Marketing management in AsiaPacific

1
Unit 5

• Marketing management in Asia-Pacific

2
Objective (I)

• Identify the factors shaping the marketing
  environment in selected Asia-Pacific countries
• Describe the nature of consumer behavior in Asia
  and how this has been influenced by the Asia
  crisis
• Link the principles of marketing strategy to the
  market environment in Asia
• Evaluate the standardization versus adoption
  debate in the Asia-Pacific context

3
Objective (II)

• Discuss issues specific to Asia-Pacific which
  affect the nature of
• Product
• Pricing
• Promotion
• Distribution strategies in the region
• Explore other key marketing issues specific to
  the Asia-Pacific region

4
Asia as a market (I)

• Marketing environment
• Asia-Pacific become attractive markets in the
  world
• Consumption in this region has grown as
  disposable incomes rise
• Traditional values become more westernized
• Changes in the marketing environment in Asia are
  result of events
• Cultural, economic, political, legal and
  technological environments
• The major trends over the past decade include
• Fast growing markets that continue to grow,
  albeit at a slower rate, even after the Asian
  crisis

5
Asia as a market (II)

• Increasing customer spending power as a result of
  higher disposable incomes and more relaxed
  attitude to saving
• Increasing income gaps between the rich and the
  poor, and between urban and rural populations
• Flourishing underground economy
• Both traditional and emerging values and beliefs
  that are shaping the modern Asian consumer
• Customers who are fulfilling their wants rather
  than just their needs
• High levels of demand for customer durables
• Changing preferences towards foreign products
  rather than domestic products
• Shift towards a more Western lifestyle
• Increasing awareness of brands, self-image and
  conspicuous consumption, return to
  price-conscious shopping

6
Asia as a market (III)

• Rapid diffusion of new products, fads and
  mass-consumer trends in purchasing
• Willingness to try new products or services
• Dramatic increases in the use of credit cards and
  credit facilities
• Implications for implementing elements of the
  marketing mix
• Product design, advertising strategies, pricing
  and distribution
• Cultural characteristics common to Asia
• Long-term orientation
• Extensive use of relationships based on trust and
  loyalty in the business setting
• Collectivist or group-oriented culture

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Asia as a market (IV)

• Business is based on long-term relationships and
  commitment between buyer and seller
• Keiretsu, Japanese business system
• Excluded all but the most innovative outside
  firms from the production network
• Small to medium-sized suppliers depended on
  relationships with larger firms
• Unwilling to distribute foreign products that
  compete with existing lines
• Chinese dominant business activity and pervasive
  influence of guanxi (connection) that difficult
  for outsiders to operate effectively
• Long-term orientation is also reflected in
  consumer purchasing
• Technology and exposure to mass media make more
  informed choices about the way they live
• Raised awareness of the need for precautionary
  spending for products

8
Asia as a market (V)

• Loyalty has been part of traditional consumer
  behavior in Asia
• In rural areas and among the older generations
• Tendency to be both risk-averse and price
  conscious in their shopping behavior
• Remain with a trusted brand
• Trustworthy friend able to give advice about any
  product or brand in the store
• Family-oriented as a result of collectivist trait
  and Confucian values
• Womans place at home and extended family still
  holds very strong in Japanese, Chinese and Korean
• Womens existence is based on her relationships
  with her father, husband and sons
• Traditionally her role was to produce a male heir
  to continue the family line

9
Asia as a market (VI)

• Opening up of their economies to trade and
  investment
• Proactive approach towards encouraging trade from
  the West and lowering trade surpluses with USA
• Increasing levels of disposable income under the
  evolving socialist market system
• China take advantage of the anticipated boom in
  consumer demand before their competitors
  establish themselves
• Chinese government maintains its socialist
  political ideology
• Characterized
• Corruption and collusive agreements with or
  influence by government bureaucrats
• Lack of clarity and consistence in rules and
  regulations pertaining to business
• Lack of reliable statistic and economic data on
  which to base market assessments and feasibility
  studies
• Transport, distribution finical and legal systems
  are still under development and presents a real
  problem for any Western firm entering the market

