Page 133 - DMGT547_INTERNATIONAL_MARKETING

International Marketing

Notes 7.3 International Product Planning

International product planning involves determining which products to introduce into which
countries; what modifications to make in the products; what new products to add; what brand
names to use; what package designs to use; what guarantees and warranties to give; what after
sales services to offer; and finally, when to enter the market. All these are crucial decisions
requiring a variety of informational inputs. Basic to these decisions are three other considerations:
(1) product objectives, (2) coordination of product planning activities between headquarters and
subsidiary, and (3) foreign collaboration.

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Caution A company interested in an international market should first define its business
intent based on the objectives of both the corporation and the host country.
The product objectives of a company would flow from the definition of its business. Ultimately,
the offering should provide satisfaction to the customer, which would be reflected in the
realization of the goals of both the corporation and the host country.
Product objectives emerge from host country and corporate objectives combines via the business
definition. The company’s goals usually are stability, growth profits, and return on investment.
Stated differently, the corporate objectives may be defined in terms of activities (the manufacture
of a specific product, or export to a particular market), financial indicators (to achieve a targeted
return on investment), desired position (its market share and relative market leadership) and all
these in combination with each other. The parent company usually also has a series of objectives
on behalf of the various stakeholders’ interests for which it is accountable. Host country objectives
vary depending on the country’s economic, political and cultural environment.

Obviously, the objectives of the host country and the company are poles apart. In any emerging
market worldwide, however, no company can hope to succeed without aligning itself with the
national concerns of the host country. There are no models to use in seeking a description of such
an alignment.

Conceptually, however, a macro analysis of a country’s socio-economic perspectives should
provide insights into its different concerns and problems. The company can then figure out if its
business would help the country in any way, directly or indirectly. The business definition
should then be developed accordingly. For example, shortage of foreign exchange might be a
big problem for a country. A multinational marketer’s willingness to pursue a major effort of
export promotion in the country would amount to an objective in line with the country’s need.
On the other hand, a company simply interested in manufacturing and selling such consumer
goods as toiletries and canned foods, in a nation that is interested in establishing a basic
infrastructure for industrial development in the country, may not be serving the national interest.

The definition of product objectives should emerge from the business definition. Product
objectives can be defined in physical or marketing terms. “We sell instant coffee” is an example
of defining objectives in physical terms. In marketing terms, the objective statement would
emphasize the satisfaction of a customer need. The latter method is preferred because it reinforces
the marketing concept.
The perspectives of international product planning can be categorized between issues of day to
day concern on the one hand and strategic issues on the other. The day-to-day issues arise in
implementing decisions already made. Strategic issues require major commitments, which
must be taken up with the parent corporation.

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