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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.
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