10
Asia as a market (VII)

• Japan affluent consumer markets in the world
• Government-imposed restrictions on importing or
  investment
• Due to the confounding nature of the Japanese
  business environment
• Independently from outside influence on the basis
  of longstanding relationships between groups of
  Japanese companies
• Determined and well-resourced firms from
  competing on an equal basis with Japanese firm
• The close network of firms also allows rapid
  responses to changes in consumer preferences and
  market demand
• Desire to purchase locally made goods or services
• Start from scratch to find new premises and new
  staff, build market share and customer loyalty
  and develop network of supporting firms
• IBM as example

11
Asia as a market (VIII)

• Hong Kong and Taiwan
• Governments adopted a minimal involvement
  philosophy that focuses on maintaining stability
  and a relatively corruption-free regulatory
  environment
• Hong Kong remain economically independent and
  close relationship with the ever-growing China
• Korea
• The are liberalization of policies concerning
  entry of foreign investment and some imports
• Tariffs on imported products are slowly being
  reduced
• Non-tariff barriers, such as government
  regulation, inspection and interference hinder
  the importation of foreign goods
• Education and training
• Encouraged a virtuous cycle of economic
  development and rising incomes supported by
  skilled workers
• More accessible and affordable to these workers
  and children

12
Asia as a market (VI)

• Education is linked to financial and career
  success
• Learning has progressed dramatically of open-door
  policies and the influx of foreign companies
• Japan invest in the upgrading of infrastructure,
  technology and human resources in the host
  economy
• Develop skills such as teamwork, quality control,
  electronic component assembly, clothing
  manufacture and numerous associated with light
  manufacturing
• Adoption and adaptation of Western ideas,
  products and consumer culture
• Profound effect on the behavior of consumers in
  Asia
• In the wealthier coastal areas of China, are now
  boutique stores and fashion outlets offering
  European designs and American labels
• Changing traditional values and customs and
  altering shopping behavior
• Dramatic increase in the use of customer credit
  including credit cards, bank overdrafts and
  loans, and hire-purchase style options

13
Asia as a market (VI)

• Thrift and saving are well-recognized values in
  Asia based on the long-team orientation of
  society
• The perceived and actual need to protect one
  family against any hardship
• Poverty, natural disaster, war and disease
• Fuelled demand and consumption and has been a
  boon for banks and companies selling consumer
  products in the East
• Changing societal characteristics of Asian
  economies
• Japan adopted as part of the collection of
  presents traditionally given to the bride, rather
  than a symbol of love and commitment as in the
  West
• HK sales of non-traditional foods
• Beef are on the increase but the meat is prepared
  in traditional Chinese style

14
Asia as a market (VII)

• Demographic factors and market segmentation
• No denying that the wider Asia region represents
  a huge actual and potential market
• Rapid rate of economic growth and
  industrialization that has made these countries
  attractive markets
• Japan fuelled strong demand for quality products
  from all over the world
• HK, Singapore, Taiwan and South Korea are now
  mature and service-oriented
• Thailand, Philippines, Indonesia and Malaysia
  have rapidly progressed into budding consumer
  societies, purchasing fashion items, products for
  the home and customer services
• China is higher costs of land, labour and other
  resourced, appreciating currencies and financial
  woes are eroding margins and comparative
  advantages

15
Asia as a market (VIII)

• The geographical spread of the population and the
  underdeveloped infrastructure means that urban
  areas will be easier and more profitable as
  target markets
• The potential of the market
• Numbers in the population that have sufficient
  incomes to afford the production
• The ease of accessing the market
• Numbers in urban areas as opposed to rural areas,
  those with televisions and ratios and adequate
  distribution infrastructure
• The distinct characteristics of the market
• The number of people in each age group, the
  numbers of working women

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Asia as a market (IX)

• Some statistics available to conduct
  environmental and market analyses
• Population density
• Life expectancy
• Population distribution (Rural or urban)
• GDP and employment per sector (Agriculture,
  industry and services)
• Changes to GDP and GDP per capital over time
• External debt, government expenditure, investment
  and savings
• Level of foreign investment, imports and exports
  by sector, commodity
• Major trading partners

