International Product Decisions

Chapter 9
International Product Decisions

International Marketing
Chapter-9 International Product
Decision

Objectives
What are the important product decisions in
IM management
What is the definition of product and what
are the components of product
What is product mix
What stages constitute the life cycle of a
product
What are the types of new products and
what are their opportunities
Decision

What is branding
What are the functions and importance of
packaging and labeling
What is business environment
What are the product strategies
What are product-communication
strategies
What is the difference between
globalization and localization
Decision

Introduction
Product strategy involves the
managerial decisions about the product
mix and the positioning and
communication
Product planning is used in a broad
sense, involves not only the product
strategy described above but also the
product development measures
Decision

Product management refers to the
managerial decisions pertaining to
product development and the product
strategies through the different stages
of the product life cycle

Decision

Product Decision
1. Market segment decision
2. Product mix decision
3. Product specifications
4. Positioning and communications
decisions

Decision

Product
Philip Kotler defines a product as
anything that can be offered to a
market for attention, acquisition, use or
consumption that might satisfy a want
or need, includes physical objects,
services, persons, places, organizations
and ideas.
Decision

Components And Levels of
Product
1. Core product
2. Tangible product
3. Augmented product

Decision

Core Product
Core product refers to the core benefit the
consumer derives from the product.
In some cases the basic physical product
remains the same, the core product differs
between markets because the purpose for
which product is used is different in these
different markets.
This is called modification of product
design, positioning and communication
strategies.
Decision

Tangible Product
Tangible product is the actual form with
all its attributes, in which the product is
offered to the consumer.
It has certain characteristics like a
quality level, features, styling, a brand
name and packaging.

Decision

Augmented Product
Augmented product refers to certain
additional services or benefits offered
with the product such as installation,
delivery and credit facilities, after sales
service and warranty.
Product augmentation may not be very
important in a seller’s market but they
are very important in the competitive
markets whichInternational Marketing market
are buyer’s
Decision

Product Mix
The product mix is the full list of all the
products offered for sale by a company.
The product mix has certain width,
depth and consistency.
The width refers to the number of
different product lines in the product
mix.
Decision

The depth refers to the average no. of
items offered by the company within
each product line.
The consistency refers to the extent to
which the various product lines are
closely related in end use, production
requirements, distribution channels, or
in some other ways.
Decision

Product Life Cycle
1. Introduction
2. Growth
3. Maturity
4. decline

Decision

Introduction
1. Low sales because it generally takes some
time for a new product to get wide
acceptance by consumers and it also takes
time to expand the marketing of the
product
2. High costs per unit because of the low sales
and high promotional expenditure
3. Absence of or low competition if the product
is entirely new.
4. Loss or negligible profits because of low
sales and high costs. Marketing
International
Decision

Growth
1. Fast growth in sales because of
increasing consumer acceptance and
expansion of marketing
2. Growing profits because of growing sales
and fall in the incidence of fixed
production cost and marketing cost per
unit.
3. Increasing competition
4. Market segmentation and the introduction
of different versions of the product.
Decision

Maturity
1. Saturation of sales
2. Intense competition
3. Falling profits because of high
promotional expenditure and falling
margins.

Decision

Decline
Entry of new products which compete
with the product
Decline in sales
Decline in profits: profits may even
become negative
Exit of some of the firms

Decision

PLC And International
Marketing
International marketing may enable a firm
to alter the shape of the PLC.
It is also a fact that in several cases
technologies/products are introduced in
developing countries when they have
become obsolete in the advanced
countries.
There is often a time leg between
countries in the adoption and diffusion of
technologies. International Marketing
Decision

New Product Development
1. Innovative product
2. Significantly modified product
3. Copy of the existing product

Decision

Steps In New Product
Development
1. Idea generation
2. Evaluation and selection
3. Concept testing
4. Business analysis
5. Product development
6. Market testing
7. commercialization
Decision

Branding
A brand is a name, term, sign, symbol, or
design or a combination of them, intended to
identify the goods or services of one seller or
group of sellers and to differentiate them from
those of others.
The part of the brand which can be vocalized-
the utterable-is known as the brand name.
The part of the brand that is given legal
protection for exclusive use by a seller is known
as the trade mark.
Decision

