Chp 11 Global Marketing Management

Front 1

Developing New Products for Global Markets

Back 1

*A cornerstone of a global marketing mix program is the set of product policy decisions that multinational companies (MNCs) constantly need to formulate.
-What new products should be developed for what markets?
-What products should be added, removed, or modified for the product line in each of the countries in which the company operates?
-What brand names should be used?
-How should the product be packaged and serviced?

Front 2

Global Product Strategies

Back 2

*companies can pursue three global strategies to penetrate foreign markets
-Extension Stragtegy
-Adaptation Strategy
-Invention Stratgegy

Front 3

Extension Strategy

Back 3

Part of global product strategies
*companies extend their homegrown product/communication strategies to their foreign markets

Front 4

Adaptation Strategy

Back 4

Part of global product strategies
*enables the firm to cater to the needs and wants of its foreign customers

Front 5

Invention Strategy

Back 5

Part of global product strategies
*products are designed from scratch for the global marketplace.

Front 6

5 Strategic options for the global marketplace

Back 6

*Strategic Option 1: product and communication extension--Dual Extention
*Strategic Option 2: product extension--communication adapation
*Strategic Option 3: product adaptation--communications extension
*Strategic Option 4: product and communications adaptation--dual adaptation
*Strategic Option 5: product invention

Front 7

Strategic Option 1: Product and Communication Extension--Dual Extension

Back 7

*company chooses to market a standardized product using a uniform communications strategy.
*Early entrants and companies with few resources use this approach.
*Dual extension might also work when the company targets a "global" segment with similar needs.

Front 8

Strategic Option 2: Product Extension--Communications Adaptation

Back 8

*due to differences in the cultural or competitive environment, the same product often is used to offer benefits or functions that dramatically differ from those in the home market.
*Market a product in different companies using customized advertising campaigns.

Front 9

Strategic Option 3: Product Adaptation--communications extension

Back 9

*firms adapt their product but market it using a standardized communications strategy.
*local market circumstances often favor the case of product adaptation.

Front 10

Strategic Option 4: Product and Communications Adaptation--Dual Adaptation

Back 10

*differences in both the cultural and physical environment across countries
*must adapt the company's product and communications strategy

Front 11

Strategic Option 5: Product Invention

Back 11

*bring new products that cater to common needs and opportunities around the world.

Front 12

Standardization Versus Customization

Back 12

*Standardization: offering a uniform product on a regional or worldwide basis.
*Customization: management focuses on cross-border differences in the needs and wants of the firm's target customers.

Front 13

Forces Favoring Globalized Product Strategy

Back 13

*Common customer needs
*Global Customers-customers typically require services or products that are harmonized worldwide
*Scale economies:global means cheap production, good and low prices.
*time to market:global means shorter time to make a product
*regional market agreements:

Front 14

Degree of Standardization

Back 14

*what elements of my product policy should be tialored to the local market conditions?
*Modular
*Core-product

Front 15

Modular

Back 15

Degreee of Standardization
*developing a randge of product parts that can be used worldwide.

Front 16

Core Product (common platform)

Back 16

Degree of Standardization
*the design of a mostly uniform core product or platform and attachments are added to match local market needs.
*balancing act between standardization and adaptation

Front 17

Overstandardization vs. overcustomization

Back 17

Degree of Standardization and part of Core Product
*overstandardizaton:too much standardization stifles initiative and experimentation at the local subsidiary level.
*overcusotmization:by adapting too much to local market conditions, an import runs the risk of losing that cachet and simply becoming a me-too brand.

Front 18

Multinational Diffusion

Back 18

the speed and pattern of market penetration for a given product innovation usually differ substantially between markets.
*The adpotion of new products is driven by three types of factors:
-individual differences: willingness to try out new products
-personal influences
-product characteristics

Front 19

Product Characterisitcs

Back 19

Multinational Diffusion
*Relative advantage: what extent does the product offer more percieved value
*Compatibility: is the product consistnet with exsiting values and attitudes
*complexity: is the product easy to understand
*triablitlity: are prospects able to try out the product
*observability: how easy will it be for adopters to see results.

Front 20

Other Country Characterisitics used to predict new product penetration patterns

Back 20

*Homogeneous Population: market is not diverse
*Lead Countries: where a product is introducted first
*lag countries: where a product is introducted after the lead country
*Cosmopolitanism: people who look beyond their immediate social surroundings
*Mobility: the ease with which members of a social system can move and interact with other memebers
*Labor Force Profile:impacts the spread of certain types of innovations
*individualism and national innovativeness

Front 21

Identifying New Product Ideas

Back 21

*company
*cusotmers
*competition
*collaborators

Front 22

Dveloping New Products for Gloabl Markets

Back 22

*identify new product ideas
*screening
*concept testing
*test marketing
*timing of entry

Front 23

Screening

Back 23

*screening weeds out ideas with little potential.

Front 24

Concept testing

Back 24

*a product concept is a fairly detailed description of the new product or service.
*Focus groups are used to assess the appeal of the product concept
*conjoint analysis

Front 25

Conjoint Analysis

Back 25

part of concept testing
*tradeoff analysis, a more sophisticated procedure.
*must decide if you should standardize or not

Front 26

Test Marketing

Back 26

*the dress rehearsal prior to the product launch.
*makes accurate projections as to the market shares, volume and penetration the new product will have.

Front 27

Timing of Entry

Back 27

*Waterfall
*Sprinkler

Front 28

Waterfall

Back 28

Timing of entry
*global phased rolout where new products trickle downn a cascade-like manner.
*takes a long time
*for long product life cyle only

Front 29

Sprinkler

Back 29

Timing of entry
*simultaneous worldwide entry.
*used for shorter product life cycle.