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Asia as a market (X)

• In China
• Willing to buy consumer goods
• Larger ticket items-Refrigerators and washing
  machines
• Luxury items-Convenience foods and beauty
  products
• Chinas market are perhaps the most diversified
  in Asia
• More useful to segment the market on the basis of
  the different economic regions to get a clearer
  idea of consumer characteristics
• A smaller group have become Chinas nouveaux
  riches and are now able to afford some luxury
  items such as vehicles or electronic goods
• Chinese have sufficient disposable income to
  become shoppers for consumer durables
• Bicycles, watches, television sets and other
  household appliances
• Chinese government s subsidization of basic
  necessities
• Food and housing, transport, education and
  medical care

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Asia as a market (XI)

• In HK
• Emigration from HK has been high through the
  1990s during the lead-up to the handover to the
  Chinese government in 1997
• Most industrial countries and reflects the
  increase in working women
• Attaining material wealth and the change in
  traditional values
• Living standards and household income are high in
  HK and comparable to those in the West and Japan
• South Korea
• Ethically homogeneous population, albeit has been
  influenced colonial rule, war and civil conflict
• The nuclear family has become the norm for the
  majority of households and divorce has now been
  legalized
• Working women make up 45 of workforce and are
  having to balance long hours and family
  responsibilities

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Asia as a market (XII)

• Traditional values of frugality and conservative
  consumption
• Reinforced by the government prominent business
  people who call for, personally demonstrate acts
  of sacrifice and personal moderation
• In Taiwan
• Second highest population density in the world
• Making the market stable and attractive
• With low levels of inflation and unemployment and
  high trade surpluses and savings
• Become the big spenders and consumption is even
  endorsed by the government
• Increasing the gender ratio of males to females
• Being perpetuated by women technologies that can
  detect and dispose of the unwanted foetus

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Asia as a market (XIII)

• Segmentation
• Process of diving a potentially large market into
  distinctive subsets of consumers
• Target the marketing strategy towards one or more
  of these segments
• Starts with an analysis of the marketing
  environment , or changes and trends influencing
  consumer behavior
• Identify where there are potentially profitable
  areas of the market
• Not being exploited or where new products can be
  introduced
• Ways that a potential market could be divided
  into more manageable segments
• Demographic variables
• Age, gender, family size and type, income,
  occupation, education, religion, place of
  residence and nationally

21
Asia as a market (XIV)

• Psychographics and lifestyle approaches
• Divide consumers according to their social class,
  culture, attitudes, behavior, lifestyle or
  personality
• Behavioral segmentation bases
• Perceived and actual benefits of the product to
  the consumer, like functional benefits, image and
  prestige, convenience or economy, or usage
  patterns
• Heavy, moderate or light users of a product or
  service
• Each segment characteristics
• Readily identifiable relevant to the product in
  question
• Measurable
• Able to count or estimate the number of people
  that fall into that segment
• Substantial in size and durable to be profitable
• Sustainable long enough to worth targeting
• Define actual and potential market segments very
  carefully
• Demographic segmentation is preferred rather than
  psychographics or lifestyle patterns

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Asia as a market (XV)

• Must be similarities between the members of a
  segment
• Yuppie segment in Southeast Asia
• Difference in culture, demonstrate similar
  preferences for Western-style consumption of fine
  wine, golf, travel and designer labels
• Based on the need for status and conveniences
  rather than solely functional attributes
• Accessible by the company
• Reach the targeted segment
• Lacks of infrastructure, roads, electricity and
  public transport
• Lack of suitable adverting media
• Purchasing power of the segment and the literacy
  rate inhibit the markers efforts to reach a
  particular group of consumers
• Affected by political events
• Type of segmentation used will depend on the type
  of product and its likely customers
• Such as soft-drinks (Asia), coffee (Singapore),
  tea (Chinese)

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Asia as a market (XVI)

