Glossary of Chp 11 Global Marketing Management

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Developing New Products for Global Markets
*A cornerstone of a global marketing mix program is the set of product policy decisions that multinational companies (MNCs) constantly need to formulate.
-What new products should be developed for what markets?
-What products should be added, removed, or modified for the product line in each of the countries in which the company operates?
-What brand names should be used?
-How should the product be packaged and serviced?
Global Product Strategies
*companies can pursue three global strategies to penetrate foreign markets
-Extension Stragtegy
-Adaptation Strategy
-Invention Stratgegy
Extension Strategy
Part of global product strategies
*companies extend their homegrown product/communication strategies to their foreign markets
Adaptation Strategy
Part of global product strategies
*enables the firm to cater to the needs and wants of its foreign customers
Invention Strategy
Part of global product strategies
*products are designed from scratch for the global marketplace.
5 Strategic options for the global marketplace
*Strategic Option 1: product and communication extension--Dual Extention
*Strategic Option 2: product extension--communication adapation
*Strategic Option 3: product adaptation--communications extension
*Strategic Option 4: product and communications adaptation--dual adaptation
*Strategic Option 5: product invention
Strategic Option 1: Product and Communication Extension--Dual Extension
*company chooses to market a standardized product using a uniform communications strategy.
*Early entrants and companies with few resources use this approach.
*Dual extension might also work when the company targets a "global" segment with similar needs.
Strategic Option 2: Product Extension--Communications Adaptation
*due to differences in the cultural or competitive environment, the same product often is used to offer benefits or functions that dramatically differ from those in the home market.
*Market a product in different companies using customized advertising campaigns.
Strategic Option 3: Product Adaptation--communications extension
*firms adapt their product but market it using a standardized communications strategy.
*local market circumstances often favor the case of product adaptation.
Strategic Option 4: Product and Communications Adaptation--Dual Adaptation
*differences in both the cultural and physical environment across countries
*must adapt the company's product and communications strategy
Strategic Option 5: Product Invention
*bring new products that cater to common needs and opportunities around the world.
Standardization Versus Customization
*Standardization: offering a uniform product on a regional or worldwide basis.
*Customization: management focuses on cross-border differences in the needs and wants of the firm's target customers.
Forces Favoring Globalized Product Strategy
*Common customer needs
*Global Customers-customers typically require services or products that are harmonized worldwide
*Scale economies:global means cheap production, good and low prices.
*time to market:global means shorter time to make a product
*regional market agreements:
Degree of Standardization
*what elements of my product policy should be tialored to the local market conditions?
Degreee of Standardization
*developing a randge of product parts that can be used worldwide.
Core Product (common platform)
Degree of Standardization
*the design of a mostly uniform core product or platform and attachments are added to match local market needs.
*balancing act between standardization and adaptation
Overstandardization vs. overcustomization
Degree of Standardization and part of Core Product
*overstandardizaton:too much standardization stifles initiative and experimentation at the local subsidiary level.
*overcusotmization:by adapting too much to local market conditions, an import runs the risk of losing that cachet and simply becoming a me-too brand.
Multinational Diffusion
the speed and pattern of market penetration for a given product innovation usually differ substantially between markets.
*The adpotion of new products is driven by three types of factors:
-individual differences: willingness to try out new products
-personal influences
-product characteristics
Product Characterisitcs
Multinational Diffusion
*Relative advantage: what extent does the product offer more percieved value
*Compatibility: is the product consistnet with exsiting values and attitudes
*complexity: is the product easy to understand
*triablitlity: are prospects able to try out the product
*observability: how easy will it be for adopters to see results.
Other Country Characterisitics used to predict new product penetration patterns
*Homogeneous Population: market is not diverse
*Lead Countries: where a product is introducted first
*lag countries: where a product is introducted after the lead country
*Cosmopolitanism: people who look beyond their immediate social surroundings
*Mobility: the ease with which members of a social system can move and interact with other memebers
*Labor Force Profile:impacts the spread of certain types of innovations
*individualism and national innovativeness
Identifying New Product Ideas
Dveloping New Products for Gloabl Markets
*identify new product ideas
*concept testing
*test marketing
*timing of entry
*screening weeds out ideas with little potential.
Concept testing
*a product concept is a fairly detailed description of the new product or service.
*Focus groups are used to assess the appeal of the product concept
*conjoint analysis
Conjoint Analysis
part of concept testing
*tradeoff analysis, a more sophisticated procedure.
*must decide if you should standardize or not
Test Marketing
*the dress rehearsal prior to the product launch.
*makes accurate projections as to the market shares, volume and penetration the new product will have.
Timing of Entry
Timing of entry
*global phased rolout where new products trickle downn a cascade-like manner.
*takes a long time
*for long product life cyle only
Timing of entry
*simultaneous worldwide entry.
*used for shorter product life cycle.

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