Definition Adapting a product for foreign markets consists of offering a product to targeted foreign consumers altered to specific tastes,

preferences and needs. The extreme position of adaptation would consist of altering the product until it is completely new. Adaptation can logically concern all the characteristics of the product (central physical product, name and denomination, design, packaging and labeling, brand, additional services, positioning, ...). Adapting a product signifies that the company is opting for maximising sales and not minimising coast in its search for profitability!

Above some products, for which a certain standardisation in tastes is observed, or for which the segmentation criterion are international, the adaptation policy of the product remains predominant. This strategy will be adopted if the sales forecast justifies the cost of adapting the product ! Generally, it agreed on to distinguish technical adaptations and commercial adaptations ! 1. Technical adaptations Technical adaptations concern all of the obligatory, minimal adaptations of the product to which the company must conform in order to be able to "put into consumption" its product. Alterations of a regulation nature are imposed by the law and by public powers, and condition how a market is accessed. It can be connected to the following factors : customs policies. Certain modifications have to be made in order to respect customs procedures before "putting into consumption" ; taxation policy. For example, the power of car engines tends to be lower in countries where cars are taxed according to engine power (for example, in France and Belgium, ...) ; local professional certification ; national standards (for example : electric voltage) ; technical regulations (notably concerning grocery products, medicines, electrical equipment, ...).

Not respecting a regulation technique or standard connected to a market makes it impossible to enter ! Technical adaptations of the product also include alterations of a structural nature, linked to geographical and climatic characteristics, religious standards, and language differences ...

2. Commercial adaptations Commercial adaptations are of a marketing nature. They translate into considering the level of supply, consumer expectations and socio-cultural aspects of the foreign market according to the chosen positioning. The company can refuse this marketing adaptation if it is left to the free evaluation of the company, in contrast to technical adaptations! However commercial adaptations is a factor, which determines commercial

success. These adaptations are connected to economic and socio-cultural aspects following the targeted foreign consumers : consumption habits ; preferences and tastes ; level of income (which influences the frequency of purchase but also the size of packaging) ; level of education and literacy (which influences the packaging and labeling) ; ...

Advantages and drawbacks The essential advantage in adapting a product is the associated probability that sales and revenue will be increased thanks to a better appropriateness to the specific needs of the targeted foreign markets. In doing this, the company's profits are likely to increase, due to the revenue generated by product adaptation is larger than the adaptation costs. However, the company which adopts an adaptation policy for the product in each foreign market has to make sure that they harmonise the strategies in these markets in order to avoid policies employed in some markets not harming the results in others. It is a veritable challenge to guarantee its cohesion for a company, which alters its product for each market ! In addition, the organisation and implementation of a product adaptation policy in all the foreign markets is quite complicated.

Driving forces There are certain circumstances, which favour using an adaptation strategy for the offered product : when the company has a low reputation and finds itself in an unfavourable balance of power with local consumers and distributors ; when the company has plentiful financial, human and productive resources available or it has local production sites or branches ; when the company is subjected to strong competition and it does not occupy a dominant position in the market. In this competitive context, foreign consumers can choose from a large assortment of products and are therefore in a position of strength. For the exporter, this signifies that he will have to design specific products for these consumers if he wants to be different from the competition and maintain his part of the market. In addition, if the competitors themselves market the products adapted to local consumers' wishes this would be a strategic error which could generate large losses of sales ; when the product (industrial or consumer goods) is subject to local legislation and regulations . Within the field of grocery or medical products for example national legislation relating to the product, packaging

and labeling are often sources of variation between countries. Taxation policies are equally susceptible to influencing the nature of products (example: car manufacturers tend to reduce the size of their engines in countries that tax "large engines" more). Different technical and industrial standards could also bring about modifications ; when the conditions for using the product are different in the foreign market due to the effect of factors such as the climate, the level of expertise and education of users, the market infrastructure, and technical standards. Therefore, as an example, the state of the roads and the level of traffic in a market can demand product modifications such as for cars, lorries, tyres, ... The differences in the size and shape of houses (houses in the United States are larger than those in Europe, which themselves are larger than those in Japan) can influence the design of domestic appliances as well as furniture. Cars designed for the British or Australian markets must be altered to drive on the left-hand side of the road ; when the product is influenced by the geographical and topographical environment as well as by the local climate. The climate has an obvious effect on the sales potential for a certain number of products and can demand adaptations connected with the packaging or the product itself (for example: cars must be adapted to extreme climate conditions in tropical countries) ; when the purchasing power of local consumers is different to that of domestic consumers as this has an influence on their purchasing behaviour. In developing countries, many consumers tend to buy in smaller quantities than in developed countries and certain products, which are considered affordable in developed countries, are perceived there as luxury products. Therefore, the level of revenue will have an influence on the nature, size and marketing of durable and non-durable consumer goods ; when the product is subject to the specific culture, language, tastes, preferences, needs, and habits, ... of local consumers.

