Global Product Strategy: Standardization, Adaptation, and Intellectual Property Protection
International Product Strategy and Management
Core Product Elements and Market Alternatives
Product Elements
- Installation, delivery, warranty, and after-sales service
- Packaging, features, styling, quality, and brand name
- Core benefit or service
Product Alternatives in International Markets
- Selling the product as is in the international marketplace
- Modifying the product for specific countries
- Designing new products for foreign markets
- Creating a global product
Standardization Versus Adaptation
Standardization: Selling the Same Product Worldwide
Drivers for Standardization
- Achieving scale in production
- Reducing costs in product research and development (R&D)
- Realizing economies in marketing
Products Favoring Standardization
- Universal brands
- Industrial goods
- Technology-intensive products
Adaptation Requirements
- Differing use conditions
- Government influences and regulations
- Consumer behavior and preferences
- Local competition
- Alignment with the local marketing concept
Factors Requiring Adaptation
- Regional characteristics
- Nature of the product
- Company considerations
Trade Barriers and Protectionism
Non-Tariff Barriers (NTBs)
Trade barriers that restrict imports and exports through mechanisms other than the simple tariff, often used to protect domestic industries.
Advantages of Protectionism
- Protection of domestic industries
- Increase in domestic employment
- Boosting upcoming industries
Disadvantages of Protectionism
- Hinders free trade
- Discourages competition
- Dampens future growth
- Raises prices for consumers
- Increases the risk of trade wars
Factors Influencing Product Decisions
Market and Consumer Influences
- Local Behavior: Affected by local behavior, tastes, attitudes, and tradition.
- Positioning: Consumers’ perception of a brand as compared with competitors.
- Economic Development: May require simplified versions of the product due to lack of purchasing power. Examples include large packages for families, cigarettes sold individually, or T-shirts sold in double packs.
- Competitive Offerings: Requires careful analysis to identify market gaps and avoid certain segments, while competing effectively with local, traditional purchasing relationships.
Product Characteristics
- Consumer Nondurables: High sensitivity to differences in national taste.
- Consumer Durables: Demand and adjustment are generally more foreseeable.
Branding Strategy
A plan that encompasses specific long-term goals achievable through the evolution of a successful brand. Standardization in branding is often effective in culturally similar regions.
Linguistic Considerations in Branding
- Translation: Direct conversion of words.
- Transliteration: Conversion of characters from one script to another.
- Transparency: Ensuring the meaning is clear and appropriate.
- Transculture: Ensuring the brand message resonates across cultures.
Tactical Product Management
Packaging Requirements
Packaging serves three primary functions: protection, promotion, and user convenience.
- Pilferage: Use shipping codes placed outside the package to deter theft.
- Package Aesthetics: Must be carefully considered in terms of the promotional role.
- Technology: Marketers must monitor packaging technology developments.
Appearance and Styling Adaptation
Adaptation in product styling, colors, and size is common for consumer goods.
- Color is crucial for identification.
- Adaptation tends to be subtle in developed markets and more direct in traditional markets.
Methods of Operation
Methods of operation are often not the same in foreign and national markets. Factors can be eliminated by standardization, but companies must read export failures as opportunities to adjust and adapt for different uses and cultures, remaining open to new ideas.
Quality and Service
- Quality: Companies cannot compete on price alone. Investment in research and development (R&D) is necessary. Countries often provide financial assistance for quality improvement (e.g., ISO 9000 certification). Quality standards are crucial, especially in developing markets.
- Service: Requires well-trained staff and comprehensive product warranties.
Country of Origin Effect
The country of origin affects the product’s image. This is important for exporters and importers dealing with products from different countries, though some products are less affected. With greater global integration, borders are becoming less significant in this regard.
Company Considerations
Internal factors influencing product decisions include:
- The nature of the product and the required level of adaptation.
- The ability to control costs.
- The estimate of market potential and securing profitability.
- Availability of human resources who understand the market conditions.
Intellectual Property Protection
Product Counterfeiting and Protection
Product counterfeiting involves any goods bearing an unauthorized reproduction of a trademark, patented invention, or copyrighted work that is legally protected. Protection is often country-specific.
Key Protection Mechanisms
- Paris Convention
- Universal Copyright Convention (UCC)
- European Patent Office (EPO)
- The Trademark Counterfeiting Act of 1984 (US)
- Intellectual Property Right Improvement initiatives