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1.

1 Starbucks Going global fast


1. The controllable and uncontrollable entry barriers
Controllable:

Limited selection of local partners


Pricing policy
Local tastes
Range of products offered on different markets

Uncontrollable:

Legal requirements
Local and global competition presence
Coffee prices on local markets
Starbucks impression
Cultural challenges

2. Major sources of risk facing Starbucks and potential solution


1. Strategy:
Strategy not adjusted to companys maturity level
Low employee morale with deepening staff dissatisfaction
Centralized power and decision-making (Howard Schultz)
Solution:
Allocation of higher percentage of revenues on employees
Increase of staff job satisfaction
Preparation for unexpected Schultz withdrawal
Strategy readjustment
2. Customers:
Growing customer infuriation due to Starbucks predatory real-estate
strategy resulting with too many outlets
Narrow customer target group
New generation not attracted by Starbucks
Solution:
Surcease of predatory real-estate strategy
Market research to address needs of new generation of customers
Stores diversification
3. Growing rivalry:
Worldwide expenditure of other global enterprises such as McCafe
Starbucks lookalikes filling up the Japanese market
Other regional coffee brands on international markets
Solution:

4. Social

Product and pricing strategy adjustment to dynamically growing


competition
Enhanced marketing focus
aspects:
Brand perception problems
Counter globalization movements and behavior
Starbucks products considered unhealthy

Solution:

No usage of unhealthy ingredients


Product positioning as healthy and eco
Market research identifying key image issues
Engagement in local community problems

3. Overall corporate strategy critique

Aggressive attitude towards local entrepreneurs


Disregard of advertisement importance trifling marketing costs
Product and pricing strategy inappropriate to the companys maturity level
Narrow target customer group
Staff dissatisfaction low wages and long working hours
Low job reputation

3. Recommendation for profitability growth on Japanese market

Increase of competitive advantage over lookalikes


Adjustment of coffee and food tastes of Japanese customers
Wisely increase marketing expenditures in terms of existing
development
Launch of official Starbucks social app increasing customer loyalty

outlets

1.2 Nestle: The Infant Formula Controversy


Nestle one of worlds largest food-processing companies with worldwide sales of
over $100 billion has been a subject of an international boycott. In 1974 report has
been published which suggested that powdered-formula manufacturers contributed
to the death of Third World infants by hard-selling their products to people incapable
of using them properly.
The charges included:

Preparation of milk-formula with highly contaminated water (coming from


local laundry and toilet) led to recurring attacks of diarrhea and vomiting

Many parents diluted the formula to stretch their supply or some believed that
bottle itself has nutrient qualities so they merely fill it with water which
resulted with extreme malnutrition
Dramatic decrease in the incidence of breast feeding
Hard-selling mass advertisements in radio and product sampling in hospital,
via nurses and doctors misleading African women of the breast feeding role.

1. Responsibilities of companies in this or similar situations


Their marketing strategy and advertising didnt fit the culture and social issues. This
led to lack of awareness of problems which undeveloped countries were facing. By
lack of customer-centricity and social responsibility Nestle were partially responsible
of deaths Third World children.
2. What could have been done to avoid accusations of killing Third World
babies and still market its product?
We should remember that this situation was many years ago when was different
marketing era. It was the time when marketing was concerned mostly about the
product. In fact the 70s were the beginning of social marketing. From current
perspective we know which factors were the baseline for issue said in the case and
we can outline the actions which could have been done. However, there was
significantly different time when it happened.

Define different marketing strategy for other countries based on the culture,
development level and issues in the society. Before entering the market they
should gain the knowledge about it in order to address and position product in
a right way which wont cause any harmful situation.
Be aware of huge differences between developed and undeveloped countries
not take international markets same as the local one

3. The possible ways of protecting the company in the future

Develop detailed market research of potential new markets so that the


company would gain the knowledge about the environment, social issues and
the culture of the nation we want to do the business. Company must ensure
that marketing strategies and advertising methods fit the culture and social
issues. The enterprise must always think of the impact of their advertisement
on the people behavior. A company must have various marketing strategies
dependent upon the characteristics of the market. Some strategies may differ
from region to region and only be able to use the same strategies for various
countries and/or regions.
Cooperation with the government and national health organization supporting
social responsibility of the company not only when it comes about local
market but also about international markets. Identify major issues, taboo,
policies and beliefs which might have impact on the peoples perception of
offered product.
Advertising strategy must be socially responsible, allowing the promotion of
product in a way which wont have any harmful consequences. Advertisement

must be led in different countries by different approaches which fit the


society, etc.
Education about the product in new markets which will decrease the risk of
misusage which leads to in case of Nestle malnutrition or even deaths.

