Ch10 kotabe

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Ch10 kotabe

  1. 1. Global Marketing Management, 5e Chapter 10 Copyright (c) 2009 John Wiley & Sons, Inc. Chapter 10 Global Product Policy Decisions I: Developing New Products for Global Markets
  2. 2. Chapter Overview <ul><li>1.Global Product Strategies </li></ul><ul><li>2.Standardization Versus Customization </li></ul><ul><li>3.Multinational Diffusion </li></ul><ul><li>4.Developing New Products for Global Markets </li></ul><ul><li>5.Truly Global Product Development </li></ul>Chapter 10 Copyright (c) 2009 John Wiley & Sons, Inc.
  3. 3. Introduction <ul><li>A cornerstone of a global marketing mix program is the set of product policy decisions that multinational companies (MNCs) constantly need to formulate. </li></ul><ul><li>The range of product policy questions may include: </li></ul><ul><ul><li>What new products should be developed for what markets? </li></ul></ul><ul><ul><li>What products should be added, removed, or modified for the product line in each of the countries in which the company operates? </li></ul></ul><ul><ul><li>What brand names should be used? </li></ul></ul><ul><ul><li>How should the product be packaged and serviced? </li></ul></ul>Chapter 10 Copyright (c) 2009 John Wiley & Sons, Inc.
  4. 4. Introduction <ul><li>Examples of improper product policy decisions in global marketing: </li></ul><ul><ul><li>Ikea in the United States </li></ul></ul><ul><ul><li>Proct e r & Gamble in Australia </li></ul></ul><ul><ul><li>U.S. Car Makers in Japan </li></ul></ul>Chapter 10 Copyright (c) 2009 John Wiley & Sons, Inc.
  5. 5. 1. Global Product Strategies <ul><li>Three global strategies to penetrate foreign markets: </li></ul><ul><ul><li>Extension strategy </li></ul></ul><ul><ul><li>Adaptation strategy </li></ul></ul><ul><ul><li>Invention strategy </li></ul></ul>Chapter 10 Copyright (c) 2009 John Wiley & Sons, Inc.
  6. 6. 1. Global Product Strategies <ul><li>Five strategic options for the global marketplace: </li></ul><ul><ul><li>Strategic Option 1: Product and Communication Extension -- Dual Extension </li></ul></ul><ul><ul><li>Strategic Option 2: Product Extension -- Communications Adaptation </li></ul></ul><ul><ul><li>Strategic Option 3: Product Adaptation -- Communications Extension </li></ul></ul><ul><ul><li>Strategic Option 4: Product and Communications Adaptation -- Dual Adaptation </li></ul></ul><ul><ul><li>Strategic Option 5: Product Invention </li></ul></ul>Chapter 10 Copyright (c) 2009 John Wiley & Sons, Inc.
  7. 7. Exhibit 10-1: Global Expansion Strategies Chapter 10 Copyright (c) 2009 John Wiley & Sons, Inc.
  8. 8. 2. Standardization versus Customization <ul><li>Five forces favoring a globalized product strategy: </li></ul><ul><ul><li>1. Common customer needs </li></ul></ul><ul><ul><li>2. Global customers </li></ul></ul><ul><ul><li>3. Scale economies </li></ul></ul><ul><ul><li>4. Time to market </li></ul></ul><ul><ul><li>5. Regional market agreements </li></ul></ul>Chapter 10 Copyright (c) 2009 John Wiley & Sons, Inc.
  9. 9. 2. Standardization versus Customization <ul><li>Degree of Standardization </li></ul><ul><ul><li>Modular Approach </li></ul></ul><ul><ul><li>Core-Product (Common Platform) Approach </li></ul></ul><ul><ul><ul><li>Balancing act between standardization and adaptation </li></ul></ul></ul><ul><ul><ul><li>Overstandardization vs. overcustomization </li></ul></ul></ul>Chapter 10 Copyright (c) 2009 John Wiley & Sons, Inc.
  10. 10. Exhibit 10-2: 2008 Automotive Color Popularity Chapter 11 Copyright (c) 2007 John Wiley & Sons, Inc.
  11. 11. Exhibit 10-2 (cont): 2008 Automotive Color Popularity Chapter 11 Copyright (c) 2007 John Wiley & Sons, Inc.
  12. 12. Exhibit 10-2 (cont): 2008 Automotive Color Popularity Chapter 11 Copyright (c) 2007 John Wiley & Sons, Inc.
  13. 13. 3. Multinational Diffusion <ul><li>Example: </li></ul><ul><ul><li>Microsoft’s Xbox videogame </li></ul></ul><ul><li>The Adoption of new products is driven by three types of factors: </li></ul><ul><ul><li>Individual Differences </li></ul></ul><ul><ul><li>Personal Influences </li></ul></ul><ul><ul><li>Product Characteristics </li></ul></ul><ul><ul><ul><li>1. Relative advantage </li></ul></ul></ul><ul><ul><ul><li>2. Compatibility </li></ul></ul></ul><ul><ul><ul><li>3. Complexity </li></ul></ul></ul><ul><ul><ul><li>4. Trialability </li></ul></ul></ul><ul><ul><ul><li>5. Observability </li></ul></ul></ul>Chapter 10 Copyright (c) 2009 John Wiley & Sons, Inc.
