International Marketing PDF - BBA Semester 6

International Marketing Unit – 05 Product for International Market Semester-06 Bachelors of Business Administration  International Marketing...

International Marketing Unit – 05 Product for International Market Semester-06 Bachelors of Business Administration  International Marketing JGI x UNIT Product for International Market Names of Sub-Unit Meaning of product, Product planning for international market, Selection of product, The International Product and its Life cycle, Standardisation vs Adoption decision, Product designing. Overview This module explores the intricacies of product planning in the international market. It covers product selection, the international product life cycle, standardization versus adaptation decisions, and product designing, offering insights into creating successful global products. Learning Objectives  Understand the key factors in product planning for international markets.  Evaluate the criteria for selecting products suitable for global markets.  Analyze the stages of the International Product Life Cycle.  Differentiate between standardization and adaptation decisions in global product strategies. 2 UNIT 05: Product for International Market Learning Outcomes Upon completing this course, participants will  Demonstrate proficiency in formulating international product plans.  Critically assess the suitability of products for global markets.  Apply knowledge of the International Product Life Cycle to real-world scenarios.  Make informed decisions on standardization or adaptation of products for diverse international markets. Pre-Unit Preparatory Material  "Global Marketing Management" by Warren J. Keegan and Mark C. Green.  "International Business: Environments and Operations" by John D. Daniels and Lee H. Radebaugh. Table of topics 5.1 Meaning of product, 5.2 Product Planning For International Market, 5.3 Selection of product, 5.4 The International Product and its Life cycle, 5.5 Standardisation vs Adoption decision, 5.6 Product designing. 5.7 Conclusion : 3  International Marketing JGI 5.1 Meaning of product, A product is a tangible or intangible item that is offered for sale and can satisfy a need or want. It encompasses physical goods, services, ideas, or a combination of these elements. Products are designed, produced, and marketed to fulfill specific customer requirements. The concept of a product extends beyond its physical form to include associated features, such as quality, brand, packaging, and after-sales support. Key Components of a Product:  Core Product: The fundamental benefit or service that addresses the customer's primary need. For example, the core product of a smartphone is communication.  Actual Product: The tangible features and attributes that make up the physical product. This includes design, packaging, brand, and other characteristics.  Augmented Product: Additional services, warranties, or benefits that enhance the product's value. This could be customer support, extended warranties, or complementary services. Product Types:  Consumer Products: Goods and services directly consumed by end-users, such as clothing, electronics, and personal care items.  Industrial Products: Goods used in the production of other goods or services, like machinery or raw materials.  Services: Intangible offerings, including experiences, expertise, or assistance, such as education, healthcare, or consulting. Product Life Cycle: Products go through a life cycle, typically comprising introduction, growth, maturity, and decline stages. The product life cycle concept helps businesses plan marketing strategies, product improvements, and adjustments based on the changing market demands. Brand and Product Positioning: Branding involves creating a unique identity for a product to differentiate it from competitors. Product positioning involves how the product is perceived in the market relative to competitors, emphasizing its unique selling propositions. Understanding the meaning of a product is fundamental in marketing and business strategy, guiding decisions related to design, pricing, distribution, and promotion to meet customer needs and achieve organizational goals. 4 UNIT 05: Product for International Market 5.2 Product Planning For International Market, Product planning for the international market involves strategically developing and managing products to meet the diverse needs of consumers in different countries. It goes beyond domestic considerations and requires a comprehensive understanding of global market trends, cultural nuances, regulatory requirements, and competitive landscapes. Here's an in-depth exploration of key aspects:  Market Research:  Conduct thorough research on the target international markets to understand cultural preferences, consumer behaviors, and market trends.  Identify local competitors, regulatory requirements, and potential challenges unique to each market.  Product Selection:  Assess the adaptability of existing products to international markets or consider developing new products tailored to specific regions.  Evaluate the demand, competition, and regulatory constraints for each product in different markets.  Standardization vs. Adaptation:  Decide whether to standardize the product globally or adapt it to suit local preferences and requirements.  Consider factors such as cultural differences, language, legal regulations, and product usage patterns in making standardization or adaptation decisions.  International Product Life Cycle:  Understand the stages of the International Product Life Cycle, from introduction to decline, and tailor strategies accordingly.  Implement adjustments in product features, marketing messages, and distribution channels as the product moves through different life cycle phases in various markets.  Quality and Compliance:  Ensure that products meet international quality standards and comply with regulations in each target market.  Address any cultural or legal considerations related to product safety, environmental impact, and other relevant factors. 5  International Marketing JGI  Localization:  Localize product features, packaging, and marketing materials to resonate with the cultural preferences and languages of the target audience.  