INTERNATIONAL

PRODUCT
DECISIONS




1

INTERNATIONAL
PRODUCT
DECISIONS




2
Local, National, International
and Global Products
Local products : are offered in a portion of
a national market
National products : are offered in a single
national market
International
products : are offered in multinational,
regional markets
Global products : are offered in the global
market
3
What is a Product
A particular
bundle of benefits
which satisfies
particular needs and
wants.
4
Product what does it extend to
Product Strategy Decision Areas
Variety
Quality
Design
Features
Packaging
Brand name
Services
Warranties
Returns .etc., etc.,.
5
Dimensions of a Product
Warranties Auxiliary Services Use Instructions
Spare
parts
availability
Installation
assistance
After sales service
Product package
Package
Physical core
Brand
name
Trademark
Label
Functional
features
Label
Design Presentation
6
Issues related to
International Product Decisions
1. Product Life Cycle stage in
different markets
2. Leader/follower position in
different markets
3. Standardization or Adaptation
7
International Product Life Cycles
Exporting
Importing
0 1
2 3 4
Initiating country,
generally a
developed country
Other advanced
countries
LDCs
8
IPCL Stages and Characteristics
Stage Import/
Export
Target market Competitors Production
costs
0. Local
innovation
None Initiating country Few : local
firms
Initially high
1. Overseas
innovation
Increasing
export
Initiating country
and other advanced
nations
Few : local
firms

Decline due
to economies
of scale
2. Maturity Stable
export
Advanced nations
and LDCs
Advanced
nations
Stable
3. Worldwide
imitation
Declining
exports
LDCs Advanced
nations
Increase due
to lower
economies of
scale
4. Reversal Increasing
import
Initiating country Advanced
nations and
LDCs
Increase due
to
comparative
advantage.
9
Critical assumptions in
support of Standardization
Homogeneity of world wants
People are willing to sacrifice
specific preferences in
product features, functions, design,
and so on
for lower price at higher quality
A view propounded by Theodore Levitt
In his article Globalization of Markets
10
Factors encouraging
Standardization
1. High cost of adaptation
2. Industrial products
3. Convergence and similar tastes in
diverse country markets
4. Predominant use in urban
environments
5. Marketing to predominantly similar
countries
11
Factors encouraging
Standardization
6. Centralized management and
operating via exports
7. Economies of scale in production
8. Economies in research and
development
9. Economies in marketing
12
Factors encouraging
Adaptation
1. Differences in technical standards
2. Consumer and personal use products
3. Variation in consumer needs and
differing use conditions
4. Variations in ability to buy differing
income levels
5. Fragmented independent national
subsidiaries
13
Factors encouraging
Adaptation
6. Impact of cultural differences
7. Environmentally induced adaptation :
the influence of government
8. Adaptation in an industrial setting
14
Product Component Model
CORE
PACKAGING
SUPPORT SERVICES
CORE
Product platform
Design features
Functional features
15
Product Component Model
PACKAGING
Trademark
Brand Name
Price
Quality
Package
Styling
CORE
PACKAGING
SUPPORT SERVICES
16
Product Component Model
SUPPORT SERVICES
Installation
Deliveries
Warranty
Spare parts
Repair &
Maintenance
Instructions
CORE
PACKAGING
SUPPORT SERVICES
17
Five Global Product and Promotion
Strategies
18
Strategy 5: Product Invention
Demanding but potentially rewarding
strategy for reaching mass markets in LDCs
Product quality is essential but must be
supported with imaginative, value-creating
advertising & marketing communication
19
THATS ALL FOR
TODAY!!!
20
Should the firm have one
brand worldwide?
The decision depends on the following :
1. Legality the firms brand may already be
used in a foreign market
2. Cultural aspects is the name
pronounceable in the local language, or does
it have an undesirable connotation
3. Importance of the brand name for the sale of
the product
4. The brand - new or established
5. The ease of integrating the brand with those
of subsidiaries

21
Global Brand
A symbol about which customer have
beliefs & perceptions
Same name or same meaning in another
language
Similar image & position
Guided by same strategic principles
Marketing mix may vary from country
to country

22
Brand Names that better not
travel around the globe.
Atum Bom Portuguese tuna
Mukk Italian yogurt
Plopp Scandinavian chocolate
Poo Argentine curry powder
Collon Bisquits Dutch chocolate cookies
Fart Polish cleanser
Bimbo The most popular brand of
bread in Spain and Mexico
Happy End Toilet Paper
23
Thats all for
today!!!
24
Introductory notes only

Slide : -1
25
International Competitive Posture
Matrix
Barons
Tata Motors,
Tata Steel

Kings
Coke, Pepsi,
McDonald, Sony

Commoners

Crusaders
High
Low
High Low
Geographical Coverage
P
r
o
d
u
c
t

S
t
r
e
n
g
t
h


26
Introductory notes only

Slide : -1
27
International Product Life Cycles
Exporting
Importing
0 1
2 3 4
Initiating Country
Generally a
developed country
Other advanced
countries
LDCs
For Notes only
28
Global Product Planning
Strategy 2 :
Product extension
Communication adaptation
Strategy 1 :
Product extension
Communication extension
Strategy 4 :
Product adaptation
Communication adaptation
Strategy 3 :
Product adaptation
Communication extension
Same Different
29
Attitude towards the Country
of Origin
Stereotyped attitudes toward foreign products
& services can favour or hinder marketing
efforts
If the quality is perceived to be low
Foreign origin of the product can be disguised
Foreign identification of the product can be
continued & consumer attitudes towards the
product can be changed
In some market segments foreign products
have a substantial advantage because they are
foreign

30
Importance of Country of Origin
Consumers use country of origin as one
element in their perception and
evaluation of products.

The firm needs to consider production
locations and sourcing patterns as part
of its international marketing strategy
31
How to Choose a Strategy
3 Stages
Cave Dweller primary motivation is
to dispose of excess capacity
Nave Nationalist Sees adaptation
as the only alternative
Globally Sensitive- Evaluated across
countries with some standardization &
some differentiation

32
Brands with Global Potential
according to Ian Batey
1. Air India
2. Ranbaxy Laboratories
3. Tata Motors
4. Tata Tetley
5. Reliance, Aditya Birla groups for
biotechnology
6. Old Monk
7. Nutrine
8. Ambo (the Alphonso mango brand
of Indian farmers cooperative)
9. Kitchens of India (ITC)
(Author :Asian Branding and Founder : Batey Advertising)
33
Consumer Adoption Process
Stages in the adoption process :
1. Awareness Massive advertising
2. Interest Teaser advertising
3. Evaluation providing information to customers
about how the product can benefit them
4. Trial demonstrations, samples, trial size packages
5. Adoption making the product available;
providing product use information
34
Adopter Categorization on the
Basis of Relative Time
of Adoption of Innovation
35
Adoption Rate Factors
1. Relative advantage superior
benefits
2. Compatibility consistent with existing
cultural values, customs, and practices
3. Complexity difficult to understand
4. Trialability ease of sampling
5. Observability visibility of the product
36
Types of Innovations
1. Continuous Innovation modification to
an existing product
2. Dynamically continuous
innovation a pronounced modification to an
existing product
3. Discontinuous innovation an
innovation which creates a major change in the way we
live
37
Extraneous factors affecting the rate of
diffusion of a new product :
1. The degree of newness
2. The perceived attributes of the
innovation
3. The method used to communicate
the idea.
38
39
40
41