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How Can Companies Design Products for International Markets?
Brands are now crossing international borders. Globalization and the era of the Internet have brought in a lot of acceptance, opportunities, and playing fields for brands. Consumers are accepting foreign brands and want to consume them as well. Since this is the current market scenario, brands now have to fight hard as well. Earlier, the competition was between neighboring brands, but now all the brands in the world are selling similar and identical products to customers. Hence, it has become crucial for brands to connect with their customers and provide the customers with something more than the product itself. This something extra could be in terms of social status, experience, emotional relief, and others. When brands enter the international market, they have two options in terms of their product strategies, and they are −
They can sell the same product to customers across the globe.
They can adapt their products as per the needs of the customer and the geographical location.
Both of these options are lucrative for the brand for various reasons. Hence, in this article, we will be discussing how brands can come up with innovations in their product strategies to compete better across international borders and some renowned examples from the business world.
Product adaptations that brands have to make while entering foreign markets
Companies cannot enter foreign markets in a standardized way. They have to make alterations. Alterations are necessary because the customers, cultural habits, religion, rituals, superstitions, income potential, educational qualifications, family size, thought process, preferences, needs, wants, and desires the company is dealing with in one country are very different from those in another country. Some pointers that a company should think about before entering different markets are −
Product size
Product taste
Brand name
Brand colors
Product texture
Shelf life
Price of the product
Price of the product
packaging of the product
Labeling of the product
Marketing communications by the brand
Tagline
flavors of the product and others.
Some brands that have made minimalistic alterations for their customers across different geographical locations but are thriving in the business world are −
eBay
Google
Twitter
Instagram
Facebook
WhatsApp and others
Some renowned examples from the business world regarding the adaptation of product strategies
Oreo from Kraft Foods − When the brand crossed international borders, it realized that the same product, i.e., their Oreo biscuits, was considered to be too sweet for the Chinese market and too bitter for the Indian market. Instead of frowning at the feedback and discarding it, the brand decided to adapt itself. The changes were made as per the market, and then new flavors were also introduced by the brand to sell better. In the Chinese market, the brand came up with flavors like mango and orange, grape and peach, green tea, and ice cream. Argentina has flavors like raspberry, banana, and blueberry, while Indonesia has chocolate and peanut varieties.
McDonald’s − This fast food outlet has made various changes to its product line to suit different markets. The strategic changes are not only in terms of raw materials, product size, and product taste but also in terms of packaging and others. When McDonald’s entered the Indian market, they realized that beef products would not sell in the market at all, and the outlet would be frowned upon if it kept selling them to the customers. Hence, to cater to the needs of McDonald's, they came up with chicken as their main ingredient in the products, and to cater to the vegetarian customers, they started adding pumpkin to their list as well.
When the brand entered the Nigerian market, it realized it was illegal for them to import chicken from outside. Hence, the brand started adding fish-related product offerings to the menu, which is also a stable food for Nigerians. When the brand entered China in the beverage section, it added green tea and other teas to suit the customers’ taste buds. In the US, the brand is known for selling big, huge burgers and fries, but in India, the brand is known for selling small, cost-worthy meals.
Danone − this brand is known for selling high-quality, high-end, and healthy products in France like Damon yogurt, Evian water, and Bledina baby food, but when it entered the Indonesian market, where the per capita income of the consumers is around $10 a day, the brand came up with new products. Milkuat is a shelf-life-extending milk beverage for customers.
Product adaptation strategy
If a marketer or business is getting overwhelmed with all the information and ifs and buts that arise while entering international markets, they can even take help from the product adaptation strategy by Warren Keegan. This strategy will help the company understand what it can do and where it stands in the matrix. This matrix has 5 boxes that companies can stand upon, and those boxes are −
Do not change the communication and do not change the product − This is also known as the straight extension phase. In this phase, the company alters none of its activities and enters the global market.
Adapt the product but do not change the marketing communication − This is also known as the product adaptation phase. Here, the company changes the product as per the market and the customer's needs but does not change the marketing communication entirely.
Adapt communication but does not change the market product − Here the company believes in the superior quality of the product and the fact that the consumer is going to accept the product as it is. Hence, the company invests in changing the marketing communication to hit the right customer nerves and sells one standardized product in the entire global market.
Adapt the product and adapt the communication − this is known as the dual adaptation phase. Here, the brand understands that for survival as well as to compete with the local brands, they have to adjust the product to the liking of the customer and also communicate this to the customer in their preferred medium. Orea, as a brand, accepted this strategy. When the brand entered the Chinese market, it introduced flavors like green tea and ice cream, orange, peach, grape, and others. Made the product a little less sweet for the customers, and along with this, for the commercials, they hired China’s first NBA star, Yao Ming, to show how customers can drink an Oreo cookie.
New Product invention − This is the stage where the brand, instead of adapting the products as per market needs, decides to innovate new products altogether to suit the customers in a geographical location. This invention can be of two types: a backward invention or a forward invention. In the backward invention, the brand re-introduces the earlier products in the new, less developed market, and in the forward invention, the brand introduces new products for the customers. For example, when Quaker Oats entered the less developed markets, they calculated the daily nutrition intake that would be necessary for the customers to be healthy in that region and added that to their product offering.
There are successful companies in the tech era that can survive and thrive in the market with minimal changes, but most FMCG companies, clothing brands, and other accessory brands have to adapt themselves to the market that they are entering. Companies cannot thrive otherwise. There are trillions of companies trying to sell their products to customers, so brands have to ensure that they are adapting themselves according to market needs and, hence, are successful in establishing relations with their customers, which is going to deliver them sales.
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