PRODUCT ADAPTATION & PRODUCT EXTENSION STRATERGIES

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BY: AYAN KANCHAN DATTA ROY 4/9/12 4th SEM. SEC- A.ROLLNO.36

O Customization: the firm introduces a unique product in each country, usually with the belief tastes differ so much between countries that it is necessary more or less to start from scratch in creating a product for each market. O Standardization: involves making one global product in the belief the same product can be sold across markets without significant 4/9/12 modification.

e.g., Intel microprocessors are the same

O A common product is modified to some extent when

moved between some markets .

O Product adaptation may be a way to stay competitive in an

evolving domestic marketplace, or a way to sell products abroad that might not be appealing to foreign consumers without small, or large changes. e.g., in the United States, where fuel is relatively less expensive, many cars have larger engines than their comparable models in Europe and Asia
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A product that is perfectly good for one market may have to be adapted for another.

There can be many reasons for this. Physical conditions may be different. Functional requirements may vary from market to market. People in different places may
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Examples:
O The outdoor garden furniture would require different

type of finish than furniture used indoors.

O A manufacturer of mens suits would have to take into

account that arms of Frenchmen tend to be longer in proportion to the rest of their bodies than these of Germans.
O Differing conditions in use, for example in the case of

automobiles, different road and traffic conditions may 4/9/12 require product changes.

O In some cases cultural factors are very important. For

example, Mattel Toys of USA wanted to sell their Barbie Doll in Japan. But the Japanese did not buy the American favorite doll. Later the firm introduced a modified Barbie slightly oriental eyes and a more girlish figure. With the culturally modified Barbie sales in Japan accounted for 12.7 per cent of the total international sales.
O Adaptation may pertain to size, functions, materials,

design style, color, tastes and standards. Sometimes this could be done easily and at low cost but at times it may cost much.
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O Standard of Living: Foreign markets are likely to feature a

different standard of living than that found in the region where a product was first sold. This may mean a need to lower the price, or an opportunity to raise it.

O Regulations: when government or industry regulations

require products to meet certain standards. This is the case with many foreign automobiles, which must undergo a major product adaptation to meet strict American safety and emissions standards before being sold in the United States.
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O Usage Conditions: The climate, altitude and distance of a

new market may require manufacturers to develop new solutions that allow a product to function as intended. Food containers are a good example of this, with manufacturers needing to provide bottles and boxes that will fit in the refrigerators and cabinets of consumers in a new market.

O Cultural Condition and Style: Sometimes a product needs

only superficial adaptation in order to fit into a new market.

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TYPES
O Mandatory adaptations involve changes that have to be

made before the product can be usede.g., appliances made for the U.S. and Europe must run on different voltages.
O Discretionary changes are changes that do not have to be

made before a product can be introduced (e.g., there is nothing to prevent an American firm from introducing an overly sweet soft drink into the Japanese market), although products may face poor sales if such changes are not made. Discretionary changes may also involve cultural adaptationse.g., in Sesame Street, the Big Bird became the Big Camel in Saudi Arabia. 4/9/12

Product Extension
O Same product as market domestically

is extended to foreign market without any significant modification. Possible when;

O Consumer Taste same O Product Use condition O No

legal requirement necessity product modification for foreign market

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Product extension strategies

O STRATEGIC OPTION 1: PRODUCT

AND COMMUNICATIONS EXTENSION

O STRATEGIC OPTION 2: PRODUCT

EXTENSION
O STRATEGIC OPTION 3: PRODUCT

ADAPTATION
O STRATEGIC OPTION 4: PRODUCT

AND COMMUNICATIONS ADAPTATION

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O STRATEGIC OPTION 5: PRODUCT