Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
29 Cards in this Set
- Front
- Back
Developing New Products for Global Markets
|
*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? |
|
Global Product Strategies
|
*companies can pursue three global strategies to penetrate foreign markets
-Extension Stragtegy -Adaptation Strategy -Invention Stratgegy |
|
Extension Strategy
|
Part of global product strategies
*companies extend their homegrown product/communication strategies to their foreign markets |
|
Adaptation Strategy
|
Part of global product strategies
*enables the firm to cater to the needs and wants of its foreign customers |
|
Invention Strategy
|
Part of global product strategies
*products are designed from scratch for the global marketplace. |
|
5 Strategic options for the global marketplace
|
*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 |
|
Strategic Option 1: Product and Communication Extension--Dual Extension
|
*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. |
|
Strategic Option 2: Product Extension--Communications Adaptation
|
*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. |
|
Strategic Option 3: Product Adaptation--communications extension
|
*firms adapt their product but market it using a standardized communications strategy.
*local market circumstances often favor the case of product adaptation. |
|
Strategic Option 4: Product and Communications Adaptation--Dual Adaptation
|
*differences in both the cultural and physical environment across countries
*must adapt the company's product and communications strategy |
|
Strategic Option 5: Product Invention
|
*bring new products that cater to common needs and opportunities around the world.
|
|
Standardization Versus Customization
|
*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. |
|
Forces Favoring Globalized Product Strategy
|
*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: |
|
Degree of Standardization
|
*what elements of my product policy should be tialored to the local market conditions?
*Modular *Core-product |
|
Modular
|
Degreee of Standardization
*developing a randge of product parts that can be used worldwide. |
|
Core Product (common platform)
|
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 |
|
Overstandardization vs. overcustomization
|
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. |
|
Multinational Diffusion
|
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 |
|
Product Characterisitcs
|
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. |
|
Other Country Characterisitics used to predict new product penetration patterns
|
*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 |
|
Identifying New Product Ideas
|
*company
*cusotmers *competition *collaborators |
|
Dveloping New Products for Gloabl Markets
|
*identify new product ideas
*screening *concept testing *test marketing *timing of entry |
|
Screening
|
*screening weeds out ideas with little potential.
|
|
Concept testing
|
*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 |
|
Conjoint Analysis
|
part of concept testing
*tradeoff analysis, a more sophisticated procedure. *must decide if you should standardize or not |
|
Test Marketing
|
*the dress rehearsal prior to the product launch.
*makes accurate projections as to the market shares, volume and penetration the new product will have. |
|
Timing of Entry
|
*Waterfall
*Sprinkler |
|
Waterfall
|
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 |
|
Sprinkler
|
Timing of entry
*simultaneous worldwide entry. *used for shorter product life cycle. |