© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 14 Global Product Management and Branding

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Global Product Development Product development is essential for catering to new or changing customer needs on a global basis.

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Global Product Development Stages of the product development process – – – – –

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Global Product Development Sources for idea generation: – – – – –

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Global Product Development A product idea that at some stage fails to meet the specified criteria is not scrapped; data from these banks are used in the development of other products.

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Global Product Development The use of computer aided design (CAD) allows inexpensive adaptation of the product designs for future markets.

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Global Product Development The assignment of product development responsibility may be based on a combination of special market and technical knowledge.

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Exhibit 14.1 – Global Program Management

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Global Product Development The time lag between product development and introduction into the market depends on: – – – – – –

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Global Product Development Reasons for investing in R&D activities abroad: –Aids technology transfer from parent to subsidiary. – –Develops new products and processes for simultaneous application in world markets of the firm. –

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Global Product Development The organization of global product development –Product development activity is undertaken by specific teams to: –Representatives of all the affected functional areas serve on each team to ensure the integrity of the project.

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Global Product Development –Multidisciplinary teams in an organization –Companies increase communication and exchange of personnel to reduce language and cultural barriers among R&D teams. –

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Global Product Development Testing of new product concepts for performance and customer acceptance – –Ranges from reliability tests to mini-launches. – Reasons for product failure: – –Lack of product distinctiveness. – –Mismatch between functions.

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Global Product Development Three techniques used for international product testing include: –Laboratory test markets - –Microtest marketing - –Forced distribution tests -

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Global Product Development Global product launch –Introducing the product into countries in three or more regions within a narrow timeframe. –Measures undertaken for successful launches: –Benefits of a successful global launch:

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Management of the Product and Brand Portfolio The marketer should have a balanced product and market portfolio—a proper mix of new, growing, and mature products to provide a sustainable competitive advantage. Product portfolio analysis –Is based on growth rates and market share positions. –Is used to analyze:

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Management of the Product and Brand Portfolio Advantages of product portfolio approach –A global view of competitive structures. – –A guide for formulation of marketing objectives based on the role of product lines in the markets served. – Disadvantages of product portfolio approach – –Relationships between market share and profitability may vary. – –Local content laws. –

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Exhibit Example of Market-Product- Business Portfolio Market Attractiveness ——— Market and Distribution Interconnectedness ………. Technology and Production Interconnectedness High Low High Competitive Strength Low Canned Tea-US Canned Tea-Europe Canned Tea-Asia Ice Cream-US Ice Cream-Europe Ice Cream-Asia Frozen Vegetables- Europe Frozen Vegetables-US Frozen Main Dishes- Europe SOURCE: Adapted from Susan P. Douglas and Samuel Craig, “Global Portfolio Planning and Market Interconnectedness,” Journal of International Marketing 4 (no.I, 1996):

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Management of the Product and Brand Portfolio Managing the brand portfolio –Branding is one of the major beneficiaries of a well- conducted portfolio analysis. –Brands help to: Influence the purchasing decisions of both consumer as well as business-to-business situations.

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Management of the Product and Brand Portfolio –Co-branding - –Global marketers have three choices of branding:

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Management of the Product and Brand Portfolio Brand strategy decisions –______ ______ are a key way of creating consistency and impact. –While some of the global brands are completely standardized, some elements of the product may be adapted to local conditions. –Characteristics of global brands

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Management of the Product and Brand Portfolio Brand strategy decisions –Three main implications for the marketing manager to consider: –The SBU and general management establish a planning policy document with respect to brand positioning, labeling, packaging, and other marketing mix issues, such as a communications platform.

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Management of the Product and Brand Portfolio Brand strategy decisions – –The brand portfolio needs to be periodically and regularly assessed. –

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Management of the Product and Brand Portfolio Private brand policies – –Methods used for private branding: –Private brand goods have achieved a significant penetration in many countries due to increase in price sensitivity and decrease in brand loyalty.

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Exhibit Private Brand Strategies SOURCES: Adapted from Sabine Bonnot, Emma Carr and Michael J. Reyner, “Fighting Brawn with Brain,” The McKinsey Quarterly 40 (no ): 85-92; and Francois Glemet and Rafael Mira, “The Brand Leader’s Dilemma,” The Mckinsey Quarterly 33 (no ):4.