Marketers should carefully consider public policy issues and regulations regarding acquiring or dropping products, patent protection, product quality and safety, and product warranties.

Regarding new products, the government may prevent companies from adding products through acquisitions if the effect threatens to lessen competition. Companies dropping products must be aware that they have legal obligations, written or implied, to their suppliers, dealers, and customers who have a stake in the dropped product. Companies must also obey U.S. patent laws when developing new products. A company cannot make its product illegally similar to another company’s established product.

Manufacturers must comply with specific laws regarding product quality and safety. The Federal Food, Drug, and Cosmetic Act protects consumers from unsafe and adulterated food, drugs, and cosmetics. Various acts provide for the inspection of sanitary conditions in the meat- and poultry-processing industries. Safety legislation has been passed to regulate fabrics, chemical substances, automobiles, toys, and drugs and poisons. The Consumer Product Safety Act of 1972 established the Consumer Product Safety Commission, which has the authority to ban or seize potentially harmful products and set severe penalties for violation of the law.

If consumers have been injured by a product with a defective design, they can sue manufacturers or dealers. A recent survey of manufacturing companies found that product liability was the second-largest litigation concern, behind only labor and employment matters. Tens of thousands of product liability suits are now tried in U.S. district courts each year. Although manufacturers are found to be at fault in only a small percentage of all product liability cases, when they are found guilty, awards can run into the tens or even hundreds of millions of dollars. Class-action suits can run into the billions. For example, after it recalled 11 million vehicles for acceleration pedal-related issues, Toyota faced more than 100 class-action and individual lawsuits and ended up paying a $1.6 billion settlement to compensate owners for financial losses associated with the defect. And GM has so far paid more than $2 billion in fines and settlements over a faulty ignition switches that caused the deaths of more than 120 drivers.26

This litigation phenomenon has resulted in huge increases in product liability insurance premiums, causing big problems in some industries. Some companies pass these higher rates along to consumers by raising prices. Others are forced to discontinue high-risk product lines. Some companies are now appointing product stewards, whose job is to protect consumers from harm and the company from liability by proactively ferreting out potential product problems.

International product and services marketers face special challenges. First, they must figure out what products and services to introduce and in which countries. Then they must decide how much to standardize or adapt their products and services for world markets.

On the one hand, companies would like to standardize their offerings. Standardization helps a company develop a consistent worldwide image. It also lowers the product design, manufacturing, and marketing costs of offering a large variety of products. On the other hand, markets and consumers around the world differ widely. Companies must usually respond to these differences by adapting their product offerings.

For example, McDonald’s operates in more than 100 countries, with sometimes widely varying local food preferences. So although you’ll find its signature burgers and fries in most locations around the world, the chain has added menu items that meet the unique taste buds of customers in local markets. McDonald’s serves salmon burgers in Norway, mashed-potato burgers in China, shrimp burgers in Japan, a Samurai Pork Burger in Thailand, chicken porridge in Malaysia, and Spam and eggs in Hawaii. In a German McDonald’s, you’ll find the Nürnburger (three large bratwurst on a soft roll with lots of mustard, of course); in Israel, there’s the McFalafel (chickpea fritters, tomatoes, cucumber, and cheese topped with tahini and wrapped in lafa). And menus in Turkey feature a chocolate orange fried pie (Brazil adds banana, Egypt taro, and Hawaii pineapple).

In many major global markets, McDonald’s adapts more than just its menu. It also adjusts its restaurant design and operations. For example, McDonald’s France has redefined itself as a French company that adapts to the needs and preferences of French consumers:27

“France—the land of haute cuisine, fine wine, and cheese—would be the last place you would expect to find a thriving [McDonald’s],” opines one observer. Yet the fast-food giant has turned France into its second-most profitable world market. Although a McDonald’s in Paris might at first seem a lot like one in Chicago, McDonald’s has carefully adapted its French operations to the preferences of local customers. At the most basic level, although a majority of revenues still come from burgers and fries, McDonald’s France has changed its menu to please the French palate. For instance, it offers up burgers with French cheeses such as chevre, cantel, and bleu, topped off with whole-grain French mustard sauce. And French consumers love baguettes, so McDonald’s bakes them fresh in its restaurants and sells them in oh-so-French McBaguette sandwiches.

But perhaps the biggest difference isn’t in the food, but in the design of the restaurants themselves, which have been adapted to suit French lifestyles. For example, French meal times tend to be longer, with more food consumed per sitting. So McDonald’s has refined its restaurant interiors to create a comfortable, welcoming environment where customers want to linger and perhaps order an additional coffee or dessert. McDonald’s even provides table-side service. As a result, the average French McDonald’s customer spends about four times what an American customer spends per visit.

Service marketers also face special challenges when going global. Some service industries have a long history of international operations. For example, the commercial banking industry was one of the first to grow internationally. Banks had to provide global services to meet the foreign exchange and credit needs of their home-country clients who wanted to sell overseas. In recent years, many banks have become truly global. Germany’s Deutsche Bank, for example, serves more than 28 million customers through 2,700 branches in more than 70 countries. For its clients around the world who wish to grow globally, Deutsche Bank can raise money not only in Frankfurt but also in Zurich, London, Paris, Tokyo, and Moscow.28

Retailers are among the latest service businesses to go global. As their home markets become saturated, American retailers such as Walmart, Office Depot, and Saks Fifth Avenue are expanding into faster-growing markets abroad. For example, Walmart now serves 260 million customers weekly in 28 countries; its international division’s sales account for nearly 29 percent of total sales. Foreign retailers are making similar moves. Asian shoppers can now buy American products in French-owned Carrefour stores. Carrefour—the world’s sixth-largest retailer behind the likes of Walmart, Costco, Kroger, Germany’s Schwarz, and the UK’s Tesco—now operates more than 10,000 stores in 34 countries. It is the leading retailer in Europe, Brazil, and Argentina and the largest foreign retailer in China.29

The trend toward growth of global service companies will continue, especially in banking, airlines, telecommunications, and professional services. Today, service firms are no longer simply following their manufacturing customers. Instead, they are taking the lead in international expansion.