In his book, "Elements of Multinational Strategy," Keith Head addresses the need to adapt a product to a targeted market. In chapter 7 of "Market Adjustment", he discusses the subject of international trade. An analysis of this chapter provides some answers through the comparison between product standardization and customization for a target market and the benefits and costs of customization of these products. The author offers some answers about the main reasons explaining the cause of differences between products.
The result is equivalent to the final version but has different characteristics. Through several examples, including those of Theodore Levitt, it is possible to understand that it provides through its claims- during 1983 - a firm in the context of globalization, must standardize its products if it wishes to retain its commercial position; hence the fact that the needs and desires of individuals from different countries, are homogenized.Therefore, he deduced that the end products of local businesses should be standardized.
To justify his view, he relies on three criteria including the new cosmopolitan culture, the politics of a large production leading to low prices (resulting from the allocation of fixed costs over a larger number of units), focus on basic goods(staples).
In this chapter some types of "anomalous" property (or shopping goods) are cited as examples:The washing machine: depending on the country targeted in the example (whether it be Italy, Britain or France),applications in terms of features will be different (function, size, power, etc) as some specific actions are required more so for certain countries.
- Also the example of the Ford car whose name differs by country (Mondeo everywhere except in the United States where it is known as Contour), and some technical characteristics.
Tags: Keith Head's Elements of Multinational Strategy, Market Adjustment, the need to adapt a product to a targeted market.
[...] This chapter looks at the aspects of a product that is ideal for a target market from the perspective of international trade. In this chapter, K.Head makes a comparison between product standardization and product customization for a target market and explains the benefits and costs of the customization of these products. The author offers us some explanation of the things that cause differences between certain products and the result is equivalent at the end but with different characteristics. Through several examples, including those of Theodore Levitt , it is possible to understand why a firm that wishes to become global needs to standardize its products if it wishes to sell them. [...]
[...] Big with its chocolate bars. With the help of these examples, it is possible to better understand the customization of products in different countries, cultures and the effects of the income of individuals (measured by GDP / capita). - Also, some brands prefer to make a new product that responds directly to a specific need in a foreign market, such as Mazda Miata; K. Head also specifies that the income effect is a very important factor that firms must take into account. [...]
[...] What are the structures that are needed to produce this abroad? What are the solutions for the company to make the processes of exporting or relocation smoother? Does the company need to internalize or outsource? It is possible to depend on the structure of the FDI of a country (Foreign Direct Investments), mergers and acquisitions are more important in developed countries and less so in developing countries. If the firm is thinking of relocating, it must take into account such things as the importance of local fixed costs. [...]
[...] Depending on the response to the elements above, it is possible that K. Head does not share the opinion of Theodore Levitt, his arguments are limited even if it makes for an interesting analysis. My opinion of the text. Given the elements of the text and the different aspects that are looked at with regard to the management, marketing and the "globalization strategy and for multinational companies, " I think that in order to market a product in a another country (to make an international exchange), it is necessary to take into account several factors(an international exchange can be specified by several variables). [...]
[...] where it is called Contour) and some of its technical characteristics are different (aesthetics etc). Finally, Levitt states that individuals generally have the same needs, to have clean clothes, more free time and a more disposable budget for spending money for their happiness. The author deduced from an analysis of Levitt's theories that these arguments ultimately help to better understand the fact that companies must make the effort to adapt their products to target markets in order to meet the demand better. [...]
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