Chapter 4 Flashcards
Int. product management
What are the aspects international marketing policy is centered on? Or the so called marketing mix
-international product management
-international price management
-international communication management
-international distribution management
4 Ps: product, price, promotion, place
What is international product management
-encompasses all decisions relating to development, control and integration of market services in tangible/ intangible nature
What are the tasks of int. product management?
-make decisions about product positioning in target market (standardization vs differentiation)
-add value to product
-choose potential customers
-select processing and product features to gain competitive advantage
What are the objectives of int. product management?
-quality enhancement of product and other elements in value chain
-utilization of synergy effects
-expand profit, sales and market share
-risk diversification by spreading risk failure across different countries (losses of one country can be compensated by gains of another)
-advantages of the division of labor
-smooth coordination
-specialization at int. level
-cost reduction by increasing volume to create economies of scale
-differences in seasonality across countries can be exploited to meet product policy objectives of employment smoothing
-conflict avoidance
What are the challenges in int. product management?
-deciding whether to standardize of differentiate
-looking for ways to design objectives so they fit company and remain achievable
What are the restrictions that can influence product policy decisions?
-market environment
-product related factors
-company related factors
What factors affect market environment?
-legal regulations as they can significantly restrict the scope of int. product policy
-regulations on product liability and product safety can make force product adaptations
-consumer behavior and preference
-competition
What factors belong to product related factors?
-sustainability
-technology
-environmentally friendly features
-product quality and image
-culture, norms, values, traditions
What factors belong to company related factors?
-profitability
-basic orientation of management
-costs of product modification vs potential global sales
-corporate philosophy
-corporate culture
What are the int. product decision elements that can influence standardization vs differentiation in general?
-time (product introduction, variation, differentiation, elimination)
-substance (core product, design, functional features, quality, brand name, packaging, labeling, services: pre-sales, delivery, installation, after-sales, warranty, guarantee)
substance is only important because time is already given when it comes to internationalization
What three parts are products made up of?
-core product
-actual product
-augmented product
What is a core product?
-intangible element that brings value to customer (e.g. convenience)
-the more homogenous needs of market the more likely core product will be standardized
What is augmented product?
-accompanying services of core product that can arouse demand for core product
What elements can influence actual product?
-special functions (“symbolic features”): brand, image, country -that can emotionally appeal to consumers; bringing improved high esteem or sense of belonging
-expected functions and features, depending on consumer taste and preference
-additional functions and features, depending on consumer expectations
What is int. product development
subsection of company’s int. product and program policy.
-pre-requisite know potential customers, needs and preferences
What are product options in internationalization during product development stage
-transferring the product concept unchanged
-adapting product concept to be country-specific
-developing new product
What are the factors to consider for unchanged transfer of product concept?
-worldwide existence of similar needs
-universal brand knowledge
-low culture-bound nature of product type
What are the benefits of unchanged transfer of product concept?
-achieving capacity utilization
-improving company’s cost situation
-improving of scope for pricing policy
What are the two methods of country-specific adaption of the product concept?
-international product variation
-international product differentiation
What is int. product variation?
-common denominator is sought in all markets in order to modify the product so that it can be sold everywhere
-aim: product standardization that appeals to broadest group of buyers without taking account on customer special preferences in individual countries
What is int. product differentiation?
-completely different preference structures prevail in various countries
-aim: meet individual needs in target market
-can take following forms: individual product variant for each target country, product variant for each group of homogenous countries, several product variants for transnational target groups with similar need across national borders
What are the two factors to consider for development of new product for foreign markets?
-if product is intended for world market
-if product is in different country-specific variants
What are the phases of product development process for parent company?
Generation of ideas:
- generation of new product ideas
-collection of suggestion from subsidiaries
Initial selection of product ideas:
-formulation of evaluation criteria from POV of whole company
-review of ideas considering standardization production ability
Profitability analysis:
-determination of methods to be used
-analysis from POV of parent company
Product design:
-implementation of idea
-creation of specification for packaging and marketing
Product tests and market tests:
-development of test designs
-evaluation of test results
Market entry:
-planning of individual market launches in each country
-development of market implementation strategy
What are the phases of product development process for foreign subsidiary?
Generation of ideas:
- generation of new product ideas
- forwarding of suggestion to parent company
Initial selection of product ideas:
-formulation of evaluation criteria from POV of subsidiary
Profitability analysis:
-formulation of country-specific minimum requirements
Product design:
-country-specific and market-specific economic profitability analysis
Product tests and market tests:
-testing in individual foreign markets
Market entry:
-planning country-specific launches
-implementation of plans of parent company
