Final answer:
The initial step in adapting a product to a foreign market involves understanding the market's reaction to new products. Subsequent steps include product modification to suit local needs and developing a product strategy, all while ensuring fair and scientific decision-making processes.
Step-by-step explanation:
The first step in adapting a product to a foreign market is often about understanding the market conditions and how new the product is to that market. More specifically, option E) Determining how new a product is to a market and how people react to newness addresses the critical step of market analysis which impacts subsequent decisions on product adaptation strategies.
Once the company understands the market dynamics, it can then choose the right approach from developing a strategy to convey benefits, to modifying the product's physical attributes or intangible aspects to better suit local needs as in option C) Determining which physical attribute to modify to suit the local needs. Companies often engage in a structured decision process to compare different design concepts and how they meet market constraints, ensuring that adaptations do not lead to unnecessary discriminatory practices and keeping the focus on scientifically-based decisions.
To ensure their product is well received, businesses must take into account potential threats to their product from foreign policies or trade restrictions, as highlighted by option D) Developing a successful product strategy. Collectively, these steps lead to a tailored approach to product differentiation and competitive positioning in the target market.