International Product Policy

Course Contents:

1. Key areas of international product policy.
2. Local Vs Global Products.
3. Business portfolio.
4. Quality and international marketing.
5. Certification.
6. CE Mark
7. e-Product. Pervasive computing.

Objectives
This Learning Unit sets out to analyze the key areas of international product policy.

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In this unit you will:
Learn the importance of adapting your product to local requirements when entering new export markets.

This will be achieved by:

• Examining the product adaptation options available to the exporter.
• Analyzing the product characteristics that typically need to be modified for different markets.

Learning Unit Summary
The first thing that an exporting company should ask itself is whether the product is exportable. A product which is successful in the home market will not always be as successful in other markets. Remember, although globalization is a reality, each market is different in its on way. Therefore, only through market research will we find out if our product is viable or not. Furthermore, we should look at what types of modifications we should carry out on the products in preparation for different markets. Finally, we should remember the life-long question, Is it a global product or shall we have to localize it to every market?

When an exporting company commissions market research, one of the most important tasks it will face will be the analysis of the competition's products. Especially when entering new markets, familiarity with the products of competitors is vital. Many inexperienced exporters neglect to do this.
Both locally based competition and that imported from elsewhere should be investigated in great detail.
- How competitive is our product?
- What advantages, unique to our product, are bestowed on the customer?

The business portfolio is the collection of businesses and products that make up the company. The best business portfolio is one that fits the company's strengths and helps exploit the most attractive opportunities. The company must:

• Analyze its current business portfolio and decide which businesses should receive more or less investment, and
• Develop growth strategies for adding new products and businesses to the portfolio, whilst at the same time deciding when products and businesses should no longer be retained.

The two best-known portfolio planning methods are the Boston Consulting Group Portfolio Matrix and the McKinsey / General Electric Matrix.

In both methods, the first step is to identify the various Strategic Business Units ("SBU's") in a company portfolio. An SBU is a unit of the company that has a separate mission and objectives and that can be planned independently from the other businesses. An SBU can be a company division, a product line or even individual brands - it all depends on how the company is organized.

Product may also be categorized according its contribution to the company. (i.e. the categories set by the Boston Consulting Group):
- Star products, those that have a large market share in a growing market.
- Cash cow products, those that have a large market share in a stable market.
- Dog products, those that have a small market share in a stable or slowly growing market.
- Question products, those that have a small market share in a fast growing market.

The experience curve has important strategic implications. If a firm is able to gain market share over its competitors, it can develop a cost advantage.

Penetration pricing strategies and a significant investment in advertising, sales personnel, production capacity, etc. can be justified to increase market share and gain a competitive advantage.

e-Product. In many cases we will have to add value to our products (atoms) with digital services (bits). We will also see industries in transition which are no longer selling atoms in order to sell bits. In almost every case companies are re-inventing in some way their products (their atoms) in order to add digital value to them through bits.