International Marketing of Products and Services - Coursework Example

International Marketing of Products and Services To what extent do the challenges facing international marketers of services differ from those facing marketers of international products? Justify your answer with relevant examples. Introduction While a simple answer to the question above would reflect on the nature of the product compared to the nature of the service being offered by international marketers, a deeper analysis shows that several important challenges exist beyond the surface. These challenges can be analyzed by examining how marketers have differentiated their products and services between markets and how companies have overcome the issues which arise when a product is being marketed with associated services. In the modern world, marketers are using the art in advertisements to attract an ever wider audience to their products and services. However, the physical features and the presence of a product brings its own challenges as compared to the services sector where things such as wealth management services or other finance services may be difficult to differentiate based on image alone. Marketing for both products and services seems to have the same purpose, i.e. to motivate and move people towards some form of action (Lee, 2000). In this respect, advertising may be a more difficult art form than painting or sculpture since it might be far easier for people to give off an emotion which costs them nothing rather than loosen their purse strings and spend money on something which they might even not need at all. Such marketing appeals can only be made when a tangible product is present but even a service can be marketed internationally and across cultures if the marketing message associated with the product or service is strong enough. The Message Perhaps the best example of messages which provide a symbiosis of both products and services come from the IT industry where computers, software, gadgets etc. may be the actual products while the repair and maintenance as well as technical support is the service part of the industry. In such situations, a company can take several different approaches but one example which stands out from amongst the rest is the marketing technique used by Apple computer which not only sells a product but also pushes the idea of the company as a unique brand. As a rule, Apple’s marketing frequently blurs the line between advertising and art and for years the company has been creating breakthrough advertisements in print, such as the ‘Think Different’ campaign, as well as video formats such as the ‘1984 commercial’. In fact, the first commercial which caused many art critics to sit up and take note was the 1984 big brother commercial which is still considered to be one of the best in terms of art direction and creative application of technology concepts. 1984 Scott (1991) explains the persuasive power of the 1984 commercial as well as the persuasive merits of the ad by taking a literary criticism approach to the video. The commercial itself can be described as a young female being chased by masked storm trooper like soldiers as she rushes past trudging workers wearing grey overalls with shaved heads. She then goes on to approach a massive screen where a big brother like figure is making a speech and she forcefully hurls a sledge hammer into the screen which causes a huge blast. A calm and smooth voice then announces that 1984 will not be like 1984 because of the Apple Macintosh (Scott, 1991). Here, Apple does not push the product or suggest a service but simply creates an image of the product and its associated value. This advertisement simply smashed every advertising convention known at the time since it only carried a minimal corporate identity, no message about the technical prowess of the computer, no mention of direct benefits to the individual, no mention of customer support, not even the price point of the item being offered (Scott, 1991). Simply put, as it was known in 1984, this ad could not even be considered advertising. However, if marketing is meant to motivate people then this approach certainly worked because when the Macintosh computer became available in the market three days after the airing of the ad, more than two hundred thousand people were waiting in lines across the world to put their money down to buy one (Scott, 1991). A critical analysis of the advertisement sounds eerily similar to a critical review which might be given to a film noir or to any other production work which has been highly acclaimed at the Sundance festival. Scott (1991) says that: “The theme of the commercial is one of individual action to prevent homogenizing tyranny and its form is a mirror of its theme. The spot communicates through an artful arrangement of images that has its own internal logic. The spot keeps the audience unbalanced and curious throughout the viewing, and thus open to affective experience through which it persuades (Scott, 1991, pg. 67).” The review goes on to use words like “rich symbolic imagery (Scott, 1991, pg. 67)” and further says that the commercial created an experience which was participatory in nature for the viewers and the experience altered dynamically from the starting scenes to the explosive finish. While the artistic value of the advertisement can not be denied, the business value must also be appreciated since it aired only once during the prime time viewing slot while making news headlines the very same night and was repeat broadcast by several channels around the world, totally free of cost to Apple. Creating an Image of the Product/Service The long lines which formed to buy the computer are also a testament to the ability of creating an image to sell a product and associated services to move people to action. With the creation of an image associated with the brand, the idea of something being a product or service becomes immaterial since the lines between them are blurred. Apple’s ‘Think Different’ Campaign was used across the world where once again, the company did not highlight any specific features of their product and did not even mention what product or service was on offer. The people used for the campaign are some of the most admired achievers in the world and come from all sorts of fields like government, business, sports, performing arts and human rights activism. A few examples are shown below reproduced by Elliot (1998) and include (in order) Jim Henson, Maria Callas, Thomas Edison and Jackie Robinson. Again, there is little product identification and only the logo of the company is presented to the viewer. The focus of the image remains on the person being revered. The campaign featured more than forty such individuals and the list includes names like Bob Dylan, Einstein, Ted Turner, Picasso, John Lennon and Yoko Ono, Muhammad Ali, Alfred Hitchcock, Miles Davis, Martin Luther King Jr., Amelia Earhart, Jim Henson, Rosa Parks, Frank Lloyd Wright and Gandhi. If winning an Emmy for