2. GLOBAL PRODUCT DEVELOPMENT
PROCESS
The challenges observed within global product
development are based on two fundamental reasons; (1) a
lack of preparation and (2) a lack of connection between
the globalization process and the rest of the organization.
The Global Decision Making (GDM) framework-
(Hansen, 2011) is presented and expanded upon as a way
to avoid the challenges within global product development
through detailed preparation and a holistic approach to
globalization.
5. In this step it needs to become clear where the
company wishes to be in the future and how to
measure the progress towards this at a strategic level.
To create a good strategic plan a company needs
to:
• Involve stakeholders in goal setting
• Seek international, national, internal and external
knowledge
• Think outside the box
7. In this step the strategic plan for how to move the
organization from where it is to where it wishes to be
in the future is created.
To create a good strategic plan a company needs
to:
• Involve all stakeholders in mapping the current
organizational position in the market as well as
physical locations for organizational units, suppliers,
customers, etc.
• Make a communication and a responsibility plan,
including evaluation phases to ensure a common
vision is created.
• Make a conscious strategic plan which considers
the role and goal with global product development .
9. In this stage a clear operational plan for moving out
and maintaining daily operations are devised.
To ensure a good operational plan a company
can:
1. Involve all stakeholders in creating the operational
plan
2. Develop scenarios of what would happen if a
given task is moved; what is affected and how
would these need to be changed to support and
encourage globalization.
3. Write down how a task is solved today, who is
involved and what knowledge each actor (human
or technical) brings in order to define and clarify all
interfaces.
11. In this stage the operational plan is implemented. Tasks are
moved abroad and daily operations begin. As feedback is given
on the progress of the move and more knowledge of the new
global operation is gained, changes and adjustments to the
operational plan can be made.
To ensure a good implementation process and daily
management of the global task a company can:
1. Ensure continuous learning and reflection through actively
using KPIs and fostering a knowledge sharing culture
2. Change organizational aspects (for example HR practices)
as new information becomes available and indicates a
better approach Based on new knowledge gained, set up
KPIs which are easier to which better supports the
operational plan
3. measure or better reflect the new situation to determine how
the implementation of the global operation is going as well
as to measure daily management
13. In this stage the global operation is re-evaluated as a part
of continuous learning for the organization.
To implement an iterative globalization process with
evaluation a company can:
1. Use change management practices in the globalization
process.
2. Implement best practices for product development of
global projects to ensure evaluation of the process,
documentation and quality. These best practices
maybe industry specific.
3. Implement well established project management
practices in global projects to ensure roles,
responsibilities and documentation.
4. Implement a learning culture in the organization to
foster evaluation of actions, acceptance of changes
and a focus on continuous improvement.
15. Causes of New Product Failures
• Overestimation of Market Size
• Product Design Problems
• Product Incorrectly Positioned, Priced or
Advertised
• Costs of Product Development
• Competitive Actions
• To create successful new products, the company
must:
– understand it’s customers, markets and competitors
– develop products that deliver superior value to
customers.
16. New Product Development Process
Step 1. Idea Generation
Systematic Search for New Product
Ideas
Internal sources
Customers
Competitors
Distributors
Suppliers
17. • Process to spot good ideas and drop poor
ones
• Criteria
– Market Size
– Product Price
– Development Time & Costs
– Manufacturing Costs
– Rate of Return
New Product Development Process
Step 2. Idea Screening
18. New Product Development Process
Step 3. Concept Development & Testing
1. Develop Product Ideas into
Alternative
Product Concepts
2. Concept Testing - Test the
Product Concepts with Groups
of Target Customers
3. Choose the Best One
19. New Product Development Process
Step 4. Marketing Strategy Development
Part Two - Short-Term:
Product’s Planned Price
Distribution
Marketing Budget
Part Three - Long-Term:
Sales & Profit Goals
Marketing Mix Strategy
Marketing Strategy Statement Formulation
Part One - Overall:
Target Market
Planned Product Positioning
Sales & Profit Goals
Market Share
20. New Product Development Process
Step 5. Business Analysis
Step 6. Product Development
Business Analysis
Review of Product Sales, Costs,
and Profits Projections to See if
They Meet Company Objectives
If Yes, Move to
Product Development
If No, Eliminate
Product Concept
21. New Product Development Process
Step 7. Test Marketing
Standard
Test Market
Full marketing campaign
in a small number of
representative cities.
Simulated
Test Market
Test in a simulated
shopping environment
to a sample of
consumers.
Controlled
Test Market
A few stores that have
agreed to carry new
products for a fee.
23. The Organization of Global Product
Development
The product development activity is undertaken
by specific teams, whose task is to subject new
products to tough scrutiny at specified in the
development cycle to eliminate weak products
before too much is invested in them and to
guide promising prototypes from labs to the
market.
24. Marketing team member
• Engineering member
• Finance member
International team member
Cable accessories
geographical responsibility
Far East
central R&D
domestic marketing planning
25. Multidisciplinary teams
maximize the payoff from R&D by
streamlining decision making; that is , they
reduce the need for elaborate reporting
mechanisms and layers of committee approvals.
26. The Testing of New Product
Concepts
The final stages of the product development process involve
testing the product in terms of both its performance and its
projected market acceptance.
Reasons for product failure
Lack of product distinctiveness
Unexpected technical problems
Mismatches between function
27. Three research methods to cope with the
difficulty
Controlled market test allows companies to assess in
items sales
potential in a real – world environment.