Cultural preferences are a major reason for adapting products as they affect purchasing behaviour and product use. The influence of cultural variables makes itself felt particularly on the level of goods for personal use (clothing, food) and non-durable consumer goods, above all, those used in the home (grocery products,...). The cultural influence is less appreciated - even not at all- with regard to industrial goods, production goods (machine tools) professional equipment goods (example: photocopier), household goods (example: household appliances) and durable consumer goods (such as cars). However even if the latter are less subject to modifications due to the cultural environment, alterations can be necessitated for other reasons, for example connected to legislation or climate !

As a general rule, assume that the closer a product is to the body (food, clothing, cosmetics,...) the more likely it is to be adapted ! when the company is marketing a grocery product. Generally, food is a very difficult product to standardise as food habits, which are rooted profoundly and emotionally in the culture are very difficult to change. In this context, it would be necessary to take into account the differences in taste in the target market (for example: McDonald's adapts its menus in certain markets : it offers pork sandwiches and beer in Germany, fish and rice in Japan. Equally Coca-Cola modifies the flavour of its drinks according to the tastes of local consumers). However certain uniformity can slowly be witnessed in culinary habits in developed countries, in particular with young people. In addition, certain very typical products (example: pizza, pasta,...) tend to be exported well without being submitted to strong modification. Their are also foodstuffs without cultural roots which have a "universal formulation" and which satisfy a global needs without having to be adapted ( example: TWIX chocolate bars).

When planning to enter (a) foreign market(s), you need to consider whether or not your current products will meet the needs of the foreign target market. After all, this market is likely to have a totally different environment that you will need to come to terms with. As we have mentioned before, this environment may have socio-cultural, legal, economic, technical and even geographic differences from the domestic market that you are familiar with. The market research investigations that you have undertaken should provide you with a good idea as to what product strategy you need to follow. Technically, there are essentially three product strategies at your disposal. These are: 1. Sell the same product as you are currently selling in the domestic market, to all of your foreign target markets - product standardisation 2. Modify the product to meet the needs of the foreign environment - product adaptation 3. Invest in and develop a totally new product for the export market - new product development Given the limited resources and competitive strengths of most companies, it is unlikely that your company would be able to tackle both a new market and invest in new product development simultaneously. It is also very seldom that companies can enter a foreign market without adapting their product at all (this is commonly referred to as product standardisation) - usually some form of product modification is necessary (if only very minor - this is referred to as product adaptation or product differentiation). The realistic choice at your disposal is therefore:

Make only the minimum of changes to your product to meet the needs of the foreign marketplace; or Make significant changes to your product in order to meet the needs of the foreign marketplace

In choosing a particular product strategy, you need to compare the likely improvement in sales turnover and profit levels with the additional costs involved in, for example, product modifications, new market research, additional product R&D, and shorter production runs. However, the firm would first have to assess:

How much is already known about the customer requirements in the various markets The extent to which these requirements differ Whether the various requirements could be met through superficial changes to the product (e.g. packaging) or whether the product will have to be completely redesigned The extent to which customers in different markets could, as a result of various promotional messages, be persuaded to accept a product which will have less than ideal characteristics, but would nevertheless be cheaper, rather than one which has been completely adapted to their needs but which will ultimately be more expensive

The size of the market, as this would determine whether or not product modification would, in fact, be profitable

It should not be forgotten that the product is more than just a physical item - it is a bundle of utilities that the buyer receives. These utilities include the product's form, taste, colour, odour, texture, its packaging, labelling, warranty, service requirements, etc., as well as the actual functioning of the product. In short, the market will react to a product in the light of its own values and customs