5. Recommendation for Nestle in terms of HIV infection spread via


mothers milk
With the increased risk of HIV infection being spread via a mothers' milk, Nestl has
an opportunity as a market for formula indeed exists if breast milk isn't feasible.

Cooperation with the governments and health organizations in terms of


showing the commitment to their country. For example, funding the HIV
testing and investing in the education programs about HIV infection and its
consequences as well as the child nutrition aspect. This must lead to product
promotion but in a way as the alternative for breast feeding when the woman
is infected.
Offering testing and samples in less developing countries all the while
knowing how and what issues that society is facing, ensuring these efforts
will make matters better not worse.
Educate the women on diseases that can be passed on to children
(conception, delivery, breast feeding). Educate moms/women on the benefits
of breast feeding when a mom is healthy. Offer tests for moms to determine if
breast feeding is the best option

1.3 Coke and Pepsi Learn to Compete in India


1. The political environment in India has proven to be critical to company
performance for both PepsiCo and Coca-Cola India. What specific aspects
of the political environment have played key roles? Could these effects
have been anticipated prior to market entry? If not, could developments in
the political arena have been handled better by each company?
The political environment have played key role as follow:
Indian government viewed as unfriendly to foreign investors. Outside
investment had been allowed only in high-tech sectors and was almost
entirely prohibited in consumer goods sectors. The Principle of indigenous
available If an item could be obtained anywhere else within the country,
imports of similar items were forbidden. This made Indian consumers had a
little choice of products or brands and no guarantees of quality or reliability.
Indian Laws, the government mandated that Pepsis products be promoted
under the Lehar Pepsi name. For Coca-Cola, they attempted to enter into
Indian market by joining with Parle and became Coca-Cola India
Some of these effects may have been anticipated, especially foreseeing the
corruption within Indian government. Taking that into account more proactively
might have helped Coca-Cola avoid hardships in the past. As far as the
contamination issues goes, that might not have been so easy to anticipate. Both

companies held their own when trying to prove their products were within safe limits
compared to other food products.
They could developments in political arena; Coke could agreed to start new bottling
plants instead of buying out Parle, and thus wouldnt agreed to sell 49% of their
equity.
2. Timing of entry into the Indian market brought different results for
PepsiCo and Coca-Cola India. What benefits or disadvantages accrued as a
result of earlier or later market entry?
Pepsi entered into the Indian beverage market in July 1986 as a joint venture with
two local partners, Voltas and Punjab Agro, forming Pepsi Foods Ltd. Coca-Cola
followed suit in 1990 with a joint venture with Britannia Industries India and then in
1993 aligning with Parle, the leader in the industry.
The primary barrier to Pepsis entry into the Indian market was its political / legal
environment as a result of its history; also, the government mandates that Pepsi
products be promoted under the name Lehar Pepsi within the Indian market.
Despite the CEO of Pepsi said: Were willing to go so far with India because we want
to be sure we get an early entry while the market is developing.
In May 1990, Coca-Cola reenters Indian by means of a proposed joint venture with
local bottling. The primary barrier to Coca-Colas entry into the Indian market was its
political / legal environment. The government turned down this application.
However, Coca-Cola made its return to India by joining forces with Britannia
Industries India Ltd., The new venture was called Britco Foods.
At that time, Coca-Cola would not take market share away from local companies
because the beverage market was itself growing consistency from year to year. This
is disadvantage of Coca-Cola.
3. The Indian market is enormous in terms of population and geography.
How have the two companies responded to the sheer scale of operations in
India in terms of product policies, promotional activities, pricing policies,
and distribution arrangements?
Responses to Indias Enormity
Pepsi and Coca-Cola responded in many ways to the enormity of India in
terms of it population and geography.
Responses to Indias Enormity
Product Policies
Catering to Indian tastes Entering with products close to those already
available in India such as colas, fruit drinks, carbonated waters and waiting to
introduce American type drinks Coca-Cola introducing Sprite recently,
Introducing new products, and Bottled water.
Responses to Indias Enormity
Promotional Activities
Both advertise and use promotional material at Navrartri
Pepsi gives away premium rice and candy with Pepsi
Coca-Cola offers free passes, Coke giveaways as well as vacations
Use of different campaigns for different areas of India
India A campaigns try to appeal to young urbanites

