MARKETING

INTERNATIONAL
2·

UNIT 5
UF

INTERNATIONAL PRODUCT MANAGEMENT

5.1. PRODUCT DEFINITION
Product is the way in which the company satisfies consumer's needs.

Products can be:

1. Goods. Physic product, tangible.

2. Services
3. Experiences. Combination of goods and services (Walt Disney)
4. Events. Planification and coordination of goods and services (concert)
5. Persons. Image, "a brand", "celebrity".
6. Places. Tourism.
7. Organizations. Balay, Ecoembes.
8. Ideas. Beauty (Revlon) / Recycle / Youth / Firefight
SATISFACTION OF
CONSUMER NEEDS
the consumer is the center of
marketing actions. No need to develop
products if does not have consumer
sense or not defined by ‘consumer
insights’
INVOLVES AN
EXCHANGE WIN-WIN
understanding marketing processes
and system as an activity or just as a
communication system

DEVELOP A LONG-TERM
RELATIONSHIP WITH THE
CONSUMER
5.1. PRODUCT DEFINITION
The products of an organization help to create the
image of the firm in the mind of the consumer.

This image is reflected in the customers’ perceptions

and feelings about its goods or services. It is
important, since experience with only one of a firm’s
products can affect a person’s attitude to the firm’s
other goods or services.
5.2. BRAND CONCEPT AND VALUE

Brand concept owns specific and valuable

characteristics develop the product strategy of a firm.
In fact, it is only “a part of the product” but reflects
meanwhile part of the company identity becoming
one of the most important topics to be considered
when investing the resources. Brand concept is very
difficult to define due to its heterogeneity and
volatility
The concept of identity is about brand,
and it is balanced and stable during the
time, in long-term expression, and
reflecting the main brand attributes and
characteristics by the Company, as a
kind of projection of values. The concept of brand image is about
consumers perception, normally in
comparison with other substitutive
products, actually creating an idea in
consumers mind and hearts, called
positioning
5.2. BRAND CONCEPT AND VALUE
IDENTITY AND BRAND POSITIONING “THE BRANDING”

The image of a product comes from the perception

of its objective public or target, just being a mental
representation of:

- Subjective perceptions
- External stimulus
- Information gathered
- Sensations and emotions
- Past experiences with a Company offer, etc. Etc.
5.2. BRAND CONCEPT AND VALUE
IDENTITY AND BRAND POSITIONING “THE BRANDING”

Brand is just an idea that reflects, reminds and reinforces the characteristics and
features that makes a company different from others (competitors).

It acts in fact as a “warehouse of information” in consumers mind and deliver to

consumers need satisfaction and returns money for the company, so the brand is
delivering value to buyers and consumers and for the company as well.
 BRAND
It is an idea reflected on consumers’ mind, reminding them positioning
items and attributes related to products that company commercializes. In
this sense, the brand become as the most important attribute of a product
due to it is able to offer value to consumers and firms.
IPHONE 1

https://www.youtube.com/watch?v=x7qPAY9JqE4
CLASS ACTIVITY #5.1
POSITIONING MAP

Choose a brand/product

Write the main attributes of the brand/product

Identify its competitors in the market

Create a positioning map to differentiate the

company
5.3. PRODUCT LIFE CYCLE
Companies need to adapt its business to environmental changes in
order to continue performing an offer based on satisfying in the best
way consumer needs.

The changes in external, may change its competitive positioning as

perceived by the consumer. In this order, renewing the offer is
mandatory to develop a differentiation against direct competitors and
being most valuable brand/company in front of the competitors.
5.3. PRODUCT LIFE CYCLE

1. New lines can be added to widen the product 3. New product variants can be added to deepen
mix. It works with complementary products: a the product mix, e.g. the radio manufacturer can
manufacturer of devices can develop a line of add new models which are the same size as existing
batteries. items but which have different features.

2. The length of existing product lines can be 4. Product consistency can be made more or less
increased by introducing additional items, e.g. the depending upon whether a firm wants to acquire a
manufacturer of DVDs can develop TVs, radios or strong reputation in a few or many different areas.
laptops.
5.3. PRODUCT LIFE CYCLE STAGES

The need for new products and new product markets has an
important
1. New lines caninfluence
be added on strategy
to widen formulation.
the product mix. This is because
therewith
It works is evidence to show
complementary that most
products: a products have life cycles
and progress through recognized stages.
manufacturer of devices can develop a line of
batteries.
Every stage in the life cycle brings with it environmental threats
and opportunities that require changes to be made in
marketing
2. The length of strategy and lines
existing product havecanimplications
be for marketing
planning.
increased by introducing additional items, e.g. the
manufacturer of DVDs can develop TVs, radios or
laptops.
5.3. PRODUCT LIFE CYCLE STAGES

1. New lines can be added to widen the product mix.

It works with complementary products: a
manufacturer of devices can develop a line of
batteries.

