Product International

Marketing
Abha Rishi

Product Characteristics

Product Variables
Constituents & Branding
Packaging & Appearance
Method of Operation or Usage
Quality
Service
Country-of-Origin Effects
Product Counterfeiting

Product Variables

The Core Product

a product or services that is essentially the
same as that of competitors.
The Tangible Product
a product or service that is differentiated
composition, origin, or tangible features from
competing products.
The Augmented Product
a product or service which is serviced after the
sale and carries a warrantee from the producer,
producing a continuing relationship with the
seller.

Product Variables

Consumer & Industrial products

Durable, nondurable and disposable
Convenience, preference & specialty

Geographical
Local
International
Global

Standardization versus
Adaptation
The fundamental international product decision
after the decision to internationalize.
International market approach alternatives to
adaptation.

Sell the product as it is internationally.

Modify product for different countries or regions
( also known as product homologation)
Design new products for foreign markets.
Incorporate all differences into one product and
introduce it globally.

Standardization versus
Adaptation
FACTORS ENCOURAGING
STANDARDIZATION
Economies of scale in production
Economies in product R&D
Economies in marketing
Shrinking of the world
marketplace/economic integration
Global competition

FACTORS
ENCOURAGING
Differing use(r)
conditions
ADAPTATION
Government and regulatory

influences
Differing consumer behavior
patterns
Local competition

Strategic Adaptation to
Foreign Markets
High
Need for
Adaptation

Degree of
Cultural
Grounding

Low
Industrial/ Technology Intensive

Consumer

Nature of Product
Source: Adapted from W. Chan Kim and R. A. Mauborgne, Cross-Cultural Strategies, Journal of Business Strategy 7 (Spring 1987): 31; and John A. Quelch and
Edward J. Hoff, Customizing Global Marketing, Harvard Business Review 64 (May-June 1986): 92-101.

The Market Environment

Economic Development

Competitive offerings

The stage of economic development affects the

market size and demand characteristics. Backward
innovation of the product may be required to meet
local requirements.
Monitoring competing local products is critical in
adjusting the product for competitive advantage.

Climate and geography

Local climatic conditions and terrain features can

make products vulnerable to damage.

The Market Environment

Government Regulations

Non-tariff Barriers

Political and social agendas often dictate regulatory

requirements.
Product standards, testing, subsidized local
products.

Customer Characteristics, Expectations, and

Preferences

Physical size, local behaviors, tastes, attitudes, and

traditions.
Consumption patterns, psychosocial characteristics,
and general cultural criteria.

Strategic Adaptation to
Foreign Markets

Factors Affecting Adaptation

Product Constituents and

Branding

Product ingredients must not violate local legal

regulations and social or religious customs.
Care must be taken that the brand in name,
symbol, sign, or design does not offend the
local customer. Trademarks are especially
vulnerable to counterfeiters.
Selecting the global brand name
Translation
Transliteration
Transparency
Trans-culture

Packaging and Appearance

Packaging serves three major functions :

Protection

Promotion

Language and symbols

User convenience

Packaging aesthetics- color and shape, overall

size, and purchase quantity
Adaptations in styling, color, size, and other
appearance features play an importance role in how
a consumer perceives a product.

Improper handling and pilferage

Country-of-Origin Effects

The origin of a
product may have
a strong effect on
consumer
perceptions and
biases about
foreign products.

Swiss

New Product Ideas

Continuous Innovations
Dynamically Radical Innovations
(kaikaku)
Disruptive Innovations
http://www.claytonchristensen.com/d
isruptive_innovation.html

Product Counterfeiting

Since 1982, the global trade in illegitimate goods has increased

from $5.5 billion to approximately $600 billion annually.
Approximately 5%-7% of the world trade is in counterfeit goods.
The World Customs Organization estimates, product
counterfeiting caused $512-600 billion in lost sales.
In 2010, losses to software piracy were more than 67 billion
dollars.
The largest number of counterfeit goods come from:
China
Brazil
Taiwan
Korea
India

Product Counterfeiting

FIGHTING PRODUCT COUNTERFEITING

Secure valuable intellectual property rights

patent applications
registration of trademarks
mask works

Act to enforce

legislative action
bilateral and multilateral negotiations
joint private sector action
individual company measures

Counterfeiting In India
15%-20% of fake medicines in India masquerade
as real.
Loss to music industry due to piracy annually is
Rs 600 Crores.
Film industry loses Rs 2000 crores a year due to
piracy
1 in 3 automotive parts are duplicates
10% of the FMCG market is accounted for by
fake products
10% of major soft drinks sold are spurious
10% - 30% cosmetics & toiletries and packaged
foods are counterfeits.
The estimated trade loss due to piracy in India
in 2006 stood at US$ 1208 million.

References

http://www.iacc.org/aboutcounterfeiting/the-truth-aboutcounterfeiting.php
http://www.ficci.com/sector/5/Add_docs/f
actsnfigures.pdf
http://www.thehindubusinessline.in/200
5/11/15/stories/2005111502750800.htm
http://www.gacg.org/