GLOBAL PRODUCT DECISIONS

Module 3

Learning Outcome:
Students will understand:
Product
Levels of product
Features of product
Product planning, Mix and Development
NPD
PLC
Global Product Management

Overview
Although all four elements of the marketing
mix are essential for success, a products
performance determines whether consumers
will engage in repeat purchases

What Is a Product ?
Anything with exchange Value (Objects,
Ideas, Organizations, People etc.)
The Total Product
1. Tangible attributes: raw materials, size,
weight, features, design, packaging
2. Intangibles: brand image, styling, other
benefits (installation, delivery, credit,
warranty, after-sale service, return policy)

Brand
name
Delivery
and
credit

Installation

Augmented
product

Packaging

Actual
product

Features

Core
benefit
or service

Quality

Styling

Warranty
Three levels of product

Aftersales
service

Core
product

FEATURES OF PRODUCT
Tangible attributes
Intangible attributesservices like repairing ,
banking, insurance services, etc.
Associated attributesbrand, package, warranty
etc
Exchange value
Consumer satisfaction
Business need satisfaction

Product Planning, Mix and Development

Key Terms

Product planning
Product mix
Product item
Product width
Product depth/ Product Line
Product modification
Product Elimination

The Concept of Product Mix

P
r
o
d
u
c
t
D
e
p
t
h

Width of the Product Mix

Blades and
Razors
MACH 3
Sensor
Trac II
Atra
Swivel
Double-Edge
Super Speed
Twin Injector
Techmatic

Toiletries
Series
Adorn
Toni
Right Guard
Silkience
Soft and Dri
Foamy
Dry Look
Dry Idea
Brush Plus

Writing
Instruments

Paper mate
Flair

Lighters
Cricket
S.T. Dupont

New Product Development (NPD)

Process/Stages

Idea Generation
Idea Screening
Business Analysis
Product Development
Test Marketing
Commercialization

Product Life Cycle(PLC)

S
A
L
E
S
Sales

A
N
D
P
R
O
F
I
Product
T
Development
S
(Rs)

Profits
Time
Introduction

Growth

Time

Maturity

Decline

Global Product Management/Decisions

Global Product management refers to the
managerial decisions pertaining to product
development and the product strategies
through the different stages of the product
life cycles.

Product Decisions:
Important product decisions in global
marketing management are:
1. Market segment decision
2. Product mix decisions
3. Product specifications
4. Positioning and communication
decisions.

Product Decisions:
Market Segment Decision:
The first product decision to be made is the
Market Segment Decision because all other
decisions product mix decision, product
specifications, and positioning and
communications decisions depend upon the
target market.

Steps in Market Segmentation,

Targeting, and Positioning
Market
Segmentation
1. Identify
segmentation
variables and
segment the
market
2. Develop
profiles of
resulting
segments

Market
Targeting
3. Evaluate
attractiveness
of each
segment
4. Select the
target
segment(s)

Market
Positioning
5. Identify
possible
positioning
concepts for
each target
segment
6. Select,
develop, and
communicate
the chosen
positioning
concept

Segmentation
The purpose of segmentation is to help start-ups
identify their most attractive market segments so
they can focus their marketing resources on
those customers.
The segmentation process involves developing
and ranking application scenarios to identify the
most attractive customer segments in a given
market.

Consumer Segmentation
Demographic ( age, gender, life stage, income
etc.)
Geographic ( location, country etc.)
Psychographic ( perceptions, attitudes, values
etc. )
Behavioural ( information processing,
communication, purchasing etc.)

Geographic Segmentation
Region(World or Country)

Density
Climate
Population(Country/State/City)
Neighborhood State/Country

City or Metro Size

Demographic Segmentation

Age
Gender
Income
Occupation
Education
Family Size & Family Life Cycle
Religion

Demographic Segmentation Variables

Nutrition bars are

targeted to
varying
demographics
including men,
women and
children

Psychographic Segmentation
Activities, Interests and Opinions(AIOs)
Values, Attitudes and Lifestyles(VALs)

Lifestyle dimensions

ACTIVITIES
WORK
HOBBIES
SOCIAL EVENTS
VACATION
ENTERTAINMENT
CLUB MEMBERSHIP
COMMUNITY
SHOPPING
SPORTS

INTERESTS

FAMILY
HOME
JOB
COMMUNITY
RECREATION
FASHION
FOOD
MEDIA
ACHIEVEMENTS

OPINIONS

SOCIAL ISSUES
POLITICS
BUSINESS
ECONOMICS
EDUCATION
PRODUCTS
FUTURE
CULTURE

Behavioral Segmentation
Personality/Lifestyle
Social Class
Occasion- Birthdays, Lunch-time, vacations
Benefits Sought-travel ,business, vacation,
educational
Usage Rate-- light, medium, heavy

Behavioral Segmentation
User status non users, ex users, first time
users, regular users, potential users
Loyalty status diehards, shifters/switchers
Buyer Readiness unaware aware
informed interested desire intention to
buy

Behavioral Segmentation Variables

This fridge with a built

in TV is targeted to the
owner who watches
television in the kitchen
and has a design that
faces the fridge

Discussion Question
Based on the car examples
on the following slide, how
do car manufacturers use the
following segments when
marketing products?

