Product Variables

Product Variables

•      The Core Product

w   a product or services that is essentially the same as that of competitors.

•      The Tangible Product

w   a product or service that is differentiated composition, origin, or tangible features from competing products.

•      The Augmented Product

w   a product or service which is serviced after the sale and carries a warrantee from the producer, producing a continuing relationship with the seller.

Standardization versus Adaptation

•      International market approach alternatives to adaptation.

w  Sell the product as it is internationally.

w  Modify product for different countries or regions.

w  Design new products for foreign markets.

w  Incorporate all differences into one product and introduce it globally.

Standardization versus Adaptation


•      Economies of scale in production

•      Economies in product R&D

•      Economies in marketing

•      “Shrinking” of the world marketplace/economic integration

•      Global competitions


•      Differing use conditions

•      Government and regulatory influences

•      Differing consumer behavior patterns

•      Local competition

•      True to the marketing concept

Strategic Adaptation to Foreign Markets

The Market Environment

•      Government Regulations

w   Political and social agendas often dictate regulatory requirements.

•      Nontariff Barriers

w   Product standards, testing, subsidized local products.

•      Customer Characteristics, Expectations, and Preferences

w   Physical size, local behaviors, tastes, attitudes, and traditions.

w   Consumption patterns, psychosocial characteristics, and  general cultural criteria.

The Market Environment

•      Economic Development

w   The stage of economic development affects the market size and demand characteristics. Backward innovation of the product may be required to meet local requirements.

•      Competitive offerings

w   Monitoring competing local products is critical in adjusting the product for competitive advantage.

•      Climate and geography

w   Local climatic conditions and can make products vulnerable to damage.

Product Characteristics

•      Product Constituents

•      Branding

•      Packaging

•      Appearance

•      Method of Operation or Usage

•      Quality

•      Service

•      Country-of-Origin Effects

Packaging and Appearance

•      Packaging serves three major functions:

  Protection

•    Improper handling and pilferage

  Promotion

•    Language and symbols

  User convenience

•    Packaging aesthetics- color and shape, overall size, and purchase quantity

•      Adaptations in styling, color, size, and other appearance features play an important role in how a consumer perceives a product.

Method of Operation or Usage

•      The product that is operable in the domestic market may not be operable in the foreign market.

•      Electrical voltages and  connectors vary around the world. English and metric standards are not comparable.

•      Software may have to be translated into the local language.

Quality and Service

•      Quality is essential to marketing products internationally

•      ISO compliance may be required by buyers.

•      Servicing products in international markets requires producers to develop local repair staffs.

Country-of-Origin Effects

•      The origin of a product may have a strong effect on consumer perceptions and biases about foreign products.

Company Considerations

•      Organizational capabilities?

•      Is it worth it?

•      Can we afford not to do it?

•      Can a specific return-on-investment (ROI) be attained?

•      What about quality, price, and user perceptions?

•      Warranties?

•      Managerial talent?