QUESTIONS 1.

What are the requirements that must be met so that a commodity can effectively be transformed into a branded product? In general, these prerequisites should be met: (1) quality and quantity consistency, (2) the possibility of product differentiation, and (3) the degree of importance consumers place on the product attribute to be differentiated. 2. Explain the "least dependent person" hypothesis and its branding implications. According to the "least dependent person" hypothesis, the stronger party is the one with resources and alternatives, and that party can demand more because it needs the other party less. The least dependent person is thus able to insist on having its name on the product. 3. When is it appropriate to use multiple brands in (a) the same market and (b) several markets/countries? It is appropriate to use multiple brands in the same market when a company wants to segment a heterogeneous market. The strategy is also suitable when the company wants to trade either up or down without hurting the firm's main business since any negative connotation can be avoided. Furthermore, multiple brands create employees' excitement and competitive spirits while gaining more retail shelf space. Instead of having one worldwide brand, it is sometimes desirable to have multiple local brands in several countries. The reasons include: legal necessity, pronunciation difficulty, local identification and meaningfulness, acquisition of a local brand, and production and marketing flexibility. 4. What are the characteristics of a good international brand name? An international brand name should reflect the desired product image. It should be unique or distinctive while rendering itself to graphic design possibilities. Special attention must be given to pronunciation, making sure that the languages have the brand's alphabets. Furthermore, the name must be capable of gaining registration and protection. 5. Explain these legal requirements related to branding: (a) registration, (b) registration eligibility, (c) use, (d) renewal, and (e) generic trademark. Except for the United States, registration is not optional in most countries. To gain protection, a trademark must be registered. Before registration is allowed, the registration eligibility must be examined. To be eligible, the mark must be distinctive or capable of being distinctive. Use of the mark is required for the registration to remain valid. Periodic renewal of the registration is necessary to prevent the loss of rights. In the case of a generic trademark, it is the mark which is identified with the product itself rather than the marketer of the product, and a loss of trademark can result.

6. Distinguish colorable imitation from counterfeit trademark. A colorable imitation is a mark so similar as to be confused with a registered mark, but it can enter the United States as long as the objectionable mark is removed. A counterfeit trademark is basically indistinguishable from a registered trademark, and the Customs Reform and Simplification Act allows the seizure as well as forfeiture to the government of any articles bearing a counterfeit trademark. 7. Cite the factors that may force a company to modify its package for overseas markets. Discuss both mandatory and optional modification. A package change is mandatory in the case of government regulations. These regulations specify sizes, types, labeling, etc. A certain language may be required, and disclosure of product information may be needed. In the case of optional modification, it may have to be undertaken for marketing impact or for facilitating marketing activities. Local use conditions and cultural factors may create preference for particular symbols, styles, colors, and sizes of package.

DISCUSSION ASSIGNMENTS AND MINICASES 1. Should farmers brand their exported commodities (e.g., soybean, corn, beef)? Soybean, corn, and beef are commodities. They are not differentiated by brands but rather by standardized grades. As such, the demand is strictly a function of price. It will be difficult to transform them into differentiated products (unless some unique, meaningful attributes can be found). Any attempt on branding or any promotional effort to support a brand is, more likely than not, unnecessary, costly, and ineffective. 2. Some retailers (e.g., Sears) and manufacturers (e.g., General Motors) place their trademarks on products actually made by foreign suppliers. Discuss the rationale for these actions by these firms. There are several reasons why U.S. firms place their trademarks on products made by foreign firms. First, they may be able to create a unique product by bundling or unbundling product attributes. Second, the strategy guarantees that U.S. firms cannot be bypassed by their suppliers. Third, they can avoid fixed production costs. Finally, the strategy offers these firms brand loyalty, bargaining power, and price. Foreign manufacturers also have their own reasons for agreeing to place other firms' brands on the products. One benefit is the ease in gaining market entry and dealers' acceptance which may allow a larger market share overall while contributing to offset fixed costs. Another

advantage is that there are no promotional headaches and expenses. Finally, the strategy prevents other competitors from making this same product for these customers. 3. Discuss how certain English letters, prefixes, suffixes, syllables, or words create pronunciation difficulties for those whose native language is not English. Many languages do not have all the alphabets. The Spanish language does not include the letter w, while the Italian language has no j, k, w, x, or y. The letter z is pronounced zed at places influenced by the British education system. Any prefix, suffix, or word containing such letters as ph, gh, ch, and sh invites difficulty because of the possibility of varying pronunciation. People in many countries do not make any distinction, as far as pronunciation is concerned, for the following pairs: v and w; z and s; c and z; and ch and sh. A similar lack of distinction often exists with the trio of j, g, and y. The letter c can be pronounced like either an s or a k. The letter y also poses some problems since it can sound like an e at one time and an i at another time. 4. Is Hyundai a good name to use for an international brand? On what do you base your evaluation? In its favor is the fact that the Hyundai is short and can be registered. Overall, however, Hyundai is not a good name to use for an international brand. First, it does not suggest product benefits. Second, unlike Japanese names which often imply quality, the Hyundai name is associated with Korea whose products are still struggling to gain respectability. The most serious problem is that Hyundai is not easy to pronounce. In Asia, the pronunciation is Hoon-di. In the United States, the company chose to facilitate the pronunciation by rhyming it with Sunday, creating pronunciation inconsistency. In any case, Hyundai, in spite of its name, was a success in the United States--at least at the beginning. It is thus important to keep in mind that a clever name cannot overcome a product's inherent weaknesses but that a good product which satisfies consumer needs can overcome the limitations of its name. 5. Go to the soft drink section of a supermarket. How many different types of softdrink packages are there (in terms of size, form, etc.)? Should any of them be modified for overseas markets? In the United States, soft drinks are available in a great variety of forms and sizes. The sizes are 8 oz., 12 oz., 16 oz., 32 oz., 2-liter, etc. They are available in cans and bottles. The cans are usually made of aluminum but are also available as 2-piece or 3-piece steel cans. The bottles are made of either glass or plastic. Some of the containers require deposit returns while others are disposable. For LDCs, many of such containers are wasteful. Disposable containers are expensive and have no secondary use. Smaller- sized containers are relatively more expensive.

It is a good idea to simplify inventory and avoid consumer confusion by reducing the number of sizes and styles of containers in LDCs while stressing economy and function. Still it must be pointed out that, with the growth of the middle class in many countries, the containers which once were luxuries have become more acceptable. Cans of cola, in spite of being more expensive than larger-sized bottles, have gained acceptance. In LDCs, a can of soft drink is a status symbol.