this campaign gave the advertisements acceptance as art by the critics, the increased sales which Apple computer enjoyed after these ads were presented to the public show their acceptance of the idea of using an image to sell both products and services (Elliot, 1998). The same idea of image was used by Dell when it entered the Asian market as a supplier of computer equipment. While the products being sold by various computer equipment manufactures were marketed on the terms of features and price points, Dell came to the market with an image of reliability and customer support services for their products. This strategy is required to improve its international positioning. However the fresh marketing strategy is expected to take some time before their international services and marketing teams can build momentum for the company (Lee, 2006). The Fast Food Service & Big Mac Problem While image can be created positively for both a product and a service, a negative image or any negative impact on the image of the company can have a direct adverse affect on sales. For example, McDonald’s went through a crisis situation internationally, soon after the release of the documentary film Super Size Me. In the wake of the film, McDonald’s has also seen several lawsuits filed against themselves and other fast food related companies which have also had an impact on their sales (MacArthur, 2004). This set of lawsuits is similar to the ones which were filed against ‘Big Tobacco’ only this time around it is being called ‘Big Fat’ by the popular media. The people suing McDonalds say that while the company was aware of its products being harmful for the people, it never took any steps to warn people or even inform them of the dangers of consuming the fast food products and services offered by the company (Arndt and Prasso, 2001). Historically speaking, McDonald’s comes across as having followed the same lines as the tobacco companies which is a very bad situation for any company to be in. As the long term prospects of tobacco companies have been reduced due to their loss in legal terms, so do McDonald’s and other fast food companies face the possible disastrous consequences of the lawsuit. At the same time, their present situation is worsening in terms of public relations since quite a few environmentalists and health groups have made McDonalds a target for their angst and negative reactions (Arndt and Prasso, 2001). Thus the image of the company is tarnished and McDonald’s need to change the product it is offering while the service it offers remains the same. For example, they still offer the service of fast food but their food offerings have to be healthier if they wish to keep a positive image and continue their growth with the changes that are coming in society. The central problem for McDonald’s is not the service itself (although objections have been made to the fast food lifestyle) but the product which has been given a negative image. Marketing the service of fast food for McDonald’s is not a problem but the selling of high fat big burgers certainly is. McDonald’s own policies were outlined by their spokeswoman, Wendy Cook, who is also the VP for U.S. menu innovation and marketing and she said that the company had offered healthy choices on the menu and had been planning to take off super sized fries from their menus long before the movie came out (MacArthur, 2004). The fact that both those things happened after the release of the movie have a bearing on the marketing of the product as well as the services of McDonald’s. It is also a question of image since it does seem like McDonald’s reacted to the movie by changing its menu. Internationally as well, McDonald’s is facing legal and image related problems since in India there has been a lawsuit brought against McDonalds since it has been alleged that it used beef products in french fries (Arndt & Prasso, 2001). This situation is in addition to the problems which McDonald’s has had with organizations like Greenpeace in the UK and health food experts in America (MacGillivray, 1997). These problems could be compounded by government regulation against McDonald’s or any other scientific discovery which sheds a negative light on the products sold by the company. Therefore, for a company like McDonald’s separating the product from the service is impossible and while they can market their services independently from their products, a tarnished image will hurt the sales of both and the battle against the image will be fought in the presses. If the company has to engage the press, it can get very dirty very quickly since McDonald’s is more than a fast food chain. It is often considered the symbol of globalization and has been given the burnt of responsibility for making menial workers out of citizens in America. Nearly one in eight American workers have worked at McDonald’s at some point in their life therefore the idea of McJob, McWork and other such words are part of the American common culture (Ecologist, 2004). It can be impossible to fight the press or go against the common culture on every issue therefore the company might have to pick its battles carefully while it is marketing services or products. Pushing Services over Products Internationally, it might be easier for companies to retain customers and ensure repeat buyers if it conforms to a global agenda of pushing their services or products and only selecting one to focus on while they are sending out an integrated marketing message. For example, Mazda has focused on allied automobile services while selling its automobiles in the UK to business customers. While private individuals are still solicited based on features and prices, business customers are brought on board by offering them services which a busy business owner could certainly appreciate. The products and services offered by Mazda are for a specific section of the market since Mazda is pushing the system of fleet sales under which all the cars operated by a company come from a single dealer and a single manufacturer. This is a not a recent undertaking for Mazda since their customer support and business services centres have been active for many years. However, the personal service and the relationship which is to be established between the business, the dealer and the manufacturer is something which is very new in the competitive car industry (Cochran, 2006). The steps taken by Mazda represent the best elements of B2B relationship management where the origins of relationship marketing for services come from (Stone & Woodcock, 1995). Instead of merely attracting businesses and clients to the company, Mazda is looking for ways to continue a business relationship and to make sure that fleet replacement plans and automobile service plans do not turn into automobile manufacturer change plans. While both short and longer term marketing related plans could be used in this situation (Parvatiyar & Sheth, 2001), Mazda is taking a long term approach to relationship marketing towards corporate