Reflection and Application Report (chapter 9)
Purpose: The objective of this exercise is to help you internalize the knowledge you learned and apply to your career. In this process, you develop your critical thinking skills.
Note: To complete this assignment, you will need to:
1. Submit one ppt file – the Reflection and Application Report (including a business news example)
2. Submit one word file – three quiz questions (multiple choices)
3. Respond to at least one peer classmate’s post (Reflection Report)
CHAPTER 9
International Product Policy
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Chapter Goals
Delineate the influences that lead a company to standardize or adapt its products.
Discuss the product attributes that are considered, in addition to the basic product itself, in formulating international product policy.
Discuss the various strategies companies use in new product development for international markets.
Discuss how companies manage their new product development.
Show examples of international product development to highlight best practices, including customer involvement and cooperation in product development.
Discuss global research and development activities and associated key issues, including the location of research and development (R&D) activities and coordination techniques.
International Product Policy
International marketing involves satisfying consumers’ needs in foreign markets
International product policy should be the cornerstone around which other aspects of the global marketing mix are designed and integrated
Two main questions should be addressed:
Existing products: Should existing products be adapted or standardized to best meet global buyer needs?
New products: How can new products be developed for global markets?
Product Strategy in a Competitive Market
Samsung Foldable (4/26, 2019)
Huawei Pro 30 (4/09, 2019)
Apple XR (10, 2018)
What to Sell Abroad?
– Product Policy for Intl. Markets
The largest watch manufacturer in the world.
Inexpensive and mass-production in Switzerland
To enter a segment where Swiss companies had zero MS
Product concept:
striking, low-cost, high-quality watch
designed to appeal to low-end segment of the market
selling an ‘emotional’ product
allow the wearer to convey an image, a fashion statement
What to Sell Abroad?
– Product Policy for Intl. Markets
Product positioning:
– allow the wearer to convey an image, a fashion statement
Design team:
– 20 designers form Europe, US, Japan, Australia
– present their designs to a mgmt committee
– selects the items for each season’s line
new release collection items every year
Inexpensive enough that an individual can own several
International Product Policy
New Swatch collections are launched each year
2013 White Swatch Watch
Saint Valentine
2013
The Legend of White Snake
2013
Random Ghost
2013
Rio 2016 Olympic Games Collection
Adaptation vs. Standardization
Examples of standardized products in global markets
Standardization is appropriate when __________?
Examples of product adaptation in global markets
Adaptation is appropriate when _________ ?
Product Adaptation
Product Standardization
Factors Encouraging Standardization
High Costs of Adaptation
– Includes R&D, manufacturing, and training costs
Industrial Products
– Tend to be more standardized than consumer goods
Convergence and Similar Tastes in Diverse Country Markets
– Convergence leads to greater standardization
Predominant Use in Urban Environments
– Urban markets may be standardized across country markets
Marketing to Predominantly Similar Countries
– Choosing similar countries may limit adaptation required
Factors Encouraging Standardization
Centralized Management and Direct Exporting
– Exporting typically results in fairly standard products
Country of Origin Effects
– Strong links to the home country may encourage standardization
Economies of Scale in Production
– Standardization allows for production economies
Economies of Scale in Research & Development Costs
– Standardization allows for higher returns to R&D costs
Economies of Scale in Marketing
Promotion material are likely also similar for standardized products
Factors Encouraging Adaptation
Differences in Technical Standards
– Health, safety, and technical standards vary by market
Consumer and Personal Use Products
– The more “personal” the product, the more likely that use will vary
Variation in Consumer Needs and Differing Use Conditions
– Use varies by skill, economic and climate conditions, etc.
Variations in Ability to Buy – Different Income Levels
– Ability to buy limits price point of products
Market’s Level of Economic Development
– Economic development is linked to technological advancement
The Influence of Governments
– Government regulations (e.g., local content, taxation) vary
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EX: Adaptation vs. Standardization
Using your term project as an example, what’s your product strategy?
Discuss with your group on the followings:
Factors contribute to your decision
Benchmark the status of substitute products/competitive products in the market
Estimate the cost of your product decision to the company
Think about the possible reactions from the marketplace (e.g., your customers, your rivals…etc.)
EX: Cultural Differences and
Product Design Adaptation
Identify a product adaptation example in the global market:
What’s the product?
How is it designed (and used) differently in the global market?
Compare at least two national markets
What factors lead to this product adaptation?
