A Term Paper

On
Developing New Global Products

Submitted To
Syed Abul Kalam Azad
Professor
Department of Marketing
University of Dhaka

Submitted By
Emergence
Group Members
Roll No
224
225
331
288
390

Name
Md.Sakhawat Hossain
Md.Ibrahim Hussain
Md.Zonaeid Shahe Zaman
Imran Hossian
Liton Kumar Pramanik

Submission Deadline: 25th April, 2016

Letter of Transmittal

25th April, 2016

Subject: Submission of the report.

Dear Sir,
We are delighted to submit a report on Developing New Global Products
which you had authorized us to prepare. We have enjoyed preparing the report though it was
challenging to finish within the given time. In preparing this report, we have tried our level best
to include all the relevant information.
So, we therefore hope that, the report will meet the standard and will serve its purpose.
Sincerely yours,
Emergence
Group Number 14
Batch 17th, Section: A
MBA, Marketing
University of Dhaka

ACKNOWLEDGEMENT

Any group work such as preparing a report must owe credit to a multitude of persons. Without
the help of these persons, it is impossible to prepare the report.
At first we would like to offer heartiest thanks to the Almighty Allah, because without the grace
of Almighty, we would not able to complete our study on this topic. Then thanks go to our course
teacher Syed Abul Kalam Azad.
Without proper supervision and extreme guidance from him, it was impossible for us to complete
this task. We have tried our level best to prepare this report with the proper instructions and
guidelines of our dearest sir Syed Abul Kalam Azad.

Executive Summary
New product introduction in todays technology-driven markets carries significant risk. New
product failure rates can be as low as one out of every three products or as high as the 90 percent
of new grocery products which are withdrawn within a year of their introduction. New
technology, improved communications, increased profit demands and shorter product life cycles
have added to the inherent risk .Yet, without the introduction of new products, deterioration of
the firms market position is inevitable.Without new products, firms will inevitably stagnate.
Initial or early entry of new products, on the other hand, can result in new market development,
longterm market dominance, and foreclosure of competitors responses.Failure to respond to
competitive new product introductions with appropriate speed can result in late market entry, a
permanent loss of market share and dissipated profits .Timely and responsive new product
development has become even more critical in the highly competitive global environment. The
need to respond quickly to these dynamic global market forces requires the firm to integrate
rapidly the perspectives and needs of both product developers and potential consumers
.However, working against timeliness is the traditional new product development process, which
is sequential, with each stage following in logical order .An analogy of the traditional method is
the relay race, which requires a smooth transition from runner to runner Any lack of
communication between various departments in the early stages of product development can be
fatal to the success of the project as a whole. The solution to the obstacles presented by the
traditional linear model is concurrent marketing, which is becoming common in the new product
development efforts for many corporations .Todays metaphor for new product development is
the team sprint: teammates in a sprint can run at the same time, in the same race. Communication
is unhindered and unbroken as teammates do not have to wait until the batonpass to see and talk
to each other. For global markets, in order to ensure success, this product development sprint
needs to be combined with the knowledge of the international target markets. The purpose of this
article is to explain the globalization of new products with the help of a global new product
development model. The model suggests that the joint functioning of engineering, marketing,
market research, R&D and management is essential, right from the idea generation stage of
product development.

