Marketing CHapter 10 Global Product Strategies

5 global product strategies
Strategy 1 : product and communication extension- Dual Extension

Strategy 2: product extension- communications adaptation

Strategy option 3: Product adaptation- Communications Extension

Strategy 4: product and communications adaptation – Dual Adaptation

Strategic Option 5: Product Invention

Strategy 1 : product and communication extension- Dual Extension
Market a standardized product using a uniform communications strategy

early entrants to the global arena use this approach

small companies use it because it is less expensive, because it is expensive to change ur approach to advertising as well as changing the product u sell

blistex sells the same lip balm all over the world with the same strategy

product driven not market driven

a standardized product is good for economies of scale because it offers a lot of savings in production


it can alienate foreign customs which could lead them to using a local product instead or using another firm that makes itself fit their needs

Strategy 2: product extension- communications adaptation
due to difference in culture or the competitive environment, the same product is sold but it is advertised in a different way to suite the particular country.

wrigely chewing gum advertised to usa cause its smoking alliterative

it advertised to Europe’s for its dental benefits

it advertises to asia for its facial fitness benefits

Strategy option 3: Product adaptation- Communications Extension
firms adapt their product but market it using a standardized commutations strategy.

local market circumstance favor the case of product adaptations

the companies expansion strategy could call for product adaptation too. because companies add brands to their product portfolio via accessions of local companies.

Strategy 4: product and communications adaptation – Dual Adaptation
differences in both cultural and physical environment across countries calls for a dual adaptation strategy

under these circumstances adaptation of the companies product and communications strategy has to happen

slim fast had to change its product to comply with government regulations for weight loss products. in germany they used a celebrity to advertise but in England you are not allowed to do that so they used a teacher, the also changed the product because in england banana flavor was a favorite but it wasn’t offered in other countries

Strategic Option 5: Product Invention
global marketers are supposed to come up with products that will work world wide rather than just locally. so they need to come up with products that fit the opportunities world wide. so make products with a global mindset.
offerings a uniform product on regional or worldwide basis. only allowing for very minor alterations.
it capitalizes on commonalities in customers needs across countries.

it minimizes cost. by saving cost in manufacturing it can offer the product for cheaper

product driven orientation- lowers costs via mass production

management focuses on cross boarder differences in the needs and wants of the firms target consumers. changes need to be made to match local market conditions

market driven mindset- increase customer satisfaction by adapting your product to local needs

5 push factors for standardization
common customer needs
global customers
economies of scale
time to market
regional market agreements
common customer needs
needs are similar world wide. functional and use of product are the same.
global customers
in business to business marketing the shift toward globalization means that a significant part of the business of many companies comes form multinationals companies that are essentially global customers. thus buying and sourcing decisions are commonly centralized. thus customers will demands services and products that are the same worldwide
scale economies
cost saving is what drives standardization. product is less which means products can be sold for less
time to market
being innovative is not enough to be competitive

companies need to shorten the time it takes to bring new products to the market

by centralizing research and consolidating new product development efforts on few products companies and reduce the time it take to get new products to the market

Regional Market Agreements
the formation of these agreements encourages companies to launch regional products or redesign existing products as pan regional brands. like what they did in europe it takes a regional product like radar candy bar and rename it twix and use it in more then just one country
Alternative approach 1 Modular Approach
develop a range of product parts that can be used worldwide. the parts can be assembled into numerous product configurations. scale economies flow form the mass production of more or less standardized components at a few sites.

like the boiler company from france

they sell boilers euro wide but they use the same core stuff ( burners and controls) and then customize the rest to fit each countries desires

alternative approach 2 core product ( common platform) approach
start with the same design which is uniformed and offer add ones.

this reduced production and purchasing costs

companies are now flexible and able to modify the product easily

in the south they have stronger ac

in the north a better heater

Developing new products for global markets
new products are the bread and butter of a companies growth strategy. but its hard to develop new products cause its time consuming and costly. its hard to do course they are trying to coordinate the processes on a worldwide basis.

1 identify new product ideas- do this by focusing on the 4 Cs- company, customers, competition, and collaborators ( the distribution channels) get ideas from within the company, from your customers wants, from what ur Compton is doing, and with the help of those distributing your product

2 screening- every idea isn’t good-you screen to weed out the ideas that wont work-test the idea based on set criteria to see if it will work

3 concept testing- once the idea has been established a product concept must be made which is a detailed description of the product. then to asses the appeal of this product. give the concept to focus groups( made up of perspective customers) you discuss the good and bad about it and if they would buy it

4 test marketing- a field experiment- you advertise the new product to a select set of cites o assess its sales potential. you do this before u launch a product so you will be able to project your results. these test can be time consuming and costly

5 timing of entry

TIMIng of entry
waterfall and sprinkler model are the options for when to release a product
waterfall model
a company releases the new product stage wise in its different country markets

first in home market
2nd in other advanced markets
3rd less advanced markets

mcdonalds did this so did coke and wal mart

adaptations of the marketing strategy fo the host market can be time consuming and costly

there may not yet be good partners in other counties so they should establish at home first

waterfall is better than sprinkler when

the life cycle of the product is long
non favorable conditions govern the foreign market
like small market size , slow growth, high fixed costs to enter, the host country market has a weak competitive climate because of weak local competitors, competitors willing to cooperate, no competitors

sprinkler strategy
roll it out in a very short tim period all over the world

the growing prominence of universal segment and concerns about competitive pre emption in the foreign markets are two major factors behind this approach

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