Product Decisions Important product decisions in international marketing management are: 1. Market segment decision 2.

Product mix decision 3. Product specifications 4. Positioning and communications decisions. Market Segment Decision The first product decision to be made is the market segment decision because all other decisions product mix decision! product specifications! and positioning and communications decisions depend upon the target market. "etails about the market segment selection is gi#en in the chapter on Market $election. Product Mix Decision Product mix decision pertains to the details of each product and product #ariants to be offered to the target market. Product Specifications This in#ol#es specification of the details of each product item in the product mix. This include factor like st%ling! shape! si&e and other attributes and factor like packaging and labeling. PRODUCT MIX The product mix is the full list of all the products offered for sale b% a compan%. The product mix ma% consist of one or more product lines. ' product line is a group of products that are closel% related either because the% satisf% a class of need! are used together! are sold to the same customer groups! are marketed through the same t%pes of outlets! or fall (ithin gi#en price ranges. ' specific #ersion of a product that has a separate designation in the seller)s list is kno(n as a product item. The product mix has certain (idth! depth and consistenc%.

The (idth refers to the number of different product lines in the product mix. The depth refers to the a#erage number of items offered b% the compan% (ithin each product line. The consistenc% refers to the extent to (hich the #arious product lines are closel% related in end use! production re*uirements! distribution channels! or in some other (a%s. +ne of the important decisions in international business is the (idth and depth of the product mix and the length of each product line. It ma% #ar% bet(een markets depending upon the market characteristics. It is generall% obser#ed that companies do not introduce their full range in some countries! particularl% in the de#eloping countries for reasons such as limited competition! lack of demand etc. It has also been a common practice to introduce products in some markets! especiall% the de#eloping countries! onl% at a later stage , sometimes onl% after the product has become obsolete or has reached the maturit% or declining stage in the product life c%cle. PRODUCT LIF C!CL

-ike li#ing beings! products ha#e life c%cle. The Product -ife .%cle /P-.0 is depicted b% the sales cur#e of the product since its introduction. ' product normall% passes through /i.e.! a P-. has0 four different stages! namel%! introduction! gro(th! Maturit% and decline. depicts a t%pical product life c%cle. Introduction The introduction stage of the P-. (hich starts (ith the launching of the ne( product is characterised b%: 1. -o( sales because it generall% takes some time for a ne( product to get (ide acceptance b% consumers and it also takes time to expand the marketing of the product. 2. 1igh costs per unit because of the lo( sales and high promotional expenditure. 3. 'bsence of or lo( competition if the product is entirel% ne(. 4. -oss or negligible profits because of lo( sales and high costs.

"ro#t$ The gro(th stage (hich follo(s the introduction stage is characterised b%: 1. 2ast gro(th in sales because of increasing consumer acceptance and expansion of marketing. 2. 3ro(ing profits because of gro(ing sales and fall in the incidence of fixed production cost and marketing cost per unit. 3. Increasing .ompetition. 4. Market segmentation and the introduction of different #ersions /models0 of the product. Maturit% The maturit% stage is characterised b%: 1. $aturation of sales /in the earl% part of this stage! sales ma% gro( slo(l% but at the later part there could e#en be a fall in sales0. 2. Intense competition. 3. 2alling profits because of high promotional expenditure and falling margins. Dec&ine The last stage is characteri&ed b%: 1. 4ntr% of ne( products (hich compete (ith the product. 2. "ecline in sales. 3. "ecline in profits: profits ma% e#en become negati#e. 4. 4xit of some of the firms. ' ( PRODUCT D ) LOPM 'T If a .ompan% finds that good opportunit% exists for products it does not manufacture no(! to exploit that opportunit% ne( product de#elopment becomes essential.

