Global Marketing Management

Chapter 11 Product Decisions

Warren J. Keegan
 Overview
 Basic Concepts
 Product Positioning
 Product Saturation Levels
 Product Design Considerations
 Attitudes Towards Country of Origin
 Geographic Expansion
 New Products in Global Marketing
 Summary

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 Learning Objectives
 Know the differences between local, national,
international & global brands
 Learn alternatives for positioning global brands
 Appreciate the importance of saturation levels
 Be aware of design considerations and attitudes
toward country of origin
 Know why development of new products are
keys to survival and global growth
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 Basic Concept of Products
 Products can be defined as a collection of
physical, psychological and symbolic attributes
that can collectively yield satisfaction, or benefit,
to a buyer or user.
 Products can be classified into consumer &
industrial goods
 Products can be classified by the way they are
purchased or their life-span

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 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.
They are international and multi-regional

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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
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 Positioning of Products and Services
 Attribute or Benefit
 Quality/Price
 Use/User
 High-Tech Positioning
 High-Touch Positioning

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 Product Saturation Levels in Global
Markets
 Many factors determine a product`s market potential
 Product saturation level increases as national income per
capita increases
 The presence or absence of a particular companion
product can be significant

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 Product and Service Design
Considerations
 Preferences
 Costs
 Laws and Regulations
 Compatibility
 Labeling and instructions

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 Attitude towards the Country of
Origin
 Stereotyped attitudes toward foreign products &
services can favor 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

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Geographic Expansion-Strategic
Alternatives
Different

Strategy 2: Product Extension, Strategy 4: Dual Adaptation

Communications
Communications

Example: Greeting Cards

Adaptation
Example: Motorbikes

Strategy 1: Dual Expansion Strategy 3: Product Adaptation,

Communication
Example: Applications Software
Extension
Example: Electrical products
Same

Same Different
Product edlich

Global Product Planning: Strategic Alternatives for Expanding into Global Markets

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 Strategy 1: Product/Communication
Extension or Dual Extension
 Company sells exactly the same product or service with
the same advertising as used in the home country
 Company assumes that all markets are alike
 Does not work in all markets
 Often used because it saves costs
 Example: Campbell Soup

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 Strategy 2: Product Extension,
Communications Adaptation
 If the product serves different needs in various
countries, only marketing communication may have to
be adapted
 Adaptation can happen by design or accident
 Cheap implementation because product does not change
 Example: Motor scooters

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 Strategy 3: Product Adaptation,
Communication Extension
 Product is adapted to the new market, but basic home
market communication strategy remains unchanged
 Product is adapted to the environment and the
preferences of the consumers in the new market
 Example: Exxon

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 Strategy 4: Product/Communication
Adaptation or Dual Adaptation
 Using Dual Adaptation the company must adapt the
product or service as well as the marketing
communication to the foreign market
 Example: Unilever fabric softener

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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

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How to Choose a Strategy

 3 Stages
Cave Dweller – primary motivation is to
dispose of excess capacity
Naïve Nationalist – Sees adaptation as the
only alternative
Globally Sensitive- Evaluated across
countries with some standardization &
some differentiation
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 New Products and Services in
Global Marketing (1)
 New to consumer & company ( Product or service
innovation)
 New to consumer but not new to company
(Product/service or line extension)
 Not new to consumer but new to company (New product
or service duplication)

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 New Products and Services in
Global Marketing (2)
 New-product development process
 Permanent identification of new-product ideas
 Screening of these ideas and identification of candidates for
further investigation
 Stringent investigation and analysis of the selected new-
product ideas
 Organisation of sufficient resources
 The international new-product department
 Testing new products & services in national markets

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New Products in Global Markets -
Reiner

 Global companies in fierce competition so

must be world class
 Focus on 1 or a few businesses
 Senior management is actively involved
 Recruit & retain the best & the brightest
 Understand the importance of speed to
market
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 Summary
 Product and services are the most important elements of
the marketing program
 Important factors: preferences, costs, laws and
regulations, and compatibility
 Five strategic alternatives for geographic expansion:
 Product/communication extension, product
extension/communications adaptation, product
adaptation/communications extension, dual adaptation and
product invention

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