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:
Physical Objects
Services
Events
Persons
Places
Organizations
Ideas
Combinations of the above

Consumer-Goods Classification

Product Line Decisions

Two-Way Product-Line Stretch: Marriott Hotels

Product Mix
7. Managing International Product Lines
Example : Procter & Gamble Product-Line
Product-Line Length
Line Stretching
Downmarket
Upmarket
Two-way
Line Filling
Line Modernization
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.
European Consumer Preferences Regarding Private Labels
European Households Judging Credibility of Private Labels
Product Packaging and Labeling
Why Package Crucial as a Marketing Tool
Self-service
Consumer affluence
Company & brand image
Opportunity for innovation
Labels
NEW PRODUCT DEVELOPMENT
Developing New Global Products
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.

Developing New Global Products

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 (see
Ch.4)
Test Marketing
Once the sales forecast looks promising, the new product is usually placed in
production and test marketed.

Alternative Strategies
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
Relying on instinct or hunch rather than testing and research
Lack of product distinctiveness
Unexpected technical problems
Mismatch between functions
International Product Testing Techniques
Limited product launch in one country market.
Laboratory test markets to capture consumer reactions in a controlled environment.
Microtest marketing uses a permanent panel of consumers and assesses their
willingness to buy after exposure to media and purchase incentives.
Forced distribution tests rely on the continuous report of consumer reactions to new
products already in the market
The Global Product Launch
Introducing the product into countries in
three or more regions within a narrow timeframe.
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
Timing of Product Introductions in
Foreign Markets
Waterfall Strategy
product is introduced into foreign markets one at a time (IPLC model approach)
Useful when:
lifecycle of product is long
high fixed costs of entry into individual markets
foreign markets are not equally developed
some customization is needed
firms have little foreign experience
Sprinkler Strategy
simultaneous introduction of the product in multiple markets
Useful when:
short product life cycle
high R&D costs in product development
competition is very strong (pre-emption of markets)
firms have existing presence in target countries
homogenized preferences

Grey Marketing
Grey (or parallel marketing)
Products are imported outside of the established distribution channel – undercutting
the authorized channel pricing
Usually results from high imported prices
Question