Product Alterations in Foreign Markets

By: Carl Phelps, Research Associate with GLOBAL ID LLC.

There are three main reasons for making product alterations when introducing your product into a foreign market. Legal requirements may cause you to alter your product, usually related to product safety. All countries have different product safety requirements. For example, the United States has stricter pollution standards than many other countries, which causes foreign automobile manufacturers to alter their products. Additionally, foods and pharmaceuticals are often subjected to different testing and labeling requirements when exported to foreign markets.
There are also cultural reasons for the alteration of products. Religious differences can cause problems with the introduction of products. For example, food companies shouldn’t expect to sell as much pork in Islamic countries or as much of any meat in India. Other cultural differences are difficult to detect, and it often takes trial and error to correct the product. For example, Toyota was fairly unsuccessful at selling pickup trucks in the United States until they altered the trucks to have enough headroom for drivers to wear large cowboy hats.
A third reason for product alterations comes from economic differences. To accommodate countries with lower average incomes a company may have to design a cheaper model. It is sometimes more beneficial for companies to sell their products in smaller package sizes, as people with lower incomes tend to buy products as they need them, instead of planning ahead. Also, countries with lower average incomes tend to have poorer infrastructure, which cause alterations in products such as automobiles. For additional information on foreign production email: carlphelps@globalidllc.com