Major product decisions for Marketing Management Mcom sem 2 Delhi University

Major product decisions for Marketing Management MCOM sem 2 Delhi University:- we will provide complete details of Major product decisions for Marketing Management MCOM sem 2 Delhi University in this article.

Major product decisions for Marketing Management Mcom sem 2 Delhi University

Product Decision Making in Global Marketing Management

The important product decisions needed to be taken in global marketing management are as follows:

1) Identification of Products for International Market:

The firm has to carry out preliminary screening, that is, identification of markets and products by conducting market research. A poorly conceived product often leads to marketing failures. It was not a smooth sailing in the Indian market for a number of transnational food companies after the initial short-lived euphoria among Indian consumers.

Kellogg’s, Pizza Hut, McDonald’s, and Domino’s Pizza have all run into trouble in the experienced the troubled waters in Indian market at one point of time or the other. The basic mistakes that these firms made were:

i) Gross Overestimation of Spending Patterns of Indian Consumers:

Despite the ability to buy products, the customers in South Asia are very cautious and selective when spending. They look for value for money in their purchase decisions far more than their Western counterparts do.

ii) Gross Overestimation of the Strength of their Transnational Brands:

These MNCs estimated their brand image very high in the international markets and the globalization of markets was considered to be a very potent factor for getting a large number of customers for their products, as happened in African and other East Asian countries.

iii) Gross Underestimation of the Strength of Ethnic Indian Products:

As Indian food is traditionally prepared on a small scale, and mass manufacturing and organised mass-marketing of Indian products was missing, it was wrongly believed that the food products manufactured by the multinationals would change the traditional eating habits of the Indian consumers. They failed to recognize the variety and strength of ethnic Indian foods. India is not only the largest producer of milk in the world with an 80 million metric ton output, that is, about 20 million tons ahead of the US but also home to hundreds of varieties of sweets.

Major product decisions for Marketing Management Mcom sem 2 Delhi University

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2) Developing Products for International Markets:

Various approaches followed for developing products for international markets are as follows:

i) Ethnocentric Approach:

This approach is based on the assumption that consumer needs and market conditions are more or less homogeneous in international markets as a result of globalization. A firm markets its products developed for the home market with little adaptation. Generally, an exporting firm in the initial phases of internationalization relies too heavily on product expansion in international markets.

This market extension approach of product development facilitates cost minimization in various functional areas and a firm gains rapid entry into international markets. However, the ethnocentric approach does not always lead to maximization of market share and profits in international markets since the local competitors are in a relatively better position to satisfy consumers’ needs.

ii) Polycentric Approach:

An international firm is aware of the fact that each country market is significantly different from the other. It therefore adopts separate approaches for different markets. In a polycentric approach products are developed separately for different markets to suit local marketing conditions.

iii) Regiocentric Approach:

Once an international firm establishes itself in various markets the world over, it attempts to consolidate its gains and tries to ascertain product similarity within market clusters. Generally, such market clusters are based on geographical and psychic proximity.

iv) Geocentric Approach:

Instead of extending the domestic products into international markets, a firm tries to identify similarities in consumption patterns that can be targeted with a standard product around the world. Psychographic segmentation is helpful in identifying consumer profiles beyond national borders.

Major product decisions for Marketing Management Mcom sem 2 Delhi University

In a geocentric approach to product development, there is a high degree of centralization and coordination of marketing and production activities resulting in higher economies of scale in the various constituents of the marketing mix. However, it needs meticulous and consistent researching of international markets.

3) Market Segment Decision:

The first product decision to be made is the market segment decision because all other decisions—product mix decision, product specifications, and positioning and communications decisions—depend upon the target market.

4) Product Mix Decision:

Product mix decision pertains to the type of products and product variants to be offered to the target market.

5) Product Specifications:

This involves specification of the details of each product item in the product mix. This includes factors like:

i) Product Attributes:

Some of the key characteristics and features of a product are its quality, styling, and performance. These characteristics are affected by consumer needs, conditions of product use, and ability to buy. The factors that affect product attributes change from country to country.

ii) Packaging:

The main concerns in packaging a product are product protection and promotion. For example, in a hot and humid climate product deteriorate rapidly. Special packaging is necessary to minimize the deterioration of the product. An international marketer has to pay attention to this aspect in designing the packaging material for the product.

In designing the packaging material for promotion, an international marketer has to consider different aspects, such as colour, size, appearance, disposable income, and shopping habits. When designing packaging for a low-income market, it must be ensured that packaging costs less and the goods are packaged in smaller amounts and sizes. When the product is meant for a high-income market the packaging must be in large amounts and must be durable, because, high-income buyers, in general, go for shopping very infrequently.

iii) Labelling:

The primary role of labelling is to provide information. Often the host governments determine the information requirements. The information the manufacturer may be asked to provide includes description of weight, contents, ingredients, product dating, name of the manufacturer, and unit price information. Language difference is a barrier for a firm operating in international markets. When it is operating in overseas markets the labels have to be translated into local languages. Alternatively, the firm can use internationally recognized symbols or multilingual labels.

iv) Service Policies:

Services of physical products can be classified into pre-sale services and post-sale services. Pre-sale services include delivery, technical advice, and postal services. Post-sale services include repair services, maintenance, and operating advice. The level of service necessary depends upon the complexity of the product.

The more complex the product the greater the demand for pre-and post-sales service. When an international firm appoints foreign distributors and agents for providing service it has to train them adequately to meet its after sales needs. The emphasis it lays on service support must be proportionate to the value the customer attaches to the service support.

v) Warranties:

A warranty is a written guarantee of a manufacturer’s responsibility when a product fails to perform. Through warranties a firm takes responsibility for repair and replacement of defective products. Warranties must conform to local laws both in terms of product standards and a manufacturer’s liability.

Major product decisions for Marketing Management Mcom sem 2 Delhi University

Local consumers in many countries view the products manufactured by a foreign firm as less dependable. Providing a strong warranty can go a long way in assuring the local consumers about the trustworthiness of the product. The international firm can in fact use the superior warranty protection as a promotional tool.

6) Positioning and Communications Decisions:

Positioning is the image projected for the product. Communication refers to the promotional message designed for the product. Obviously, both positioning and marketing communication are very much interrelated. For the same product, sometimes the positioning and communication strategies differ between markets.

7) Product Elimination:

Product Elimination is one of the most important product related decision. Too many product introductions can risk overburdening the firm’s marketing system. There is a constant need for a regular review of the range and for elimination decisions to be made where a product is either in its decline stage or simply failing to generate sufficient profit.

The international perspective, however, means that decision-making is more difficult, since a product may be manufactured principally in a plant in one country, be a ‘cash cow’ in one market and a ‘dog’ in another. Careful analysis is therefore needed before the product elimination decision is taken. The identification of overlaps in the product range or poor performance of specific products may necessitate elimination of products if they are in the declining stage of the product life cycle, have been duplicated or have been replaced by a newer product.

8) Product Diversification:

Diversification means seeking unfamiliar products or unfamiliar markets, or both, for the purpose of expansion. Diversification requires substantially different and unfamiliar knowledge, thinking skills, and processes. Thus, diversification is at best a risky strategy, and a company should choose this path only when current product/market orientation seems to provide no further opportunities for growth.

Major product decisions for Marketing Management MCOM sem 2 Delhi University