Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

International plc

273 views

Published on

Published in: Business, Education
  • Be the first to comment

  • Be the first to like this

International plc

  1. 1. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002 StudsPlanet Leading Education consultant in India www.StudsPlanet.com
  2. 2. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002 International Product and Service Strategies Dana-Nicoleta Lascu Chapter 10
  3. 3. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002 Chapter Objectives • Evaluate the stages of the international product life cycle identify locus of operations and target markets at each stage • Identify the different dimensions of the international product mix with company illustrations • Examine the new product development process and the activities involved at each stage in international markets • Examine degrees of product newness and address international diffusion processes
  4. 4. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002 The International Product Life Cycle MNC Manufactures Product in Developed Countries; Exports to Developing Countries MNC Moves Production to Developing Country; Begins Importing to Home Country Developing Country Competitor Exports Product To MNC Home Country; Competes with MNC Imports Developing Country Markets Remain Viable Target Markets for MNC; MNC Home Country Market Is Diminishing Sales Introduction and Growth Stages: Early Maturity: Late Maturity Decline Time
  5. 5. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002 International Product Life Cycle, continued • The Product Introduction Stage  Products are developed and marketed in developed countries
  6. 6. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002 International Product Life Cycle, continued • The Growth Stage  Increasing competition and rapid product adoption  Marketed primarily in developed countries  Product is exported to developing countries
  7. 7. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002 International Product Life Cycle, continued • The Maturity Stage  Product is adopted by most target consumers  Sales are leveling off  Profits decline due to intense competition  Manufacturing operations move to developing countries to take advantage of cheap labor  New competitors: firms from developing countries
  8. 8. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002 International Product Life Cycle, continued • The Decline Stage  Products are rapidly losing ground to new technologies and product alternatives  Decrease in sales and profits  Product lifecycle is extended through sales to consumers in developing countries
  9. 9. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002 Dimensions of the International Product Mix • Product length  Total number of brands • Product width  Total number of product lines • Product depth  Total number of different offerings for a product category
  10. 10. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002 New Product Development • Substantial risk and costs • Complex in international markets  Competition can appropriate the product/service idea and deliver final product or service to the market more swiftly than the initial developer  International consumers might not respond as anticipated  Local and/or home-country government might impose restrictions on product testing  Technological infrastructure of individual markets may be substandard and unable to support the product
  11. 11. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002 Generating New Product Ideas • Most product and service firms are driven by the marketing concept  Product development decisions are based on identifying the needs, wants, and desires of consumers • Technology firms focus on the products  Focus on research and development
  12. 12. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002 Product Ideas • Consumers • Competitive Analyses • Channel Members • Employees • Top Management • Inventors • Consultants • University Research
  13. 13. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002 Screening Ideas • Consider:  Fit with target consumers and the overall mission of the organization  The extent to which product offers unique benefits  The extent to which target market is large and/or is likely to grow  Fit between new product requirements and resources, skills, experience of the firm
  14. 14. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002 Developing and Evaluating Product Concepts • Develop detailed description of product • Ask consumers to evaluate and indicate willingness to buy • Use:  Focus Groups  Conjoint Analysis
  15. 15. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002 Product Business Analysis • Estimate:  Project costs  Return on investment  Cash flow  Fixed/variable costs
  16. 16. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002 Product Development • Create prototypes • Create brand identity and marketing mix • Coordinate strategy across international subsidiaries
  17. 17. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002 Test Marketing • Involves testing new product performance in a limited area of a national or regional target market • Provides estimate of product performance in the respective country or region • Expensive • Time consuming • Open to competitive sabotage
  18. 18. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002 Types of Test Marketing • Simulated Test Marketing  Test marketing simulating purchase environment where samples of target consumers are observed during the decision-making process • Controlled Test Marketing  Test marketing that involves offering a new product to a group of stores and evaluating market reaction • Test Marketing  Full-blown test marketing  Focus on cities appropriate for the test; involves selecting distributors and the ancillary marketing infrastructure  Most costly  Leaves the company most exposed to competitive sabotage
  19. 19. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002 Launching Product Internationally • Quality of launch  High service quality  On-time shipment  Appropriate product availability  Quality sales force and support  Quality and amount of promotion
  20. 20. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002 International Launch Decisions • Timing of launch • Consumers and countries • Marketing mix decisions  Product mix  Place  Price  Promotion
  21. 21. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002 Degree of Product/Service Newness • New product to existing market • New product to existing company • New line • New item in an existing product line • Modification of an existing company product • Innovation
  22. 22. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002 Product Diffusion • Product Factors  Relative advantage compared to competitive products  Compatibility with the needs of the consumers  Observability, or communicability to other consumers  Trialability – the ability of consumers to experience the product with only minimal effort • Country (Market) Factors – the country may be a  Lead country – wealthy industrialized country where the product is adopted first  Lag country – developing country that adopts the product later
  23. 23. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002 Adopters • Innovators  Risk takers who can afford to pay a higher price during the introduction stage (2.5% of the total market)  Primarily consumers in developed countries • Early adopters  Consumers who purchase the product early in the lifecycle stage and who tend to be opinion leaders in their community  (13.5% of the total market)  Primarily consumers in developed countries
  24. 24. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002 Adopters, continued • Early majority  Consumers who enjoy status of being among the first to purchase a popular product (34% of the total market)  Consumers are primarily from developed countries • Late majority  Consumers who adopt popular products when the risk associated with them is minimal (34% of the total market)  Consumers are from both developed and developing countries • Laggards  The last consumers to adopt a product; they are risk averse and conservative in their spending (16% of the total population)  Consumers are primarily from developing countries
  25. 25. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002 Chapter Summary • Evaluated stages of the international product lifecycle • Identified focus of operations and target markets at each stage • Identified the different dimensions of the international product mix • Examined the new product development process • Examined degrees of product newness and addressed the international diffusion processes

×