Global Marketing Management
Masaaki Kotabe & Kristiaan Helsen
Third Edition
John Wiley & Sons, Inc., 2004
Chapter 11
Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
1
Chapter 11
Global Product Policy Decisions I:
Developing New Products for
Global Markets
Chapter 11
Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
2
Chapter Overview
1. Global Product Strategies
2. Standardization Versus Customization
3. Multinational Diffusion
4. Developing New Products for Global
Markets
5. Global NPD and Culture
Chapter 11
Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
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Introduction
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A cornerstone of a global marketing mix program
is the set of product policy decisions that
multinational companies (MNCs) constantly need
to formulate.
The range of product policy questions may
include:
– What new products should be developed for
what markets?
– What products should be added, removed, or
modified for the product line in each of the
countries in which the company operates?
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Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
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Introduction (contd.)

– What brand names should be used?
– How should the product be packaged and
serviced?
Examples of improper product policy decisions in
global marketing:
– Ikea in the United States
– Proctor & Gamble in Australia
– U.S. Car Makers in Japan
– Ford in Brazil
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Management, Third Edition, 2004
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1. Global Product Strategies

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Three global strategies to penetrate foreign
markets:
– Extension strategy
– Adaptation strategy
– Invention strategy
Five strategic options for the global marketplace:
Strategic Option 1: Product and Communication
Extension -- Dual Extension
Strategic Option 2: Product Extension -Communications Adaptation
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Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
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1. Global Product Strategies (contd.)

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Strategic Option 3: Product Adaptation -Communications Extension
Strategic Option 4: Product and Communications
Adaptation -- Dual Adaptation
Strategic Option 5: Product Invention
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Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
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2. Standardization Versus Customization
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Five forces favoring a globalized product strategy:
1. Common customer needs
2. Global customers
3. Scale economies
4. Time to market
5. Regional market agreements
Degree of Standardization
– Modular Approach
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Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
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2. Standardization versus Customization
(contd. )
– Core-Product (Common Platform) Approach
» Balancing act between standardization and
adaptation
» Overstandardization vs. overcustomization
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Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
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3. Multinational Diffusion
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Examples:
– Microsoft’s Xbox videogame
– NTT DoCoMo’s iMode
The Adoption of new products is driven by three
types of factors:
– Individual Differences
– Personal Influences
– Product Characteristics
1. Relative advantage
2. Compatibility
Chapter 11
Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
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3. Multinational Diffusion (contd.)

3. Complexity
4. Trialability
5. Observability
Other country characteristics used to predict new
product penetration patterns include:
– Homogeneous population
– Lead countries
– Lag countries
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Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
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3. Multinational Diffusion (contd.)
–
–
–
–
Cosmopolitanism
Mobility
Labor force profile
Individualism and national innovativeness (see
Exhibit 11-4)
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Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
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4. Developing New Products
for Global Markets
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Identifying New Product Ideas
– 4 C’s:
» Company
» Customers
» Competition
» Collaborators
New Product Development (NPD) Process
Screening (see Exhibit 11-5)
Concept Testing
Chapter 11
Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
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4. Developing New Products
for Global Markets (contd.)


– Conjoint Analysis
– To Standardize or not to Standardize
Test Marketing
Timing of Entry: Waterfall versus Sprinkler
Strategies (see Exhibit 11-11)
– Waterfall Strategy: Global phased rollout where
new products trickle down in a cascade-like
manner
– Sprinkler Strategy: Simultaneous worldwide
entry
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Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
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5. Global NPD and Culture
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
Global linkages between the new product
development process and national cultures where
cultural differences heavily influence the NPD
process.
Differences between European and North
American new product development programs:
– The NPD process among European firms is
much more formalized.
– European Go/No Go standards tend to be far
stricter than American norms.
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Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
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5. Global NPD and Culture (contd.)
– NPD projects within European firms are more
likely to have a well-defined project leader and
an assigned team of players than projects run by
North American companies; European teams
are much more multifunctional than American
teams.
– European companies punish project leaders less
in case of failure, reward intrapreneurs more
generously, and offer more seed money for pet
projects.
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Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
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5. Global NPD and Culture (contd.)

Japanese Companies and Product Churning:
– Japanese companies strongly believe in rushing
new products to the markets with little or no
market research and then gauge the market’s
reaction.
– Japanese NPD managers constantly listen to the
“voice of the customers.”
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Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
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Copyright © John Wiley & Sons, Inc. 2004
Chapter 11
Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
18