2. The length of existing product lines can be

increased by introducing additional items, e.g. the
manufacturer of DVDs can develop TVs, radios or
laptops.
5.3. PRODUCT LIFE CYCLE STAGES

1. The introductory stage

Losses or at best low profits are experienced often during the introductory stage. This is because
sales are low and promotion and distribution are relatively high. Obtaining distribution for a
1. New lines can be added to widen the product mix.
product requires amounts of cash and promotional costs are greatest in relationship to during
It works with complementary products: a
the introductory stage. In addition, extensive promotion is required to secure distribution.
manufacturer of devices can develop a line of
batteries.
High margins can provide the cash heavy promotional expenditure and this in turn produces high
initial positioning. This promotional pressure, oriented to develop trial and repeat, must be
2. The length of existing product lines can be
related with the efforts to develop product awareness. In this first stage, pull strategy is the key
increased by introducing additional items, e.g. the
fact, with a balance in the investment between distribution and awareness (push-pull strategy
manufacturer of DVDs can develop TVs, radios or
combination).
laptops.
5.3. PRODUCT LIFE CYCLE STAGES

2. Growth
New competitors enter the market attracted by the prospect of production potential and the
large profits to be made as the market grows size and economies of scale come into operation.
1. New lines can be added to widen the product mix.
There is little change in prices and promotional expenditure (oriented to “trial”) from the
It works with complementary products: a
introductory stage, both may be slightly reduced.
manufacturer of devices can develop a line of
batteries.
There is also a decline in the ‘promotion sales ratio’—that is the amount of money spent on
promotion in relation the amount of sales generated, since sales are expanding during this
2. The length of existing product lines can be
stage. The net result of all this is that increased profits are generated as costs spread over a
increased by introducing additional items, e.g. the
larger volume and unit manufacturing costs decrease in with the influence of the experience
manufacturer of DVDs can develop TVs, radios or
curve.
laptops.
5.3. PRODUCT LIFE CYCLE STAGES

3. Maturity stage
The maturity stage follows on from the onset of decline in the rate of sales growth. The latter
produces over-capacity in the industry which in turn leads to increased competition. It is a
1. New lines can be added to widen the product mix.
stage in which profits decline. During the maturity stage, firms implement frequent price
It works with complementary products: a
reductions and increase advertising and consumer promotions. Emphasis is placed on
manufacturer of devices can develop a line of
product research and development to come up with product improvements and flanker
batteries.
brands. While the well established competitors do well, the weaker competitors may quit the
market.
2. The length of existing product lines can be
increased by introducing additional items, e.g. the
Cash earned by strong competitors at this stage can be put into products that are at
manufacturer of DVDs can develop TVs, radios or
earlier stages in their life cycles.
laptops.
5.3. PRODUCT LIFE CYCLE STAGES

4. Decline
Sales of most products eventually start to decline for one or more of several reasons. These
1. New lines can be added to widen the product mix.
include technological progress, shifts in consumer tastes increased domestic and foreign
It works with complementary products: a
competition. Over-capacity in the market produced together with price cutting and lower
manufacturer of devices can develop a line of
profits.
batteries.

At this time firms may withdraw from the market and those remaining reduce the number of
2. The length of existing product lines can be
products that they have to offer, pull out of smaller market segments and weaker trade
increased by introducing additional items, e.g. the
channels, cut the promotion budget or reduce prices even further.
manufacturer of DVDs can develop TVs, radios or
laptops.
5.4. THE ROLE OF INNOVATION

Innovation and New Product Development (NPD) has become one of the main growing
strategy for manufacturers and distributors, and key successful factors for developing markets
and segments (new or actual ones). Following R. Gallego (2017), there are two main strategic
objectives for investing in the new product development:

Long-Term growing of the company. Specially in mature markets where companies feel
continuously threatened, losing sales and profits.

Differentiation and leadership strategies. It is commonly perceived by the consumer as

better brands whether dynamic and innovatives, offering better value for the range of
products.
5.4. THE ROLE OF INNOVATION
LAUNCHING STEPS: NEW PRODUCTS/PROJECTS FUNNEL

The dual drivers of innovation are technology and market

demand.

Although the impact of technology is primarily felt in the

R&D environment, market drivers have to be ascertained
primarily with the aid of market research. Essentially this
involves generating new product concepts based upon
the notion of problem-based ideation.

