Introduction to Export Product Strategy

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INTRODUCTION to

PRODUCT STRATEGY

Rahim Jabbar

19 June 2007

PRODUCT DEVELOPMENT FOR GLOBAL MARKET


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Main Discussion (1)

Introduction

Product Strategy as a part of Strategy to Enter theExport Market (SEEM)

Choosing Winning Characteristic-Figure and Utilities

NTE Buyers Questions about the Product

End Consumers Questions at Export Destination

Country (EDC)The Requirements to Enter Developed Countries

Market

Understanding Product

The Scope of A Product

Types of ProductsComponents of a Branded Product

Consumer Values

Values gained by the Consumer

Example of a Product: Rattan Furniture

ExerciseThe Core of Product Strategy

INTRODUCTION to PRODUCT STRATEGY


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INTRODUCTION


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PRODUCT STRATEGY:PART OF THE STRATEGY TO ENTER

EXPORT MARKET (SEEM)Through the SEEM process you should have:

Determined the targeted market segment

Attributes of a product that the targetsegment likes

Known the attributes and the appropriateutilities and packaging for your exportproduct aimed at the target segment at theExport Destination Country (EDC)

Product strategy is a further breakdown of

SEEM


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PRODUCT STRATEGY:CHOOSING THE CHARACTERISTIC-FIGURE

& UTILITIES OF A WINNING PRODUCT!

Product strategy a winning product:

maximizes its competitive advantages andminimizes its competitive disadvantages

these enable it to become the primary choice forconsumers at the targeted segment in EDCthese also improve its success rate in EDC markets

where competition is fierceneeds to understand the requirements demanded at

EDC and the wants and favorites of the consumersthere.


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How are their quality and reliability?How much are they priced?Are those prices worth the value that Im

getting?How do their prices compare to other similarproducts?

What are the return policies should theproducts be found defective?

Typically end-buyers place full confidence atthe store network that sell imported goods.

PRODUCT:

THE QUESTIONS AND CONSIDERATIONS OF

END-BUYERS AT EDC


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PRODUCT:

SOME REQUIREMENTS TO ENTER

EXPORT DESTINATION DEVELOPED COUNTRIES

Consumer safety regulations

Health regulations related to food products

(e.g. Foods and Drugs Administration in

USA)

Labeling requirements

Requirements to display a products origin

information

Environmental requirements

Biorterrorism Act


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UNDERSTANDING PRODUCT


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SCOPE OF A PRODUCT

Product something that ismanufactured/processed from raw

materials and supporting materials to fulfillthe needs of consumers, whosemanufacture requires certain techniquesand methods

Kandungan Isi Makalah ini Merupakan Hak Cipta Rahim Jabbar


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TYPES OF PRODUCTS (1)


CATEGORIZED BASED ON PRIMARY USER

Consumer Goods are products that are used to meethuman needs through direct use or consumption byindividuals.

Consumer goods can be categorized into two

categories:

non-durable consumer goods or fast movingconsumer goods such as food, cosmetics, personalhygiene products, etc.

durable consumer goods such as : car, householdwares, stationeries, computers, sports equipment, etc.


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CATEGORIZED BASED ON PRIMARY USER (2)

Industrial goods are raw materials, supportingmaterials, processing machines, that are usedas inputs or processing tools to make other

goods.

Can be categorized into:

capital goodsintermediate goods


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BASED ON THE LEVEL OF TECHNOLOGY OF ITSPRODUCTION(1)

Products directly processed from nature and

biological resources: Processed food, wooden andleather products, rubber products (some products

commonly made by small businesses)

Products made by simple technologies, such as

textile, clothing, footwear, furniture, glassware,

porcelain, toys (most of the products commonly

made by small businesses)


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BASED ON THE LEVEL OF TECHNOLOGY OF ITSPRODUCTION (2)

Products of mid-level technology industries such

as : motor vehicles, cars, machines, chemicals,

metal goods.

Products of high technology industries such as

electronics, pharmaceuticals, biotechnologyproducts, high precision tools, airplanes


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FROM MARKETING STANDPOINT PRODUCTS CAN BEDIFFERENTIATED INTO COMMODITIES AND BRANDED PRODUCTS

COMMODITIES BRANDED PRODUCTS

Products that can not bedifferentiated from other similarproducts (e.g.: salt powder , dryground rice)

Based on its point of difference

Can be very easily substituted bysimilar products from otherproducers negligible cost ofswitching to other same products

Able to build customer loyaltythe cost of switching brands arehigh enough (customers hesitanceon the effectiveness of otherbrands of the same product)

Competition is based on price(cheaper is more attractive)

Can be charged a premium price

Typically provides only a smallprofit margin

Can provide higher levels of profit

Profit is determined by volume Profit is determined by theeffectiveness of branding and

marketing activities.



