International Product Policy

1
International Product Policy

• Presented by
• Bronia McConnell
• David McGurnaghan
• Gillian Smythe
• Peter Snodden
• Louise Galbraith
• Richard McQuillan

2
Introduction

• Global marketing mix or programme
• Product
• Promotion
• Price
• Place (distribution)

3
Introduction

• Types of product
• physical good
• service
• digital good
• right of sale

4
Levels of a product

• 3 or 5 - 3 sufficient
• core
• expected
• augmented

Core product
Augmented product
Expected product
5
Question is????

• Whether to
• Standardise or Adapt

6
Factors influencing product decision making

• timing within product policy
• differences and similarities found across
  countries
• cultural - need to adapt/timing of introduction
• legal - product standards/specifications
• environmental - legal/social responsibility
• technological - customisation possibilities/produc
  ts spanning country divide
• convergence/divergence of consumer tastes

7
Marketing questions

• Choices involved in international product policy
• branding
• positioning
• innovate or adapt or standardise
• packaging and labelling
• product lines

8
International product life cycle

• The concept of the Product Life Cycle (PLC)
  according to Svend Hollensen provides useful
  inputs into making product decisions and
  formulating product strategies.

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Product Life Cycle has four stages

• Introduction
• Growth
• Maturity
• Decline

10
Marketing support can be achieved through

• Product improvements
• Reposition perception of the product
• Reach new users of the product
• Promote new uses of the product

11
Comparisons of product forms

• Example from Hollensen, showing comparisons of
  PLC for product forms.
• (Technological life cycles) and a single product
  model, i.e different VCR systems

12
PLC for different countries

• When expanding the concept of the PLC to
  international markets two different approaches
  appear.
• International Product Life Cycle (IPLC) a macro
  economic approach
• PLCs across countries a micro economic approach

13
Product life cycle of different countries for a
specific product
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Product life cycle

• A Product Life Cycle is a useful planning device
  and can have a direct bearing on a companys
  survival
• The life cycle provides useful insights into
  making product decisions and formulating product
  strategies
• The International Product Life Cycle helps
  identify promising markets across national
  boundaries

15
Product Design in a Global Environment
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Environmental factors affecting product features

• Level of literacy
• Real disposable income
• Technical skills of potential customers
• Climate
• Power level
• Maintenance support

17
Physical factors affecting product features

• Population size
• Population density
• Geographic area
• Surroundings
• Space / Size requirements

18
Product dimensions

• Size, volume, capacity
• Physical difference in characteristics of ethnic
  groups e.g. - Japanese have smaller wrists than
  Americans
• Metric versus non-metric
• Standardise versus adapt

19
Design Features

• Raw materials
• Intended purpose?
• Culture
• Level of performance?
• Standardise versus adapt?

20
Quality

• Intended function and circumstance of use
• Technical skills of potential customers
• Maintenance support - e.g. BMW

21
Global standards

• National Organisation who set standards
• British Standards Institute (BSI)
• American National Standards Institute (ANSI)
• Canadian Standards Association (CSA)
• International Standards Organisation (ISO)
• Europe
• USA

22
Positioning

• Where good is placed to be sold
• Careful research required
• Image of product and position determines product
  price - Value perceived image
• The product or company, which does not have a
  clear position in the customers mind consequently
  stands for nothing and is rarely able to command
  more than a simple commodity or utility price.
  (Hollenson, S 2001)

23
Positioning

• Positioning can vary in different markets
• The good has to appeal to people in the markets
  where it is positioned, otherwise they will not
  sell
• Some markets are similar, this may mean that
  producers do not need to alter there marketing of
  their product between different countries

24
Positioning

• Image of product needs to be clear for the
  consumer - clearly identifying what role the
  product plays
• Country of origin effects are important for some
  goods in terms of consumer perception

25
Packaging and Labelling

• Probably the cheapest, quickest and easiest way
  to adapt a product to make it more suitable to
  foreign markets. (Albaum, G et al. 1998)
• The package and the label are the first thing
  that the consumer sees of the product, it has to
  relay a good message

26
Packaging and Labelling

• Multilingual packaging is becoming more common
  e.g. DVDs, Coca - Cola
• This is a huge advantage to the international
  producer
• Environmental Issues have to be considered before
  a product is packaged for world-wide distribution

27
Packaging and Labelling

• Should be kept to a minimum cost in order to
  reduce overall cost to the producer

28
BRANDING

• A brand is a name, term, design or any other
  feature that identifies one sellers good from
  anothers. ( Dibb, et al )

29
BRANDING

• Help buyers identify specific products and
  evaluate the quality of those products
• Creates loyalty where one buyer chooses that
  product / service repeatedly

30
Marketers should

• Choose a brand name that is easy for customers to
  remember.
• Keep name and image of the product simple -
  especially true if language is an issue in other
  markets

31
Marketers need to decide appropriate strategy

• STANDARDISATION
• INTERNATIONALISATION (LOCALISATION)

32
Internationalisation

• Involves changing aspects of the product to meet
  the needs of a specific market
• Creates local recognition
• Allows organisation to vary quantity provided
  (packaging)
• BUT
• may result in loss of some economies of scale
• create image problems

33
Standardisation (Global Brand)

• Presents itself with a uniform image
• Allows greater economies of scale to be reached
• Less confusion of brand image across markets

34
Disadvantage

• Some producers may be deemed unacceptable because
  of what they represent
• Assumes markets are homogeneous
• May be expensive to maintain consistency of
  quality etc.

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INTERNATIONAL PRODUCT LINE MANAGEMENT

• An organisation must decide on the product line
  that will be sold in each foreign market.

36
Two Approaches

• Replicate
• Develop new products

37
Benefits of International product line management

• All-star Team
• Market testing

38
Factors effecting International product lines

• Government regulation
• Level of economic development
• Method of growth
• Length of time in market

39
Strategy for international product line

• Extension of domestic product line

40
Other factors

• Introducing new products
• Dropping/replacing products

41
Conclusion

• Marketing products in the international market
  place is more complex
• Cultural issues such as language, environmental
  issues and number of competitors need to be
  carefully researched before entering the
  international market place

42
Conclusion

• Failure of a company to research the points that
  we have highlighted could result in them failing
  outside there domestic market place, losing
  revenue, threatening there image and possibly
  putting there business in jeopardy

43
References

• Albaum, G., Strandskov, J., Duerr, E., (1998),
  International Marketing and Export Management,
  3rd Edition, Addison Wesley Longman
• Dibb, S., Simkin, L., Pride, W.M., Ferrell,
  O.C., (2001), Marketing Concepts and Strategies,
  4th European Edition
• Hill, C.W.L., (2000), International Business
  Competing in the Global Marketplace, 3rd Edition,
  McGraw-Hill
• Hollensen, S., (2001), Global Marketing, 2nd
  Edition, Prentice Hall
• Jeannet, J-P., Hennesey, H.D., (2001), Global
  Marketing Strategies, 5th Edition, Houghton
  Mifflin
• Paliwoda, S.J., Thomas, M.J., (1998),
  International Marketing, 3rd Edition,
  Butterworth-Heinemann
• Strandskov, J., Duerr, E., Dowd, L., (1994),
  International Marketing and Export Management,
  2nd Edition, Addison-Wesley Publishing
• Terpstra, V., Sarathy, R., (1991),
  International Marketing, 5th Edition, Dryden
  Press