Question

In a short essay, describe the various reasons for product alteration when a company enters a new foreign market?

Answer 1

Reasons for product alteration when a company enters a new foreign market

Companies will enter into the foreign market as part of their expansion strategies. The need to make necessary alterations to its product offerings in foreign markets may arise in such situations. Three major reasons will be there behind altering a product while entering a new foreign market. Legal requirements are the first reason in this. In most of the cases, legal requirements will be related to product safety. Nations will have varied legal requirements in connection with product safety and the companies entering the markets should comply with the product safety requirements of the concerned foreign market. These rules will be stricter for food and pharmaceutical products compared to other categories of products. Cultural reasons are the second major reason behind product alteration while entering a new foreign market. For example, a food company shall not sell products containing pork in Islamic nations or beef in India as it may affect the religious sentiments of the customers. The third major reason for product alteration is economic reasons. Companies need to make the alteration in products in markets with lower average incomes to make its products affordable to customers.

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