1. Global Marketing Management
Masaaki Kotabe & Kristiaan Helsen Third Edition
John Wiley & Sons, Inc., 2004
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Kotabe & Helsen's Global Marketing Management, Third Edition, 2004

2. Global Product Policy Decisions I: Developing New Products for
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Global Product Policy Decisions I: Developing New Products for
Global Markets
Chapter 11
Kotabe & Helsen's Global Marketing Management, Third Edition, 2004

3. Kotabe & Helsen's Global Marketing Management, Third Edition, 2004
Chapter Overview
1. Global Product Strategies
2. Standardization Versus Customization
3. Multinational Diffusion
4. Developing New Products for Global Markets
5. Global NPD and Culture
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Kotabe & Helsen's Global Marketing Management, Third Edition, 2004

4. Kotabe & Helsen's Global Marketing Management, Third Edition, 2004
Introduction
A cornerstone of a global marketing mix program is the set of product policy decisions that multinational companies (MNCs) constantly need to formulate.
The range of product policy questions may include:
What new products should be developed for what markets?
What products should be added, removed, or modified for the product line in each of the countries in which the company operates?
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Kotabe & Helsen's Global Marketing Management, Third Edition, 2004

5. Kotabe & Helsen's Global Marketing Management, Third Edition, 2004
Introduction (contd.)
What brand names should be used?
How should the product be packaged and serviced?
Examples of improper product policy decisions in global marketing:
Ikea in the United States
Proctor & Gamble in Australia
U.S. Car Makers in Japan
Ford in Brazil
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Kotabe & Helsen's Global Marketing Management, Third Edition, 2004

6. 1. Global Product Strategies
Three global strategies to penetrate foreign markets:
Extension strategy
Adaptation strategy
Invention strategy
Five strategic options for the global marketplace:
Strategic Option 1: Product and Communication Extension -- Dual Extension
Strategic Option 2: Product Extension -- Communications Adaptation
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Kotabe & Helsen's Global Marketing Management, Third Edition, 2004

7. 1. Global Product Strategies (contd.)
Strategic Option 3: Product Adaptation -- Communications Extension
Strategic Option 4: Product and Communications Adaptation -- Dual Adaptation
Strategic Option 5: Product Invention
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Kotabe & Helsen's Global Marketing Management, Third Edition, 2004

8. 2. Standardization Versus Customization
Five forces favoring a globalized product strategy:
1. Common customer needs
2. Global customers
3. Scale economies
4. Time to market
5. Regional market agreements
Degree of Standardization
Modular Approach
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Kotabe & Helsen's Global Marketing Management, Third Edition, 2004

9. 2. Standardization versus Customization (contd. )
Core-Product (Common Platform) Approach
Balancing act between standardization and adaptation
Overstandardization vs. overcustomization
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Kotabe & Helsen's Global Marketing Management, Third Edition, 2004

10. 3. Multinational Diffusion
Examples:
Microsoft’s Xbox videogame
NTT DoCoMo’s iMode
The Adoption of new products is driven by three types of factors:
Individual Differences
Personal Influences
Product Characteristics
1. Relative advantage
2. Compatibility
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Kotabe & Helsen's Global Marketing Management, Third Edition, 2004

11. 3. Multinational Diffusion (contd.)
3. Complexity
4. Trialability
5. Observability
Other country characteristics used to predict new product penetration patterns include:
Homogeneous population
Lead countries
Lag countries
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Kotabe & Helsen's Global Marketing Management, Third Edition, 2004

12. 3. Multinational Diffusion (contd.)
Cosmopolitanism
Mobility
Labor force profile
Individualism and national innovativeness (see Exhibit 11-4)
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Kotabe & Helsen's Global Marketing Management, Third Edition, 2004

13. 4. Developing New Products for Global Markets
Identifying New Product Ideas
4 C’s:
Company
Customers
Competition
Collaborators
New Product Development (NPD) Process
Screening (see Exhibit 11-5)
Concept Testing
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Kotabe & Helsen's Global Marketing Management, Third Edition, 2004

14. 4. Developing New Products for Global Markets (contd.)
Conjoint Analysis
To Standardize or not to Standardize
Test Marketing
Timing of Entry: Waterfall versus Sprinkler Strategies (see Exhibit 11-11)
Waterfall Strategy: Global phased rollout where new products trickle down in a cascade-like manner
Sprinkler Strategy: Simultaneous worldwide entry
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Kotabe & Helsen's Global Marketing Management, Third Edition, 2004

15. Kotabe & Helsen's Global Marketing Management, Third Edition, 2004
5. Global NPD and Culture
Global linkages between the new product development process and national cultures where cultural differences heavily influence the NPD process.
Differences between European and North American new product development programs:
The NPD process among European firms is much more formalized.
European Go/No Go standards tend to be far stricter than American norms.
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Kotabe & Helsen's Global Marketing Management, Third Edition, 2004

16. 5. Global NPD and Culture (contd.)
NPD projects within European firms are more likely to have a well-defined project leader and an assigned team of players than projects run by North American companies; European teams are much more multifunctional than American teams.
European companies punish project leaders less in case of failure, reward intrapreneurs more generously, and offer more seed money for pet projects.
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Kotabe & Helsen's Global Marketing Management, Third Edition, 2004

17. 5. Global NPD and Culture (contd.)
Japanese Companies and Product Churning:
Japanese companies strongly believe in rushing new products to the markets with little or no market research and then gauge the market’s reaction.
Japanese NPD managers constantly listen to the “voice of the customers.”
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Kotabe & Helsen's Global Marketing Management, Third Edition, 2004

18. Copyright © John Wiley & Sons, Inc. 2004
Chapter 11
Kotabe & Helsen's Global Marketing Management, Third Edition, 2004