India B campaigns try to appeal to rural areas


Responses to Indias Enormity
Pricing Policies
Pepsi started out with an aggressive pricing policy to try to get immediate
market share from Indian competitors
Coca-Cola cut its prices by 15-25% in 2003
Attempt to encourage consumption to try to compete with Pepsi and gain
market share
Responses to Indias Enormity
Distribution Arrangements
Production plants and bottling centers placed in large cities all around India
More added as demand grew and as new products were added

4. Global localization (glocalization) is a policy that both companies have


implemented successfully. Give examples for each company from the case.
Global + Localization = Glocalization
By taking a product global, a firm will have more success if they adapt it specifically
to the location and culture that they are trying to market it in.
Both companies have successfully implemented glocalization
Pepsis Glocalization
Pepsi forms joint venture when first entering India with two local partners, Voltas and
Punjab Agro, forming Pepsi Foods Ltd.
In 1990, Pepsi Foods Ltd. changed the name of their product to Lehar Pepsi to
conform with foreign collaboration rules.
In keeping with local tastes, Pepsi launched its Lehar 7UP in the clear lemon
category.
Pepsis Glocalization
Advertising is done during the cultural festival of Navrartri , a traditional festival held
in the town of Gujarat which lasts for nine days.
Pepsis most effective glocalization strategy has been sponsoring world famous
Indian athletes, such as cricket and soccer players.
Coca-Colas Glocalization
First joined forces with the local snack food producer Britannia Industries India Ltd.
in the early 90s.
Formed a joint venture with the market leader Parle in 1993
For the festival of Navrartri, Coca-Cola issued free passes to the celebration in each
of its Thums Up bottles
Also ran special promotions where people could win free vacations to Goa, a resort
state in western India
Coca-Colas Glocalization
Coca-Cola also hired several famous Bollywood actors to endorse their products.
5. How can Pepsi and Coke confront the issues of water use in the
manufacture of their products? How can they defuse further boycotts or
demonstrations against their products? How effective are activist groups
like the one that launched the campaign in California? Should Coke
address the group directly or just let the furor subside?

Coca-Cola eventually decide to go on the attack, though indirectly, giving detailed


briefing by executive, who questioned the scientific credentials of their products
accusers.
PepsiCo began a public relations offensive, placing large advertisement in daily
newspapers saying, Pepsi is one of the safest beverage you can drink today.
From campaign in California can be effective in solving the problem and marking
trust in water problem. Coke should the group directly for easy working.
6. Which of the two companies do you think has better longterm prospects
for success in India?
Pepsi
Better marketing and advertising strategies
More widely accepted
More market share
Coke
Government conflicts
Trailing Pepsi in market share
Pepsi will fare better in the long run
7. What lessons can each company draw from its Indian experience as it
contemplates entry into other Big Emerging Markets?
Pepsis Lessons Learned
Beneficial to keep with local tastes
Beneficial to pay attention to market trends
Celebrity appeal makes for exceptional advertising
It pays to keep up with emerging trends in the market
Coca-Colas Lessons Learned
Pay specific attention to deals made with the government
Establish a good business relationship with the government
Investment in quality products
Advertising is crucial

1.4 Marketing Microwave Ovens to a New


Market Segment
ASSIGNMENT
Your task is to develop a strategy to market White Appliances microwave ovens in
India. Include target market(s), microwave oven features, price(s), promotion, and
distribution in your program. You should also consider both short-term and long-term
marketing programs. Some of the issues you may want to consider are:
Indian food preparation versus Western food preparation.
Values and customs that might affect opinions about microwave
ovens.
The effects of competition in the market.

India outlook:
India is the seventh largest country in the world.
India's population is one billion making it the second most populous country
after China.
There are generally more children in a family.
In some places girls do not attend schools and becoming housewives.
The food of India is extremely diverse, as ingredients, spices and cooking
methods.
Other facts:
Indian people prefer cook in kitchen rather than using microwave
The taste of the dishes will be different if cooked by hand manually or by
microwave.
Compare of Indian foods and western foods:
Indian foods

Western foods

Use of various spices, herbs Simple ingredients and put


and vegetables

Wide assortment of dishes and


cooking techniques

substantial
emphasis
on
sauces
as
condiments,
seasonings,
or
accompaniments
Less-simple
cooking
techniques

Microwave is becoming an emerging trend in small towns in India, since the


Indians already get the knowledge how to used microwave daily.
Indians like novelty, so microwaves may replace the demand of goods like
second television or big refrigerators.
Soon, microwave is taking up a key role as one of the daily use home
appliances in Indian homes.