Different accepted phases or stages for new product

development (NPD) are:
5.4. THE ROLE OF INNOVATION
LAUNCHING STEPS: NEW PRODUCTS/PROJECTS FUNNEL

a. Concept definition
There are a variety of ways of obtaining new product ideas. Monitoring competitors’ new
product development, feedback from customers, market research, contact with R&D
establishments, a firm’s own R&D. There is not one best method and firms should try all
methods wherever possible.

The use of a creativity technique such as morphological analysis can help executives to
generate many new product ideas. Surveys of market opinion can be particularly helpful at the
business analysis phase since in addition to helping to quantify potential demand they can also
help to provide other information as well. It may be possible that with some adjustment to the
product or service it will sell better. It is important to get this right at the outset.
5.4. THE ROLE OF INNOVATION
LAUNCHING STEPS: NEW PRODUCTS/PROJECTS FUNNEL

b. Product development
Development is the stage at which a new product proposal is developed into a physical entity
and plans are put together for its production and introduction to the market place. Some
products are obviously more complex than others. Product development can therefore be an
extremely lengthy business or it can be reasonably short. As a stage in the new product
development process it is important for all products.

It is the stage where the product moves into R&D and engineering (in the case of a complex
technological product) and it is here that the really heavy costs can start to mount up. Efforts
are directed at trying to turn the idea into a technically and commercially feasible product. This
involves what is known as prototyping. The objective is to develop a physical version of the
product (a prototype or mock-ups)
5.4. THE ROLE OF INNOVATION
LAUNCHING STEPS: NEW PRODUCTS/PROJECTS FUNNEL

c. Testing
Where launch costs are high it would seem commonsense to test market new products before
embarking on commercialization on a national or international scale. However, not all products
are test marketed. It is possible under certain circumstances that test marketing the product
may provide important business knowledge to competitors.

Nevertheless, test marketing, on the other hand, can avoid disasters and save firms millions of
money. A variety of test marketing methods exist and there are differences between test
marketing industrial and consumer goods.
5.4. THE ROLE OF INNOVATION
LAUNCHING STEPS: NEW PRODUCTS/PROJECTS FUNNEL

d. Commercialization
This final stage could equally be divided in two different steps: presentation to the internal
commercial area or sales team and introduction into distributors or retailers. The products are
introduced in the market due to commercialization channel and first sales come to the
company.

It is very important to monitoring all the actions-reactions from-against the product and balance
the budget to develop pull-push strategies, depending on the type of product and distribution
strategy to follow.
 The Ansoff Matrix, often called the Product/Market Expansion Grid, is a

ANSOFF MATRIX two-by-two framework used by management teams and the analyst
community to help plan and evaluate growth initiatives.

PRODUCT
EXISTING NEW
EXISTING

Market Product
Penetration Development
MARKET

Market
NEW

Diversification
Development
CLASS ACTIVITY #5.2

According to the Ansoff Matix, explain the

strategies carried out by the companies

Identify the reasons of the companies to carry this

strategy.

Explain the actions taken by the companies.

CLASS ACTIVITY #5.2
CASE 1
Antabax is a Malaysian personal care brand that offers a range of antibacterial products. Antabax first started with
its three soap ranges: Shield, Gentle, and Balance. But the challenge for Antabax is to convince customers that its
products belong in the “hygiene care” category, the same category as some of Antabax’s competitors: Lifebuoy,
Protex, and Dettol. Despite the brand’s longevity, the company fears that customers still don’t see its products as
sitting within the health and hygiene category. By dubbing them “Halal health care products,” Antabax has
reformulated and repackaged its personal care products.

The company is also working on new schemes which aim to increase customer awareness. For instance, it has
introduced a new brand ambassador, Malaysian singer Ziana Zain, who is involved with the Antabax new range
product launches and roadshows. It has also started an Antabax Facebook contest called “2012—My Attribution
Year For Others,” and has been promoting the Antabax family of products with a “hygiene” concept in schools.
Today, Antabax is the fastest growing brand within the bar and liquid medicated category.
CLASS ACTIVITY #5.2
CASE 2

Apple encourages owners of its computers to form local Apple user groups. Over 800 groups exist worldwide,
ranging in size from fewer than 25 members to over 1,000 members. Many groups offer monthly meetings, an
informative newsletter, member discounts, special interest groups, classes, and one-on-one support. Larger
groups offer extensive training programs, computer labs, and resource libraries.

The user groups provide Apple owners with opportunities to learn more about their computers, share ideas,
friendships with fellow Apple users, as well as sponsor special activities and events and perform community
service. A visit to Apple’s Web site helps customers find nearby user groups.
 UF 2 · INTERNATIONAL MARKETING

UNIT 5
INTERNATIONAL PRODUCT MANAGEMENT

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