2rom the point of #ie( of a compan%! there are three t%pes of ne( product. 1. Inno#ati#e Product! i.e.! a product (hich is entirel% original and ne( to the market. 2. $ignificantl% Modified Product! i.e.! a significant modification of an existing product /of either the compan% or others0. 3. .op% of the 4xisting Product! I.e.! exactl% or almost the same t%pe of product currentl% marketed b% other companies. In fact! opportunities exist for all these three categories of products. Cop%ing There are man% products (ithout patent or other legal hurdles (hich can be copied and marketed. 's a matter of fact! in the case of a number of products! particularl% labour intensi#e products! manufacturers in the de#eloped countries ha#e been losing their competiti#eness. "e#eloping countr% firms ha#e been emerging as exporters of these products. Man% de#eloped countr% firms /manufacturers and marketers0 are eager to form alliances (ith firms in the de#eloping countries for the manufacture of such products. 2irms in de#eloping countries ma% obtain technolog% and5or marketing support from the de#eloped countr% firms. Product Modification -ot of export opportunities exist b% product modifications. This re*uires enterprise and inno#ati#eness. It is kno(n that one of the reasons for the success of the 6apanese is their skill in product impro#ements. Inno*ation "e#elopment of an entirel% ne( product is a real challenge. In man% cases it in#ol#es a lot of research and de#elopment expenditure. .onsidering the lo( success rates of the ne( products! one should consider it as #er% risk%. 7ut! then! profit is the re(ard for risk,bearing. There are also cases of successful ne( product inno#ation (ithout an% significant 89" expenditure or other in#estments.

Steps in 'e# Product De*e&opment Idea generation 4#alution and selection .oncept testing 7usiness anal%sis Product de#elopment Market testing .ommerciali&ation +R,'DI'" ' brand is a name! term! sign! s%mbol! or design or a combination of them! intended to identif% the goods or ser#ices of one seller or group of sellers and to differentiate them from those of others:, That part of the brand (hich can be #ocalised , the utterable , is kno(n as the brand name. That part of the brand that is gi#en legal protection for exclusi#e use b% a seller is kno(n as the trade mark.

"&o-a& +rands $ome brands like .oca .ola! Pepsi! Mc"onalds! etc. ha#e become so popular allo#er the (orld that) the% are regarded as global brands. $uch global brands certainl% gi#e definite ad#antage to de#elop markets. 7ecause of cultural and other factors! it ma% not al(a%s be possible to use the same brands in all the markets. 2or example! colors! numbers! s%mbols etc.: ha#e different connotations in different cultures. $imilarl%! sometimes the same (ord has different meanings in different languages. 2or example! the brand name ;o#a in $panish means )it does not mo#e.)

's stated earlier! a number of brands of multinational companies ha#e become global brands. $uch global brands possess some ad#antages. 1. It makes market entr% eas% , for example! Pepsi (as (ell,kno(n in India e#en before it came to India. 2. It reduces the promotional expenditure as the brand is (ell,kno(n. 3. It helps to generate good sales since the #er% beginning +randing Pro-&ems in Internationa& Marketing There are a number of difficulties in#ol#ed in branding in export marketing. 1. It is #er% difficult for a small firm to promote its brand in foreign markets because of the hea#% cost of brand promotion. 2. 4stablished foreign importers and distributors discourage use of exporter)s brand because the% prefer to sell the products under their o(n brand name. <sing the exporter)s )brand name (ould mean undermining the market po(er of the importers5distributors. $o the% strongl% resist the use of exporter)s brand name. 3. 's pointed out earlier! the cultural and other factors make branding decision complicated in international marketing. 4. +ne interesting problem faced b% some multinational companies (hen the% (anted to market their products in some countries (as that the% found that their (orld reno(ned brands had been registered in these countries b% somebod% else (ith the result that these firms had to pa% a fee to the registered holders of these brands in these countries for permission to use these brands. =. In some countries! there are restrictions on use of foreign brands. <ntil recentl%! there (ere such restrictions in India. 1o(e#er! companies sought to o#ercome this problem b% prefixing or suffixing an Indian (ord to the foreign brand name /4xamples: -ehar Pepsi! -.M.-. >espa! $(ara? Ma&da etc.0 Functions and Importance of Packaging Packaging has gro(n in importance o#er the %ears. 'part from the basic functions of packaging! certain de#elopments in the marketing s%stem and market characteristics ha#e enlarged the role of packaging.

