GMS 522 Chapter 7 Global Product Strategies

 

Product Defined: A complex combination of tangible and intangible elements that distinguishes it (the product) from the other entities in the marketplace.

 

Standardization versus Adaptation

Four basic alternatives

1.        Selling the product as is in int'l market

2.        Modifying products for diff countries

3.        Designing new products for foreign markets

4.        Incorporating all differences into one product design

 

Standardization Advantages

·         Cost savings in production and marketing (economies of scale)

·         Global customer segments may exist and can be targeted with a standardized product.

·         Some argue that standardized products are likely to be better tested and therefore provide customers with higher quality

·         Global competition

Generally some product changes are needed as standardization results in products that are off-target, i.e. do not appeal completely to any consumer market.

Standardization also results in products which are not unique – firm foregoes the segment of the market that wants exclusivity.

The firm leaves itselfvulnerable to local firms that can more precisely cater to local tastes.

Factors Affecting Adaptation
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