INTRODUCTION
In the past, most globally standardized products did not start out as global products. They were
products that turned out to be successful in the home market and were then gradually introduced
in markets abroad. A good example is the Ford Fiesta discussed in the opening vignette to this
chapter. Other examples include P&Gs Pampers diapers, Coca-Colas overseas expansion
spearheaded by the American soldiers in World War II, and Marlboro cigarettes. Today, as in the
case of the Ford Focus, new products are developed with an eye toward the global market. This
is of course true for the companies characterized as born global whose products often involve
computer software, peripherals, and other high-technology products. It is also true for new
products whose home market is small and therefore the opportunity for success really lies
abroad. Finlands Nokia cell phones are designed with the global market in mind. So are
Switzerlands Swatch watch and Taiwans Acer computer. But today more mainstream products
also are designed for global appeal. The list includes not only hardware products such as
automobiles, home appliances, consumer electronics, and cameras, but also movies, music CDs,
and apparel. Design decisions about these products are no longer made with one local market in
mind but with eyes firmly focused on the global marketplace.The new product development
process can be divided into five sequential stages: idea generation, preliminary screening,
concept research, sales forecast, and test marketing. Most marketing texts will discuss these
stages in detail. Here we will focus on the way the global perspective changes what companies
do.
Getting the Picture

DISCUSSION
Idea Generation
Ideas are cheap? Yes and no. In one way, ideas come easily. Brainstorming sessions, simple
observations, or just an intuitive Aha experience can be counted on to yield a number of ideas.
For example, when Lego, the Danish toy maker, needed some innovative thinking they employed
a new session format where executives indulged in childs play to generate new product ideas
and ways to combine their building blocks.10 When the new minicopier task force at Canon
looked for ways to lower cost and increase reliability, the leader of the group brought in an
empty beer can as a stimulus for thinking about the kind of disposable aluminum cylinder that
became the model for the copier The Mazda Miata small sports car was a proposed design by a
British driver who convinced Mazda management that a more modern version of the old MG
sportscar would be a winner.Other sources for new product ideas are more systematically used
by multinationals.
First of all, local subsidiaries are likely to have some ideas from their respective markets that can
be used. Liquid Tide, one of P&Gs top share leaders in detergents,came from the companys
European operation, and compact Tide came from its Japanese subsidiary observing a product
launch by Kao, its local competitor. Also,many companies involve employees via suggestion
boxes and incentives for winning ideas. A well-known example is the 3M Post-it Notes, a real
global product that emerged from a company engineer who needed a way of marking his choral
songbook.Surveys and focus group sessions with customers are important, especially with
modifications of existing products. Customers have user experience that can suggest new
features and even completely new concepts. Snowboarding emerged out of downhill skiers
desires for extending the skateboard experience into the winter season.
New technology is perhaps the most common source of new product ideas, especially for global
products. But not all new ideas are winners. Four-channel stereo, a sure winner, failed. Skisailing, adapting wind-surfing to snow, failed. Prepaid telephone cards, a winner in Europe and
Asia, are slow getting accepted in the United States. High-definition TV took a long time to
come, as were rectangular TV screens although flat screens took off faster. Soccer is still in the
embryonic stage in the United States. And so on. A typical quote is that it takes 64 new product
ideas to generate one successful new product. Even after launch, according to one 1997 count for

the U.S. market, the success rate was less than 20 percent. To reduce the chances of failure, most
R&D undertaken for new products in multinational companies is still focused not so much on
completely new products as on modifications and upgrading of existing products. Even an
innovative company such as Sony, for example, estimates that over 80 percent of its new product
activity is focused on improving and upgrading existing products.
Preliminary Screening
Once a promising idea has been identified, companies tend to assign the responsibility for new
product development to cross-functional teams. There are typically engineering, design, and/or
production representatives on the teams, as well as marketing executives, sales managers, and
some financial control. In the case of global products, these teams also involve representatives
from the major country markets. In particular, members are drawn from the lead countries for the
product category. This team is responsible for taking the idea through the screening process to
final decision. At this stage the factors requiring localization of a global product are usually
uncovered. For example, the size of parking spaces, the narrowness of streets, and the price of
gasoline affect what size car is acceptable. Voltage levels, fire regulations, and circuit overloads
affect what changes may be necessary in electrical products. Language, operating systems, and
functions used affect what PC software applications may or may not be acceptable. When it
comes to removing obstacles to convenient and proper local use, the local members of the
development team will be particularly useful.
Concept Research
Even though a preliminary assessment of market acceptability can be done by members of the
product development team, companies generally need more systematic data from the various
markets. These data can come from standard marketing research tools,including focus groups
and surveys, and from concept testing of alternative design features.