Turn in a one-page write up
Attach the photos of the products and the citation
File name format: EX-Prod Design Adaptation – your name
Factors Encouraging Adaptation
– Consumer and personal use products
Coca-Cola losing market share in Japan
Local competitors sell a variety of new soft drinks
sugarless blended
Asian teas
fermented milk drinks
fruit-flavored noncarbonated
drinks w less sugar
Factors Encouraging Adaptation
– Consumer and personal use products
Coca-Cola began imitating its Japanese competitors
Launched its own version of Asian tea under Sokenbicha brand
Fermented tea – Lactia brand
Coca-Cola’s newer drinks outsold traditional cola drinks by a 3:2 margin
Keys to be able to push its late-entry competing drinks
– uses its advertising and marketing clout to win back younger customers
– controls over 40% of Japan’s vending machines
– could by pass Japan’s inefficient and tightly controlled hierarchical distribution system
Coca-Cola Brands in Japan
AMBASA: Ambasa, launched in 1981, is a noncarbonated lactic soft drink with a familiar smooth taste for everyday use.
CALO: Calo is the new functional soft drink that helps build healthy bones. It combines a refreshing cocoa taste with multiple nutrients such as calcium, vitamin D and protein. Calo debuted on September 15, 1997.
GEORGIA: Georgia, launched in 1975, offers authentic, real coffees in a variety of flavors and aromas sourced from around the world. It appeals to all coffee drinkers, who enjoy the rejuvenation genuine coffee products bring.
http://www.angelfire.com/ca3/ETclanSETH114/brands2.html
Coca-Cola Brands in Japan
KO CHA KA DEN: Introduced in 1992, Kochakaden has become a well-known specially brewed line of perfectly blended teas. The product is available as Royal Milk, Fine Aroma Straight and Garden Lemon teas.
LACTIA: This lactic, noncarbonated soft drink combines ingredients and nutrients that promote healthy digestion and quick refreshment. Lactia was introduced nationwide in Japan in 1996.
PERFECT WATER: This mineral-balanced water was launched nationally in April 1997. Its appeal lies in its refreshing ability to help restore “balance” to daily life.
Coca-Cola Brands in Japan
REAL GOLD: This carbonated herb-mix-flavored drink provides quick energy, combining a refreshing rich taste with a variety of vitamins and nutrients. Real Gold debuted in 1981.
SARYUSAISAI: For all non-sugar Oolong tea drinkers, Saryusaisai provides refreshment because it is made from high quality natural ingredients. It was introduced in 1993.
SARYUSAISAI SOKENBICHA: This brand’s national launch came in February of 1994. For all consumers, Saryusaisai Sokenbicha is the special brewed tea made from a specially balanced blend of natural ingredients.
Coca-Cola Brands in Japan
SEIRYUSABO: In May 1994, this brand of Green and Barley teas was introduced nationally. Each flavor offers a variety of traditional and familiar tea tastes with assured quality, because it is brewed from selected quality leaves and pure water.
SHPLA: This “functional” citrus flavored soft drink was launched in October 1996. It helps overcome mental stress and dullness because it provides a unique refreshing sensation with a tangy, cool aftertaste and multiple nutrients such as vitamins A, C and E and calcium.
VEGITABETA: VegitaBeta helps maintain a healthy balance by combining a refreshing fruity taste with multiple nutrients which are often insufficient in daily diets. The peach-flavored soft drink was introduced in October 1991.
Think Globally and Act Locally
The flatter hierarchy of the brand means a better division of tasks between the local and global level.
The global level is responsible for:
– brand vision
– strategies like visual identity and product innovation
The local level is responsible for:
– adapting the brand and products to local needs
– to implement the innovation into it
– the biggest brand in Uniliver profile
– sauces, seasoning, bouillons and soups.
– annual sales over 3 billion euro
Think Globally and Act Locally
Local adaptation:
– packaging
– advertising
– actual product
launching products varieties based on local recipes or tastes from the specific countries.
Think Globally and Act Locally
Centralized decisions:
– To improve scale economy, some control was shifted back to higher level
– In Europe there were 17 different kind of package designs used for Knorr bouillon, this was reduced to one
Both domestic and global companies need a strong new product development strategy to remain competitive.
Global companies must take into account the global business environment, market characteristics, and varying consumer needs.
A firm’s NPD strategy centers on two major tasks:
– understanding consumer needs, conditions of use, and their ability to buy the products;
– leveraging the firm’s R&D expertise, experience, and intellectual property to develop products that can satisfy consumer needs in different countries.
NPD is also dependent on the mode of entry
New Product Development (NPD) Strategy
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Export: has the freedom to choose as many or as few products as it wants in each market.
Licensing: offers less freedom in product selection.
Appropriate licensees may not be available for all products
Licensees may not have satisfactory technology
The licensee’s product line can limit the licensor’s product line
Joint-venture: also restricts a firm’s product line
When the national partner has complementary products, the product-line possibilities of the international partner are confined.
