INTERNATIONAL PRODUCT POLICY

1
INTERNATIONAL PRODUCT POLICY

• Aim To examine the most important issues
  involved in the formulation of international
  product policy and those factors which may lead
  to the standardisation or adaptation of
  products in the global market.

2
What are the characteristics of a product?
3
What are the characteristics of a product?

• A product is anything that can be offered to a
  market for attention, acquisition, use, or
  consumption that might satisfy a want or need. It
  includes physical objects, services, persons,
  places, organisations and ideas.
• (Kotler)
• A product can be defined as a collection of
  physical, psychological and symbolic attributes
  that collectively yield satisfaction, or
  benefits, to a buyer or user.
• (Keegan/Schlegelmilch)

4
Three essential aspects of a product

• Core product benefits
• - Functional features
• - Technology
• - Performance

5
Three essential aspects of a product (cont.)

• 2. Actual Product - Product Attributes
• - Brand name
• - Country of origin
• - Price
• - Packaging

6
Three essential aspects of a product (cont.)

• 3. Augmented Product - Support services
• - Guarantees
• - Delivery
• - Installation
• - After-sales service repair/maintenance
• (based on Kotler)

7
PRODUCT CLASSIFICATION

• Consumer goods
• bought by final consumer for personal
  consumption
• Convenience goods
• bought frequently, often with little comparison
• Nondurable goods
• usually consumed in one or a few uses

8
PRODUCT CLASSIFICATION (cont.)

• Durable goods
• normally last for many uses
• e.g. clothes, household appliances
• Industrial goods
• bought for further processing or for use in
  conducting a business.

9
What category of good is a lawnmower?
10
THE PRODUCT LIFE CYCLE (PLC)

• What are the stages in the product life cycle?
• Introduction ? Growth ? Maturity ? Decline

11
THE PRODUCT LIFE CYCLE (PLC) (cont.)

• PLC concept may be applied to industry, product
  form, product or model
• useful concept for product and other marketing
  mix decisions
• BUT - often unpredictable
• - shortening of PLCs
• - effects of communications revolution

12
The International Product Life Cycle (IPLC)

• Based on Vernon (1966)
• Product Life Cycles Across Countries
• Diffusion of new products across national
  boundaries
• Product may be in different PLC stages in
  different countries
• USE WITH CARE!

13
STANDARDISATION vs. ADAPTATION

• Core benefits can be standardised more easily
  than non-core benefits.
• Decision to adapt/standardise usually based on
  cost/benefit analysis and implications for
• Revenue
• Profitability
• Market share

14
STANDARDISATION vs. ADAPTATION (cont.)

• Factors encouraging standardisation
• Prohibitive costs of adaptation
• Economies of scale
• - R D
• - Production
• - Marketing

15
Factors encouraging standardisation (cont)

• Convergence of consumption patterns
• - similarity of urban environments
• - similarities between clusters of countries
• Industrial products

16
STANDARDISATION vs. ADAPTATION (cont.)

• Factors encouraging adaptation
• Cultural differences
• - food
• - clothing
• - entertainment
• Also note common elements across cultures!

17
Factors encouraging adaptation (cont.)

• Different income levels
• - global range of per capita income 300 -
  40,000
• Usage Factors
• - e g washing machines.

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STANDARDISATION vs. ADAPTATION (cont.)

• Factors making adaptation necessary
• Technical standards
• Legal requirements
• - products
• - packaging
• - labelling

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Factors making adaptation necessary (cont.)

• Climatic differences
• Differing use conditions
• Competitive reasons
• Environmental/ethical considerations

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Strategic Options

• One product, one message
• Product extension, promotion adaptation
• Product adaptation, promotion extension
• Product and promotion adaptation
• New product development

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Summary

• Definition
• Classification
• Aspects
• IPLC
• Standardisation vs. Adaptation

22
Further Reading

• Delene, L., Meloche, M. S. and Hodkins, J.
  (1997).
• International product strategy building the
• standardisation-modification decision. Irish
  Marketing Review 10 (1), 47-54.