COULD YOU PLEASE SOMEONE EXPLAIN BRIFELY EACH ASSUMPTION THAT I POST? Assumption
ID: 1132583 • Letter: C
Question
COULD YOU PLEASE SOMEONE EXPLAIN BRIFELY EACH ASSUMPTION THAT I POST?
Assumptions to Standardizing Global New Products
•One product fits all
•Significant homogenization of world consumer needs and wants
- cultural issue are minimal
- incremental profits are less than incremental costs of product modification
•Lower price/consistent quality that standardization drives, outweighs benefits of tailored product features
•Economies of scale are greater and more readily achieved.
•There is a preference for global corporate and product image
•Absence of external (host country) restraints
- Legal, regulatory, societal, financial and behavioral norms
•Absence of internal (corporate) restraints
- e.g., manufacturing and people skills
•Favorable synergy’s gained from multi-country operations
- product design, engineering, production, R&D, service, quality control, marketing mix management
Explanation / Answer
Assumptions to standardizing global new products-
1. Having the same product across the boundaries makes the world 'smaller' and more close.
2.A homogenized product definitely represents a unified customer base with similar wants and needs. No barriers apply to such products. A muslim, hindu or a christian all would want the same drink, same watch brand etc.
3. A global product maintains certain quality with a certain price tag which stays constant over the period of time, bringing stability to the product.
4. Economies of scale for such product would lead towards saving a lot of extra cost and will result in more production, because the country-specific strategies are not needed, ultimately saving the extra costs.
5. People prefer globally acknowledged product more because of the stability factor rather than buying a local product with cheap quality.
6. There maybe some marketing and distribution risks in some host countries, but the mass appeal and the formal backing from government would outweigh the same. Additionally, no other country can block the product from crossing the boundaries.
7. No corporate internal conflicts come in play considering the need for the product in the market. To maintain that level of quality, you need to work together to manufacture it.
8. Due to the experience of different countries, the future plans relating to the product's engineering, design etc. can be understood with the need of the region. Ex- Launching McDonald's in Arab and Asia with the same taste but different names according to the region to attract the interest of the customers.