Global-Product-Development.pdf - CHAPTER 10 GLOBAL PRODUCT...

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CHAPTER 10
GLOBAL PRODUCT DEVELOPMENT
CHAPTER OBJECTIVES
1. Global Product Strategies
2. Standardization versus Customization
3. Multinational Diffusion
4. Developing New Products for Global Markets
5. Truly Global Product Development
CHAPTER OVERVIEW
Global product policy decisions are tremendously important for the success of a MNC’s
global marketing strategy. With this in mind, this chapter has as a primary focus on the
new product development process in a global context.
Several broad approaches include extension of the domestic strategy, adaptation of home-
grown strategies, or invention by designing products that cater to the common needs of
global customers. As an issue to be considered within these alternatives is whether to
standar dize or customize the product. This issue is not an “either - or” issue. Instead it is
a “degree” issue. Proper balance is the mark of a successful global competitor. Variants
(such as the modular or core-product approach) are described. Conjoint analysis can be
used to help make the determination more correct.
The new product development process is explained in a step by step procedure. This
process is somewhat similar to the new product development process used domestically.
However, the global decision has its own set of complicating factors. Each is examined
in some detail.
The customer and their individual culture must not be forgotten. The chapter closes with
a discussion of culture and its relationship to product development.
CHAPTER OUTLINE

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A. Introduction
1. A cornerstone of a global marketing mix program is the set of product policy
decisions that multinational companies (MNCs) constantly need to formulate.
2. Blunder and success stories abound.
3. Fostering the development of new products that satisfy or even amaze customers
worldwide is the major ingredient of many global success stories.
B. Global Product Strategies
1. Companies can pursue three global strategies to penetrate foreign markets.
*****Use Exhibit 10-1 Here*****
*****Use Global Perspective 10- 1 “Selling Saturns in Japan” Here*****
2. Strategic Option 1: Product and Communication Extension: Dual Extension.
a. A company can choose to market a standardized product using a uniform
communication strategy.
1). Early entrants prefer this approach.
2). Small companies with few resources prefer this form of extension.
b. A standardized product policy coupled with a uniform communication strategy
offers substantial savings coming from economies of scale.
1). This strategy is usually product-driven rather than market-driven.
2). This strategy can alienate foreign customers who prefer a customized
product.
3. Strategic Option 2: Product Extension-Communications Adaptation.
a. Due to differences in the cultural or competitive environment, the same product
often is used to offer benefits or functions that dramatically differ from those
in the home market.