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International Marketing ­ MKT630
VU
Lesson # 41
INTRODUCING NEW PRODUCTS IN INTERNATIONAL MARKETS
In business and engineering, new product development (NPD) is the term used to describe the
complete process of bringing a new product or service to market. There are two parallel paths involved
in the NPD process : one involves the idea generation, product design, and detail engineering ; the other
involves market research and marketing analysis. Companies typically see new product development as
the first stage in generating and commercializing new products within the overall strategic process of
product life cycle management used to maintain or grow their market share.
Categories of new products:
· Six categories of new products in terms of their newness to the company and to the market
place:
­ New-to-the-world products
· new products that create an entirely mew market
­ New product-lines
· new products that allow a company to enter an established market for the first time
­ Additions to existing product-lines
· new products that supplement a company's established product lines (package sizes, flavors,
so on)
­ Improvements or revisions to existing products
· new products that provide improved performance or greater perceived value and replace
existing products
­ Repositioning
· existing products that are targeted to new markets or new market segments
­ Cost reductions
· new products that provide similar performance at lower cost
Issues in new product development:
The companies need the development of original products, product improvements, product
modifications & new brands on a consistent basis to survive competition but most new products fail.
· New-product failure
nearly 80% of new packaged consumer goods & line extensions fail
­
nearly 33% of new industrial products fail at launch
­
· New successful products
are unique superior products
­
· higher quality, new features & offer higher value
­ have well-defined concept
· by carefully defining and assessing the target markets, product requirements & benefits
To remain successful companies must continuously develop new products - but the odds weigh heavily
against success. The solution lies in strong new-product planning
Successful new products are the ones;
·
that have relative advantage
·
have compatibility with other technology and distribution systems
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International Marketing ­ MKT630
VU
·
allow trialability / divisibility for buyers to try and learn
·
can be judged through observation
·
just right in terms of complexity of technology and use
·
offer value for the price
The new product development process:
Successful new product development process consists of eight major steps;
1. Idea generation:
systematic search for new-product ideas
-
internal sources
-
customers
-
competitors
-
distributors
-
suppliers
-
others
2. Idea screening:
to spot good ideas and drop poor ones
-  is the product truly useful to consumers & society
-  availability of market
-  does it mesh well with company's objectives & strategies
-  do we have the people, skills & resources to make it succeed
-  does it deliver more value to customers than competing products
-  is it easy to advertise and distribute
-  availability of technology
-  availability of raw materials
-  risk exposure, profitability, cost/benefit
-  government priority
-  any other factor
-  CRITICAL SUCCESS FACTOR
3. Concept development & testing
­ product concept is a detailed version of the new-product idea stated in meaningful consumer
terms
­ concept development - a new product idea is developed into alternative product concepts
­ concept testing - calls for testing new-product concepts with groups of target customers
4. Marketing strategy development
­ describe target market
­ planned product positioning
­ planned sales & market share
­ & profit goals for first few years
5. Business analysis
­ a review of the sales, costs & profit projections for a new product to find out whether these
factors satisfy the company's objectives
­ sales forecast
­ estimation of costs & profits
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International Marketing ­ MKT630
VU
6. Product development
7. Test marketing - in realistic market setting
8. Commercialization (launch)
Introducing new products to the world markets:
Waterfall Model:
-
- Global phased roll out ­ new products tickle down in a cascade like manner.
Sprinkler Model:
-
- Simultaneous worldwide entry.
- Growing prominence of universal segments.
- Concerns about competitive pre-emption in the foreign markets.
The waterfall strategy of segmentation entry is preferable over the sprinkler model when ;
1.
The lifecycle of the products is relatively long
2.
Non-favorable conditions govern the foreign market, such as:
· Small foreign markets (compared to home market)
· Slow growth
· High fixed cost of entry
3.
