Product Strategy

for

International Markets

Dr. Rakesh Mohan Joshi www.rakeshmohanjoshi.com

 Lecture Objectives:

•To describe the concept of product decisions for

international markets

•To explain product standardization vs. adaptation in

international markets

•To understand the quality, packaging, and labelling

decisions in international markets

•To discuss the process of new product launch and diffusion

in international markets

•To examine international product strategies

Dr. Rakesh Mohan Joshi www.rakeshmohanjoshi.com
 A product is anything that can be offered to a
market to satisfy a want or need. Products that are
marketed include physical goods, services,
experiences, events, persons, places, properties,
organisations, information and ideas

Dr. Rakesh Mohan Joshi www.rakeshmohanjoshi.com

 A product consists of:
• Core Component: the core benefit or
problem solving services offered by the
product
• Packaging Component: The features,
quality, design, packaging, branding, and Augmented
Component
other attributes integral to a product’s core
benefit.
• Augmented Component: The support
services and other augmented components Core
Component
such as warranties, guarantees and after
sales service
Packaging
Component

Dr. Rakesh Mohan Joshi www.rakeshmohanjoshi.com

 Identification of Products for
International Markets

The firm has to carry out preliminary screening, that is

identification of markets and products by conducting

market research. A poorly conceived product often

leads to marketing failures.

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 Developing Products for International
Markets

• Ethnocentric Approach

•Polycentric Approach

•Regiocentric Approach

•Geocentric Approach
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 Product Standardisation Vs. Adaptation

Globalized Customized
Product Product

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 Continuum of Sensitivity to the Foreign Environment

Insensitive Highly sensitive

Industrial products Basic consumer High style and

and services staples faddish
consumer
products

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 Product Standardization
The process of marketing a product in overseas markets with
little change except for some cosmetic changes such as modified
packaging and labelling.

The benefits associated with using standardized products:

• Projecting a global product image

•Catering to customers globally

•Cost savings in terms of economies of scale in production

•Designing and monitoring various components of marketing

mix economically

•Facilitating the development

Dr. Rakesh Mohan Joshi of a product as a global brand
www.rakeshmohanjoshi.com
 Factors Favouring Product Standardisation
in International Markets

• High level of technology intensity

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 Factors Favouring Product Standardisation
in International Markets

•Formidable Adaptation Costs

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 Factors Favouring Product Standardisation
in International Markets

•Convergence of customer needs worldwide

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 Factors Favouring Product Standardisation
in International Markets
• The country of origin impact

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 Product Adaptation:
Key to Success for Chinese Goods

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 Product Adaptation
Making changes in a product in respond to the needs of the
target market is termed product adaptation or customization.

Benefits of product adaptation include:

•Enables a firm to tap markets, which are not accessible due to

mandatory requirements

•Fulfills the needs and expectations of customers in varied

cultures and environments

•Helps in gaining market share

•Increases sales leading to economies of scale

Dr. Rakesh Mohan Joshi www.rakeshmohanjoshi.com
 Factors Influencing Product Adaptation in
International Markets
Mandatory:
•Government Regulations

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 Factors Influencing Product Adaptation in
International Markets
Mandatory:
•Standards for Electric Current

220V/110V

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 Factors Influencing Product Adaptation in
International Markets
Mandatory:
•Operating Systems

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 Factors Influencing Product Adaptation in
International Markets
Mandatory:
•Measurement Systems

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 Factors Influencing Product Adaptation in
International Markets
Mandatory:
•Packaging and Labelling Regulations

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 Factors Influencing Product Adaptation
in International Markets
Voluntary:
•Consumer Demographics

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 Factors Influencing Product Adaptation
in International Markets
Voluntary:
•Culture

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 Factors Influencing Product Adaptation
in International Markets
Voluntary:
•Local Customs and Traditions

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 Factors Influencing Product Adaptation
in International Markets
Voluntary:
•Condition of Use

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 Factors Influencing Product Adaptation
in International Markets
Voluntary: India
•Price

USA

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 Trade-Off Strategy Between Product
Standardization and Adaptation

Customization of products involves substantial

commitment of financial resources and adversely
affects economies of scale. Therefore, a trade-off
has to be evolved for the extent of product
adaptation in international markets.

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 Product Launch for International
Markets

The process by which innovations spread

throughout a social system over time

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 New Product Launch

Waterfall Approach: The launch of a new product in international markets in a

phased manner.

Country A

Country B
Market

Country C

Time

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 New Product Launch

Sprinkler Approach: Simultaneous product launch in various international

markets.

New Product

Country A Country B Country C

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 Product Life Cycle in International Markets

The patterns followed by a product in international markets in terms of its

production and market demand.

Other
advanced
Exporting
nations
LDCs
Local
innovation

1 2 3 4
0
Time

USA
(initiating
Country)
Importing

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 International Product Strategies
Product
Don’t change Adapt Develop new
product product product
Promotion

Don’t Straight Product

change adaptation adaptation
promotion Product
Invention
Adapt Communication Dual
promotion adaptation adaptation

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 Disruptive Technologies:
Innovative Products would replace Traditional Ones

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