clients with the addition of fleet service contracts and replacement parts plan for cars and trucks bought by their clients at discount rates which offer financial advantages to their business clients (Mazda, 2005). This means that the product is given a back seat while the services provided by Mazda dealers are brought into a sharper focus. The process begins once a business has decided to switch its fleet to Mazda or to establish a new fleet of cars from a Mazda dealership. The company steps in with personal service levels which are very important for the people responsible for running the business as well as keeping the fleet running. For fleet customers, Mazda offers a special customer relationship counter as well as lounge facilities for business customers at the dealership where business clients are provided internet access and plasma screens while their cars are being serviced or just taken for a quick wash (Mazda, 2005). Such relationships and amenities provided to the business clients are important for the company since they help retain clients and earn repeat business for products (Harker and Esan, 2006). Retention becomes essential in a market where the buyer has a number of choices available to him/her and this is certainly applicable in the automobile industry where every major company produces cars for nearly every segment of the market (Tenser, 2006). Ford or Honda could easily supply the same types of cars, trucks, vans, runabouts and luxury models that are produced by Mazda therefore the selection decision remains with the buyer. As Mazda offers a product where there is an ongoing need for service based on the mileage done by the car, the concept of giving service priority over a largely comparable product is enforced since good service will mean continued business while bad service could end up losing the company a lot of money (Mercer, 1996). Additionally, there is also the need for replacement parts as well as replacement cars when the company feels that one or more of the cars in a fleet have lived out their usefulness. The combination of defensive and offensive plays made by Mazda have firmly established their system of relationship marketing since Fornell and Wernerfet (1987) confirmed that these two systems are necessary for any international marketing campaign. In defensive terms, Mazda is providing their clients with top quality service as well as business amenities which would be very acceptable to clients coming from SMEs. The defensive tactics would reduce the chances of customers going away to other companies by giving them something more that the competition (Lindsay, 2006). The offensive strategy for Mazda is simply to offer a comparison of how well they and their dealers treat business customers as compared to other companies offering similar services. This combination of defensive and offensive marketing makes up the marketing mix which is the basis of the marketing plan which Mazda thinks would be most appealing. Given that the services include seven working days for car servicing and free car washes for the life of the car, quite a few businesses would be interested in such positions for their fleet. This means that Mazda accepts the customer’s schedule to be the primary mover for the service requirements for their cars rather than to make the customers accept Mazda’s or the dealers’ terms for when the cars could be serviced or repaired (Mazda, 2005). The company has declared that service, especially personalised service is very important for their SME business customers by saying: “Personal service, the introduction of innovative business concepts and the ability to ensure service, maintenance and repair work is retained within franchises are all crucial to corporate sales success, with Mazda aiming to expand relations with small and medium enterprises (Mazda, 2005, Pg. 1).” Of course such a declaration certainly means that companies like Mazda have to keep their word when it comes to service expectations of the clients. Without meeting and exceeding the customers’ expectations time after time, the company can not expect retention figures to be where they should be (Egan, 2001). The product may be comparable to similarly priced cars in the automobile market but the focus on services gives Mazda the advantage it needs. It is understood that a continued relationship between the targeted client and the company itself can be sustained if the customer gets additional value from the relationship (Parvatiyar & Sheth, 2001). Most of the cars manufactured today can be serviced at nearly the same level from any licensed automobile workshop. Therefore unless Mazda provides additional benefits to their clients, they could easily take their business elsewhere (Cochran, 2006). The approach of pushing services over the product itself has given Mazda significant rewards and the results obtained since the program was started have been appreciated by the industry analysts as well as the company members. Mazda Motors has more than 150 dealerships across the UK and all dealerships report rising figures for fleet related sales. Mazda reports that: Last year [2004] fleet sales were up almost 50 per cent on 2003 levels and in 2005 Mazda expects fleet sales to total about 18,000 units [this figure was exceeded]- around a third of total sales - and approximately 2,000 registrations up on last years corporate business (Mazda, 2005, Pg. 1).” It must be noted that before taking this initiative and focusing on marketing towards businesses, Mazda only had 12 fleet specialist dealers across the country and their fleet sales were only a fraction of their total sales. By getting more dealers of Mazda to join into the fleet sales program, Mazda not only improved their own business, but also expanded their fleet dealership network to places where they previously could not penetrate. The dealers also have a lot to gain since by becoming fleet dealers, they increase their reputation in the area to a great extent (Mazda, 2005). Conclusion Internationally as well as in regional terms, the selling of products and services differs to some extent but the marketing principles behind both products and services remain more or less the same. Products and services can gain improved market shares and become important to individuals on the basis of features, price as well as other factors but the more important factors which can give a product or service a positive edge over the competition vary from market to market and from time to time. In some cases, it is the image of the product which is more important than the actual features and in others it is the associated services which become more important. However, if the rules of marketing, novelty or even battling with public relations management techniques are carefully applied, there is no reason that a company should not be able to succeed in being the market leader regardless of the product it is selling or the service it is offering. 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