FDI: offers the greatest flexibility
A firm can produce products in its foreign plants suited to local market needs, use conditions, competitive situation, and purchasing power.
NPD and Foreign Market Entry
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Product Line vs. Brand Extension
Product Line vs. Brand Extension
Product Line Extension
When a company introduces additional items in the same product category under the same brand name such as new flavors, forms, colors, added ingredients, package sizes
Brand Extension
When a company introduces a new product, in a different product category with the same branding of their core product
Product Line Extension
Product Line Extension
Assumption:
Consumers like Campbell’s Chicken Noodles Sop are likely to try Creamy Chicken Noodle Soup.
Even with minimal impact from advertisement and promotions.
Product Line Extension
Benefits:
Offer consumers more variety opportunity to sell more to each customer
Gain more potential customers
Greater marketing efficiency
Greater product efficiency
Lower promotional cost
Increase profit
Product Line Extension
Threats:
Potential for failure, which may damage products within the brand
Could cannibalize demand from other items in the product line
Line extension products must be different enough that they will not compete with one another as much as they will rival other companies’ brands.
Could overwhelm consumers
when presented with too many choices consumers tend to shut down.
Affect brand loyalty
Perceived as not innovative
Sensory segmentation divides customers according to their responses to sensory product characteristics
Allows for the development of a limited range of products within a product line to satisfy a large number of product needs across countries
For example, a soda manufacturer might characterize sensory perceptions as:
Flavor type, flavor level, color, use of a sweetener, acidity, and cloud
These variables can be altered during manufacturing and testing
Customers may ultimately be grouped into low, medium, and high impact seekers depending on the sweetness and color of the soda
NPD Using Sensory Segment
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NPD Using Sensory Segmentation
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Effective product development has distinct layers
The “bedrock” layer is the firm’s core competencies
Product platforms are built on the firm’s core competencies and product families are marketed to customers
Next-generation products should be developed out of existing core competencies and the product platforms and families that are built on these competencies
To stay competitive with new product development, firms need to innovate and strengthen core competencies
Core Competencies & Product Platforms
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They focus on product architecture (rather than process) as the basis for defining and creating their platforms.
They resort to platform approaches to gain:
Increased flexibility in product design
Greater efficiency in product development
Improved effectiveness in market positioning & comm.
Core Competencies and Prod. Platforms
ASMI: a leading supplier of semiconductor mfg tools
Skil: a manufacturer of power tools
Stork Digital Imaging: a supplier of digital print for textile market
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Reflection and Application Report
Purpose: The objective of this exercise is to help you internalize the knowledge you learned and apply to your career. In this process, you develop your critical thinking skills.
Note: To complete this assignment, you will need to:
1. Submit one ppt file – the Reflection and Application Report
2. Submit one word file – three quiz questions (multiple choices)
3. Respond to at least one peer classmate’s post (Reflection Report)
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The Development of Critical Thinking Process |
Instruction |
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Step 1: Observation and recognition |
Choose one concept/topic that you learn from this week’s lecture or textbook. |
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Step 2: Comprehension |
1. Explain the meaning of the concept. 2. Summarize what you have learned or understood about this topic. |
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Step 3: Reflection and Application |
Present 1. Further comprehend your understanding of this topic/concept 2. Add insights to this topic/concept 3. Serve as a great real life example to resonate what you learned |
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Document Format ppt slides |
1. Make your ppt slides informative so that one can easily understand your viewpoints. 2. Make your slides as 3. If applicable, provide examples with 4. File name: Chapter # – your name.ppt |
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Step 4: Knowledge Internalization Document format – word file |
1. Base on your understanding of this topic; 2. This a process of knowledge internationalization by which you digest the information and recreate value. 3. Submit your word file. 4. File name: Chapter # quizzes – your name *Your quiz questions may be chosen for Exam 1 and Exam 2. |
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Submission |
1. Due on Sunday midnight of the week 2. Post your Report on iLearn 3. Give a thought provoking title for your post. (This will attract more views and feedback from your peers.) 4. Write a brief description about your topic in the description box. 5. Attach your ppt file and word file. |
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To earn Participation grades |
1. Read and respond to at least one peer classmate’s post. 2. You can ask questions, adding insights, or offering different perspectives. 3. Your feedback needs to add value, but not just “I agree” or “I disagree” comments. |
Tips: Imaging you are invited to give a talk to a group of business students on this topic/concept:
1. What real life example would you use to illustrate the concept?
2. How can you explain, in a more related and fun way, of what is meant?
3. How would you approach it? (e.g., more visual charts, tables, graphs, photos…etc.)