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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