Global Product Strategies

RAYMOND R. KOH

Global Product Strategies

Local and International Environment

Competitive Situation

Product Strategies

Firms Internal Situation

Customer Needs & Price Elasticity

RAYMOND R. KOH

What Is a Product ?
Product: A bundle of attributes The Total Product
Tangible attributes: materials, size, weight, design, packaging, performance, comfort Intangibles: brand image, styling, other benefits (installation, delivery, credit, warranty, after-sale service, return policy)

RAYMOND R. KOH

Product Related Global Drivers

Demand Drivers
Higher expectations More information Higher switching costs Full-service expectations

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Product Related Global Drivers

Supply Drivers
Fast-paced innovations Frequent product modifications Manufacturing rationalization Outsourcing coordination Strategic Alliances

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Global Product Decisions

Existing Products
Product phase-out Product modification Product introduction into new markets Product performance management

New Product
Product development Product introduction Product performance management
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Global Product Development

Standardization- developing same product for multiple countries Premise-- consumes share some common values, beliefs, and consumption patterns Advantages: economies of scale and scope, price competitiveness, uniform image
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Global Product Development

Product Adaptation- modifying product
to reflect characteristics of a market Premise-- consumers are not the same Advantages: improved fit between product and consumer, expanded penetration

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Global Product Development

Mandatory product adaptations
Governmental regulations Technological considerations (e.g., voltage, infrastructure) Cultural imperatives - is it acceptable to consumers Measurement standards: volume, length, weight, quantity

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A Testable Framework of Product and Promotion Adaptation

Product and Industry
Technology Orientation of Industry Cultural Specificity of Product

Product Uniqueness

Type of Product

EXPORT MARKET COMPANY

Firms International Experience Product Adaptation - Upon Entry - After Entry Product Adaptation - Upon Entry Promotion Adaptation - After Entry - Positioning Promotion Adaptation - Packaging/Labeling Positioning - Promotional Approachh Packaging/Labeling
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Similarity of Legal Regulations

Export Sales Goal for the Venture

Competitiveness Of Export Market

Entry Scope

Product Familiarity Of Export Customers

Source: S.T. Cavusgil, Shaoming Zou, and G.M. Naidu. Product and Promotion Adaptation in Export Venturs: An Empirical Investigation, Journal of International Business Studies 24, no 3, (1993,485.

A Framework to Integrate Markets, Platforms and Competencies

Markets Segments 1 through N ...

Tiers of PriceT Performance 1 through N .

Derivative Products or Services

with Development Time/Cost Efficiency and Attractive Price-Performance Positioning

Product or Service Platform Subsystem A

Interface i.n

Subsystem C

Subsystem B
Commondesign Design Rules and Tools Common Rules and Tools

Competencies

Market Insights

Product Technologies and Design Processes

Production Processes and Technologies RAYMOND R. KOH

Organizational Capabilities and Infrastructure

Source: Mark Meyer, personal communication

Globalizing Palmolive Soap

Combination of competitive packages fragrances shapes

25 20 15 10 5 0

After Before

Shapes

Fragrances
RAYMOND R. KOH

Packages

The View from Toyota

Our global strategy used to center on world cars, which we would modify slightly to accommodate demand in different markets. Today our focus is shifting to models that we develop and manufacture especially for selected regional markets.

RAYMOND R. KOH

The View from Honda

We are the most international of the Japanese companies. At the moment we are the most diversified, and we will be more diversified in the future. Still, I think it would be very hard to build a one-type world car. In the end, I dont think it would be very efficient.
---Nobuhiko Kawamoto President and CEO, Honda Motor Company

RAYMOND R. KOH

Basic Product Concepts

Local Products Regional Products Global Products

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Global Product Issues

Country Customer Needs Competition Marketing Infrastructure Internal Resources
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Region

Global

Global Product Issues

Country Segmenting Region Global

Targeting Positioning

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Brands Global brand Tiered branding Cobranding Brand extensions

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Brand Positioning
Perceived fit between a particular product offering and the needs of target market Positioning is defined relative to:
competitive offerings consumer needs

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Brand Positioning
Physical Positioning How a firms product compares to the competitions on some set of objective physical characteristics Perceptual Positioning How a firms product compares to the competitions on some set of subjective characteristics

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Positioning Strategy
Attribute or Benefit Quality and Price Use or User

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Brand Equity BMW Coke Cartier Best engineered Fun and excitement Quality

Corporate Branding
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Product/Brand Strategic Alternatives

Brand Different Same

Different Product Same

Local

Transnational

Multinational

Global

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Global Brands Positioning

Local Market Segment Universal Unique Uniform Positioning Adapted

Nike Volvo

IKEA Levis

RAYMOND R. KOH

Thank You!!!

RAYMOND R. KOH