Simulated test markets offer simulation under realistic
conditions from a 360degree marketing
vantage point.
Vitality lab provides a directional gauge of the initiative’s
potential in a real world environment.
29. The Importance of Launches
“A company….must choose a launch
strategy that is consistent with its intended
positioning. The launch strategy should be
the first step in a grand plan for life-cycle
marketing.”
Philip Kotler
Marketing Management
29
Does your product launch plan reflect all of the money
and time put into developing the product?
30. Some Factoids
• 85% of new B2B products are failures
• 95% of new consumer products are failures
• Failures = doesn’t meet company objectives, withdrawn
from market within 12-18 months
30
Source: New Product News
32. Launch Consideration
• Make sure to launch the global products on the same date
and one at a time.
Example: Apple products – iphone 5, iphone 5c and then
iphone 6.
33. Launch Pitfalls
• Launch planning starts too late in product development process
• Positioning strategy half-baked and untested, externally
• Not enough (credible) strategy evidence: bug-free product, the right –
at least one Tier 1 - customer testimonials and references (negotiated
into contracts), application notes and documentation, channels,
customer support
• Proper market foundation has not been laid, no one has heard of the
company or product
• A non-programmatic approach (‘escapes’ vs. launches): lack of launch
manager, market leverage and message models, launch objectives,
plan, measurable goals
• Lack of fully integrated plan (from product management to marketing
communications to product development)
33
35. Definition
• Branding – is one of the major beneficiaries of a well-
conducted portfolio analysis.
• Brands - are important because they shape customer
decisions and ultimately, create economic value.
36. Why focus on branding?
• On the average, the brand is responsible for 18 percent of
total purchase decisions, and the majority of studies
reveal a brand-loyalty segment of individuals for whom
the brand is the major influencing factor.
• Strong brands are able to charge a price premium of 19
percent.
37. 2 Dimensions to Global Brands
• Consistency of brand strength (differentiation, relevance)
and brand stature (esteem and knowledge) together.
• Consistency of branding meaning.
38. Remember:
• Have brands that feature the corporate name.
• Have family brands for a wide range of products or
product variations.
• Have individual brands for each item in the product line.
• Additionally, with the increase in strategic alliances,
cobranding - in which two or more well-known brands are
combined in an offer – has also become popular.
40. GLOBAL BRANDS
• Global brands are a key way of reaching this
goal.
• Global brands are those that reach the world’s
megamarkets and are perceived as the same
brand are completely standardized, some
elements of the product may be adapted to local
conditions.
41. 3 ADJUSTMENT
• Brand names ( Tide, Whisper, and Clairol in
North America are Ariel, Allways, and Wella in
Europe )
• Positioning (Ford Fiesta as a small car in
Germany but a family vehicle in port in Portugal )
• Product versions sold under the same brand
name ( 9 to 13 different types of coffee sold under
the nescafe name in Northern Europe alone).
42. 3 MAIN IMPLICATIONS FOR
MARKETING MANAGER
•Don’t hide globality
•Tackle home country bias
•Satisfy the basic
46. 2 GENERALAPPROACHES
• Umbrella Branding- where a number of
product are covered using the same brand.
• Separate Brand- names for individual
products or product line.
47. PRIVATE BRAND STRATEGIES
STRATEGY RATIONALE CIRCUMSTANCE
No participation Refusal to produce
private label
Heavily branded
markets; high
distinctiveness;
technological
advantage
Capacity filling Opportunistic
Market control Influence category
sales
High brand shares
where distinctiveness
is lower; more
switching by
consumers
Competitive leverage Stake in both markets
50. Product counterfeiting
• COUNTERFEIT- means to imitate something.
counterfeit products are often produced with the
intent to take advantage of the superior value of
the imitated product.
• COUNTERFEIT PRODUCTS are any goods bearing
an unauthorized representation of a trademark,
patented inventions, or copyrighted work that is
legally protected in the country where it is
marketed.
51. Counterfeit Goods
The spread of counterfeit goods (commonly called
"knockoffs") has become global in recent years and the
range of goods subject to infringement has increased
significantly.
Apparel and accessories accounted for over 50 percent of
the counterfeit goods seized by U.S Customs and Border
Control.
53. Scope of Global Counterfeiting
• A very high percentage of counterfeit goods originate in
China
• Counterfeit products infiltrate legitimate supply chains
• New technologies, including the internet, have given
counterfeiters access to new channels of distribution
• Counterfeit products are bought and sold in virtually all
economies
54. Effects on Consumers
• Consumers are cheated out of quality products and are exposed to
health and safety risks
• Safety issues are prevalent in many sectors, including:
Food and beverages
Pharmaceuticals
Automotive and machinery
Electrical components, including:
• Relays and contacts
• Timers, circuit breakers and fuses and
• Wiring accessories and batteries
• Substandard items can cause property damage, illness, injury and
death
55. Sample laws against counterfeiting:
• REPUBLIC ACT NO. 7394the consumer act of the
Philippines
• R.A. 8293, otherwise known as the Intellectual Property
Code,
• U.S. Code § 2320 - Trafficking in counterfeit goods or
services(U.S)
• The Anti-Counterfeiting Trade Agreement (ACTA) is
a multinational treaty for the purpose of establishing
international standards for intellectual property rights
enforcement. The agreement aims to establish an
international legal framework for targeting
counterfeit goods