Product Globalization

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Submitted to:

Dr. Y.L.R.Moorthi

Professor, Marketing

Indian Institute of Management, Bangalore

Submitted By:

Kapil Dabur (0311016)

CONTEMPRARY COURSE STUDY

Project Report on:

Product Globalization

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Acknowledgement

I am extremely grateful to my guide Dr.Y.L.R.Moorthi. He provided valuable

inputs to me throughout the duration of the study. His informative and exhaustive

lectures as well as pertinent real life examples helped me assimilate the

intricacies of this complex topic in an extremely lucid way.

I am also very thankful to the library staff who helped me a lot in finding relevant

journals, and other literature.

I am also thankful to various authors who have published various research

papers on this topic and have allowed them to go in public domain. Their work

was very helpful in understanding the intricacies of this topic.

This study was more in the form of a research project and hence the format used

is that of a Research paper.

Kapil Dabur

PGP-II

IIM Bangalore

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Defining a Global Product, Different ways to Globalize

your product.

Abstract:

The author conceptualizes and examines the different ways in which a product

can be globalised. The paper is about global PRODUCTS and not about global

brands. The first step in the process involves defining what a global product is?

It requires theorizing a model that is applicable in every product category. A

study of globalization and Internationalization literature forms the foundation of

the model. Various ways of managing the Product component are discussed and

grouped under two types of managerial orientations.

“In about five years there will be two types of CEOs: those who think

globally and those who are unemployedфЂ‚Ò'.

Peter F. Drucker (1909- ) Management Consultant and Author

This quote exemplifies the importance of thinking about global markets in a fast

changing global economy.

Why think for the Global Markets:

Nowadays, a belief that a new era has begun seems to be dominating

international societies. Globalization has taken over and it is hitting us at every

possible point. Markets are expending, distances are getting shorter and

exchanges are bringing people closer and closer.

The development of worldwide access to the Internet has largely contributed to

accelerate the globalization process. Then, domestic markets are getting

saturated and there is a growing need for looking for new markets. Awareness

and knowledge about consumer behavior across global markets is also rising.

And this has made the Product managers focus on global markets.

Economies of scale, saturation in domestic markets, drastic reduction in transport

and communication time, learnings from different types of consumers et are

some of the main reasons for thinking for global markets.

Due to the overwhelming globalization process in the world economy, a new

product category has appeared. The global product!

For over thirty years there has been ongoing development of the Globalization

theory. There is no consensus on the meaning and ways to go about it.

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Levitt1 (1983), argued for use of standardized marketing strategies for global

markets. This paper fuelled the ongoing debate on product globalization process.

Most of the arguments in the debate were based either on standardizing so as to

maximize economies of scale by maximizing by selling the same product, using

the same advertising, prices and promotions, in all markets Or on customizing

the Product so as to get a better Positioning in each market.

Standardization:

Yip2 (1989) spoke about improving the product quality by standardizing the

product. Michael Porter3 (1980, 1985) talk about economies of scale in

production, logistics, distribution and R&D. Quelch and Hoff4 (1986) focus on

standardization based upon economies of scale in Promotion and Advertising.

Kale and Sudarshan5 (1987) invoke the segmentation argument for it.

Adaptation:

Shoham and ALbaum6 (1994) argue for adaptation basing it on their �theory of

friction between headquarters and local representatives’. Samiee and Roth7

(1992) suggest opportunity of Price Discrimination based on a better Positioning

in