Chapter 17 Outline

Product Attributes

A product can be viewed as a bundle of attributes.⁷ For example, the attributes that make up a car include power, design, quality, performance, fuel consumption, and comfort; the attributes of a hamburger include taste, texture, and size; a hotel's attributes include atmosphere, quality, comfort, and service. Products sell well when their attributes match consumer needs (and when their prices are appropriate). BMW cars sell well to people who have high needs for luxury, quality, and performance, precisely because BMW builds those attributes into its cars. If consumer needs were the same the world over, a firm could simply sell the same product worldwide. However, consumer needs vary from country to country depending on culture and the level of economic development. A firm's ability to sell the same product worldwide is further constrained by countries' differing product standards. In this section, we review each of these issues and discuss how they influence product attributes.

Cultural Differences

We discussed countries' cultural differences in Chapter 3. Countries differ along a whole range of dimensions, including social structure, language, religion, and education. And as alluded to in Chapter 2, these differences have important implications for marketing strategy. For example, "hamburgers" do not sell well in Islamic countries, where the consumption of ham is forbidden by Islamic law. The most important aspect of cultural differences is probably the impact of tradition. Tradition is particularly important in foodstuffs and beverages. For example, reflecting differences in traditional eating habits, the Findus frozen food division of Nestle, the Swiss food giant, markets fish cakes and fish fingers in Great Britain, but beef bourguignon and coq au vin in France and vitèllo con funghi and braviola in Italy. In addition to its normal range of products, Coca-Cola in Japan markets Georgia, a cold coffee in a can, and Aquarius, a tonic drink, which appeal to traditional Japanese tastes.

For historical and idiosyncratic reasons, a range of other cultural differences exist between countries. For example, scent preferences differ from one country to another. S. C. Johnson Wax, a manufacturer of waxes and polishes, encountered resistance to its lemon-scented Pledge furniture polish among older consumers in Japan. Careful market research revealed that the polish smelled similar to a latrine disinfectant used widely in Japan in the 1940s. Sales rose sharply after the scent was adjusted.⁸ In another example, Cheetos, the bright orange and cheesy-tasting snack from PepsiCo's Frito-Lay unit, do not have a cheese taste in China. Chinese consumers generally do not like the taste of cheese because it has never been part of traditional cuisine and because many Chinese are lactose-intolerant.⁹

There is some evidence of the trends Levitt talked about. Tastes and preferences are becoming more cosmopolitan. Coffee is gaining ground against tea in Japan and Great Britain, while American-style frozen dinners have become popular in Europe (with some fine-tuning to local tastes). Taking advantage of these trends, Nestle has found that it can market its instant coffee, spaghetti bolognese, and Lean Cuisine frozen dinners in essentially the same manner in both North America and Western Europe. However, there is no market for Lean Cuisine dinners in most of the rest of the world, and there may never be. A calorie-conscious Asian is difficult to find. Although some cultural convergence has occurred, particularly among the advanced industrial nations of North America and Western Europe, Levitt's global culture is still a long way off.

Economic Differences

Just as important as differences in culture are differences in the level of economic development. We discussed the extent of country differences in economic development in Chapter 2. Consumer behavior is influenced by the level of economic development of a country. Firms based in highly developed countries such as the United States tend to build a lot of extra performance attributes into their products. These extra attributes are not usually demanded by consumers in less developed nations, where the preference is for more basic products. Thus, cars sold in less developed nations typically lack many of the features found in the West, such as air-conditioning, power steering, power windows, radios, and cassette players. For most consumer durables, product reliability may be a more important attribute in less developed nations, where such a purchase may account for a major proportion of a consumer's income, than it is in advanced nations.

Contrary to Levitt's suggestions, consumers in the most developed countries are often not willing to sacrifice their preferred attributes for lower prices. Consumers in the most advanced countries often shun globally standardized products that have been developed with the lowest common denominator in mind. They are willing to pay more for products that have additional features and attributes customized to their tastes and preferences. For example, demand for top-of-the-line four-wheel-drive sport utility vehicles, such as Chrysler's Jeep, Ford's Explorer, and Toyota's Land Cruiser, is almost totally restricted to the United States. This is due to a combination of factors, including the high income level of US consumers, the country's vast distances, the relatively low cost of gasoline, and the culturally grounded "outdoor" theme of American life.

Product and Technical Standards

Even with the forces that are creating some convergence of consumer tastes and preferences among advanced, industrialized nations, Levitt's vision of global markets may still be a long way off because of national differences in product and technological standards.

Differing government-mandated product standards can rule out mass production and marketing of a standardized product. For example, Caterpillar, the US construction equipment firm, manufactures backhoe-loaders for all of Europe in Great Britain. These tractor-type machines have a bucket in front and a digger at the back. Several special parts must be built into backhoe-loaders that will be sold in Germany: a separate brake attached to the rear axle, a special locking mechanism on the backhoe operating valve, specially positioned valves in the steering system, and a lock on the bucket for traveling. These extras account for 5 percent of the total cost of the product in Germany.¹⁰ The European Union is trying to harmonize such divergent product standards among its member nations. If the EU is successful, the need to customize products will be reduced within the boundaries of the EU.

Differences in technical standards also constrain the globalization of markets. Some of these differences result from idiosyncratic decisions made long ago, rather than from government actions, but their long-term effects are nonetheless profound. For example, video equipment manufactured for sale in the United States will not play videotapes recorded on equipment manufactured for sale in Great Britain, Germany, and France (and vice versa). Different technical standards for frequency of television signals emerged in the 1950s that require television and video equipment to be customized to prevailing standards. RCA stumbled in the 1970s when it failed to account for this in its marketing of TVs in Asia. Although several Asian countries adopted the US standard, Singapore, Hong Kong, and Malaysia adopted the British standard. People who bought RCA TVs in those countries could receive a picture but no sound!¹¹