• Consumer behavior
• Segments identified through the analysis of the
  marketing environment and specific
  characteristics of the consumers
• Coupled with demographic information and other
  segmentation bases
• Existing culture, trends and changes in Asian
  society with demographic features
• Japan
• Middle class consumer exhibits very similar
  patterns of buying behavior
• Attributed to the collectivist and relatively
  homogeneous nature of Japanese society
• Well-educated population have served to make
  Japanese consumer behavior much more uniform
• Emphasis on quality and service rather than price
• More sophisticated in their buying behavior

24
Asia as a market (XVII)

• China
• The middle class consumer exhibits a fairly
  conservative style of consumer behavior
• Remain faithful to traditional Chinese products
• Aspirations of new refrigerator or a second
  television set
• Younger generation and the wealthier
  entrepreneurial class
• Try new things and make riskier purchasing
  decisions
• The time for leisure and family is more in demand
  in Asia
• Pursuit of higher education and training
• Childrens schoolwork and extracurricular
  activities
• Products and services that reduce the time needed
  for household chores
• Vacuum cleaners, microwaves, family restaurants
  and product with remote control

25
Asia as a market (XVIII)

• Working women
• They are earning money themselves and household
  has higher levels of discretionary income to
  spend
• Encourage purchases of convenience products and
  restaurant meals
• HK, women are holding down goods in service
  sectors and devoted to the raising of the family
  still very strong
• Yuppies
• Focus on their wants rather than just their
  needs in purchasing behavior
• Cars, refrigerators and mobile telephones
• Nouveaux riches are striving to fit into an
  emerging lifestyle that is modern
• Led to conspicuous consumption or the acquisition
  of material assets
• Fine wines, expensive jewellery, luxury vehicles
  and artwork
• Services as foreign maids, tutors, medical
  insurance, overseas travel and golf membership

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Asia as a market (XIX)

• Youth and teenagers
• Demonstrated a passion for consumer fads
• Taiwan, as the bean sprout generation
• Well protected, yet feeble and vulnerable
• Post-crisis consumers
• Japanese, shifted towards goods that are
  realistically priced and offer value for money
• Purchase high quality functional items
• The rise of cut-price or no-frills shopping
  outlets that provide the customer with the best
  value for money
• Readjust their marketing mixes and product
  offerings to suit the new consumers
• Past 5 years
• HK, consumers are cautious and prefer to save
  their money rather than upgrade to newer models
  of cars, stereos and TV
• Korea, consumers desires to spend on hold and
  demand for expensive foreign products
• thailand,

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Marketing strategy and the marketing programme (I)

• Marketing strategy Basic concepts
• Marketing philosophy
• Behind marketing-oriented strategy
• Focus on determining the needs and wants of the
  customer
• Develop a product that meets those needs, then
  sell it for profit
• Marketing concept
• Seek to achieve its goal through identifying the
  needs and wants of target markets
• Delivering the product more effectively than
  competitors
• Most successful for companies to understand what
  their customers expect
• Able to satisfy those customers better
• Leads to high demand, sales and ultimately to
  achieving the companys goals

28
Marketing strategy and the marketing programme
(II)

• Selling
• Encouraging customers to buy existing products
  through use of the promotion and adverting and
  aggressive selling techniques
• Selling try to sell what it makes rather than
  what the market wants
• Insurance companies as example
• Marketing-oriented
• Employ aspects of the marketing function
• Oriented towards selling, production or the
  product
• Production-oriented
• Lowering the cost of the through efficient
  production techniques
• Making the product widely available through
  expansive distribution coverage
• Develop and refine their product offering
• Disadvantage
• Increasing choice of products, available
  consumers may put other needs of product quality

29
Marketing strategy and the marketing programme
(III)

• Marketing fundamentals (Market-oriented)
• Customer satisfaction is ultimate goal
• Understanding what customers want and
• How the company can best meet customer needs
  profitable and achieve this goal
• Customers do not buy products or services
• Solutions or benefits the product can provide to
  customer
• Kodak as example
• Led marketing-oriented firms to view their
  products as bundles of benefits
• IBM as example
• Made up different groups of consumers with
  different characteristics
• Sell a single idea or product to all these people
  in the same way
• Ineffective and a poor use of company resources
• Market segmentation and adoption of the marketing
  mix to suit the segment
• Needs to review each element of the marketing mix
  continually in view of these changes
• More volatile than others
• Computers as exapmle