  14. 14. 3. Multinational Diffusion <ul><li>Other country characteristics used to predict new product penetration patterns include: </li></ul><ul><ul><li>Homogeneous population </li></ul></ul><ul><ul><li>Lead countries </li></ul></ul><ul><ul><li>Lag countries </li></ul></ul><ul><ul><li>Cosmopolitanism </li></ul></ul><ul><ul><li>Mobility </li></ul></ul><ul><ul><li>Labor force profile, Developing vs. Developed countries </li></ul></ul>Chapter 10 Copyright (c) 2009 John Wiley & Sons, Inc.
  15. 15. 3. Multinational Diffusion <ul><ul><li>Time to “Take off” </li></ul></ul><ul><ul><li>- Most new products display a distinct period of time to takeoff </li></ul></ul><ul><ul><li>- Varies a great deal across product categories, between countries, previous takeoff experience </li></ul></ul>Chapter 10 Copyright (c) 2009 John Wiley & Sons, Inc.
  16. 16. Exhibit 10-3: Mean Time to Take Off Across Product Categories within a Country Chapter 11 Copyright (c) 2007 John Wiley & Sons, Inc.
  17. 17. 4. Developing New Products for Global Markets <ul><li>Identifying New Product Ideas </li></ul><ul><ul><li>4 C’s : </li></ul></ul><ul><ul><ul><li>Company </li></ul></ul></ul><ul><ul><ul><li>Customers </li></ul></ul></ul><ul><ul><ul><li>Competition </li></ul></ul></ul><ul><ul><ul><li>Collaborators </li></ul></ul></ul><ul><li>New Product Development (NPD) Process </li></ul><ul><li>Screening </li></ul><ul><li>Concept Testing </li></ul><ul><ul><li>Conjoint analysis </li></ul></ul><ul><ul><li>To Standardize or not to standardize </li></ul></ul>Chapter 11 Copyright (c) 2007 John Wiley & Sons, Inc.
  18. 18. 4. Developing New Products for Global Markets <ul><li>Test marketing </li></ul><ul><ul><li>May be skipped to save money </li></ul></ul><ul><ul><li>Lead markets can be used as projections </li></ul></ul><ul><ul><li>(Exhibit 10-4) </li></ul></ul><ul><li>Timing of Entry (Exhibit 10-5) </li></ul><ul><ul><li>Waterfall—staged rollout beginning with home country </li></ul></ul><ul><ul><li>Sprinkler—global rollout simultaneously </li></ul></ul><ul><ul><ul><li>Often used for high tech goods </li></ul></ul></ul>Chapter 11 Copyright (c) 2007 John Wiley & Sons, Inc.
  19. 19. Exhibit 10-4: Examples of Test Market Countries Chapter 11 Copyright (c) 2007 John Wiley & Sons, Inc.
  20. 20. Exhibit 10-5: Waterfall versus Sprinkler Models Chapter 10 Copyright (c) 2009 John Wiley & Sons, Inc.
  21. 21. Exhibit 10-6: Roll-Out of Xbox 360 and Sony Playstation 3 Chapter 11 Copyright (c) 2007 John Wiley & Sons, Inc.
  22. 22. 5. Truly Global Product Development <ul><li>Scores of companies have research centers spread across the world. Challenge is to establish a truly global innovation process that transcends local clusters (i.e., to become a metanational innovator). </li></ul><ul><li>To harvest the benefits of metanational innovation: </li></ul><ul><ul><li>Prospecting- find valuable new pockets of knowledge around the world. </li></ul></ul><ul><ul><li>Assessing- decide on an optimal footprint (number and dispersion of knowledge sources). </li></ul></ul>Chapter 10 Copyright (c) 2009 John Wiley & Sons, Inc.
  23. 23. 5. Truly Global Product Development <ul><ul><li>Mobilizing: To harness the benefits of global innovation, companies must find ways to mobilize pockets of knowledge (e.g., technical blueprints, patents, equipment, market knowledge). </li></ul></ul><ul><ul><li>The optimal strategy for mobilizing knowledge depends on the type (simple vs. complex) and nature (technical vs. market) of the knowledge involved. </li></ul></ul>Chapter 10 Copyright (c) 2009 John Wiley & Sons, Inc.
  24. 24. 5. Truly Global Product Development <ul><li>4 possible strategic scenarios for mobilizing knowledge: </li></ul><ul><ul><li>Exchange information (arm’s length, digital transfer is sufficient). </li></ul></ul><ul><ul><li>Move information about the market where the technology is. </li></ul></ul><ul><ul><li>Move information about the technology to where the market knowledge is </li></ul></ul><ul><ul><li>Move knowledge by rotating people and by temporary co-location </li></ul></ul><ul><ul><li>(See Exhibit 10-7.) </li></ul></ul>Chapter 10 Copyright (c) 2009 John Wiley & Sons, Inc.
  25. 25. Exhibit 10-7: Mobilizing Knowledge Chapter 10 Copyright (c) 2009 John Wiley & Sons, Inc.

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