Brand = Differential Effect that Brand

has on Customer Response to Product/Marketing Product.
– Customers’ loyalty
– Ability to Sell at Higher Prices
– Higher Revenue & Profit
67

Brand Development Strategies
Branding in International Markets
• General trend: one brand for same product in different

markets.
• Brand is not a solution for company incapable of
communicating brand to target customers.
• 3 basic questions:
1. What makes brand special in target customers’ mind?
2. What make them recognize the differences?
3. Is company capable of making target customers to be aware of the
differences?
• Brand represents the consumer’s perceptions and feelings about
a product and its performance. It is the company’s promise to
deliver a specific set of features, benefits, services, and
experiences consistently to the buyers.
69

Protecting Brands in International Markets
• SHOULD protect brands in international markets
• World
– WIPO – World Intellectual Property Organization
– http://www.wipo.int/portal/en/index.html
• Vietnam
– NOIP – National Office of Intellectual Property
– http://www.noip.gov.vn/web/noip/home/en
70

4 Decisions on Packaging & Labeling in
International Markets
72

Packaging fruits
1. Apple
2. Fresh produce packaging
73
Functions of Packaging & Labeling
• Packaging and labeling are under the actual product circle.
• Functions of packaging & labeling

– Products protection
– Usage guidelines
– Communication to customers
– Convenience for customers.
➔ Bring the value to customers
Packaging for convenience

Packaging as an art
74

Decisions on Packaging & Labeling in
International Markets
• International & national regulations on packaging & labeling.
• Integrated of food safety, environment (green) protection ➔

Certification
GFSI, BRC & SQF
• Inputs before presentations on requirements for lychee in the

international markets
Madagascar lychee export
Fruits, vegetables and food safety
75

More videos on GAP
1. Global Gap
2. Gap – Good Agricultural Practices
77

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Product Decisions: Standardization vs Adaptation

“When you sleep, keep your business run”

Mai The Cuong, PhD

© 2021 Mai The Cuong.

1. Revision of last sessions

2. Product Decisions in International Markets

© 2021 Mai The Cuong.

© 2021 Mai The Cuong.

• Evaluating the significance of each variable to customers so that

• 5 criteria to select segmentation variables (MASDA)

© 2021 Mai The Cuong.

• Usually begin with geographic and economic criteria

Adapted from Christine Comrie (2019)

© 2021 Mai The Cuong.

• Selection and expansion to international markets

• Example: 5 choices of a Vietnamese fruits & vegetable exporter in

Adapted from Christine Comrie (2019)

• Positioning is mapping, designing and developing image of

• Multinational Companies (MNCs): Position their products as

© 2021 Mai The Cuong.

1. Designing positioning map

2. Selecting positioning criteria

3. Selecting the right competitive advantages as the positioning

4. Deciding on approaches to promote positioning image

5. Deciding on measures to deliver the chosen positioning

© 2021 Mai The Cuong.

• Positioning map shows customers’

• Footwear industry: selection of 1

– Flexibility in small orders

© 2021 Mai The Cuong.

© 2021 Mai The Cuong.

Understanding the firm’s home base

Can the firm leverage its success in 15

international markets? © 2021 Mai The Cuong.

PESTLE What brings

CSA – Country Specific Advantage

© 2021 Mai The Cuong. 16

• Products in marketing: anything that can be offered to the

© 2021 Mai The Cuong.

3 levels of Product and Services

Expected benefits: Sight seeing, shuttle bus

• Products in marketing: anything that can be offered to the

© 2021 Mai The Cuong.

© 2021 Mai The Cuong.

Adapted from Doole & Lowe (2008 cited 2019)

© 2021 Mai The Cuong.

Adapted from Christine Comrie (2019)

Adapted from Christine Comrie (2019)

Adapted from Christine Comrie (2019)

© 2021 Mai The Cuong.

Adapted from Christine Comrie (2019)

Highly influenced by Barely influenced by

Adapted from Christine Comrie (2019)

Adapted from Christine Comrie (2019)

© 2021 Mai The Cuong.

© 2021 Mai The Cuong.

OREO CHINA TVC

• Very competitive market

• Different flavours – green tea

© 2021 Mai The Cuong. Adapted from Christine Comrie (2019)

© 2021 Mai The Cuong.

Adapted from Christine Comrie (2019)

© 2021 Mai The Cuong.