Consider adapting product sizes, colors, and functionalities to align with regional preferences.  Brand Consistency:  Maintain a consistent global brand image while allowing for local variations to cater to diverse markets.  Implement a cohesive brand strategy that reflects cultural sensitivity and resonates with consumers worldwide.  Distribution and Logistics:  Develop an efficient global distribution network considering factors such as transportation costs, customs regulations, and local distribution channels.  Optimize logistics to minimize lead times and ensure timely delivery to international markets.  After-Sales Service:  Establish a robust after-sales service and support system to address customer queries, warranty issues, and product maintenance on a global scale.  Consider cultural differences in customer service expectations and communication styles.  Continuous Monitoring and Adaptation:  Regularly monitor market dynamics, consumer feedback, and competitive developments to adapt product strategies accordingly.  Implement agile approaches to respond quickly to changes in international markets and maintain a competitive edge. By meticulously planning and executing these strategies, businesses can position their products effectively in the international market, fostering global success and sustainable growth. 5.3 Selection of product, Selecting the right product for international markets is a critical decision that involves a thorough analysis of various factors to ensure success in diverse cultural, economic, and regulatory environments. Here's a detailed exploration of the key considerations in the selection of products for global expansion: 6 UNIT 05: Product for International Market  Market Research:  Conduct comprehensive market research to identify global trends, consumer preferences, and potential demand for specific products in different regions.  Analyze the competitive landscape and assess the feasibility of entering a particular market with the chosen product.  Cultural Considerations:  Understand the cultural nuances and preferences of the target audience in different countries.  Choose products that align with local customs, traditions, and lifestyle choices to enhance acceptance and market penetration.  Legal and Regulatory Compliance:  Evaluate the regulatory requirements and legal constraints associated with the selected product in each target market.  Ensure that the product complies with international standards, safety regulations, and any country-specific certifications.  Adaptability and Customization:  Assess the adaptability of the product to different markets without compromising its core value.  Consider whether the product requires customization or localization to suit specific regional preferences, sizes, or usage patterns.  Market Demand and Trends:  Identify products with high demand in the international market or those aligned with emerging global trends.  Anticipate and capitalize on changing consumer behaviors and preferences, ensuring sustained demand for the selected product.  Competitive Landscape:  Analyze the competition in each target market to identify gaps or opportunities for differentiation.  Choose products that offer a unique value proposition or have a competitive advantage over existing offerings.  Logistical Feasibility:  Evaluate the logistical aspects of transporting and distributing the product globally.  Consider factors such as transportation costs, storage requirements, and the ease of handling the product throughout the supply chain. 7  International Marketing JGI  Market Entry Strategy:  Align the product selection with the chosen market entry strategy, whether it's exporting, licensing, joint ventures, or establishing a wholly-owned subsidiary.  Ensure that the selected product complements the overall market penetration plan.  Brand Fit and Image:  Assess how well the selected product aligns with the brand image and values of the company.  Consider whether the product reinforces the brand's positioning and resonates with the target audience globally.  Risk Management:  Evaluate potential risks associated with the selected product, such as economic fluctuations, political instability, or unforeseen challenges in specific markets.  Develop risk mitigation strategies to address uncertainties and ensure a resilient international market presence.  Long-Term Viability:  Consider the long-term viability of the product in global markets, taking into account factors like evolving consumer preferences, technological advancements, and industry trends.  Plan for product updates, innovations, or diversification to maintain relevance over time. By carefully considering these factors, businesses can make informed decisions when selecting products for international markets, increasing the likelihood of success and sustained growth on a global scale. 5.4 The International Product and its Life cycle, The International Product Life Cycle (IPLC) is a theoretical framework that describes the stages a product goes through in the global market. Developed by economist Raymond Vernon, the IPLC concept outlines how a product evolves over time, from its introduction to maturity and eventual decline. Here's a detailed exploration of each phase:  Introduction Stage:  Characteristics: The product is introduced in the domestic market where it was developed. 8 UNIT 05: Product for International Market  Market Focus: Initially, sales are limited to the home market.  Marketing Strategy: Heavy investment in promotion and distribution to create awareness and stimulate demand.  IPLC in International Context: Exporting may begin to select foreign markets, often to test receptivity and gather feedback.  Growth Stage:  Characteristics: Demand increases rapidly, and the product gains acceptance.  Market Focus: Sales expand in the domestic market and may start in foreign markets.  Marketing Strategy: Continued investment in promotion; pricing may stabilize as economies of scale are realized.  IPLC in International Context: Expansion into new foreign markets accelerates, and adaptation to local preferences may occur.  Maturity Stage:  Characteristics: Sales growth stabilizes, and the product reaches its peak in the domestic market.  Market Focus: Saturation in the home market; competition intensifies.  