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16Copyright Rahim Jabbar/1999

COMPONENTS OF A

BRANDED PRODUCTA PRODUCT or SERVICE as a basis

NAME/LOGO as a marker / hook

PACKAGING as a display tool

PRICE as a representation of value

ADVERTISEMENT/MESSAGE as story

teller


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COMPONENTS OF A PRODUCT

Product is a term used describe goods,services and knowledge that are made to besold.

A product possesses

a certain attributea certain utility, and for a certain use (may be tangible orintangible or some combination of both).

All of which characteristics provide a utilityfor the consumer, which makes it valuable inthe eyes of the consumer.



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Value is the basic/core general principles ofbehavior in a society that are very highlyvalued by the society. Value is related towhether something is viewed as good or bad.

Pragmatically, a product is seen as valuable tothe consumer if the product (be it goods orservice) helps him/her (the consumer) to

achieve his/her goals, fulfill his/herneeds and satisfy his/her wants.

CONSUMER VALUES



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EXAMPLE OF A PRODUCT: RATTANFURNITURE

Rattan furniture is made of pieces of cut rattan andsome parts of rattan skin that are meshed and

shaped into chairs, tables, beds, etc. Their shapes are

based on certain designs that fulfill consumerrequirements of seating or sleeping comfort, etc.

They are also padded and varnished to make them

look attractive and liked by the consumers.



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EXAMPLE OF A PRODUCT: RATTANFURNITURE

What the consumer really purchases is comfort andconvenience utilities for their everyday life. I.e. to avoid from

being forced to eat sitting on the floor or standing, or sleeping

on the floor. In this way, the furniture maker provides values to

consumers in the form of comfort utility (physical need) and

convenience utility (psychological need).

The furniture producer provides these utilities through the

properties of certain raw materials (in this case rattan) and

certain design that gives attributes that will support the

intended utilities.



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EXERCISE : RELATIONSHIP BETWEEN A PRODUCTSATTRIBUTES & UTILITIES AND ITS VALUE TO THE

CONSUMER

Product (Attributes) Utility Value

Corn-basedcooking oil

Muslim

Clothing(Mens)

Spicy crackers

Bandrek Drink


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BASICPREREQUISITE

SUFFICIENT

PREREQUISITE

THE PREREQUISITES OF A COMPETITIVE PRODUCT BETHE PRIMARY CHOICE OF CUSTOMERS

FULFILL CUSTOMERS/CONSUMERS NEEDS

Technical performanceQuality level

QUALITY THAT IS IN GENERAL COMPARABLE TO COMPETITORS

Ratio of Quality vs. Price > Competitors

Better quality (if at the same price) or better price(if at the same quality).

Differentiating superiority:*utility attributes (most decisive)*physical attributes*process attributes

KEY TO

SUCCESS



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PRODUCT STRATEGY


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QUESTIONS TO GUIDEPRODUCT STRATEGY DEVELOPMENT

Product Strategy: choosing attributes and utilities ofa competitive and winning product.The final judge are the consumers in EDCQuestions to answer:

Who are the primary target

customers/consumers?What kind of values do they look for in aproduct?

What are the profiles of attributes, utilities andvalues of products currently in the market?

How can we differentiate our product fromcompetitors to create a certain uniqueness?

PRODUCT STRATEGY


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TARGET MARKETSEGMENT:

WHAT ARE THEIRSPECIFIC

NEEDS OF THEPRODUCT

YOUR PRODUCTDESIGN

(to be developed)The strengths and weaknesses

of your currentproduct

COMPETITORSPRODUCTS

(current)

COMPARISON:ATRIBUTES, UTILITIES,

USES, BENEFITS

COMPETINGTHROUGH

DIFFERENTIATION

ConsumerInsights

PRODUCT STRATEGY:BASED ON THE NEEDS OF THE TARGET SEGMENT AND

THE DIFFERENTIATION FROM COMPETITORS

Vision ofThe Product


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Introduction to Export Product Strategy

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