Chapter 10 Global Product Development      For International Marketing Final Exam December, 14 - 2011

Strategies for global product development is mostly talking about…

1.  What new products should be developed

2.  What product should be added, removed and modified for the product line in each

countries

3.  What brand name should be used

4.  How the product should be packaged

3 Global Strategies To Penetrate The Foreign Market

1.  Extension –  Product with a well-developed image uses the

same brand name in a different product line category.

–  Example: Coca Cola is produce Diet Coke

2.  Adaptation –  New product based on modifications and

improvements in order to fulfill the needs of foreign customers

–  Example: McDonald sell chicken and rice in Indonesia

3 Global Strategies To Penetrate The Foreign Market

3. Invention –  Product are designed from scratch for the global

market place –  Example: Apple Inc. create iPod

Extension Product Adaptation Product Invention Product

Standardization vs. Customization

•  Standardization –  Offering a uniform products on a regional or worldwide

basis –  In order to meet local regulations and market conditions

(like policy, regulations and language)

•  Customization –  Focus on what cross-bordered differences in the needs

and wants of the firms target customers –  Appropriate changes are made to match local market

conditions

Five Forces That Favor Globalized Product Strategy

1.  Common Customer Needs – Customers needs are very similar or various in

the different countries 2.  Global Customers 3.  Scale Economics

–  The cost advantage that an enterprise obtains due to expansion

–  Example: goods can be produce in a larger scale, yet with less input cost

Five Forces That Favor Globalized Product Strategy (Cont’d)

4. Time-To-Time Market – Companies must to seek ways to shorten the

time to bring new products to the market

5.  Regional Market Agreements

Two Alternatives In Product Design Policies  

1. Modular Approach –  Offering a uniform products on a regional or worldwide basis –  In order to meet local regulations and market conditions (like

policy, regulations and language)

2. Core Product (Common Platform Approach) –  Focus on what cross-bordered differences in the needs and

wants of the firms target customers –  Appropriate changes are made to match local market

conditions