Global Products
For many years, product management was done on a centralized level across nations, with close collaboration across disciplines. Today's model incorporates some of these past practices but also integrates a more regional approach to generate greater efficiencies, facilitate flexibility, and utilize local expertise. Companies must evaluate the pros and cons of standardized products vs. products that have been customized to address local tastes and preferences. For example, Coca-Cola and Pepsi use the same products and ingredients in all markets. However, McDonald's varies their menus to meet cultural variations and local tastes. Read this summary and the sections for more insight into strategies taken by different organizations in global markets.
Summary
The product is the most important element of a company's marketing program. Global marketers face the challenge of formulating coherent product and brand strategies on a worldwide basis. A product can be viewed as a collection of tangible and intangible attributes that collectively provide benefits to a buyer or user. A brand is a complex bundle of images and experiences in the mind of the customer. In most countries, local brands compete with international brands and global brands. A local product is available in a single country; a global product meets the wants and needs of a global market.
Product and communications strategies can be viewed within a framework that allows for combinations of three strategies: extension strategy, adaptation strategy, and creation strategy. Five strategic alternatives are open to companies pursuing geographic expansion: product-communication extension; product extension-communication adaptation; product adaptation-communication extension; product-communication adaptation; and product invention (innovation). The strategic alternative(s) that a particular company chooses will depend on the product and the need it serves, customer preferences and purchasing power, and the costs of adaptation versus standardization. Product transformation occurs when a product that has been introduced into new country markets serves a different function or is used differently than originally intended. When choosing a strategy, management should consciously strive to avoid the "not invented here" syndrome.
Global competition has put pressure on companies to excel at developing standardized product platforms that can serve as a foundation for cost-efficient adaptation. New products can be classified as discontinuous, dynamically continuous, or continuous innovations. A successful product launch requires an understanding of how markets develop: sequentially over time or simultaneously. Today, many new products are launched in multiple national markets as product development cycles shorten and product development costs soar.
Source: Babu John Mariadoss, https://opentext.wsu.edu/mktg360/chapter/chapter-8-creating-offerings/
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