The choice of the product to be introduced into a market is the most important decision made by a marketing management team. Product conception, testing, prototype development, market testing, and so on may be expensive, but they are vital, as the other three elements of the marketing process can do little to salvage a defective, ineffective, or useless product.
By and large, industrial products (products destined for further use in the production process as intermediate products or as machinery) are relatively standardized. There are, of course, occasions on which adaptations must be made, either because of environmental conditions or because of customer habits, but for the most part there is much less difference among models of industrial products (say, beer bottling machines) than among commercial products (for example, the brands of beer put into the bottles). Commercial products, which are consumed as they are, often are differentiated through packaging (different beers in different bottles), brand naming, color, flavor, services, quality of performance, and so on. The more commercial the markets a firm wishes to reach, the higher the probability that the product will have to undergo considerable modification and adaptation to local requirements. Warren Keegan has outlined five product strategies that can be used to expand international markets. 1
(1) Product and promotional extension (dual extension) is the easiest marketing strategy to implement and probably the most profitable one. The strategy entails selling exactly the same product, with the same advertising and promotional themes and appeals, in every country in which the company operates. Pepsi Cola, for example, has been successful in selling the same product with standard promotional themes in a variety of markets. Pepsi has estimated that tailoring promotions to each foreign market would substantially raise the cost of doing business.
(2) Product extension with promotional adaptation involves selling the same product in foreign markets but tailoring the promotion to local conditions. U.S. firms marketing analgesics in Japan sell essentially the same product as they do in the United States, but use a somewhat different advertising theme. Colgate has put its Irish Spring formula to use in Mexico in a new soap called Nordiko. The name Nordiko was chosen because it brings to mind the north ("el norte") and thus (Colgate hopes) projects a fresh and cool image to Mexican consumers.
(3) Product adaptation with promotional extension is an approach in which the original promotional strategy is retained, but the product is adapted to local conditions. Exxon, for example, adapted its gasoline to suit different climatic conditions in foreign markets, but used its famous "Put a tiger in your tank" promotion in nearly all areas.
(4) When the sociocultural and economic conditions in various markets are such that using the same product and/ or promotion in all of them is impossible, a strategy of dual adaptation-adaptation of both the product and the communications efforts-is required. When the military government in Brazil imposed a heavy tax on all imports it considered "superfluous," liquor manufacturers came up with a score of new brands, all bottled (and some even distilled) in Brazil, and promoted them as thirst-quenching, cooling drinks.
(5) Perhaps the riskiest market expansion strategy is to try to invent something to meet the special needs of overseas customers. Seeing a potential market in the estimated 600 million people in the world who wash clothes by hand, Colgate developed an inexpensive plastic, hand-powered washer that has the tumbling action of a modern automatic machine. This product has sold well in Mexico and could help expand the demand for Colgate's laundry detergent. 2
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