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Global Marketing and New
Product Development - Searching
for Common Ground
 January 2002

At the AMA Educators’ Conference this summer, a colleague and fellow member of the Product Development
& Management Association (PDMA) asked the question – “What connections do you see between global marketing and product development?”  After providing a short list of top-of-the-mind topics where the two areas interact, and thinking there must be more, I told him I would get back to him.  Here is an expanded answer. 

The initial response was (1) country of origin, (2) global strategic alliances, and (3) co-located global teams.  The common element among these concepts is that each looks for differences that can be applied to gain strategic advantage when making product-related decisions. With country of origin, a characteristic trait or traits associated with perceptions about a country affects the image of a product, perhaps leading to unique positioning.  When arranging strategic alliances, the ability of partnering organizations to jointly launch a new product can be enhanced by combining the resources, knowledge, and situational advantages of the interacting companies.  When a single company’s co-located product development team is spread across several countries, effective collaboration among members depends on blending cultural pre-dispositions, specialized knowledge (which can have cultural foundations), and functional responsibilities. 

These are all fruitful areas for research that contributes
to integrating global marketing (GM) and product development and management (PDM).  Methodological approaches from global market research, such as regional studies and inter-country cultural comparisons, are useful for investigating strategic product adaptations that deliver improved performance in the international marketplace. 
But this approach overlooks an equally promising outcome.  In addition to looking for differences that require local adjustment, there is also value in research that identifies common characteristics across several country markets.  The customary behavior of looking for significant differences when analyzing data reduces the chances of seeing value in the bigger picture.  Statistical results that indicate differences in countries are usually more
interesting to investigators, but they do not always indicate the best financial opportunity.  “Go global, act local”
is still an actionable phrase, but standardization can
improve the bottom line. 

With PDM efforts, there are operative forces that favor offerings that have common appeal across countries. 
There is considerable uncertainty in product decision making, and most new products fail to achieve substantial long-term return on investment.  PDM has focused on this problem, and success rates have improved through use of multi-stage processes and cross-functional teams.  In these phase-review processes, such metrics as market potential and expected financial performance are estimated at
several stages, with updated information, as development moves toward commercialization.  If individual countries
are targeted with differentiated products, these indicators
of project acceptability will suffer.  When the scope of the product market effort is narrowed too far, the project is unlikely to be favorably evaluated in comparison to a product that meets a need in several countries.  Analysis and planning based on combined versus individual country markets is a topic global marketers’ and product decision makers’ should explore, both conceptually and empirically.  A “best” practice recommendation would be helpful. 

The changing nature of both fields should also be
considered jointly.  One area that presents an opportunity for application of GM perspective to PDM is the electronic marketplace.  This field, despite its recent dismal commercial results, provides many opportunities for GM and PDM proponents to collaborate and improve applications. 

Electronic markets are global markets.  The Internet
allows interaction with customers all over the world, in
real time.  PDM requires speed.  The connection seems obvious, yet how many PDM teams include an
international market research specialist, an emerging
field that requires Internet and information technology expertise?  The opportunity to provide useful information and market test results to PDM teams is substantial.  World-wide databases can be mined for quantitative
results that link attribute preferences to cultural, demographic, and lifestyle characteristics.  Chat rooms
can provide global voice of the customer insights.  Internet panels with international customers can provide a valuable source of novel product ideas and unique perspectives on concepts, designs, and prototypes in development.  These applications represent the initial footsteps of an emerging information leap forward.  Integration is the facilitator. 

Back to the original question—What are the connections between GM and PDM?  Product developers consider technology integration a key to innovation, as new knowledge that serves a useful purpose is created when
two or more diverse fields are combined.  A variation of technology integration, where the merger is between intellectual domains of marketing thought, holds similar promise.  GM and PDM connections are limitless, as long as scholars and practitioners maintain an open mind to the possibilities of collaboration.  Keep the dialogue going. 

 
Frank J. Franzak, Virginia Commonwealth University