Global Marketing Management Masaaki Kotabe Kristiaan Helsen Third
Global Marketing Management Masaaki Kotabe & Kristiaan Helsen Third Edition John Wiley & Sons, Inc. , 2004 Chapter 11 Kotabe & Helsen's Global Marketing Management, Third Edition, 2004 1
Chapter 11 Global Product Policy Decisions I: Developing New Products for Global Markets Chapter 11 Kotabe & Helsen's Global Marketing Management, Third Edition, 2004 2
Chapter Overview 1. Global Product Strategies 2. Standardization Versus Customization 3. Multinational Diffusion 4. Developing New Products for Global Markets 5. Global NPD and Culture Chapter 11 Kotabe & Helsen's Global Marketing Management, Third Edition, 2004 3
Introduction n n A cornerstone of a global marketing mix program is the set of product policy decisions that multinational companies (MNCs) constantly need to formulate. The range of product policy questions may include: – What new products should be developed for what markets? – What products should be added, removed, or modified for the product line in each of the countries in which the company operates? Chapter 11 Kotabe & Helsen's Global Marketing Management, Third Edition, 2004 4
Introduction (contd. ) n – What brand names should be used? – How should the product be packaged and serviced? Examples of improper product policy decisions in global marketing: – Ikea in the United States – Proctor & Gamble in Australia – U. S. Car Makers in Japan – Ford in Brazil Chapter 11 Kotabe & Helsen's Global Marketing Management, Third Edition, 2004 5
1. Global Product Strategies n n Three global strategies to penetrate foreign markets: – Extension strategy – Adaptation strategy – Invention strategy Five strategic options for the global marketplace: Strategic Option 1: Product and Communication Extension -- Dual Extension Strategic Option 2: Product Extension -Communications Adaptation Chapter 11 Kotabe & Helsen's Global Marketing Management, Third Edition, 2004 6
1. Global Product Strategies (contd. ) n n n Strategic Option 3: Product Adaptation -Communications Extension Strategic Option 4: Product and Communications Adaptation -- Dual Adaptation Strategic Option 5: Product Invention Chapter 11 Kotabe & Helsen's Global Marketing Management, Third Edition, 2004 7
2. Standardization Versus Customization n n Five forces favoring a globalized product strategy: 1. Common customer needs 2. Global customers 3. Scale economies 4. Time to market 5. Regional market agreements Degree of Standardization – Modular Approach Chapter 11 Kotabe & Helsen's Global Marketing Management, Third Edition, 2004 8
2. Standardization versus Customization (contd. ) – Core-Product (Common Platform) Approach » Balancing act between standardization and adaptation » Overstandardization vs. overcustomization Chapter 11 Kotabe & Helsen's Global Marketing Management, Third Edition, 2004 9
3. Multinational Diffusion n n Examples: – Microsoft’s Xbox videogame – NTT Do. Co. Mo’s i. Mode The Adoption of new products is driven by three types of factors: – Individual Differences – Personal Influences – Product Characteristics 1. Relative advantage 2. Compatibility Chapter 11 Kotabe & Helsen's Global Marketing Management, Third Edition, 2004 10
3. Multinational Diffusion (contd. ) n 3. Complexity 4. Trialability 5. Observability Other country characteristics used to predict new product penetration patterns include: – Homogeneous population – Lead countries – Lag countries Chapter 11 Kotabe & Helsen's Global Marketing Management, Third Edition, 2004 11
3. Multinational Diffusion (contd. ) – Cosmopolitanism – Mobility – Labor force profile – Individualism and national innovativeness (see Exhibit 11 -4) Chapter 11 Kotabe & Helsen's Global Marketing Management, Third Edition, 2004 12
4. Developing New Products for Global Markets n n Identifying New Product Ideas – 4 C’s: » Company » Customers » Competition » Collaborators New Product Development (NPD) Process Screening (see Exhibit 11 -5) Concept Testing Chapter 11 Kotabe & Helsen's Global Marketing Management, Third Edition, 2004 13
4. Developing New Products for Global Markets (contd. ) n n – Conjoint Analysis – To Standardize or not to Standardize Test Marketing Timing of Entry: Waterfall versus Sprinkler Strategies (see Exhibit 11 -11) – Waterfall Strategy: Global phased rollout where new products trickle down in a cascade-like manner – Sprinkler Strategy: Simultaneous worldwide entry Chapter 11 Kotabe & Helsen's Global Marketing Management, Third Edition, 2004 14
5. Global NPD and Culture n n Global linkages between the new product development process and national cultures where cultural differences heavily influence the NPD process. Differences between European and North American new product development programs: – The NPD process among European firms is much more formalized. – European Go/No Go standards tend to be far stricter than American norms. Chapter 11 Kotabe & Helsen's Global Marketing Management, Third Edition, 2004 15
5. Global NPD and Culture (contd. ) – NPD projects within European firms are more likely to have a well-defined project leader and an assigned team of players than projects run by North American companies; European teams are much more multifunctional than American teams. – European companies punish project leaders less in case of failure, reward intrapreneurs more generously, and offer more seed money for pet projects. Chapter 11 Kotabe & Helsen's Global Marketing Management, Third Edition, 2004 16
5. Global NPD and Culture (contd. ) n Japanese Companies and Product Churning: – Japanese companies strongly believe in rushing new products to the markets with little or no market research and then gauge the market’s reaction. – Japanese NPD managers constantly listen to the “voice of the customers. ” Chapter 11 Kotabe & Helsen's Global Marketing Management, Third Edition, 2004 17
Copyright © John Wiley & Sons, Inc. 2004 Chapter 11 Kotabe & Helsen's Global Marketing Management, Third Edition, 2004 18
- Slides: 18