1.1.1. Product concepts
Most of the product concepts leamed in basic marketing are applicable in international marketing, too. Therefore, we can define the product as a bundle of attributes both tangible (physical attributes) and intangible (emotional attributes) that offer satisfaction to the consumer.
However, the product can be seen at different levels according ta the degree of incIusion of different physical or non-physical benefits. Figure no.1 presents the levels ofthe product and the type ofbenefits offered at each level. Cateora and Graham see a product concept; whatever the product is, as being formed ofthree components: a) the core component: incIuding the main functional features of the product that fulfiIs a basic need and offers a core benefit, such as design features and technical features, b) the packaging component that includes other elements such as styling, quality, packaging, brand name and c) the support
services component that refers to the services associated to the product: installation, instruction of use, repair and maintenance, warranties, spare parts a.s.o.
Kotler sees the product concept at three levels (that are assimilated with the components from Cateora’s model): core product, actual product and augmented product.
The core product fulfils a basic need and offers core benefits, the benefits that consumers attain when purchasing the good or the service. It incIudes aspects such as the product platform and the basic functional and design features of the product, as well as corresponding legal requirements.
The actual product offers usuaIly physical benefits and consists of styling, packaging, trademark, brand, quality and corresponding legal requirements.
Figure no.1 Levels of product and associated benefits
The augmented product usually offers benefits through services and includes aspects such as installation, instruction, delivery, warranty, after-sale services, credit facilities, repair and maintenance, spare parts availability and other related services.
Either if it deals with the domestic market or with foreign markets, the company should be aware that the consumer looks for benefits at aII three levels or in all three components of the product.
In international marketing, the company should identify the changes needed at each level in order to fit the market. The consumer when it acquires a product, sees it as a whole package incIuding aspects of a11three levels and therefore, producers should also decide what they are going to offer to consumers at each level.
At international level requirements at each level can be different as we will see in the following section.
1.1.2. The degree of adaptation/ standardization
One of the main decisions in international marketing is whether to adapt or standardize the product for different markets. Standardization means offering the same product in aII markets, while adaptation refers to complying ta local tastes and requirements and make changes ta the product ta satisfy local needs by offering different products in different markets.
Complete standardization is only an utopia, as even the most standardized products, (such as McDonald’s, Coca-Cola) known as global products did suffer adaptation in foreign markets. The issue is not if it is necessary or not to adapt, because there is always the case, but what is going to be the degree of adaptation required.
In order to decide over the degree of standardization/adaptation the company should start by looking at the factors that possibly favour standardization and those that possible favour adaptation and identify their presence in each company/market relationship. Table no.1 presents the main factors influencing both standardization/adaptation.