30
Marketing strategy and the marketing programme
(IV)

• Market positioning
• Consider the market positioning of your company
  relative to your existing competitors
• McDonalds hamburger chain in Asia
• Different products
• Vegetarian and chicken burgers to Indians and
  Muslims
• Kids meals and toys to children
• Emphasis the company image and its bundle of
  benefits as a lifestyle and image choice
• Convenience of the purchase, the congenial family
  atmosphere of the restaurants, promotions
  targeted at different customer segments, the
  hygienic and efficient food preparation
• Strongly influenced by the firm strengths and
  weaknesses relative to competing firms
• Understand the extent of its resources and the
  nature of the business environment
• Maintain a competitive edge in the market
• Market often overwhelmed with choice

31
Marketing strategy and the marketing programme (V)

• Marketers tried to position their position their
  companies as suppliers of luxury goods only for
  the elite
• Through building brand reputation, up-market
  promotion techniques, high prices and
  technologically sophisticated products or
  snob-appeal
• Future growth is the marketing of environmentally
  friendly products to the green segments
• Environment concern will increase among consumers
  and companies alike
• China are simply not rich enough to afford to
  purchase green products
• SWOT analysis
• Competitor analysis
• Useful for developing marketing strategy after
  the market grouped into clearly defined segments
  of customers
• Allowed the firm to see if any segments are not
  being served adequately-fill that gap
• Incorporating all the environmental and internal
  analyses clarify the process of strategy
  formulation

32
Marketing strategy and the marketing programme
(VI)

• Standardization versus adaptation
• Firms offering and the elements of the marketing
  mix can be standardized across international
  markets
• Standardization across world markets is
  globalization
• Becoming more homogeneous due to the growing
  influence and accessibility of travel and
  worldwide media
• TV, films, telecommunications and the Internet
• McDonalds and Coca-Cola as example
• Identify and target homogeneous market segments
  that exist globally, such as the youth/teen,
  yuppie, or young family market segments
• Adaptation (or customization)
• Needs to be modified account for differences in
  host-country environments, demographic
  characteristics and consumer tastes, needs and
  preferences

33
Marketing strategy and the marketing programme
(VII)

• Consumers in global markets are diverse rather
  than homogeneous and marketing programme should
  be directed accordingly
• Honda Motor Company
• Full standardization or full adoption strategies
  must be extremely uncommon
• Take Coca-cola for example
• Promotional material translated into different
  languages for different countries
• Sophistication and availability of different
  distribution channels
• Pricing depends on what the market bear and the
  strength of the other competitors
• The product must be altered, the can is green
  where red is considered to be offensive
• Professional service companies customize the
  service offered to each customer

34
Marketing strategy and the marketing programme
(VIII)

• Marketing mix elements 3 key advantages for the
  firm
• Cost advantage through achieving economies of
  scale in production, research and development,
  promotional material
• Standardization also promotes consistency and
  customer recognition of products that are offered
  in more than one country
• The golden arches of McDonald
• Provide a consistent product, pricing and
  distribution regardless of location
• International firms have found that
  standardization improves marketing performance,
  market share and profitability
• Through ease of implementation, control and
  management of standardized marketing programme
• Adaptation of the elements of the marketing mix
• Higher levels of consumer satisfaction, patronage
  and ultimately profits

35
Marketing strategy and the marketing programme
(IX)

• Advantages of partial adaptation
• Better tailor the marketing mix to specific
  segments and cater to the differences in customer
  needs
• Mandatory to meet the legal requirements of some
  countries
• Safety standards, labeling and censorship
• Balance must be achieved somewhere between full
  standardization and full adaptation of marketing
  mix
• Based on traditional and marketing mix elements
• Able to capture an international market segment
• Standardization will be determines by
• Product features and type
• Environmental variables
• Political and legal requirements
• Demographic and economic characteristics of the
  segment