Market segmentation:
Geography
Urban
Suburban
Demography
College graduated or higher
Age 22-40 years old
Income over Rs. 30,000
Lifestyle
Modern cooking
Hurry-up lifestyle
Marketing Mix
Product strategy:
Compact microwave oven: toast and grill function
Modern appearance

Price:

User friendly with less-button


Auto cooking
Multi-stages cooking
Easy-to-clean and rust free
Child safety lock

A little lower to competition, to attract the market in its introductory stage.


But can be adjusted through time, depending on market response (may go
low or high).
Promotion:
Incorporate the use of this microwave oven in a popular cooking show thats
being aired in major cities in India, if not all over the country
Entice the idea in making a promotional ads that everyone can use microwave
to cook good food effortless, which even can man prepare his own food
Demonstrate microwave utilization in major malls or widely known appliance
stores, capitalizing to the products special feature
Place:
Shops / markets
Personal sales

SWOT

Strength
Easy-to-use
High technology
Functional; toasted, grill, heat
Long-term usage
Safety for child
Easy-to-clean
Call center service
After-sale service
Opportunity
Social change (The changing
lifestyles and family structure)
Huge population (1.3 billion)
Labor pool

Weakness
Microwave maintenance cost is
high. (for user)
Lacking brand awareness and
image

Threat
Consumer unclear of other
microwave utilizations for dayto-day cooking.
Competitor intentions

Short term marketing strategy:


To position the product in the market
A little lower pricing to the existing competitor
Highlight on the special feature of the microwave in launching a promotional
ads (cooking shows, mall demos, personalized cooking class, etc.)
Advertising and communicating
Use a known personality to endorse the product

Movie, regular ads, internet banner


Door-to-door marketing in the most populated places in the 7 major cities, to
create awareness that the product exist

2.1 The Not So Wonderful World of


EuroDisney
1992: Paris 310 million people in Europe live 2 hours by plane
Summer 1994: lost 900 million since opening
Cheaper hotel, meal, tickets
French dont go to EuroDisney "American imperialism"
New change to attract: bigger castle, tram from hotel to park
French spend max 2 days against 3 in US.
1996: start to be successful "Disneyland Paris"
They realize it's not a good to make all the US atmosphere (food) but guest need to
be welcomed on basic of their own culture.
Disneyland most famous than Eiffel tower, they learned from mistake
Tokyo made money because Japanese attach to Disney characters.
2005 Disneyland Paris bankruptcy, new invest from government.
CEO ask to open Charles de Gaulle (airport) to more low cost company
Hong Kong: they wouldnt make the same mistake as Paris, take a long time to
analyze Chinese comportment and culture, attitude. No building 4 floor because is a
bad number in china, wait a special date to open the park much better orientation of
park...
Problem: to small park, not so famous in China, limited knowledge, communism area
40 years, big adaptation, special decoration for new year, food in restaurant...

2.2 Cultural Norms, Fair & Lovely and


Advertising
Huge cultural differences between Western and Asian countries while in Western
countries tanning is the rage, in Asia skin lightening treatments are widely popular.
Hindustan Lever Ltd. (now Hindustan Unilever) Fair & Lovely used to be and still is
the top-selling skin lightening cream, followed by its competitor CavinKares
Fairever. Before Fairever was created, Fair & Lovely dominated the market by having
90% of market share. With the introduction of Fairever and its rapid growth, HLL
came up with the series of controversial advertising campaigns which focused on
skin color as a leverage to better social position, finding husband, etc. Skin color is
the powerful theme in India fair skin is connected to higher social status, class and
beauty. Moreover, it focus on men dominance and women passiveness in the society.
AIDWA (All India Womens Democratic Association) is an activist group against the
Fair & Lovely advertising as well as the product. AIDWA lodged the complaint about

