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Chapter 13 - Products and Services for Consumers
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Chapter 13 – Products and Services for Consumers
Teaching Objectives
Products and services, the first part of the marketing mix to be discussed, is covered here with consumer
products and services, and the next chapter on industrial products and services. An overall point that
needs to be made with these two chapters is that companies face two different problems in developing
products for international markets – they either have an existing product that needs to be evaluated for
possible adaptation or they are developing a product for global markets from scratch. The two situations
require different approaches to product development. The decisions as to whether to standardize or adapt,
to develop global products and global brands need to be addressed at the beginning of the chapter since
the direction taken will influence later discussions. The teaching objectives are to:
1) Familiarize students with the debate between standardization and adaptation and global products
and brands.
2) Stress the importance of offering products and services suitable to the intended market. That the
issue is not whether to adapt or standardize, but how much adaptation is necessary and to what
point a product can be standardized.
3) Make them aware of the country of origin effect on how products are perceived.
4) Explore the relationship between consumer perceptions of products and culture. Special emphasis
on the product as an innovation and the possibility of resistance to an innovation if it is too new
or disruptive of the norm.
5) Present two methods for screening products and services for adaptation; the analysis of
characteristics of innovation and analysis of product components model.
Comments and Suggestions
1. Coverage of this chapter can be divided into three parts. First, a broad discussion of how cultural
factors and the country of origin affect the acceptance of a product, how a product is received if it is
perceived as an innovation and the issues of global products and standardization versus adaptation.
Second, there are physical and mandatory requirements that require adaptation, and third, screening
products for adaptation. This third point recognizes the fact that most companies have existing
products that require evaluation for adaptation, whether mandatory or cultural, before being
introduced in another country.
2. Exhibit 13.3, Product Component Model is helpful in focusing on the different components of a
product that may require adaptation. Using this model also helps me discuss the issue of the core
component and product platform–the most costly part of a product to adapt yet possibly the most
easily standardized.
3. If the students are asked to do a research project similar to the one described in Part I-F, above, The
Country Notebook – A Guide for Developing a Marketing Plan, many of the points in the chapter can
be brought out in class. We bring a product to class and ask students to respond on how they think the
product will need to be adapted or could be standardized in the country they are studying.
Chapter 13 - Products and Services for Consumers
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Lecture Outline
I. Quality Products
A. Quality Defined
B. Maintaining Quality
C. Physical or Mandatory Requirements for Adaptation
D. Green Marketing and Product Development
II. Products and Culture
A. Innovate Products and Adaptation
B. Diffusion of Innovations
C. Production of Innovations
III. Analyzing Product Components for Adaptation
A. Core Component
B. Packaging Component
C. Support Services Component
IV. Marketing Consumer Services Globally
A. Services Opportunities in Global Markets
B. Barriers to Entering Global Markets for Consumer Services
V. Consumer Services
VI. Brands in International Markets
A. Global Brands
B. National Brands
C. Country of Origin Effect and Global Brands
D. Private Brands
Discussion Questions
1.
Define the following terms and show their significance to international marketing:
Diffusion
Innovation
Product Component Model
Green marketing
Quality
Product Homologation
Global brand
2. Debate the issue of global versus adapted products for the international market.
A recurring debate exists relative to product planning and focuses on the question of standardized
products marketed worldwide versus differentiated products adapted or even redesigned for each
Chapter 13 - Products and Services for Consumers
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© 2020 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use.
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To differentiate for the sake of differentiation is no solution, and realistic business practice requires a
company to strive for uniformity in its marketing mix whenever and wherever possible. Economies of
production, better planning, more effective control, and better use of creative managerial personnel
are all advantages of standardization.
3. Define the country-of-origin effect and give examples.
Country of Origin Effect (COE) can be defined as any influence that country-of-manufacturer has on
a consumer’s positive or negative perception of a product. Today a company competing in global
4. The text discusses stereotypes, ethnocentrism, degree of economic development, and fads as the basis
for generalizations about country-of-origin effect on product perception. Explain each and give an
example.
The country, the type of product, and the image of the company and its brands all influence whether
or not the country of origin will engender a positive or negative reaction. There are a variety of
and points out how many component parts are made in America in some of their advertisements. On
the other hand, others have a stereotype of Japan as producing the “best” automobiles. A recent study
found that U.S. automobile producers may suffer comparatively tarnished in-country images
regardless of whether they actually produce superior products.
Countries are also stereotyped on the basis of whether they are industrialized, in the process of
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One final generalization about COE involves fads that often surround products from particular
5. Discuss product alternatives and the three marketing strategies: domestic market extension,
multidomestic market, and global market strategies.
The marketer has at least three viable alternatives when entering a new market: (1) sell the same
6. Discuss the different promotional/product strategies available to an international marketer.
The marketer has at least three viable alternatives when entering a new market: he can (1) sell the
same product he presently sells elsewhere, (2) individualize existing products to the tastes and
specific needs of the new country, or (3) develop a totally new product. These three basic alternatives,
when combined with promotional effort, can be developed into five different product strategies
7. Assume you are deciding to “go international” and outline the steps you would take to help you
Chapter 13 - Products and Services for Consumers
8. Products can be adapted physically and culturally for foreign markets. Discuss.
Products can be adapted to a new culture in a variety of ways ranging from simple package changes
environmental factors listed below. Each is quickly detected and requires only basic changes to bring
the product in line with a culture.
Environmental Factor
Design Change
Level of technical skills
Product simplification
Level of labor cost
Automation or manualization of product
Level of literacy
Remarking and simplification of product
Level of income
Quality and price change
Level of interest rates
Quality and price change (investment in high quality
might not be financially desirable
Level of maintenance
Change in tolerances
Climatic differences
Product adaptation
Isolation (heavy repair difficult and
expensive)
Product simplification and reliability improvement
Differences in standards
Recalibration of product and resizing
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9. What are the three major components of a product? Discuss their importance to product adaptation.
(3) the support services component, which completes the product buyers receive and from which the
bundle of satisfactions received are derived. This support services component includes repair and
maintenance services, installation, delivery, warranty, spare parts, training and instructions, credit,
10. How can the knowledge of the diffusion of innovations help a product manager plan his international
investments?
11. Old products (that is, old to the U.S. market) may be innovations in a foreign market. Discuss fully.
It is important for the marketer to appreciate that a product which has gained acceptance and is now at
12. “. . . If the product sells in Dallas, it will sell in Tokyo or Berlin.” Comment.
Basically, the needs and hence the demand for a product are the same in all markets. Similarities in
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13. How can a country with a per capita GNP of $100 be a potential market for consumer goods? What
kinds of goods would probably be in demand? Discuss.
14. Discuss the characteristics of an innovation which can account for differential diffusion rates.
The characteristics of an innovation which can account for differential diffusion rates are: (1) relative
advantage, (2) compatibility, (3) complexity, (4) trialability, and (5) observability. Relative advantage
15. Give an example of how a foreign marketer can use knowledge of the characteristics of innovations in
product adaptation decisions.
An answer to this question should be based on the 5 characteristics (listed just above) that influence
16. Discuss “environmentally friendly” products and product development.
Germany has a strict Eco-labeling program to identify, for the concerned consumer, products that
have a lesser negative impact on the environment than similar products. Under German law, a
manufacturer is permitted to display a logo, called the “Blue Angel,” on all products that comply with
Chapter 13 - Products and Services for Consumers
The “Blue Angel” and similar eco-labels are awarded on the basis of a product’s environmental