36
Marketing strategy and the marketing programme (X)
Factors influencing standardization
37
Marketing strategy and the marketing programme
(XI)

• Introduction to the marketing programme
• Identified and the marketer has ensured that this
  segment is large and sustainable enough to be
  profitable
• Potentially incorporate a number of different
  product offerings over several market segments or
  countries
• Factors influencing the marketing mix

38
Marketing strategy and the marketing programme
(XII)

• The Four elements, or Ps of the marketing mix
  are the
• Product-the firms offering of both products and
  services
• Price-which includes the purchase price of the
  product in different markets, and the value of
  the product to different customers
• Promotion-of the product and communication of the
  products benefits to the customer
• Place-or distribution of the product from
  manufacturer to end consumer
• More closely aligned with the needs and wants of
  the consumers
• Trends of the marketing environment

39
Product management and development (I)

• Understanding the product/service mix
• The companys offering to the market and can
  include physical goods, services, ideas and even
  places or organizations and people
• bundle of benefits embodied in the physical
  product and service mix offered to customer
• Having services
• Pre-purchase advice, installation and
  instructions for use, or after-sales service
• Maintenance and repair
• Example of IBM
• Involve some physical product elements
• And either not retained by the customer-air
  travel
• Brochures from the travel agent, the airplane
  itself and the food served

40
Product management and development (II)

• Bundles of benefits or product offerings are
  products and which are services
• A meal at a restaurant
• A mobile telephone
• A doctors consultation and prescription for
  pharmaceuticals
• An outdoor landscaping service
• A personal computer
• A tailored suit
• Consumers become more discerning about the
  products they buy, the range of choices increases
• Companies need to spend more time considering how
  their product could be supplemented by supporting
  service elements and vice versa for services
• Avoid confusion we will refer to the product
  and/or service mix as the product offering, or
  simply the product

41
Product management and development (III)

• Product offering at f different levels
• Most basic level
• Company is selling a fundamental or core benefit
  to the customer
• Second level
• Benefit must be transformed into a generic
  product to relay the benefit to the customer
• Third level
• Expected product includes all features and
  attributes
• Most customers would expect to receive upon
  purchasing the product
• Fourth level
• Augmented product embodies more than the expected
  features to make the offering superior to
  competitors
• Their product offering from the competitors
  offerings by providing additional benefits sought
  or desired by customers
• Fifth level
• Product evolve sometimes in the future and will
  better meet the changing needs of the customer
  and generate more business for the company

42
Product management and development (IV)
Product levels
43
Product management and development (V)

• Manufacturing firms in Asia have traditionally
  focused on the functional attributes of the
  generic product
• Maximum benefit through functional attributes at
  minimal cost
• Cost-focused or product-oriented strategy works
  well when consumers are price-sensitive
• Attention to developing the expanded product
  offering
• Tangible and intangible attributes sought after
  by the customer
• Select their products over their competitors and
  are willing to pay a premium for additional
  actual or perceived benefits
• Product differentiation and commonly used include
  price, brand names, packaging, quality of the
  product and aesthetic attributes such as style
  and design
• Books and CDs as a example
• Services included with the product (as free
  delivery), promotion and give-aways
• Appeals to identity and image are also used to
  differentiate the product

44
Product management and development (VI)

• Managing brands
• Represents a lasting symbol of the company and
  its products in the eyes of the consumers
• Define brand as a name, term, sign, symbol, or
  design, or a combination of them, intended to
  identify the goods or services of one seller or
  group of sellers and to differentiate them from
  those the competitors
• Purpose of branding is to create awareness,
  foster loyalty and encourage repeat sales of the
  companys products
• Associated with a certain reputation, as quality
  and reliability, value for money, or innovation
  and technological sophistication
• Produces a wide range of non-durable consumer
  goods ,focuses on positioning the brand names of
  the products rather than the company in the
  marketplace