three aspect of campaigns: racism, son preference promotion, insulting working


women.
As a result HLL:
Launched Fair & Lovely Foundation encouraging economic empowerment of
women across India by providing resources in education and business to
millions of women
Sponsorship of career fairs in over 20 cities offering counseling in many
careers
Rural scholarships for women students passing their 10 th grade
Professional course for aspiring beauticians
Three-month Home Healthcare Nursing Assistant course offering training for
young women who possess no entry-level skills and therefore are not
employable
Modifications in advertising reworked to enhance your self-confidence
After AIWDA campaigns, Fair&Lovely advertising has change but in fact HLL still
keeps the highest market share and despite the boycott the demand for fairness
creams didnt slow down. In fact the demand is growing 15-20% each year. It has
risen about 43% in last 3 years.
1. Is it ethical to sell product which is only mildly effective?
Yes, in other way there should be no advertisements of any beauty cosmetics
because there is no prove for them to be effective. Promotion is the most important
element of brand positioning so companies should be able to promote their
products. Customer on the other hand are thinking beings which have their own
right to believe in the potential effects of offered product. One will believe that those
product are working, others not but its their own opinion.
2. Is it ethical to exploit cultural norms and values to promote the product?
Yes, international marketing is based on entering new markets with the awareness
about the culture, existing social issues, taboos or other factors specific to each
country. Using cultural aspect while promoting is something normal. Fair & Lovely
didnt create the feeling of being worse when having the darker skin. This existed
much before theyve created the fairness cream. They simply observed what are the
needs of people and controversial social aspect and use it wisely.
3. Fair & Lovely way of promotion
HLL used social taboos and caste issues which exist in Indian society. Theyve
promoted the hope of changing the lifestyle rather than simply promoting how to
use product and potential effects.
4. Will Fair & Lovely Foundation be enough to counter charges AIDWA?
Yes, HLL put lots of efforts to become socially responsible company, which supports
women empowerment. As shown in the case, after AIDWA boycott the market hasnt
declined. It has even risen about 43% in 3 years and is still growing about 15-20%
each year. This shows the demand for fairness creams and for me this means that
people didnt give up on HLL.

7. Now that a male market for fairness cream exists, is the strength of
AIDWAs argument weakened?
Yes, AIDWA postulated about the gender discrimination and unethicality of
promoting that the main qualification for woman to get the job or husband is the
way she looks. While more than 40% of men is using fairness cream, this means that
the skin color is the important issue not only in female Indian population but as well
as the male. Accusing the Fair & Lovely of it is wrong. They simply addressed the
people needs and the demand.

2.3 Starnes-Brenner Machine Tool Company:


To Bribe or Not to Bribe?
Case outlook:
Frank
Frank pays mordidas to get
equipment passed by government
officials.
States business will fail without the
payment of mordidas.
Believes they are not encouraging
bribery to spread but rather just
accepting the Latinos ways of
doing business.

Bill
Bill absolutely opposes the idea of
mordidas.
States business will be successful
without paying mordidas.
To bribe is unethical.

1. Is what Frank did ethical? By whose ethicsthose of Latino or the United


States?
Bribing is not ethical. In this case it is ethical for Frank, because Latino bribery is
seen as normal.
What did Frank not justified, since no matter the part of the world in which they do,
bribery is totally unethical.

2. Are Franks two different payments legal under the Foreign Corrupt
Practices Act as amended by the Omnibus Trade and Competitiveness Act
of 1988?
The first payment of Frank is legal, because as a payment to the chief of the border
workers to expedite the transfer, the statutes concerning the payment of these have
softened.
The second payment to government officials, to repair the machines is illegal.

3. Identify the types of payments made in the case; that is, are they
lubrication, extortion, or subornation?
In both cases, the types of payments are identified subornation because subornation
is defined as someone with corrupt money, gifts or some kind of favor, in order to
get something for that person.
4. Frank seemed to imply that there is a similarity between what he was
doing and what happens in the United States. Is there any difference?
Explain.
Frank says that when you have big dinner parties where different treatment or close
businesses and stakeholders pay the bill, is a tipe of bribery.
The difference is that in the U.S. these are normal business dinners and Latino
bribes are large amounts of money being paid directly.
5. Are there any legal differences between the money paid to the
dockworkers and the money paid the jefe (government official)? Any
ethical differences?
Yes, there are legal differences. First, the payment to a government official is illegal,
while bribery dock workers is considered legal under Foreign Law on Corrupt
Practices.
If we analyze the ethical part, there aren't differences, because it evades honesty
and in both cases there is bribery.
6. Franks attitude seems to imply that a foreigner must comply with all
local customs, but some would say that one of the contributions made by
U.S. firms is to change local ways of doing business. Who is right?
The reality of the world tells us that when we enter or do business in other countries,
we must know their culture, their traditions, their profile negotiator, among other
things. This doesn't mean that we have to mold it entirely. There is a difference
between adapting to certain rules or customs and depend or be enslaved them.
U.S. companies are trying to establish a new business system, without bribery and
honest practices, regardless of whether the country you're working with is illegal
working methods, make use of bribes and this is seen as normal.
Ethics must be above everything.
7. Should Franks behavior have been any different had this not been a
government contract?
Franks attitude would have been different, as with any client, ethical principles
should be the same. Bribes not be admitted under any circumstances.
8. If Frank shouldnt have paid the bribe, what should he have done, and
what might have been the consequences?

