Subject :- International Marketing

Course :- MBA(III)rd sem

Faculty :- Ms. Parul Gupta

MANAGING INTERNATIONAL PRODUCT LINE

What is a Product?
A Product is anything that can be offered to a market for attention, acquisition, use, or consumption and
that might satisfy a want or need. (Product: a need-satisfying offering of a firm.)
Includes:
1. Physical Objects
2. Services
3. Events
4. Persons
5. Places
6. Organizations
7. Ideas
8. Combinations of the above

Consumer-Goods Classification

2. Shopping Goods
1.Convineance Goods Buy less frequently
Buy frequently & immediately Gather product information
Low priced Fewer purchase locations
Many purchase locations Compare for:
Includes: Suitability & Quality
Staple goods Price & Style
Impulse goods
Emergency goods

4. Unsought Goods
3. Specialty Goods New innovations
Special purchase efforts Products consumers don’t want
Unique characteristics to think about.
Brand identification Require much advertising &
Few purchase locations personal selling

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 Product Line Decisions
Product Line Length
Number of Items in a Product Line

Stretching Filling
Lengthen beyond Lengthen within
current range current range

Downward
Two-Way

Upward

Managing International Product Lines

Product Mix
differe
produ

Width
numb
lines

er of
nt
ct

-
Consistency

Length
numbe
within

all the

Produ
produ

ct Mix
offere
- total
items
lines

lines
r of
the

ct
d

-
numbe
versio
produ

Depth
ns of
each

r of
ct

Example : Procter & Gamble Product-Line

Product Line Width

Detergents Toothpaste Bar Soaps Disp. Diapers Detergents

Ivory Snow Gleem Ivory Pampers Charmin

Dreft Crest Kirk's Luvs White Cloud
Tide Denquel Lava Puffs
Product-Line Cheer Camay Banner
Length Oxydol Zest
Dash Safeguard
Bold Coast
Gain
Era
Solo

Product-Line Length

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 1. Line Stretching
1. Downmarket
2. Upmarket
3. Two-way
2. Line Filling
3. Line Modernization
4. Line Featuring & Line Pruning

Managing International Product Lines

• Deciding on the right individual product for world markets is only one aspect of product policy.
The next step is to decide what family of products should be offered

International Product Line Planning

The foreign product line is frequently smaller than the domestic line because of financial and market
limitations.
By introducing a limited product line into foreign markets the firm can test the market before taking a
bigger plunge.

Product Packaging and Labeling

Product Packaging and Labeling

Protection

Climate
Transport & Handling
Buyer's slow usage
rate
Lack of storage
facilites
Promotion Legal Constraints

Merchandising ( income level, shopping Recycling of Packaging

habits) (Duales System, Eco-
Minimum breakage / theft Emballage)
Ease of handling Regulations on consumer info.
Multilingual Labels to Convey an International (Origin, weight, ingredients)
Image (Zara, Hollywood Chewing Gum)

Why Package Crucial as a Marketing Tool

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 1. Self-service
2. Consumer affluence
3. Company & brand image
4. Opportunity for innovation

Labels

1. Promote
2. Describe
3. Indentity

NEW PRODUCT DEVELOPMENT

Five Stages of the New Product Development Process

Idea Generation
Local subsidiaries are likely to have some ideas from their respective markets and new technology is a
common source of new product ideas

Preliminary Screening
The most immediate evaluation of an idea is whether it is compatible with the company objectives,
strategies, and resources.

Concept Research
Focus Groups offer the development team a chance to hear spontaneous reactions to a new concept
and hear suggestions for improvement.
Concept Testing
A more formal approach to selecting product attributes is using techniques such as trade-off analysis
or conjoint analysis

Sales Forecast
The appropriate sales forecast approach is based on the product life cycle

Test Marketing
Once the sales forecast looks promising, the new product is usually placed in production and test
marketed.

4
“64 ideas make one successful product”

Number of
surviving
new
product
ideas

Sales
Idea Preliminary Concept Test
forecastin
generation screening research marketing
(leading markets) (focus groups, g
concept testing)

Alternative Strategies

Alternative Strategies

Strategy Product Conditions of Ability to Product

function product use buy the Strategy
product

1 Same Same Yes Extension

2 Different Same Yes Extension

3 Same Different Yes Adaptation

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 The Testing of New Product Concepts
• Testing for performance and customer acceptance is the final stage of product development.
• Testing ranges from reliability tests to mini-launches

Reasons that new international products fail

1. Relying on instinct or hunch rather than testing and research

2. Lack of product distinctiveness
3. Unexpected technical problems
4. Mismatch between functions

New Products’ Speed of Diffusion

• Relative advantage – how much better is the new product?

• Compatibility – can the product be used in terms of local infrastructure & customs?

• Complexity – is it easy to use?

• Trialability – is it easy to try the new product?

• Observability – are the advantages obvious?

International Product Testing Techniques

1. Limited product launch in one country market.

2. Laboratory test markets to capture consumer reactions in a controlled environment.
3. Microtest marketing uses a permanent panel of consumers and assesses their willingness to buy after
exposure to media and purchase incentives.
4. Forced distribution tests rely on the continuous report of consumer reactions to new products
already in the market

Timing of Product Introductions in Foreign Markets

1. Waterfall Strategy
product is introduced into foreign markets one at a time (IPLC model approach)
Useful when:
1. lifecycle of product is long
2. high fixed costs of entry into individual markets
3. foreign markets are not equally developed
4. some customization is needed
5. firms have little foreign experience

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2. Sprinkler Strategy
simultaneous introduction of the product in multiple markets
Useful when:
1. short product life cycle
2. high R&D costs in product development
3. competition is very strong (pre-emption of markets)
4. firms have existing presence in target countries
5. homogenized preferences

Managing the Brand Portfolio

A strong brand is a global marketing asset.

Cobranding
A strategic alliance where two or more brands are combined in an offer.
Brand strategy decisions
Use of the corporate name
Family brands for a wide product line
Individual brands for each item in the product line
Private (store) branding
Umbrella branding with the intermediary’s name
Separate brand names

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International Product life cycle