Branding Decisions
1. To brand or not to brand
2. Manufacturer’s brand or private brand
3. Same brands or different brands

Decision

Global Brands
1. It makes market entry easy- for
example, Pepsi is well known in India
even before it came to India
2. It reduces the promotional expenditure
as the brand is well known.
3. It helps to generate good sales since
the very beginning.
Decision

Branding Problems In
1. It is very difficult for a small firm to
promote its brand in foreign markets
because of the heavy cost of brand
promotion.
2. Established foreign importers and
distributors discourage use of exporter
brand because they prefer to sell the
products under their own brand name.
3. The cultural and other factors make
branding decision complicated in IM.
Decision

4. One problem faced by some multinational
companies when they wanted to market
their products in some countries is that they
found that their world renowned brands had
been registered in these countries by
somebody else with the result that these
firms had to pay fee to the registered
holders of these brands in these countries
for permission to use these brands.
5. In some countries, there are restrictions on
use of foreign brands
Decision

Scope For Use Of Indian
Brands
1. Indian brand names may be used when
niche marketing strategy is employed.
2. Indian brand names may be used when the
export is made to foreign firms who do not
have their own brands or when goods are
sold by distributors who do not have their
own brand names.
3. After gaining credibility and gaining
experience in export business by being
suppliers to foreign firms, the Indian
exporter may start selling under its own
brand name. Chapter-9 International Product

Decision

4. An Indian firm may buy a foreign brand or take
over a foreign firm with established brand name.
5. The Indian firms having reputation in foreign
countries may promote their brands in the foreign
markets.
6. Indian companies may also use mixed brands.
7. Several firms may jointly promote a common
brand-consortium approach.
8. Promotion of a logo by export promotion agencies
and permission to use this logo along with the
brands of firms who will strictly adhere to the
quality and other norms.
Decision

Packaging And Labeling
This terms are distinct in the marketing parlance.
In export marketing, packaging, including
packing, is a factor which demands very careful
attention.
Packaging in IM is a much more serious problem
than in domestic marketing because of the
varying physical conditions and situations the
cargo is exposed to and subjected to; difference
in the tastes, preferences and practices;
differences and International Marketing
peculiarities in packaging
requirements and regulations.Decision

Functions And Importance Of
Packaging
Functions
1. Protection
2. Preservation
3. Presentation
Importance
1. Self service
2. Consumer affuence
3. Integrated marketing concept
Decision

Factors Influencing Packaging
Decision
1. Physical characteristics
2. Physio-chemical characteristics
3. Economy
4. Convenience
5. Miscellaneous factors

Decision

Special Consideration in IM
Regulations in the foreign countries
Buyer’s specification
Socio-cultural factors
Retailing characteristics
Environmental factors
Disposability
Decision

Importance And Requirement
Of Export Packaging
1. It should be capable of withstanding
the hazards of handling and transport.
2. It should be easy to handle.
3. It should be amenable to quick
examination of contents.
4. It should be easy to identify
5. It should be adequately marked.
Decision

6. Unless it is necessary, contents shall
not be disclosed
7. It should be easy to dispose of
8. Packaging must conform to the buyer’s
specifications.

Decision

Business Environment
Business environment is a very important
factor which influences the marketing mix
strategy
Some times a company may find the
introduction of a better material a problem
because of certain peculiar convictions of the
consumers.
There are many instances of national
regulations prohibiting the marketing of
certain products. International Marketing
Decision

Product Communication
Strategies
In IM product and communication strategies are
usually considered together because the need
satisfaction, purpose of product use or usage occasion
and the product communication are rather inseparable.
1. Straight extension
2. Product extension, communications adaptation strategy
3. Product adaptation, communications extension strategy
4. Dual adaptation
5. Product invention
Decision

Developments tend to favour
Globalization
1. Technological advance
2. Travel and communication
3. Product image
4. International standards

Decision

Summary
Product decisions in IM management
includes; market segment decision,
product specifications and positioning and
communication decisions.
All the categories of products enjoy the
opportunities of copying, product
modification and innovation.
The term product decision include product
strategy, product planning and product
management.
Decision

International Product Decisions

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