Page 132 - DMGT547_INTERNATIONAL_MARKETING

Unit 7: Product Strategy for International Markets

Notes
Did u know? In today’s dynamic, competitive market environment, many companies realize
that continuous development and introduction of new products are keys to survival and
growth.

The eight stages are illustrated in Figure 7.1, which begins with a statement of the new product
development strategy.

Identifying New Product Ideas

The starting point for an effective worldwide new-product program is an information system
that seeks new-product ideas from all potentially useful sources and channels. Those ideas
relevant to the company undergo screening at decision centers within the organisation. There
are many sources of new product ideas, including customers, suppliers, competitors, company
salespeople, distributors and agents, subsidiary executives, headquarters executives, documentary
sources (for example, information service reports and publications), and finally, actual firsthand
observation of the market environment.

International New Product Department

As previously noted, a high volume of information flow is required to scan adequately for new
product opportunities, and considerable effort is subsequently required to screen these
opportunities to identify candidates for product development. An organizational design for
addressing these requirements is a new product department. The function of such a department
is fourfold: (1) to ensure that all relevant information sources are continuously tapped for new
product ideas; (2) to screen these ideas to identify candidates for investigation; (3) to investigate
and analyse selected new product ideas; (4) to ensure that the organisation commits resources to
the most likely new product candidates and is continuously involved in an orderly program of
new product introduction and development on a worldwide basis.

Testing New Products in National Markets

The major lesson of new product introduction outside the home market has been that whenever
a product interacts with human, mechanical, or chemical elements, there is the potential for a
surprising and unexpected incompatibility. Since virtually every product matches this description,
it is important to test a product under actual market conditions before proceeding with full-scale
introduction. A test does not necessarily involve a full scale test marketing effort.
It may simply involve observing the actual use of the product in the target market.

Self Assessment

State whether the following statements are true or false:

3. 7up Lemon was an entirely new invention by 7up.
4. It is imperative to test the product under standard conditions before launching it into the
global market.

Task Make a list of different products in (different categories) that are specifically made
for India. (At least 5 product categories and 5 products in each category)

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