THARAKA DIASMBA(USA), BBA(USA), Dip in Mgt, ACIM(UK), FAEA(Dip in AEA-UK),

FinstSMM(UK), CPM(Asia), MSLIM, PM(Sri-Lanka)

List the advantages of product standardization and product adaptation.

Differentiate between mandatory and discretionary product adaptations.

Explain the concepts of global product standards and generic management system standards.

Explain why product lines can vary from country to country. Define modularity and explain its impact on global product

development. Compare and contrast the product development roles played by a

multinational firm’s headquarters and the roles played by subsidiaries.

Explain the importance of lead markets and note their importance to product development.

Describe how companies may access new products by purchasing research and development or by importing products from other firms.

Discuss the use of acquisitions, joint ventures, and alliances for the purpose of product development.

Explain the process of introducing new products to global markets, including concept testing, test marketing, and the timing of new product introduction.

Product design in a global environment

Packaging and labeling for global markets

Global warranty and service policiesManaging a global product line Introducing new products to global

markets

Mandatory this involves product quality, and safety, hygiene and

environment concerns. Ex. Kinder eggs made by Italian candy giant Ferroro Spa are popular in one hundred country. Necessary for product to be sold in a

local marketDiscretionary

Not necessary but may be beneficial

Physical realties of markets affect product decisions

People may actually use the products differently in a market

ExamplesGulf warm and Europe coldDriving sides for vehiclesDetergent powder in japan

Products designed in highly developed countries often exceed the performance needed in developing countries

Companies from developing countries selling in developed-country markets may have to increase the performance of their products to meet the standards of industrialized countries

Examples BMW – Japan high quality China – Europe and Asia different quality

Growth in international commerce has increased the benefits of international standards

Examples Global standards for products like Coke, Films and Medicine Canadian standard association, British standard institute

and EU certification symbol are few

Country-to-country standards still predominate National organizations set standards for

products and business practices U.S. standards system is fragmented Unification of Europe forced EU to adopt

regional standards

Incompatible national standards can hinder global companies

Examples – 2001, US Mobile industry used 4 different technologies

Size, shape, materials Product packaging norms Existing standards Economic development Environmental concerns

Color and text Promotional

strategy Cultural

meaning and implications

Government regulations

Language issues

Standardization versus Adaptation Domestic warranty valid worldwide? Tailoring warranties to

countries/markets? Issues to consider

Actual product use Local competition Spillover effects to other markets

Why do companies provide after-sales service for their products? Warranty credibility Differentiate from competition Decrease economic loss due to product

malfunction or downtime

Modularity – Development of standard modules that can easily be connected with other standard modules to increase the variety of products

Example – Mobile adopters, computer adopters, USB portals etc

The shift from global to local development requires consideration of unique or special conditions for major markets at the very beginning of product development

Corporations must keep track of evolving lead markets as major sources for new product ideas and production techniques

Lead market – A market whose level of development exceeds that of the markets in other countries

Foreign subsidiaries rarely play active R&D role unless they have manufacturing responsibilities

Manufacturing subsidiaries may assume R&D functions if adaptation is required

MNCs are increasing R&D investment abroad to obtain key market input

Concept Tests Importance of subjecting new

product to actual use conditions

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