45
Product management and development (VII)

• Six levels of meaning can be incorporated into
  the branding strategy
• Product attributes such as quality, reliability
  and prestige
• FEO (Singapore) focus on improving the quality
  and design features its condominiums
• Achieved ISO 9002
• Product benefits communicate the value of the
  specific product attributes to the customer
• Installing a comprehensive range of additional
  features
• Caters to emotional benefits
• Values of the company or what the company stands
  for
• Body shop, retailer and marketer of its unique
  range of cosmetics and toiletries
• Not testing on animals, using renewable natural
  resources and promoting the personalities rather
  than the body image of its clients

46
Product management and development (VIII)

• Cultural influences are evident in many products
  from developed countries
• Italy, whose sports cars and fashion industry are
  famous for quality of design and performance
• Personalities normally associated with person,
  animal or object can be projected by the brand
• Slogan or Puma logo which suggest strength and
  dominance
• User characteristics are potentially the most
  influential aspect of the brand
• LV, BMW, Posrche or Toyota
• Marketing mix should support the desired
  reputation or image of the brand
• The product itself, the packaging, the way in
  which the product is promoted, distributed and
  sold
• The Mercedes as example (Motorcar as a luxury)

47
Product management and development (IX)

• Some strategies that company take to overcome the
  difficulties of branding across several counties
• Standardization of a brand name to cover both
  company and products
• Advantages of consistency and clarity for the
  consumer and economies of scale
• Disadvantages of firm risk its own reputation,
  based on the poor performance of a single product
  if the two are so closely associated
• Translate appropriately and still appeal to local
  tastes
• Coca-Cola, Nissan, Kodak, IBM and ATT
• Standardization of a brand name to cover all
  products
• Promotes brand awareness and product acceptance
• Avoids the risks of the fisrt strategy, may
  create lower levels of loyalty with some
  consumers
• Tend to remain loyal to the company rather than
  its products

48
Product management and development (X)

• Standardization of brand names for different
  classes of product produced by the same firm
• Advantage of associating a brand name with a
  specific product or consumer segment
• Lower-priced goods without hurting the quality
  reputation of its more expansive product lines
• Individualized brand names for each product
• More time-consuming and expensive
• Brand names to suit both products and markets and
  re-package and re-label products
• Closely tailored to customer tastes and
  requirements and brand names for the same product
  are changed for different situations
• Common characteristics
• Ability to convey meaning about the product
• Names being short and easy to pronounce
• Recognizable and easy to remember
• Able to translated into different languages

49
Product management and development (XI)

• In Asia, brand name that sounds good when spoken
  and looks good on paper
• Names and numbers are associated with luck
• Number eight (associated with prosperity)
• Number four (avoid, considered unlucky)
• Symbols are used to support the brand name, are
  instantly recognizable and overcome the
  difficulties of translation
• Using translations may be problematic within
  countries as well as between countries
• Japanese, 4 different writing systems exist and
  associated with different historical or cultural
  characteristics
• Kanji, traditional and quite inappropriate for a
  technologically sophisticated product
• Katakana, borrowing language from the West
• Hiragana, perceived to be feminine and used for
  beauty prodcuts and hair dressing salons

50
Product management and development (XII)

• Brand equity
• The loyalty to the brand by consumers, awareness
  of the brand, perceived quality, the strength of
  brand associations and supporting patents,
  trademarks
• Tailoring each element of the marketing mix
  contributes to brand equality
• Gain legal protection of their name and unique
  products features
• Gain leverage when dealing with distributors and
  retailers who need to offer the brand to keep
  customers satisfied
• Easily identify the type of goods or services
  that suit them best
• Branding strategy
• Japanese (Flexible branding strategies)
• Meet the customer needs that change over time
• Translated into direct benefits for the consumer
• Advertising and promotion have sought to support
  the image of the brand
• Example as Mitsubishi, Toyota and Sony

