Chapter 9

International Product Decisions

International Marketing
Chapter-9 International Product
Decision
 Objectives
„ What are the important product decisions in
IM management
„ What is the definition of product and what
are the components of product
„ What is product mix
„ What stages constitute the life cycle of a
product
„ What are the types of new products and
what are their opportunities
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Chapter-9 International Product
Decision
„ What is branding
„ What are the functions and importance of
packaging and labeling
„ What is business environment
„ What are the product strategies
„ What are product-communication
strategies
„ What is the difference between
globalization and localization
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Chapter-9 International Product
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Introduction
„ Product strategy involves the
managerial decisions about the product
mix and the positioning and
communication
„ Product planning is used in a broad
sense, involves not only the product
strategy described above but also the
product development measures
International Marketing
Chapter-9 International Product
Decision
„ Product management refers to the
managerial decisions pertaining to
product development and the product
strategies through the different stages
of the product life cycle

International Marketing
Chapter-9 International Product
Decision
Product Decision
1. Market segment decision
2. Product mix decision
3. Product specifications
4. Positioning and communications
decisions

International Marketing
Chapter-9 International Product
Decision
Product
„ Philip Kotler defines a product as
anything that can be offered to a
market for attention, acquisition, use or
consumption that might satisfy a want
or need, includes physical objects,
services, persons, places, organizations
and ideas.
International Marketing
Chapter-9 International Product
Decision
Components And Levels of
Product
1. Core product
2. Tangible product
3. Augmented product

International Marketing
Chapter-9 International Product
Decision
Core Product
„ Core product refers to the core benefit the
consumer derives from the product.
„ In some cases the basic physical product
remains the same, the core product differs
between markets because the purpose for
which product is used is different in these
different markets.
„ This is called modification of product
design, positioning and communication
strategies.
International Marketing
Chapter-9 International Product
Decision
Tangible Product
„ Tangible product is the actual form with
all its attributes, in which the product is
offered to the consumer.
„ It has certain characteristics like a
quality level, features, styling, a brand
name and packaging.

International Marketing
Chapter-9 International Product
Decision
Augmented Product
„ Augmented product refers to certain
additional services or benefits offered
with the product such as installation,
delivery and credit facilities, after sales
service and warranty.
„ Product augmentation may not be very
important in a seller’s market but they
are very important in the competitive
markets which are buyer’s
International Marketing
Chapter-9 International Product
market
Decision
Product Mix
„ The product mix is the full list of all the
products offered for sale by a company.
„ The product mix has certain width,
depth and consistency.
„ The width refers to the number of
different product lines in the product
mix.
International Marketing
Chapter-9 International Product
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„ The depth refers to the average no. of
items offered by the company within
each product line.
„ The consistency refers to the extent to
which the various product lines are
closely related in end use, production
requirements, distribution channels, or
in some other ways.
International Marketing
Chapter-9 International Product
Decision
Product Life Cycle
1. Introduction
2. Growth
3. Maturity
4. decline

International Marketing
Chapter-9 International Product
Decision
 Introduction
1. Low sales because it generally takes some
time for a new product to get wide
acceptance by consumers and it also takes
time to expand the marketing of the
product
2. High costs per unit because of the low sales
and high promotional expenditure
3. Absence of or low competition if the product
is entirely new.
4. Loss or negligible profits because of low
sales and high costs.
International Marketing
Chapter-9 International Product
Decision
Growth
1. Fast growth in sales because of
increasing consumer acceptance and
expansion of marketing
2. Growing profits because of growing sales
and fall in the incidence of fixed
production cost and marketing cost per
unit.
3. Increasing competition
4. Market segmentation and the introduction
of different versions of the product.
International Marketing
Chapter-9 International Product
Decision
Maturity
1. Saturation of sales
2. Intense competition
3. Falling profits because of high
promotional expenditure and falling
margins.

International Marketing
Chapter-9 International Product
Decision
Decline
„ Entry of new products which compete
with the product
„ Decline in sales
„ Decline in profits: profits may even
become negative
„ Exit of some of the firms

International Marketing
Chapter-9 International Product
Decision
PLC And International
Marketing
„ International marketing may enable a firm
to alter the shape of the PLC.
„ It is also a fact that in several cases
technologies/products are introduced in
developing countries when they have
become obsolete in the advanced
countries.
„ There is often a time leg between
countries in the adoption and diffusion of
technologies. International Marketing
Chapter-9 International Product
Decision
New Product Development
1. Innovative product
2. Significantly modified product
3. Copy of the existing product

International Marketing
Chapter-9 International Product
Decision
Steps In New Product
Development
1. Idea generation
2. Evaluation and selection
3. Concept testing
4. Business analysis
5. Product development
6. Market testing
7. commercialization
International Marketing
Chapter-9 International Product
Decision
 Branding
„ A brand is a name, term, sign, symbol, or
design or a combination of them, intended to
identify the goods or services of one seller or
group of sellers and to differentiate them from
those of others.
„ The part of the brand which can be vocalized-
the utterable-is known as the brand name.
„ The part of the brand that is given legal
protection for exclusive use by a seller is known
as the trade mark.
International Marketing
Chapter-9 International Product
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Branding Decisions
1. To brand or not to brand
2. Manufacturer’s brand or private brand
3. Same brands or different brands

