Chapter 13 AND 14 INTERNATIONAL PRODUCT DECISIONS

PRODUCT COMPONENTS
SUPPORT SERVICES COMPONENT PACKAGING COMPONENT Deliveries Price Quality Warranty

Repair and maintenance

Trademark Installation Brand name Instructions

CORE COMPONENT
Product platform Design features Functional features Legal

Package

Spare parts

Styling
Other related services

S-A MODEL
Planning involves 4 Ps Standardization Adaptation Debate and Continuum
Standardization_____________________Adaptation Product Price Promotion Distribution Planning 5______4______3______2______1 5______4______3______2______1 5______4______3______2______1 5______4______3______2______1 5______4______3______2______1

Factors favoring Standardization or Adaptation

GLOBAL PRODUCT ISSUES

Core vs. augmented product, how global competition changed How price and quality affect competition Is quality cultural dependent? ISO 9000/ISO 14000 Products and Culture Services in global marketing Service opportunities in global markets Protectionism in service marketing Restrictions on dataflow Protection of intellectual property Cultural barriers and adaptation

GLOBAL PRODUCT ISSUEScontd.

Global/national brandssuccessful? Country of Origin (COO) effects Green Marketing B2B Marketing Demand in Global B2B-growing very fast, derived demand Stages of Economic Development-how it affects the demand and growth of the B2B products (Use Rostows classification) Level of Technology in a country-how it affects demand www.alibaba.com

GLOBAL PRODUCT ISSUEScontd.

How price and quality affect competition Is quality cultural dependent? Defined by the buyer? International Quality Standard-ISO 9000/ISO 14000 After sales services are demanded too Products and Culture International Trade Shows-crucial for B2B marketing Online trade fairs- www.itradefair.com Online B2B example: www.alibaba.com Relationship marketing in B2B Solar Turbines Inc. example

MANAGING PRODUCTS IN GLOBAL MARKETS Global product mix: item, line, width and depth Optimum product mix Global branding issues: Global vs. National Product innovation and diffusion in global markets Managing global innovations and R&D Managing diffusions

OPTIMUM PRODUCT MIX OF A COMPANY DEPENDS ON THE FOLLOWING FACTORS

Level of market/economic development Sales/Profit Competition Market characteristics Product characteristics Legal considerations

CHARACTERISTICS OF PRODUCTS INFLUENCING DIFFUSION/ADOPTION Relative advantage (over existing products) Compatibility (with existing products, values etc.) Complexity (perceived difficulty in use) Trialability (perceived economic or social risk) Observability (visibility of product benefits / advantages)

DIFFUSION MODEL: BASS (1969)

S(T) = p m + (q - p) Y(T) q/m [Y (T)]2 where, S(T) = Sales at time T p = Coefficient of innovation m = Coefficient of imitation Y(T) = Number of previous buyers

DISCUSSION QUESTIONS
1. Explain how culture affects product decisions. 2. Discuss the role of branding in global marketing. Do country of origin influence branding? Explain. 3. What is optimum product mix? What factors affect optimum product decisions? 4. Explain how various characteristics of the product affect innovation/diffusion process. 5. Discuss B2B marketing. Explain its role, practice, and influence in global marketing.