Focus Groups and Surveys

to hear spontaneous reactions to a new concept, observe group interactions, and hear suggestions
for improvement. Where a prototype is developed, focus groups also make it possible to see how
potential users handle the product and to witness reactions to various design features and styling.
For example, when Fuji photo entered the audio and videotape market, the development team
decided that the differentiation factor would be packaging. Being a late-comer to the product
category, a very competitive global market, the companys product involved basically a
standardized technology, with well-defined quality standards and formats. Thus, the market
research was focused on alternative packaging material, color designs, and logo, with prototypes
tested through focus groups in the United States and several countries in Europe.
Concept Testing
A more formal approach to selecting product attributes is concept testing, using techniques such
as trade-off analysis or conjoint analysis. Many marketing texts offer good introductions to these
techniques, and we will highlight only the global aspects here.In concept testing, potential buyers
rank specific product design alternatives in order of preference. The alternative product profiles
include not only physical attributes and styling, but also price points. The preference ranking can
be used to infer how much a particular feature is worth to the market. For example, a respondent
who prefers paying $10 more for a set of blank CDs offering an erasable option clearly considers
the option worth at least $10. By comparing similar trade-offs across product profiles and
respondents, the concept testing analysis shows quite precisely how much the erasable option is
worth in that segment.
This kind of analysis explains why standardized products are typically uniform not only where
consumers have similar preferences but also in less critical features. Adaptation is required when
local preferences differ sharply and the feature is important. Thus, a lot of cultural research
would suggest that the preferred color of personal computers differs considerably between
countriesbut it is a less critical feature and we all get the same drab greyish noncolor (Apple
and Acer are two players who try to make color more salient and important). By contrast, the PC
keyboard feel is important and preferences differ. The smaller and lighter Asian PC keyboards
have no market in the United States where, as always, the big and solid seems preferred.

Target Research
An alternative approach short-circuits the concept research process and speeds it up. It is called
target research. By analyzing the leading brands and their attributes, they are able to understand
what appeals to their consumers. Targeting one of the brands, that brands customers can be
questioned directly for possible improvements. By reverse engineering the brand and producing
a new version incorporating the existing leaders strengths minus the weaknessesa so-called
me-too-plus product the Japanese have been able to capture large market shares abroad.
Examples include Toyotas Lexus, Camry, and Corona; the Canon Sureshot; and the VHS
development by Matsushita In developed countries with mature markets, the target research
approach has the drawback that a striking innovation that completely changes market preferences
will be missed. Targeting some leading brand and offering improvements is generally not enough
to establish a sustainable advantage. The leading brand is likely to respond, and a cycle of
actions and reactions will push prices down. This is a typical result of a Japanese entry in many
markets. For the local marketer, it is important to recognize that establishing customer loyalty is
as important in the foreign market as at home. The aim should not be the quick kill but the
sustained satisfaction of the customer.
Sales Forecast
Even though rough sales projections are done throughout the development process, it is after the
market research is done that a more precise forecast can be produced. By this time the product
development team will know what design is preferable and, therefore, what the feasible product
positions and target segments might be. This, in turn, suggests what the likely competition will
be in the various markets. As we saw in Chapter 4, the appropriate sales forecasting approach
varies across the product life cycle. In mature markets unit sales can conveniently be broken up
into two multiplicative components, product category sales and market share. The category sales
depend on market segment targeted, and the market share depends on competitive factors. When
forecasting sales of global products, each country can be handled separately and the results
aggregated across countries.

