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International
Marketing MKT630
VU
Lesson
# 38
INTERNATIONAL
MARKETING MIX PRODUCT
POLICY
Product
Planning
International
product planning:
Product
management is an
organizational function within a company
dealing with the
product
planning
or product marketing of a product or
products at all stages of the product
lifecycle.
Product
Management is also a collective
term used to describe the
broad sum of diverse
activities
performed
in
the
interest
of
delivering
a
particular
product
to
market.
From
a practical perspective, product
management is an occupational domain
which hold two
professional
disciplines: product planning and
product marketing. This is
because the product's
functionality
is created for the user via
product planning efforts, and
product value is presented to
the
buyer
via product marketing
activities.
Product
planning and product marketing
are very different but due
to the collaborative nature of
these
two
disciplines, some companies
erroneously perceive them as being one
discipline, which they
call
product
management. Done carefully, it is
very possible to functionally divide the
product management
domain
into product planning and
product marketing, yet
retain the required synergy between the
two
disciplines.
Product
planning typically deals
with these
activities:
·
Defining
new products and gathering market
requirements
·
Product
Life Cycle considerations
·
Product
portfolio management
·
Product
differentiation
Product
marketing typically deals
with these
activities:
·
Product
positioning and outbound
messaging
·
Promoting
the product externally with
press, customers, and
partners
·
Bringing
new products to market
Product
management typically deals
with these closely-related
functions:
·
Product
planning
·
Product
marketing
·
Program
management
·
Project
management
Product
planning related decisions:
which
product to introduce in which
countries
what
modifications to make in the
products
what
new products to add
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International
Marketing MKT630
VU
what
brand name to use
what
guarantees and warranties to
give
what
after-sales service to offer
when
to enter the market
International
product design strategies to
differentiate:
In
marketing, product
differentiation is the
modification of a product to make it more
attractive to the
target
market. This involves
differentiating it from competitors' products as
well as one's own
product
offerings.
In economics, successful product
differentiation leads to monopolistic
competition and is
inconsistent
with the conditions for
perfect competition, which
include the requirement that the
products
of
competing firms should be
perfect substitutes.
The
changes are usually minor;
they can be merely a change
in packaging or also include a
change in
advertising
theme. The physical product
need not change, but it
could. The major sources of
product
differentiation
are as follows.
Differences
in quality or design among output
(product)
Ignorance
of buyers regarding the essential
characteristics and qualities of goods
they are
purchasing
Pervasive
sales promotion activities of
sellers and, in particular,
advertising
Possibility
of developing significant product
differentiation through advertising is
greatly
enhanced
for so called "gift goods"
or "prestige goods"
Differentiation
in the locations of sellers of the same
good where the product fills no
technical
function
but rather can satisfy many
different sort of personal needs or
uses (psychological or
physical).
The
objective of this strategy is to develop
a position that potential
customers will see as
unique. If your
target
market sees your product as
different from the competitors', you
will have more flexibility in
developing
your marketing mix. A
successful product differentiation
strategy will move your
product
from
competing based primarily on
price to competing on non-price factors
(such as product
characteristics,
distribution strategy, or promotional
variables).
Differentiation
has been shown to impact
firm performance positively both
theoretically and
empirically.
Differentiation primarily impacts
performance through two
mechanisms:
Reduced
price sensitivity: Consumers
may become willing to pay a
premium price for the
differentiating
factor/s.
Reducing
directness of competition: As the product
becomes more different,
categorization
becomes
more difficult and hence
draws fewer comparisons with
its competition.
Most
people would say that the
implication of differentiation is the
possibility of charging a
price
premium;
however, this is a gross
simplification. If customers value the
firm's offer, they will be
less
sensitive
to aspects of competing offers;
price may not be one of
these aspects. Differentiation
makes
customers
in a given segment have a lower
sensitivity to other features
(non-price) of the product.
The
disadvantage of this repositioning is
that it usually requires large
advertising and production
expenditures.
An
international firms product design
strategies would depend on the following
factors;
nature
of product
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International
Marketing MKT630
VU
market
development
legal
requirements
cost
/ benefit relationship
competition
support
system
physical
environment
market
conditions
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