Marketing Strategy: Focus on cost control, market share retention, and product differentiation.  IPLC in International Context: Further expansion into international markets; standardization may be emphasized to maximize efficiency.  Decline Stage:  Characteristics: Sales decline due to changing consumer preferences or the emergence of newer technologies.  Market Focus: A decrease in demand in both domestic and international markets.  Marketing Strategy: Cost-cutting, discontinuation of less profitable variations, and consideration of product phase-out.  IPLC in International Context: Evaluate the feasibility of continued international presence; some markets may be exited. Factors Influencing the IPLC:  Technological Innovation:  Rapid advancements can shorten the life cycle by introducing newer, more efficient products.  Market Saturation: 9  International Marketing JGI  A mature product may face saturation in domestic markets, prompting companies to seek growth in international markets.  Global Competition:  Increased global competition can impact the pace of product adoption and decline.  Consumer Preferences:  Changing consumer preferences, influenced by cultural or economic factors, can drive the product life cycle. Challenges and Strategies in Each Stage:  Introduction:  Challenge: High initial costs and uncertainty.  Strategy: Focus on building brand awareness, gaining market share, and refining the product based on feedback.  Growth:  Challenge: Intensified competition.  Strategy: Invest in scaling production, expanding distribution, and adapting marketing strategies for different international markets.  Maturity:  Challenge: Saturation and declining profitability.  Strategy: Emphasize cost efficiency, explore international markets for growth, and consider product diversification.  Decline:  Challenge: Declining sales and potential obsolescence.  Strategy: Evaluate the potential for product revitalization, explore international markets with slower adoption rates, or consider product phasing out. Understanding and strategically managing the International Product Life Cycle is crucial for companies aiming to navigate the complexities of global markets and maintain a competitive edge over time. 5.5 Standardisation vs Adoption decision, When expanding into international markets, businesses face the crucial decision of whether to standardize their marketing strategies globally or adapt them to local conditions. The 10 UNIT 05: Product for International Market choice between standardization and adaptation has profound implications for product positioning, communication, and overall market success. Standardization:  Definition:  Standardization involves maintaining uniform marketing strategies, product offerings, and messaging across different international markets.  Advantages:  Consistency: Ensures a consistent brand image and messaging globally.  Cost Efficiency: Reduces costs associated with developing and managing multiple variations of products and marketing materials.  Global Brand Recognition: Builds a standardized brand identity that is easily recognizable across borders.  Challenges:  Cultural Differences: Ignores cultural nuances that may affect consumer preferences and behavior.  Market Variation: Fails to address specific market needs and differences.  Examples:  Fast food chains like McDonald's often standardize their menu items globally, but may introduce localized options in response to cultural preferences. Adaptation:  Definition:  Adaptation involves tailoring marketing strategies, product offerings, and communication to meet the specific needs and preferences of each local market.  Advantages:  Cultural Relevance: Addresses cultural differences, increasing the product's appeal to local consumers.  Market Responsiveness: Allows for quick adjustments to changing market conditions.  Competitive Edge: Positions the brand as sensitive to local needs, fostering consumer trust.  Challenges:  Increased Costs: Developing customized products and marketing materials for each market can be more expensive. 11  International Marketing JGI  Brand Consistency: May lead to challenges in maintaining a consistent global brand image.  Examples:  Coca-Cola adapts its marketing strategies and product formulations to suit local tastes, offering different variations of its beverages in various countries. Factors Influencing the Decision:  Cultural Variations:  The extent of cultural differences between home and target markets influences the decision.  Product Type:  Some products may require adaptation due to cultural or regulatory considerations, while others can be standardized more easily.  Competitive Landscape:  The level of competition and the strategies employed by competitors in each market impact the decision.  Economic Considerations:  Economic factors, such as income levels and purchasing power, may necessitate adaptation in pricing and product features. Hybrid Approach:  Many companies adopt a hybrid strategy, combining elements of both standardization and adaptation. They maintain a core standardized offering while making localized adjustments as needed. Decision-Making Process:  Careful market research, analysis of cultural nuances, and consideration of the product and brand positioning are essential in making an informed decision. Choosing between standardization and adaptation is a dynamic process that requires ongoing evaluation of market conditions. Striking the right balance between global consistency and local relevance is crucial for achieving success in international markets. 5.6 Product designing. Definition: Product designing is a multidisciplinary process that involves creating and developing a product with a focus on aesthetics, functionality, usability, and 12 UNIT 05: Product for International Market manufacturability. It encompasses a range of activities, from conceptualizing the product idea to its realization in the form of a tangible or digital item. Key Stages in Product Designing:  Conceptualization:  Idea Generation: Brainstorming and researching to generate innovative ideas for a new product or improvements to existing ones.  Feasibility Study: Assessing the technical, economic, and market feasibility of the proposed product concept.  Research and Analysis:  Market Research: Understanding consumer needs, preferences, and market trends.  