Professional Documents
Culture Documents
New Product
New Product
DEVELOPING NEW
PRODUCTS FOR
GLOBAL MARKETS
Group members:
Denise Caesar
Debbie Goodman
Delicia John
Roxanne Risbrooke
CHAPTER OUTLINE
1. Introducing products into
foreign markets
2. Developing a global
product
3. New product development
processes for Global
markets
4. Introducing new products
to global markets
DEFINITIONS
STRATEGIC OPTIONS
1. EXTENSION STRATEGY –
Same approach as home market
2. ADAPTATION STRATEGY -
Makes changes to fit new market requirements
3. INVENTION STRATEGY -
Entirely new approach is developed for
the new market
STRATEGIC OPTIONS
4. STANDARDIZATON –
Same product, all markets
5. GLOBAL PRODUCTS -
Only some aspects of the product is standardized
OPTION 1.
PRODUCT EXTENSION – COMMUNICATION EXTENSION
Marketing/communications
Stock Holding
STANDARDIZATION VS ADAPTATION CONTINUED
Factors encouraging
adaptation/modification
Mandatory Modification:
Normally involves either adaptation to
available fuels
Discretionary Modifications:
Modularity
This process involved the development of standard
modules that can easily be connected with other
standard modules to increase the variety of products.
Subsidiaries
o Subsidiaries may assume R&D function if products require
some adaptation to a local market
o Foreign subsidiaries of international firms rarely play an
active role in the R&D unless they have manufacturing
responsibilities and capabilities
o Sales subsidiaries provide central organization with feedback
on product adjustments or adaptation, but generally their
participation does not go beyond the generation of ideas.
o A subsidiary located in a lead market is in a better position
to observe developments and to accommodate new
demands and can therefore act as an effective “listening
post”
Roles of involvement for the subsidiary:
Strategic leader role:
With responsibility for developing a new range of products to be
used by the entire company. This role will be handled by a highly
competent subsidiary in a market of strategic importance.
Contributor:
This role would be assumed by a subsidiary in a distinct area and
the subsidiary will adapt some products in smaller though
important markets
Implementer:
These are smaller subsidiaries located in less strategic markets
that act as implementers of the overall strategy without making
a major contribution to either technology or strategy
Sources of New Product Development #4
Purchasing Research and Development from
Foreign Countries
Advantages:
Efficient, cost-effective way to create a new product
experience
Establish supplier relationships
Concept Test
This involves presenting the product concept to appropriate
target consumers and getting their reactions. The concepts can
be presented symbolically or physically. However the more the
tested concepts resembles the final product or experience, the
more dependable concept testing is.
Test Market
The ultimate way to test a new consumer product is to put it
into full-blown test markets. The company chooses a few
representative cities, and the sales force tries to sell the trade
on carrying the product and giving it good shelf exposure, full
advertising and promotional strategy, similar to the one use in
the home market.
First entry
Parallel entry
Late entry
Timing of New Product Introduction continued
First Entry
The first firm entering a market usually enjoys first
mover advantages of locking up key distributors and
customers while gaining the reputation of product
leader. If the product is rushed before to market
before it is thoroughly debugged, the product can
acquire a flawed image.
Timing of New Product Introduction Continued
Parallel Entry
The firm might time its entry to coincide with the competitor’s
entry. The market may pay more attention when two
companies are advertising the new product.
Late Entry
The firm might delay its launch until after the competitor has
entered. The competitor will have borne the cost of educating
the market. The competitor’s product may review faults the
late entrant can avoid.
Timing of New Product Introduction continued