Question

Most brands are adapted to some extent to reflect significant differences in consumer behavior, brand development, competitive forces, and the legal or political environment. Identify the five international product and communication strategies available to firms that expand their businesses to foreign countries.

Answer 1

Introduction:-

International trade has rapidly increased over the years, thanks to the reduced government interference and reduced effect of tariffs and trade barriers across regions and for companies alike.

This has resulted in companies looking to expand their operations from their base country to others so as to be able to increase their profit margins and earn at much higher rates relatively.

However, each company has used its own methodology as per the market demand for its product and services and other similar factors such as availability of funds, manpower requirements etc.

Following are the Five International Product and Communication Strategy which most companies would follow when engaging in foreign trade.

1) "Product and Communication Extension"

This strategy is primarily followed by any company extending its market for the first time. Smaller companies which have relatively lesser capital to alter its products and communication for a new market. It is also followed by companies that aim to sell similar products across the globe. It offers the benefit of reduced costs as mass marketing and production are possible.

Ford was one of the first companies which tried implementing this policy but later had to change the same due to difficulty in operations in such model in foreign countries.

The economy of scale is maximum in such a model and costs are extremely low.

2) "Product Extension Communication Adaption"

Under this strategy, a company sells the same product in two market types wherein the need of the product is thought to be relatively similar. However the communication strategy largely is domestic in approach.

For example a company like Pepsi or Coca Cola sells the same product across the globe, however it appeals the domestic population in different styles and methods, adopting different communication and marketing strategies in each of the countries that it happens to select. The language of advertisements in the United States and the content is much different than followed in countries in Asia.

3) "Product Adaptation Communication Extension"

In this strategy, a company changes its products subject to local by laws and conditions whereas the communication remains the same.

A great example of the technique are oil and petroleum companies which sell slightly altered products in most countries but their communication and brand positioning remains the same. The changes are done to be compliant to local authority norms and to be able to sell in the extended country respectively.

4) " Product and Communications Adaptation"

In this, a company adopts both communication and product of the country it expands its operations in. This is done primarily seeing that the needs and wants of the consumers is different from the local markets.

For example, companies such as British Tobacco Company has expanded its operation into the retail sector in most Asian markets and sells and markets different products in different countries with different marketing and communication strategies.

5) "Product Invention"

This strategy primarily aims at creating a new product which will then sell across the globe. The aim of the company remains at creating a new offering which has never been sold in any market before, and the need for which is similar across the globe.

A company such as Black and Decker is an example in this category. It offers a product like portable lighting which is easy to sell across the globe.

Please feel free to ask your doubts in the comments section.