IBM

1161 Words3 Pages

Product
According to Kotler and Armstrong, “A product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need.” Product constitutes one of the four P’s of the marketing mix and entails both the physical products and also the services that comprise all the offerings of a company to the target market. Product can also be further sub-divided into two categories comprising; firstly consumer products and secondly industrial products. Consumer products are bought by final consumers for personal consumption. They can be broken down to tangible and intangible (services). Examples of tangible are laptops, cars, books, games. Examples of intangibles are insurance and haircuts.
Industrial products are those purchased by individuals and organizations for added processing or for use in conducting a business. It comprises of materials and parts, capital items and supplies and services. Some examples include steel, building and equipment.
Product Standardization
According to Buzzell, standardization can be defined as, “The offering of identical product lines at identical prices, through identical promotion programs, in different countries” 2. In the world we live, we are observing same patterns of consumer buyer behaviour, tastes and demands as the world is becoming a homogenous place.

Standardization of a company’s product signifies that there is no change to the product what so ever and that the same product is distributed and sold to all markets around the globe. This strategy is seen as significant in lowering costs through economies of scale where each product unit shares uniform characteristics making them identical to each other. With standardization the compan...

... middle of paper ...

... – A company’s product is adapted to the needs and wants of the international markets. Thus this satisfies and provides customer value. For instance Subway offers “Halal meats” in specific stores and McDonald offers the “Maharaja Mac” in India.
2) Flexibility-A company can adjust to market conditions and adapt its product decisions to the international market.
3) Risk is reduced- A company that adapts its product to cultural background across international markets would see risk of failure greatly reduced and a higher probability of success.
Cons
1) Economies of Scale- Each product it tailored for each specific target market and the firm cannot enjoy the benefits of economies of scale.
2) Quality- There may be differences in the consistency of quality of products to the target market.
3) Costs- The company has to spend large sums of finance in marketing the product

Open Document