Weak competitive climate exists in the foreign market, because of such things as
· Very weak local competitors
· Competitors willing to cooperate
· No competitors
Superior quality can reduce a customer's life-cycle ownership costs, enhancing customer loyalty, repeat
buying, and word-of-mouth advertising ISO 9004 suggests the roles that marketing should play:
Take the lead in establishing quality requirements for the company by determining customer
­
needs and communicating them throughout the company
­ Translate customers needs into specifications including performance and sensory characteristics,
installation configuration, statutory and technical standards, packaging and quality standards
­ Set up an information system to monitor customer satisfaction and dissatisfaction, and feedback
such pertinent information to facilitate design and manufacturing changes
­ Develop early warning systems to spot performance problems with new-product introductions;
continuously monitor product performance against quality specifications such as reliability and
safety, and track and analyze customer complaints so that corrective action can be taken in design
and manufacturing
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Table of Contents:
  1. OVERVIEW OF INTERNATIONAL MARKETING:Domestic marketing, Multinational marketing, Globalization of markets
  2. INETRNATIONAL MARKETING PROCESS:Situation Analysis, Implementation and Control, Relationship
  3. INETRNATIONAL MARKETING PROCESS:The Product Concept, The Societal Marketing Concept
  4. INETRNATIONAL MARKETING PROCESS
  5. ENGAGING IN INETRNATIONAL MARKETS:Expansion of technology, Merchandize export and import
  6. INTERNATIONAL TRADE & INVESTMENT THEORIES:Theory of Comparative Advantage, Country Similarity Theory
  7. INTERNATIONAL TRADE & INVESTMENT THEORIES:Global Strategic Rivalry Theory,
  8. INTERNATIONAL MARKETING INFORMATION REQUIREMENTS:Foreign exchange info
  9. INTERNATIONAL MARKETING INFORMATION REQUIREMENTS:The Product
  10. FOREIGN NATIONAL ENVIRONMENTS:Political systems in the world, Political risks in international markets
  11. FOREIGN NATIONAL ENVIRONMENTS:Types of legal systems,
  12. FOREIGN NATIONAL ENVIRONMENTS:Conciliation, Mediation, Global relevance
  13. ROLE OF GOVERNMENTS IN INTERNATIONAL MARKETS:Industry-level needs, Promotion of exports by governments
  14. INTERNATIONAL CULTURAL AND SOCIAL ENVIRONMENTS:The concept of culture, Attitudes & beliefs,
  15. INTERNATIONAL CULTURAL AND SOCIAL ENVIRONMENTS:Culture is a human medium
  16. DETERMINING EXPORT POTENTIAL IN INTERNATIONAL MARKETS:Political Environment
  17. DETERMINING EXPORT POTENTIAL IN INTERNATIONAL MARKETS:Product Potential
  18. INTERNATIONAL MARKETING RESEARCH PROCESS:market structure, Implementing the research plan
  19. INTERNATIONAL MARKETING RESEARCH PROCESS:Identify alternative information sources
  20. INTERNATIONAL MARKETING RESEARCH PROCESS:Issues with primary global research:
  21. INTERNATIONAL MARKETING RESEARCH PROCESS:Problems with data, Comparative Analysis
  22. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Export intermediaries, Export and import management
  23. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Licensing contract, Licensing risks
  24. MODES OF ENTRY INTO INTERNATIONAL MARKETS:The franchiser’s balance,
  25. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Forms of countertrade, Specialized entry modes
  26. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Demand factors, Political factors
  27. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Drivers behind successful joint ventures
  28. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Distribution agreements, Critical mass & optimism traps
  29. INTERNATIONAL STRATEGIC ALLIANCES:Impetus for international alliances, Management of strategic alliances
  30. INTERNATIONAL CONSUMER MARKETS:Model of Consumer BehaviorThe Buyer Decision Process
  31. INTERNATIONAL BUSINESS MARKETS:Nature of buying unit, Major influences on international business buyers
  32. INTERNATIONAL TARGET MARKETING:Market segmentation, Market positioning
  33. INTERNATIONAL MARKET SEGMENTATION:Geographic, Behavioral, Situational factors
  34. INTERNATIONAL MARKET SEGMENTATION:Basis for country segmentation, Stages of economics development
  35. INTERNATIONAL MARKET SEGMENTATION:Cultural Variables,
  36. INTERNATIONAL MARKET SEGMENTATION:Market coverage strategy, Socio-economic variables
  37. INTERNATIONAL MARKETING MIX - PRODUCT POLICY:Individual product decisions, Branding
  38. INTERNATIONAL MARKETING MIX – PRODUCT POLICY:
  39. INTERNATIONAL MARKETING MIX - PRODUCT POLICY:Modular Approach
  40. INTERNATIONAL MARKETING MIX – PRODUCT POLICY:Issues in labeling, Pricing, Distribution
  41. INTRODUCING NEW PRODUCTS IN INTERNATIONAL MARKETS:The new product development process
  42. PRICING IN INTERNATIONAL MARKETS:Factors influencing international pricing,
  43. ITERNATIONAL MARKETING CHANNELS:Channel membership, Vertical marketing, Control over distribution
  44. PROMOTING IN INTERNATIONAL MARKETS:Advertising, Direct marketing, Public Relationing
  45. REVISION