GLOBAL PRODUCT STRATEGIES: Developing global product strategies requires knowing what types of product or services are easily standardized and what are appropriate adaption strategies.
Some products cross borders without adaption better than others, and consumer knowledge about new products is generally the same everywhere because perceptions have yet to be formed.
Many leading Internet brands—such as Google, eBay, Twitter, and Facebook—made quick progress in overseas markets.
High-end products also benefit from standardized because quality and prestige often can be marketed similarly across countries,
Culture and wealth factors influence how quickly a new product takes off in a country, though adoption and diffusion rates are becoming more alike across countries over time.
Food and beverage marketers find it more challenging to standardize, of course, given widely varying tastes and cultural habits.
A company many emphasize its products differently across markets. In its medical-equipment business.
Philips traditionally reserved higher-end, premium products for developed markets and emphasized products with basic functionality and affordability in developing markets.
Increasingly, however, the company is designing, engineering, and manufacturing locally in emerging markets like China and India.
With a growing middle class in many emerging markets, many firm are assembling product portfolio to tab into different income segments.
French food company Danone has many high-end healthy products, such as Dennon yogurt, Evian water, and Bledina baby food, but it also sells much lower prized products targeting consumers with ‘’dollar-a-day’’ food budgets.
In Indonesia, where average per-capita income is about US$10 a day, the company sells Milk out, a 6 month shelf life neutral ph milk beverage. Danone now generates over 60% of its sales from growth markets (i.e. all except Western Europe ), up from just 23% in 1996 ( source; www.danone.com ).
PRODUCT ADAPTATION STRATEGIES
Warren Keenan has distinguished five product and communications adaption strategies. We review the product strategies here and the communication strategies in the next section.
Straight extension introduces the product in the foreign market without any change.
Tempting because it requires no additional R&D expense, manufacturing retooling, or promotional modification, the strategy has been successful for cameras, consumers electronics, and many machine tools. It has been a disaster.
Campbell Soup Company lost an estimated $30 million introducing condensed soups in England; consumers saw expensive small-sized cans and didn’t realize water needed to be added.
Product adaptation alters the product to meet local conditions or preferences. Flexible manufacturing makes it easier to do so on several levels.
- A company can produce a regional version of its product. Dunkin’ Donuts has been introducing more rationalized product, such as Coco Leche donuts in Miami and sausage kolaches in Dallas.
- A company can produce a country version. Kraft blends different coffee for the British ( who drink coffee with milk ), the French (who drink it black), and Latin Americans ( who want a chicory taste).
- A company can produce a city version—for instance, a beer to meet Munich or Tokyo’s tastes.
- A company can produce different retailer version, such as one coffee brew for the Migros chain store and another for Cooperative chain store, both in Switzerland.
Some companies have learned adaption the hard way. The Euro Disney theme park, launched outside Paris in 1992, was harshly criticized as an example of U.S.
Cultural imperialism that ignored French customs and values, such as the serving of wine with meals. As one Euro Disney executive noted, ‘’When we first launched, there was the belief that was enough to be Disney.
Now we realized our guests need to be welcomed on the basis of their own culture and travel habits.’’ Renamed Disneyland Paris, the theme park eventually became one of Europe’s biggest tourist attraction—even more popular than the Eiffel Tower— by implementing a number of local touches.
On the other hand, South Korea’s LG Electronics has found success in India by investing in local design and manufacturing facilities that helped it develops TVs with higher-quality speaker, refrigerators with brighter colors and smaller freezers, and microwaves with one-touch ‘’Indian menu’’ functions, all reflecting Indian preferences.
Product invention creates something new. It can take two form:
- Backward invention reintroduce earlier product forms well adapted to a foreign country’s needs. A bit developing markets in Latin America, and the Middle East, the powdered drink Tang has added local flavors like lemon pepper and soursop. Although its U.S. sales have fallen precipitously, worldwide sales double from 2016 to 2011.
- Forward invention creates a new product to meet a need in another country. Less-developed countries need low-cost, high-protein foods. Companies such as Quaker Oats, Swift, and Monsanto have researched their nutrition requirements, formulated new foods, and developed advertising to gain product trail and acceptance.