Competitive Analysis: Studying similar products in the market to identify opportunities for differentiation.  Sketching and Prototyping:  Sketching: Translating conceptual ideas into rough sketches to visualize the product's form and features.  Prototyping: Creating physical or digital prototypes to test and refine the design before mass production.  Detailed Design:  CAD (Computer-Aided Design): Using CAD software to create detailed and precise digital representations of the product.  Materials and Manufacturing Considerations: Selecting materials and processes that align with the design goals and manufacturing capabilities.  Testing and Iteration:  Functional Testing: Evaluating the product's functionality and performance against design specifications.  User Testing: Gathering feedback from potential users to identify areas for improvement.  Iteration: Making necessary modifications to the design based on testing results and user feedback.  Design for Manufacturing (DFM):  Simplification: Streamlining the design for cost-effective and efficient manufacturing.  Scalability: Ensuring that the design is scalable for mass production without compromising quality. 13  International Marketing JGI  Aesthetics and Branding:  Aesthetic Design: Refining the visual appearance of the product to enhance its appeal.  Branding Integration: Incorporating brand elements into the design to reinforce the product's identity.  Packaging Design:  Functional Packaging: Designing packaging that protects the product and enhances its usability.  Visual Communication: Using packaging as a tool for communicating the product's features and brand identity.  Regulatory Compliance:  Compliance Checks: Ensuring that the product design adheres to regulatory standards and safety requirements.  Documentation: Creating documentation to support regulatory approvals and certifications.  Collaboration and Communication:  Cross-Functional Collaboration: Collaborating with different teams such as marketing, engineering, and manufacturing to integrate various perspectives.  Communication: Clearly communicating the design specifications to all stakeholders involved in the product development process. Importance of Product Designing:  User Experience (UX):  Well-designed products enhance user satisfaction and experience, leading to increased customer loyalty.  Competitive Advantage:  Unique and aesthetically pleasing designs can set a product apart in the market, providing a competitive edge.  Innovation:  Product designing fosters innovation by pushing the boundaries of what is possible and creating solutions to unmet needs.  Cost Efficiency:  Designing products with manufacturing efficiency in mind helps reduce production costs and improve profitability.  Brand Image: 14 UNIT 05: Product for International Market  The design of a product contributes significantly to the overall brand image and perception in the market. Product designing is an iterative and collaborative process that requires creativity, technical expertise, and a deep understanding of user needs and market dynamics. A well-designed product not only meets functional requirements but also resonates with users, creating a positive and lasting impact. 5.7 Conclusion : In conclusion, a product is a tangible or intangible offering aimed at fulfilling customer needs. International product planning involves meticulous strategies for global success. The selection of products must consider cultural, legal, and market factors. The International Product Life Cycle guides products through introduction, growth, maturity, and decline. Decisions on standardization or adaptation are pivotal in global strategies, while product designing integrates aesthetics and functionality. Achieving success in international markets requires a dynamic approach that balances global consistency with local relevance. 5.8 Glossary:  Product: A tangible or intangible item offered for sale that satisfies a customer need or want.  Product Planning for International Market: The strategic process of developing and managing products to meet the diverse needs of consumers in different countries.  Selection of Product: The process of choosing the right product for international markets based on market research, cultural considerations, and regulatory compliance.  International Product Life Cycle: A theoretical framework describing the stages a product goes through in the global market, including introduction, growth, maturity, and decline.  Standardization vs Adoption Decision: The strategic choice between maintaining uniform marketing strategies globally (standardization) or adapting them to local conditions (adoption).  Product Designing: The multidisciplinary process of creating and developing a product, focusing on aesthetics, functionality, and manufacturability. 15  International Marketing JGI  Core Product: The fundamental benefit or service that addresses the customer's primary need.  Actual Product: The tangible features and attributes that make up the physical product.  Augmented Product: Additional services, warranties, or benefits that enhance the product's value.  International Market: The global marketplace where products are bought and sold across different countries. Self- Assessment questions Multiple Choice Questions Answers for Self- Assessment questions Descriptive Questions: 1. How does cultural diversity impact the selection of products for international markets? 2. What are the key considerations when deciding between standardization and adaptation in global marketing? 3. How does the International Product Life Cycle influence product strategies in different phases? 4. What role does user experience play in the product designing process? 5. How can businesses ensure regulatory compliance when designing products for global markets? Post Unit Reading Material  World Trade Organization (WTO)  Product Development and Management Association (PDMA) 16 UNIT 05: Product for International Market Topics for Discussion forum  Global Market Entry Strategies: Explore various strategies for entering international markets and their implications.  Sustainable Product Design: Discuss the importance of incorporating sustainability into product design and its impact on market competitiveness. 17  International Marketing JGI 18