Product design benefits a company when it matches products with local requirements in the global marketplace. Companies that follow the one-size-fits-all rule will not succeed globally because tastes, standards, prices, legislation and cultural differences influence customer choice from country to country. As “Design Week” magazine reported, effective product design must reflect global markets. Global companies like Nokia, Braun and Nike know success is based on a single brand with many product design variations.
Companies that operate in global markets manage their product designs using a platform strategy. That allows them to create a core product with different versions for individual markets and customer segments. The platform strategy reduces research and development effort and enables companies to launch streams of products on the underlying platform. This approach also helps control development and manufacturing costs when compared with producing a new version for each market.
Research into individual country requirements translates the product platform into a market platform plan. Market research identifies customer segments and priorities and maps local product offerings against those requirements. The product design team then can prioritize requests for local variations in line with individual market potential.
While variation is essential, the key is to design the same level of quality in every market version. This allows a company to create a strong brand recognized and accepted in all territories. Marketing teams then can use that global brand strength to improve the effectiveness of local campaigns.
Although a strong global brand is helpful, research consultancy Millward Brown’s chief global analyst, Nigel Hollis, argues that marketers must determine which brand characteristics apply in different markets and which need to be localized. In his book, “The Global Brand,” Hollis cites an analysis of more than 10,000 brands. The research data suggests brands that compete in more countries tend to have weaker scores for bonding with the local market. He concludes that a business model that caters to local cultures is crucial. Global product design must take account of those differences.
To ensure they meet local needs, multinational companies increasingly are creating global product design teams with employees or business partners from different territories. Forty-four percent of respondents to the Aberdeen Group’s 2005 Product Innovation Agenda study indicated that they are assembling teams across geographies to pursue global design. The Group’s report, “Enabling Product Innovation,” indicated that 25 percent of companies surveyed already were outsourcing some design processes.
Global product design is not a new idea. Almost half of the manufacturers surveyed in Aberdeen Group’s Product Innovation Agenda study already had a global design strategy in place. Looking ahead, the opportunity to reach global markets is open to companies of all sizes as networked communications and Internet tools reduce barriers to market entry. Although global market entry has become easier, the challenge remains -- to meet local requirements with an effective global product design strategy.
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