Product Decisions

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Product Decisions
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Dynamics have changed

• PLCs shorter
• Fast production response
• Shorter survival time
• Product development changed
• from sequential to parallel

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Yoplaits Waterfall approach
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Universality of Products
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Universality of Products
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Geographic Expansion-Strategic Alternatives
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What type of product?

• Local single national market
• - no global leverage
• - no experience transfer
• International several national markets
• - some marketing and experience leverage
• - market niches are important
• Global target needs in global markets
• - divers are cost of product, RD
• - globalizing industry gt develop global
  products

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When to use global products and services

• Market drivers gt common customer needs
• gt global customers
• Cost drivers gt high R D costs
• gt global scale economics
• Competitive drivers gt technology advantage
• Government drivers gt trade policy
• gt common standards

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The Two Fundamental Questions
1. What is the deep need that we satisfy? What
is our raison detre?
2. What is our core competence? What are we
really good at?
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Old Wisdom in International Marketing

Standardize marketing process not content.
New Wisdom in Global Marketing
Search also for opportunities to use uniform
content.
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Product developmentlearning from the Japanese
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Product and Service Design Considerations

• Preferences
• Costs
• Laws and Regulations
• Compatibility
• Labeling and instructions

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Does environment affect product design?

• Literacy gt remarking, simplification
• Labour costs gt automation or manualization
  
• Income gt quality and price changes
• Styling preferences gt adapt appearance
• User mobility gt standardize basic product

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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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Brands in product policy

• One name single product, no culture conflict
• Adapt name Nescafe Gold (Germany)
• Gold Blend (U.K.)
• Different name translation not possible, range
  of segments served (cigarettes)
• Company name flexibility from trademark plus
  local brand name (automobiles)

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Global Product / Brand LaunchAlternatives

• Sequentially launch products (Yoplait)
• Simultaneously Launch Product (Sony
  Walkman)
• Transform a Domestic Product / Brand (Coca
  Cola)

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Deciding on Brand

• Can product be differentiated?
• Is brand manufacturer-dependent?
• Are there inter-market differences?
• Are there intra-market differences?

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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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Purpose and Positioning
? What Will Our Business Be? ?
What wants does the consumer have that are not
being adequately satisfied today? It is the
ability to answer this question correctly that
usually makes the difference between a growth
company and one that depends on the rising tide
of its industry.
- Peter Drucker, The Practice of Management, 1954
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Global Positioning

• Increase effectiveness
• Tried and tested in many countries
• Provide basis for commonality in other elements
• Increase competitive leverage
• Devote resources to build assets to support one
  positioning

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Global Product / Brand Development
Steps To Create A Global Product/Brand

• Identify strategic markets
• Identify and understand needs in those markets
• Identify global use conditions and
  requirements
• Search for commonalities and differences
• Extend, adapt, or create a product to fill
  the need

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The View from Toyota

• Our global strategy used to center on world
  cars, which we would modify slightly to
  accommodate demand in different markets. Today
  our focus is shifting to models that we develop
  and manufacture especially for selected regional
  markets.
• Examples
• North America Avalon and and Camry coupe and
  station wagon. 1997 Minivan
• NUMMI Joint Venture Tacoma light pickup.
• Europe Carina E
• Southeast Asia Toyota Utility Vehicle (Kijang
  in Indonesia, Tamaraw in Philippines)

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The View from Honda

• We are the most international of the Japanese
  companies. At the moment we are the most
  diversified, and we will be more diversified in
  the future. Still, I think it would be very hard
  to build a one-type world car. In the end, I
  dont think it would be very efficient.
• ---Nobuhiko Kawamoto
• President and CEO, Honda Motor Company

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Car Wars
Availability of American cars with
right-hand-drive in Japan
Maker Number of Total Number Number
of models of versions available Sales
Outlets GM NONE NONE
249 Ford 1 1
310 Chrysler
1 2
1,917
Availability of Japanese cars with
left-hand-drive in the US
Maker Number of Total Number Number
of models of versions available Sales
Outlets Toyota/Lexus 15 37
1,359 Honda/Acura 16 49
1,285 Nissan/Infiniti 12
31 1,250 Mazda 9 19
906 Mitsubishi 6 16
514 Others 10 27
1,586
Source Economist, June 17, 1995
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Summary

• Dynamics short PLC, fast response, parallel
  approach
• Universality of products depends on many things
• Global product drivers are market, cost,
  competition, government
• Management orientation affects design and launch
• Standardization has many benefits
• Branding depends on differentiability,
  manfucaturer and market differences