Geographic
Demographic
Psychographic
Behavioral

Examples of Cars

Industrial segmentation
Size ( small, large, global, stock exchange ranking etc.)
Strategy ( innovator, efficiency, cost cutter, customercentric etc.)
Buying criteria ( performance enhancement, cost
cutting, market share etc.)
Buying process ( tender, meetings, presentations,
proposals, tests etc.)

Targeting
When crafting a business plan or giving it an
overhaul, it's critical to thoroughly understand
the target customers.
Understanding target customers helps in
determining exactly what products or services
will be, and what kind of customer service
tactics work best.

Target Marketing
Identifying those particular groups of customers
which your product/service is capable of meeting
their requirements (needs) most.
Each of these groups constitute a market segment
Selecting one or more segments to enter
Establishing and communicating the products key
distinctive benefits in that market

Target Marketing Strategies

Five basic strategies for target market
selection:
(1) Single Segment Targeting
(2) Selective Targeting
(3) Mass Market Targeting
(4) Product Specialization
(5) Market Specialization

Basic Target Marketing Strategies

POSITIONING
PRODUCT POSITION: The place the
product occupies in consumers minds.
Function of perceptions, impressions and
feelings

POSITIONING:
Attempting to influence how people see a
product/service (products will occupy a
position in a customers mind)

Product Decisions:
Product Mix Decision:
Product mix decision pertains to the type of
products and product variants to be offered
to the target market.

Product Decisions:
Product Specifications:
This involves specification of the details of
each product items in the product mix.
This includes factors like styling, shape, size
and other attributes and factors like packaging
and labelling.

Product Decisions:
Positioning and Communications Decisions:
Positioning is the image projected for the product.
For example, toilet soap may be positioned as baby
soap, beauty soap, a deodorant soap, freshness soap or
skin care soap.
Communication refers to the promotional message
designed for the product.

Individual Product Decisions

Product
ProductAttributes
Attributes

Branding
Branding

Packaging
Packaging

Labeling
Labeling

Product
Product Support
Support Services
Services

International Product Strategies

Straight
Extension
The firm adopts the
same policy used in
its home market.

Product
Adaptation

Product
Innovation

The company caters

The firm designs a
to the needs and wants product from scratch
of its foreign customers. for foreign customers.

Source: W.J. Keegan, Multinational Product Planning: Strategic Alternatives,

Journal of Marketing, 33, 1969, pp.58-62

Global Products Marketing

Localisation of a product or service to fit local
regulation and usage requirements e.g. local
voltages and safety laws
Adaptation fits the product to buyer preferences
e.g. Air-conditioning in USA and Malaysia
Standardised global products are not adapted to
local preferences, but must still be localised.

Deciding on the Global Marketing

Program:
Standardized Marketing Mix:
Selling largely the same products and using the
same marketing approaches worldwide.

Adapted Marketing Mix:

Producer adjusts the marketing mix elements to
each target market, bearing more costs but hoping
for a larger market share and return

Product Adoption
Relative Advantage - To satisfy Needs Better Than the
Competition
Compatibility - The Fit of Product to Norms, Values,
and Tastes of Market
Trialability - Ease of Sampling a New Product
Complexity - Easier to Use, More Likely to Be Adopted
Observability - To What Extent Benefits Can Be
Observed and Understood

Marketing Mix Adaptation

In India, McDonalds serves chicken, fish, and vegetable burgers, and

the Maharaja Mactwo all-mutton patties, special sauce, lettuce,
cheese, pickles, onions, on a sesame-seed bun.

Advantages of standardisation
Cost reduction - e.g. economies of scale
Improved quality - resources can be focussed
Enhanced customer preference - positive
experiences lead to global brand loyalty
Global customers - uniform quality and services
Global segments - e.g. software, cameras.

Disadvantages of Standardisation
Lack of uniqueness - exclusivity may be behind
purchase decision
Off-target - miss the customer target completely
Vulnerable to trade barriers - local production
may be necessary, so economy of scale benefits
are lost
Strong local competition - customisation by
competitors, lack of local knowledge

Global Product Strategies

Straight Product Extension:
Marketing a product in a foreign market without any
change.

Product Adaptation:
Adapting a product to meet local conditions or wants
in foreign markets.

Product Invention:
Creating new products or services for foreign markets.

Thank You