Product adaptation

3 elements of the product or service

Benefits

Attributes

The core productbenefit or

serviceImage Perceived value

Brand nameQuality

Features

PackagingSize and colour

variants

Design

After-sales service

Guarantees

Delivery

Installation

Performance

Marketingsupport services

StandardisationAdaptation

Adaptation

Fundamental QuestionsTo what extent are our products suitable for

international markets?

If we must change the product, what should these changes be?

International product life cycle

MarketD

Domesticmarket

Sales

Time

MarketAMarket

B

MarketC

International product strategies (Van Mesdag)

Sell What You have Got (SWYG)

Sell What people Actually Buy (SWAB)

Sell the same thing globally, disregarding national frontiers (GLOB)

Global Product Strategies

Extension—offering product virtually unchanged in markets outside of home country

Adaptation—changing elements of design, function, and packaging according to needs of different country markets

• Invention—developing new products for the world market

Product/communication strategies

Promotion

Product

Standard

Adapt

NewAdaptStandard

Straight Extension

One product, one message

PromotionAdaptation

only

ProductAdaptation

only

Dualadaptation

Productinvention

Source: Source: adapted from Keegan, 1995.

STRATEGIC ALTERNATIVES AVAILABLE

One product, One message worldwide

Product Extension-Communications Adaptation

Product Adaptation-Communications Extension

Dual Adaptation

Product Invention

Standardized product with same communications strategy across the globe. i.e Product Extension

This strategy is Cost effectiveAllows for greater economies of scaleRarely used for consumer type products

except soft drink and some luxury type goodsUsed mainly for industrial type products

2.Product Extension-Communications Adaptation

Use conditions are similar or identical but the product fulfills a different need or serves a different function.

Cost effective because communications adaptation is less expensive than the tailoring product to a local market.

Can be used for consumer type products E.g Motorcycles & Bicycles

Serve the purpose of recreation in U.S but provide basic transportation in many foreign countries.

3.Product Adaptation-Communications Extension

Changes made to the product, same communications strategy across the globe

To extend without changing the basic communication strategy developed for home market.

Assumes that the product will serve the same function in foreign markets under different use conditions.

Product formulations are changed without consumers knowing it

Electrical Appliances, Detergents

4. Dual Adaptation - Changes made to the product, changes made to communications strategy

When there is difference in environmental conditions of use and in the function which a product serves

Combination of marketing conditions of strategies 2and 3.

*Kellogg’s ‘dual adaptation’ for Indian market

5. Invention - Usually redesigning of an original product at a lower level of complexity.

Recognizes the socio-cultural and economic differences from country to country

Leads to more purchases as a result of the reinvention of the product

Standardization versus Adaptation

Global Standardization: standardization of products across markets and standardization of the marketing mix worldwide

Addresses needs of global consumers (homogeneous consumer groups sharing similar interests and product/ brand preferences)

Allows for global branding – using the same brand name, logo, image, and positioning everywhere in the world

Standardization versus Adaptation, Mandatory Adaptation:

Adapting products to local requirements so that they can legally and physically operate in the respective countries – for example: Left-hand driving in the United Kingdom

Local Non-Mandatory Adaptation: Adapting a product to better meet the needs of

the local market, or developing new brands for individual local markets, even though such adaptation is not required

Factors encouraging standardisation

Economies of scale production R&D Marketing

Reduced inventory costsReduced component costsCost of investmentReducing trade barriersWhere ‘made in’/‘designed by’ is important

Reasons for adaptation

Cultural factorsUsage factorsDiffering consumer purchasing powerLevel of local technical skillsLocal taxation policiesEffect of different market entry methodsLegal standardsTariffsTechnical SpecificationsClimate

How to Choose a Strategy

Two errors that management makes in choosing a strategyNIH (not invented here) syndrome means

managers ignore the advancements of subsidiaries overseas

Managers impose policies upon subsidiaries because they assume what is right for customers in one market is right in every market

10-18

Failure of New Product Development

• Tariff and non-tariff barriers• Subsidies given to local competitors• Cultural insensitivity• Poor planning• Lack of unique selling proposition• Product deficiencies• Top management approach