Product Planning For Exports

Product planning for exports is a process of selecting items for a target market. It involves determination of length and depth of a product line. Length relates to number of products and depth signifies variation of a particular item. This process is generally confined to the existing product line for which the intending exporter has the necessary manufacturing capabilities

The difficulty lies with manufactured products where the requirements are different. This is attributed to a variety of reasons like physical conditions, functional needs and method of product use. For example large refrigerators are not preferred in Japan where the apartments are small while bigger appliances are liked in the US. There could be a number of examples where same products are sold differently in different markets.
This subject involves discussion on issues like product adaptation, standardization, product life cycle, brands, packaging and support service.

1. Product Adaptation: Product adaptation is changing the product either through value addition or making it functionality different. Selection of features is the key element in product adaptation.

2. Strategy: Product adaptation is also used to enter a new market, which is dominated by existing manufacturers. In such a situation, some product differential will help the intending exporter to sell his product successfully in the target market. This is amply demonstrated by the entry of Daewoo and Hyundai small cars against Maruti in the Indian market

3. Standardisation: Standardisation is equally important in the planning of products for export. This is more relevant for consumer items. Major benefits of this strategy include economies of large scale production, R&D and marketing. Standardisation also helps in saving on technology as the same specifications are used for standard products. To generate better marketing results, it is desirable to mix up both product adaptation and standardization for countries having similar segments.

4. Life Cycle: Understanding of product life cycle is another element of export planning. Longevity of product life is related to the laver of economic development of a country. Compared to developing economies products sold in developed countries have shorter life. A product has four stages in its life cycle. In the first stage, a product is in the process of development and its sales pick up gradually. Having established its acceptability, the product registers rapid growth during the second stage. In the third stage, the product reaches maturity. The fourth stage witnesses a decline in sales. This development is related to life cycle of manufacturing technology which becomes obsolete with the passage of time. Products sold worldwide do not command the same status in their life cycle in different countries. This difference has to be plugged by extending the life cycle of products through innovation.

5. Branding: Branding is yet another aspect of product planning foe exports. It is an identify or value addition given to a product. In a market driven economy, this recognition is built up through provision pf quality product and adequate back-up service. This identity is rooted in a language which should evoke similar emotions/associations worldwide. It should not be misinterpreted. It should have universal appeal and be amenable to integrated international marketing strategy.

6. Packaging: Packaging is also important for product planning. A change in marketing environment requires a different package to insure adequate protection and shelf life for a product. Difference in climate conditions also influences the packaging requirement. In developed countries packaging should not entail additional handling at the retail level. As against this, there are a number of countries, where extra labour is used to supply individual orders from bulk packages at the retailing stage. Other considerations which affect decision on product packaging include size, shape, material and text. Customs and level of income also affect the package size

7. Support Service: Support service is the last but crucial point in product planning foe exporters. This involves two components – warranty and after-sales-service. The intending exporter must have a clear policy with regard to product warranty. Based on corporate strategy, the exporter should either declare that his domestic warranty is valid worldwide or specify a separate policy in this context for different countries. Adoption of worldwide warranty with uniform performance standard may look simple but this may not work under different marketing conditions. Time span and standard coverage apart, the intending exporter should examine the method of a product use in a particular country. For example, in a developing country, a product may be subject to a rough use causing frequent product failure. In such a situation, it would be desirable to make local provision for required support service. This can be done either through establishment of a subsidiary or appointment of an independent sales distributor to perform the necessary function. In both the cases, availability of trained staff with adequate staff of spares is important.