51
Product management and development (XIII)

• South Korean
• Brands internationally
• Example as Goldstar, Samsung, Daewoo and Hyundai
• Taiwanese
• Ranging from the computers to fashion clothing ,
  relied on established brands from the USA, Japan
  and Europe to market these products
• Rely on product function, low prices and
  international distribution and marketing to
  promote their products
• Product life cycle and positioning
• PLC concept refers to the stages of a products
  life span in the marketplace
• Depend on how well the company can stimulate
  demand for the product
• The perception of the product type changes and
  the elements of the marketing mix are adjusted

52
Product management and development (XIV)

• PLC consists of 4 separate stages
• The first stage-Introduction
• First released onto the market
• Typically slow, aware of the product
• Inferior to their current brand or are waiting
  for others in their peer group to try the product
  first
• Products are minimal at this stage due to the
  high costs of product development, trials,
  promotion and distribution channel set-up
• Be long and protracted in Asian
• Lack of understanding of Asian consumer
  preferences and behavior may also slow the
  availability and acceptance pf the product
• The second stage- Growth
• Consumers accept the products and sales rise
  rapidly and profits follow
• Promotion related costs are offset by higher
  revenue

53
Product management and development (XV)

• Try and extend the PLC through improvements or
  additional features
• Competitors start to enter the market during this
  stage
• Firm must clearly differentiate the benefits of
  its product offering and communicate these to
  consumers
• The third stage-Maturity
• Sales reach their peak and level off
• Profits are highest early in this stage
• Steady revenue generated by sales and lower costs
  once the product has been established
• Offering against products from competing firms
  (lowering prices)
• Offering promotional deals or differentiating the
  product through minor modification
• Products have been available for years and merely
  being updated and improved
• The fourth stage-Decline
• Product and profits decrease

54
Product management and development (XVI)

• Product becomes a short-lived fad, or its style
  and features go out of fashion
• Product becomes obsolescent or replaced by a
  superior model
• Competitors supply rival models of the product,
  purchase have already done so
• Consumer behavior in response to the products
  entry, acceptance and maturity provides a
  rationale for the PLC concept
• Introductory stage are known as innovators
• Growth stage are known as early adopters
• Decline stage, the product becomes legitimized
  for the majority of the target segments who then
  decide to purchase
• Substitutes rise and price wars ensure, consumers
  move on to new products and alternative brands

55
Product management and development (XVII)

• Strategies for the PLC
• Introduction stage-skimming strategy
• High price level while it is still new and offers
  additional benefits over existing products
• Promotion is high, encourages more rapid
  acceptance and awareness
• Promotion is low, company recover some of the
  costs of the product development and introduction
• Willing to pay premium for product
• Introduction stage-penetration strategy
• Product is introduced at a low price to capture
  market share quickly
• Higher level of promotion, market already
  price-sensitive and awareness of the product is
  low
• Lower level of promotion, market id large enough
  to sell sufficient volume of the product
• Growth stage
• Sustain rapid sales growth for as long as
  possible, avoid the onset of the maturity stage
• Product involve improving quality and design
• Adding features to the product

56
Product management and development (XVIII)

• Introducing new models or products that
  complement the existing model
• Redesigns promotional materials or lowers prices
  to attract new customers
• Maturity stage
• Dominant players and by competition on the basis
  of price and new product attributes
• Selling based on their established brand and
  brand reputation
• For quality, value-for-money or service
• Smaller customer segments avoid head-on
  competition with the dominant market players
• Employ market and product expansion strategies
  during this stage
• Attempting to increase the volume of sales by
  attracting new customers in new segments or from
  competitors
• Increasing the purchase rate of existing
  customers or modifying the product features,
  style or performance
• Marketing mix elements is reviewed

57
Product management and development (XIX)

• Decline stage
• Need to address its position in the market for
  the product in question
• Decide on some type of exit or harvest strategy
• More profitable to drop the product than to
  continue to complete
• Decide the product is able to continue to
  generate sales
• Substantially curb expenditure on the product
  while maintaining sales levels
• The companys strengths versus those of the
  competitors and the potential return during the
  decline stage
• Product positioning
• Identified target markets, evaluated the
  companys strengths and weaknesses and those of
  competitors
• Firm needs to establish and clearly communicate
  the grounds on which the product is