Test Marketing
Once the sales forecast looks promising, the new product is usually placed in production and test
marketed. Even though companies might prefer to simply launch the product, caution is often
necessary. Whether the markets are emerging, developing, or developed, there are uncertainties
that are difficult to erase simply by doing more research. The customers cant give reliable and
valid responses without direct experience with the new product. Competitive reactions may be
different from those expected. Local conditions may be quite different from those anticipated.
Although there are many similarities, the test marketing of a new global product candidate is
different in scope from the domestic case. Usually several different country markets are used to
ensure that potential problems are detected early. For example, in the case of Colgates global
introduction of Total toothpaste, six different markets were used: Australia, Colombia, Greece,
New Zealand, the Philippines, and Portugal.The positive results in all six markets indicated that
the products taste and unique positioning benefitsa long-lasting antibacterial formula that
fought plaque, tartar, and cavitiescould be the same throughout the world. Also, the tendency
is to use leading markets, or smaller markets that are similar to the major target markets, much
like musical shows are honed in smaller theaters before coming to the West End in London or
Broadway in New York. Thus, Hondas Odyssey minivan was introduced in Canada before the
United States, the Japanese use their home market as tests for consumer electronics products, and
Nokia and Ericsson use Scandinavia for test marketing new designs. Even though test marketing
slows down the global rollout, there are other benefits. For one, there is more leeway in
scheduling production capacity. Necessary product modifications can be uncovered and
completed. The local sales force is given enough information and training for a successful
rollout.On the other hand, the delay can hurt because of competitive reaction and loss of firstmover advantage. Because of the cost and risk of competitive reaction, many companies find it
useful to simply let customers use the product and offer feedback. Recruited subjects can be
given the chance to try it in their homes for a period of time and then report their experiences. In
software development, for example, test marketing is the so-called beta-testing stage in which
selected users are asked to try the software for some period of time to help debug the program. A
similar approach was used by Procter & Gamble when they introduced Pampers in European and
Asian markets. It is done routinely by consumer goods companies going into emerging and
developing markets, since it allows localization requirements to be uncovered. For example,

when German electric irons were first introduced in Asia, their cords were too short. In Europe
there are usually several electric outlets in the wall, while in Asia at that time electric outlets
connected to the one bulb in the ceiling.

CONCLUSION
This topic examined the Developing new global products process as it applies to global
products.it shows how global products asre today developed with an eye toward standarization
across markets. There is no question that we are witnessing global competition. This is especially
true for industrial products such as steel and chemicals. However, global competition has often
been mistaken for global markets. In other words, success of foreign companies doing business
in the domestic markets is probably due to factors other than an emerging universality of
consumer needs and wants. Consumers inevitably demand more choices, and the result is market
segmentation or fragmentation. This divergence of consumption values is not limited to the
advanced countries but is also prevalent in socially controlled, traditional societies such as India
and China. Global marketing has its pitfalls, but it can also yield impressive advantages.
Standardizing products can reduce operating costs. Even more important, effective coordination
can exploit a companys best product and marketing ideas.Proponents of the Laboratory pre-test
models Market segmentation standardization approach to international marketing claim that it
offers benefits in terms of increasing managerial control, reducing costs, simplifying strategic
planning efforts, and taking advantage of home-country headquarters expertise. While
proponents of the localized or adaptive approach to marketing strategies argue their position
by differentiating voluntary (the marketing mix variables controlled by the international
marketer) from compulsory (legislative and regulatory intervention by host country
governments) modifications. standardization is more effective than adaptation, because it gives
the marketer an edge over other competitors in terms of time and money. Because a standardized
marketing program is superior in quality to what localized approaches can accomplish, even with
the benefit of local market knowledge, executives may welcome it .The issue discussed in this
report was the integration of the global marketing concept with the new Global product
development process. Try to provide a framework for the new Global product development

process in view of the increasing globalization of markets. Basically, the product development
process was derived from the traditional new product development process which consists of a
specific stage-by-stage approach. For global markets concurrent engineering helps integrate a
few of these stages, and shorssten the new Global product development process.