Global Product and Market Development
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Chapter Overview
1.Global Product Strategies
2.Standardization Versus Customization
3.Multinational Diffusion
4.Developing New Products for Global Markets
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Introduction
ØA cornerstone of a global marketing mix program is the set of
product policy decisions that multinational companies (MNCs)
constantly need to formulate.
ØThe range of product policy questions may include:
ØWhat new products should be developed for what markets?
ØWhat products should be added, removed, or modified for the
product line in each of the countries in which the company
operates?
ØWhat brand names should be used?
ØHow should the product be packaged and serviced?
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Introduction
ØExamples of improper product policy decisions in global
marketing:
ØIkea in the United States
ØProcter & Gamble in Australia
ØU.S. Car Makers in Japan
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US versus Sweden
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Procter & Gamble in Australia
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U.S. Car Makers in Japan
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ØIn North America, the width of angled
and perpendicular parking spaces
usually ranges from 2.3 to 2.75 meters
(7.5–9.0 ft). For example, normal
parking spaces in the city of Dallas,
Texas are 8.5 feet wide, while compact
spaces are 7.5 feet wide.
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Global Product Strategies
ØThree global strategies to penetrate foreign markets:
ØExtension strategy
ØAdaptation strategy
ØInvention strategy
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Global Product Strategies
ØFive strategic options for the global marketplace:
ØStrategic Option 1: Product and Communication Extension -- Dual Extension
ØStrategic Option 2: Product Extension -- Communications Adaptation
ØStrategic Option 3: Product Adaptation -- Communications Extension
ØStrategic Option 4: Product and Communications Adaptation – Dual
Adaptation
ØStrategic Option 5: Product Invention
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Exhibit 10-1: Global Expansion Strategies
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Standardization versus Customization
ØFive forces favoring a globalized product strategy:
ØCommon customer needs
ØGlobal customers
ØScale economies
ØTime to market
ØRegional market agreements
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Standardization versus Customization
ØDegree of Standardization
ØModular Approach
ØCore-Product (Common Platform) Approach
ØBalancing act between standardization and adaptation
ØOverstandardization vs. overcustomization
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Multinational Diffusion
ØExample:
ØMicrosoft’s Xbox videogame
ØThe Adoption of new products is driven by
three types of factors:
ØIndividual Differences
ØPersonal Influences
ØProduct Characteristics
1. Relative advantage
2. Compatibility
3. Complexity
4. Trialability
5. Observability
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Multinational Diffusion
ØOther country characteristics used to
predict new product penetration patterns
include:
ØHomogeneous population
ØLead countries
ØLag countries
ØCosmopolitanism
ØMobility
ØLabor force profile, Developing vs.
Developed countries
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Multinational Diffusion
Time to “Take off”
ØMost new products display a distinct period of time to takeoff
ØVaries a great deal across product categories, between countries,
previous takeoff experience
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Exhibit 10-3: Mean Time to Take Off Across Product
Categories within a Country
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Developing New Products
for Global Markets
ØIdentifying New Product Ideas
Ø4 C’s:
ØCompany
ØCustomers
ØCompetition
ØCollaborators
ØNew Product Development (NPD) Process
ØScreening
ØConcept Testing
ØConjoint analysis
ØTo Standardize or not to standardize
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Developing New Products
for Global Markets
ØTest marketing
ØMay be skipped to save money
ØLead markets can be used as
projections
ØTiming of Entry (Exhibit 10-5)
ØWaterfall—staged rollout beginning
with home country
ØSprinkler—global rollout
simultaneously
ØOften used for high tech goods
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Exhibit 10-5:
Waterfall versus
Sprinkler Models
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Exhibit 10-6:
Roll-Out of
Xbox 360 and
Sony
Playstation 3
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