Product Management

and Global Brands

Chapter 11
Product Variables
The Core Product
a product or services that is essentially the same as that
of competitors.
The Tangible Product
a product or service that is differentiated composition,
origin, or tangible features from competing products.
The Augmented Product
a product or service which is serviced after the sale and
carries a warrantee from the producer, producing a
continuing relationship with the seller.
Standardization versus Adaptation
International market approach alternatives
to adaptation.
Sell the product as it is internationally.
Modify product for different countries or
regions.
Design new products for foreign markets.
Incorporate all differences into one product and
introduce it globally.
 Standardization versus Adaptation
FACTORS ENCOURAGING FACTORS ENCOURAGING
STANDARDIZATION ADAPTATION
Economies of scale in Differing use conditions
production Government and
Economies in product R&D regulatory influences
Economies in marketing Differing consumer
“Shrinking” of the world behavior patterns
marketplace/economic Local competition
integration
True to the marketing
Global competitions
concept
 Strategic Adaptation to Foreign Markets
High
Need for
Adaptation

Degree of
Cultural
Grounding

Low

Industrial/ Technology Intensive Consumer

Nature of Product
The Market Environment
Government Regulations
Political and social agendas often dictate regulatory
requirements.
Nontariff Barriers
Product standards, testing, subsidized local products.
Customer Characteristics, Expectations, and
Preferences
Physical size, local behaviors, tastes, attitudes, and
traditions.
Consumption patterns, psychosocial characteristics, and
general cultural criteria.
The Market Environment
Economic Development
The stage of economic development affects the market
size and demand characteristics. Backward innovation of
the product may be required to meet local requirements.
Competitive offerings
Monitoring competing local products is critical in
adjusting the product for competitive advantage.
Climate and geography
Local climatic conditions and can make products
vulnerable to damage.
Product Characteristics
Product Constituents
Branding
Packaging
Appearance
Method of Operation or Usage
Quality
Service
Country-of-Origin Effects
Packaging and Appearance
Packaging serves three major functions:
 Protection
• Improper handling and pilferage
 Promotion
• Language and symbols
 User convenience
• Packaging aesthetics- color and shape, overall size, and purchase
quantity
Adaptations in styling, color, size, and other
appearance features play an important role in how
a consumer perceives a product.
Method of Operation or Usage
The product that is operable in the domestic
market may not be operable in the foreign market.
Electrical voltages and connectors vary around
the world. English and metric standards are not
comparable.
Software may have to be translated into the local
language.
Quality and Service
Quality is essential to marketing products
internationally
ISO compliance may be required by buyers.
Servicing products in international markets
requires producers to develop local repair staffs.
Country-of-Origin Effects
The origin of a product may have a strong
effect on consumer perceptions and biases
about foreign products.

Swiss
France “Mad Cow”
Company Considerations

Organizational capabilities?
Is it worth it?
Can we afford not to do it?
Can a specific return-on-investment (ROI) be
attained?
What about quality, price, and user perceptions?
Warranties?
Managerial talent?