Global Marketing

Product Decision
Victoria Joyce Noel Judge

Sharon Kilgannon
Carla Magliocco

Standardisation Vs Adaptation

In international markets, success depends on satisfying the market demands. The product or service must be suitable and acceptable for its purpose.

According to Doole & Lowe (1999, p.296), The main issue for a company about to commence marketing internationally, is to assess the suitability of the existing products for international markets. Product policy abroad: firm must decide which aspects of a product need to be adapted and which can be standardised.

Standardisation Vs Adaptation

Standardisation policy: offering a uniform version of a product in all of its foreign markets.

Adaptation policy: offering a product to targeted foreign consumers altered to specific tastes, preferences and needs. Adaptation can concern all the characteristics of the product. Decision between standardisation and adaptation is not mutually exclusive rather it is a matter of degree
A certain degree of adaptation of a product is required in international markets.

Standardisation Vs Adaptation

McDonalds example: Pork in India!

Advantages to pursuing a standardised approach: cost economies, a consistent brand image and simplification of planning and control.

Standardising a product can ultimately lead to failure.

Main advantage of an adaptation policy is probability that sales and revenue will be increased due to appropriateness to the specific needs of the markets. The major drawback is the complex organisation and implementation issues of a product adaptation policy in all foreign markets. Ultimately, the individual company will decide

Product Standards

Global competition is fierce and companies are looking for new ways to differentiate themselves from competitors Using product standards as a means of differentiating their product offering
In Europe and worldwide, the ISO 9000 certification is a mark of superior quality.

Product Standards

The ISO 9000 is awarded where products are produced using certified manufacturing procedures eliminating product quality variation. The ISO 9000 is seen as a global standard made up of five sub standards. Terpstra and Sarathy (1997) suggest, quality provides an edge; corporations should strive to obtain quality standards such as ISO 9000, as these product standards are increasingly being sought worldwide.

Green Marketing

Green marketing is a term used to identify concern with the environmental consequences of a variety of marketing activities (Cateora & Graham, 2002). Consumers take environmental issues into concern when they buy, consume or dispose of products

Green Marketing
Alliances provide 5 benefits to marketers
1.

They increase consumer confidence in green products and their claim

2.

They provide firms with access to environmental information - support and advice
They give the marketer access to new markets - have an extensive support base

3.

4.

They provide positive publicity and reduce public criticism

They educate consumers about key environmental issues for the firm and its products - valuable sources of educational information and material.

5.

Product Development
Eleven Critical Success Factors
1.
2. 3. 4.

Offers a unique, superior product value to the customer

A strong market orientation Incorporating international orientation in product The right organisational structure

5.

The support of top management

Cooper (2002)

Product Development
6.
7.

Leveraging core competencies

Projects aimed attractive markets do better

8. 9.

Focusing on a few projects Resources must be in place to implement the projected plan

10. Speed at developing products

11. High quality, disciplined and systematic new product process

Cooper (2002)

Key Authours
Product Packaging Development
Terpstra & Sarathy (1997) Cooper (2002; 1999; 1998) Doole & Sarathy Lowe (2001) Terpstra (1997)

R&D Management
Terpstra & Sarathy (1997)
Jeannet & Hennessey (2001)

Jeannet && Hennessey (2001) Doole Lowe (2001)

Developing International Service Strategies

A service is an activity which has some element of intangibility associated with it which involves some interaction with customers or with property in their possession, and does not result in a transfer of ownership. A change in condition may occur and production of the service may or may not be closely associated with a physical product
Characteristics: Intangibility, Inseparability, Perishability, Variability Pricing & Uniformity difficulties

Developing International Service Strategies

Barriers to Global Markets
1)

Protectionism

2)

Restrictions on Transborder Data Flows

Protection of Intellectual Property Cultural barriers and adaptation

3)

4)

The Product Life - Cycle

Levels of the cycle

Life cycles for different products of the firm Life cycles for different countries International product lifecycle

Strategic Options
Product improvements Repositioning of the product Increase the reach of the product to new users Promote more frequent use of the product Promote new uses of the product

Branding Decisions
Developing new products Degrees of product newness Brand vs. No brand Private label vs. Manufacturers own brand Co-branding vs. Ingredient branding Single brand vs. Multiple brands Local brand vs. Global brand

Product Growth Strategies

Acquisitions and divestments

Product line diversification Joint ventures, licensing and wholly owned foreign operations Franchising
Relatively fast and easy access to markets Fit between franchise concept and foreign market International issues in franchising

Product & Service Positioning

Positioning Strategies
Attribute or benefit Quality vs. price Use/user of the product High-tech positioning High-touch positioning

Hollenson - Attributes - Benefits Johansson & Thorelli - Perceptual Map

Country of Origin Effect

any influence that the country of manufacture, assembly, or design has on a consumers positive or negative perception of a product (Cateora & Graham, 2002, p.369) Stereotypes positive or negative

Significant influence on product positioning

Adapt positioning from country to country

Market Entry

Terpstra & Sarathy (1997)

Global strategic variables Transaction specific variables Environmental variables

Unrealised market potential Competitive audit Level of Government involvement Risk evaluation

Conclusion

International product decisions are wide-ranging and complex

Extensive research needs to be undertaken before

entering a new market