International Marketing
Chapter-9 International Product
Decision
Global Brands
1. It makes market entry easy- for
example, Pepsi is well known in India
even before it came to India
2. It reduces the promotional expenditure
as the brand is well known.
3. It helps to generate good sales since
the very beginning.
International Marketing
Chapter-9 International Product
Decision
Branding Problems In
International Marketing
1. It is very difficult for a small firm to
promote its brand in foreign markets
because of the heavy cost of brand
promotion.
2. Established foreign importers and
distributors discourage use of exporter
brand because they prefer to sell the
products under their own brand name.
3. The cultural and other factors make
branding decision complicated in IM.
International Marketing
Chapter-9 International Product
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4. One problem faced by some multinational
companies when they wanted to market
their products in some countries is that they
found that their world renowned brands had
been registered in these countries by
somebody else with the result that these
firms had to pay fee to the registered
holders of these brands in these countries
for permission to use these brands.
5. In some countries, there are restrictions on
use of foreign brands
International Marketing
Chapter-9 International Product
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 Scope For Use Of Indian
Brands
1. Indian brand names may be used when
niche marketing strategy is employed.
2. Indian brand names may be used when the
export is made to foreign firms who do not
have their own brands or when goods are
sold by distributors who do not have their
own brand names.
3. After gaining credibility and gaining
experience in export business by being
suppliers to foreign firms, the Indian
exporter may start selling under its own
brand name. Chapter-9
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International Product
Decision
4. An Indian firm may buy a foreign brand or take
over a foreign firm with established brand name.
5. The Indian firms having reputation in foreign
countries may promote their brands in the foreign
markets.
6. Indian companies may also use mixed brands.
7. Several firms may jointly promote a common
brand-consortium approach.
8. Promotion of a logo by export promotion agencies
and permission to use this logo along with the
brands of firms who will strictly adhere to the
quality and other norms.
International Marketing
Chapter-9 International Product
Decision
 Packaging And Labeling
„ This terms are distinct in the marketing parlance.
„ In export marketing, packaging, including
packing, is a factor which demands very careful
attention.
„ Packaging in IM is a much more serious problem
than in domestic marketing because of the
varying physical conditions and situations the
cargo is exposed to and subjected to; difference
in the tastes, preferences and practices;
differences and International
peculiaritiesMarketing in packaging
Chapter-9 International Product
requirements and regulations.Decision
Functions And Importance Of
Packaging
Functions
1. Protection
2. Preservation
3. Presentation
Importance
1. Self service
2. Consumer affuence
3. Integrated marketing concept
International Marketing
Chapter-9 International Product
Decision
Factors Influencing Packaging
Decision
1. Physical characteristics
2. Physio-chemical characteristics
3. Economy
4. Convenience
5. Miscellaneous factors

International Marketing
Chapter-9 International Product
Decision
Special Consideration in IM
„ Regulations in the foreign countries
„ Buyer’s specification
„ Socio-cultural factors
„ Retailing characteristics
„ Environmental factors
„ Disposability
International Marketing
Chapter-9 International Product
Decision
Importance And Requirement
Of Export Packaging
1. It should be capable of withstanding
the hazards of handling and transport.
2. It should be easy to handle.
3. It should be amenable to quick
examination of contents.
4. It should be easy to identify
5. It should be adequately marked.
International Marketing
Chapter-9 International Product
Decision
6. Unless it is necessary, contents shall
not be disclosed
7. It should be easy to dispose of
8. Packaging must conform to the buyer’s
specifications.

International Marketing
Chapter-9 International Product
Decision
 Business Environment
„ Business environment is a very important
factor which influences the marketing mix
strategy
„ Some times a company may find the
introduction of a better material a problem
because of certain peculiar convictions of the
consumers.
„ There are many instances of national
regulations prohibiting the marketing of
certain products. International Marketing
Chapter-9 International Product
Decision
 Product Communication
Strategies
In IM product and communication strategies are
usually considered together because the need
satisfaction, purpose of product use or usage occasion
and the product communication are rather inseparable.
1. Straight extension
2. Product extension, communications adaptation strategy
3. Product adaptation, communications extension strategy
4. Dual adaptation
5. Product invention
International Marketing
Chapter-9 International Product
Decision
Developments tend to favour
Globalization
1. Technological advance
2. Travel and communication
3. Product image
4. International standards

International Marketing
Chapter-9 International Product
Decision
Summary
„ Product decisions in IM management
includes; market segment decision,
product specifications and positioning and
communication decisions.
„ All the categories of products enjoy the
opportunities of copying, product
modification and innovation.
„ The term product decision include product
strategy, product planning and product
management.
International Marketing
Chapter-9 International Product
Decision