The important functions and reasons for the gro(ing importance of packaging are gi#en belo(. /i0 Protection: Protection to the product is an essential function of packaging. 1andling re*uirements and methods of handling! climatic and (eather conditions! etc.! are! therefore! among important considerations in packaging decision making. /ii0 Preser#ation: The packaging should preser#e the *ualit% of the product. The packaging material should not pass or absorb an% fla#or or odour to the product or react (ith it. This is particularl% important in cases like food and pharmaceutical products. The interaction bet(een the product and packaging should be totall% eliminated. /iii0 Presentation: Packaging has been (idel% recogni&ed as an independent and potential selling tool. In other (ords! packaging also performs a promotional function. @The increased use of branding and the public)s rising standards of health and sanitation ha#e contributed to the gro(th of packaging. The ma?or factor! ho(e#er! is the importance of packaging as a real competiti#e force in toda%)s struggle for markets. The (idespread use of self,ser#ice and automatic #ending methods of selling means that the package must do the selling ?ob at the point of purchase. It is no simple task for manufacturers e#en to get their products placed on displa% in a retail outlet. $helf space is at a premium and retailers are inclined to cater to producers (ho ha#e used effecti#e packaging.@ $pecial .onsiderations in International Marketing In addition to the general considerations in packaging mentioned abo#e! there are certain special factors to be considered in export packaging decision. Important among them are the follo(ing: /i0 8egulations in the 2oreign .ountries: Packaging and labelling ma% be sub?ect to go#ernment regulations in the foreign countries. $ome countries ha#e specified packaging. $tandards for certain commodities. The trend to(ard re*uiring labelling in a countr%)s nati#e language is gro(ing. If such regulations are not strictl% follo(ed! the goods ma% be confiscated or ma% attract some other puniti#e action.

/ii0 7u%er)s $pecifications: In some cases! bu%ers! like the importers! ma% gi#e packaging specifications. Ahile incorporating such specifications! it should also be ensured that packaging satisfied other re*uirements like the statutor% re*uirements. /iii0 $ocio,.ultural 2actors: Ahile designing the packaging for a product! socio,cultural factors relating to the importing countr% like customs! traditions! beliefs! etc.! should also be considered. 2or instance! (e ha#e pointed out certain beliefs or #alues attached (ith different colors in some societies. /i#0 8etailing .haracteristics. The nature of retail outlets is a #er% important consideration in packaging decision. 2or instance! as pointed out earlier! in some of the foreign markets! as a result of the spread of super,markets and discount houses! a large number of products are sold on a self,ser#ice basis. The package has! therefore! to perform man% of the sales tasks and hence it must attract attention! describe the product)s features! gi#e the consumer confidence and make a fa#ourable o#erall impression. /#i0 4n#ironmental 2actors: Packaging decisions are also influenced b% certain en#ironmental factors like (eather and climatic factors. The impact of such factors in the place (here the ,product originates! (hile the product is in transit and (hile in the market etc.! should be considered. The package should be capable of (ithstanding the stresses and ha&ards of handling and transporting! stacking! storing! etc.! under di#erse conditions. /#ii0 "isposabilit%: 'ttention should also be paid to the aspects relating to the disposal of the packaging. +ne of the *ualities re*uired for good package is that it could be easil% disposed of or rec%cled. In some of the de#eloping countries like India man% packaging materials easil% find some other use or are rec%cled. 7ut the situation is different in other countries. Indeed! the disposal of packaging materials is causing en#ironmental problems in a number of countries. 8eusable packages carr% the risk of misusing it for selling bogus products.

Product ,daptation <nder the product adaptation strateg%! the product is properl% modified to suit the en#ironment of the foreign market. Important factors (hich necessitate such product modification for the foreign market #is,a,#is the domestic market are: "ifference in the consumer tastes! consuming habits etc. "ifferences in the conditions of use of the product. "ifferences in the use facilit% characteristics. "ifferences in the purpose of use or need satisfaction. "ifferences in the cultural en#ironment. "ifferences in the natural en#ironment like geo,ph%sical characteristics! (eather5 climatic conditions etc. "ifferences in the regulator% en#ironment. "ifferences in income le#els and standard of li#ing. "ifferences in the competiti#e en#ironment