Frank had to wait for American mechanics or find another solution within the same
country. If I had done this, you probably would have lost the client and their profits,
but had established a more clean and proper business conduct.
If Frank shouldnt have paid the bribe, what should he have done, and what might
have
9. What are the company interests in this problem?
Within the policies of the company there is no possibility of bribing, but if this
happens, as in the case of Frank, former president of the company preferred to skip
this, because he gave more importance to the profits it was generating Frank, no
matter how it was generated.
10. Explain how this may be a good example of the SRC (self reference
criterion) at work.
Frank has a reference about himself and his way of manage the business, and he
thinks that he is the best doing his job and that the others are wrong, but he doesnt
know that he is making a mistake doing the things without ethics.
This is a perfect example of the SRC, because he closed his view to himself and
nothing else, and belittles the work of the other people.
11. Do you think Bill will make the grade in Latino? Why or why not? What
will it take?
Bill will succeed in Latin as honest working methods establish and implement the
strategy that worked well in the United States. He will need strong strategies based
on cost or differentiation to compete healthily without bribes.
12. How can an overseas manager be prepared to face this problem?
Any manager that aims to work abroad in the future, you will need excellent
training. This training should address issues such as practices, norms, lifestyles,
culture, etc.., the country where you are going, so that when exercising, that person
can know what will face problems and scenarios. Your skills and abilities will give you
the tools to resolve conflicts that may arise.

2.4. Ethic and Airbus


1. In each of the cases described, who benefits and who suffers from the
alleged ethical and legal lapses of Airbus?
Suffers taxpayer and consumer but also Boeing because they are coming back
with fair offers and those are getting rejected because they are not giving kickbacks.
Benefits middleman, government officials and Airbus.
2. How should the public relations staff at Airbus respond to the articles
appearing in The Economist , The Guardian , and Reuters News?

3. What steps might Boeing take to defend itself from this sort of
competition?
U.S. Commercial services frequently aides businesses attempting to compete in
foreign markets conducting un fair business practices. The US government needs to
step up nad help Boeing with contracts.
4. Do you think that Boeing and Airbus behave differently in marketing
their aircraft around the globe? How and why?
Yes, Boeing does not give in to bribery to win contracts, from the way this article
sounds. Airbus does nothing but give out bribes and kickbacks to win contracts. The
article makes the point that Airbus has more attractive range of planes yet Boeing
frequently comes in at a lover bid.
5. Had France adopted the OECD convention on bribery ahead of these
transactions, would the firms behavior have differed? Why?
Yes, had France adopted OECD earlier these middlemen

2.7 McDonalds and Obesity


30 percent young fat in US, we have to take care!
American child sees 10000 food ads a year, mostly for high fat
Junk food
Country realized it, they create law against fast food (France, UK ...)
McDonalds answer: try to be healthier. No salt in fries, less ads, change color of logo,
propose bag of fruits for children...
We all know McDonalds and bad effect (super-size me)

3.1 International Market Research at Mayo


Clinic
1. Outline the market research which needs to be done in order to support
the growth strategy
Step 1: Definition of the problem
Existing customers:

Determine current satisfaction level of patients and factors that cause


satisfaction or dissatisfaction
Perception of doctors, medical technology, nursing care, physical facilities,
management and ethics
Perception of Mayo Clinic

New potential markets:

Perception of health insurance, medical care (public and private) in different


markets
Perception of doctors, medical technology, nursing care, physical facilities,
management and ethics
Satisfaction or dissatisfaction of medical care services
Local competitors as well as local pricing of medical care services

Step 2: Development of the approach to the problem


Quantitative and qualitative research based on data about potential market. Each
potential market should be evaluated separately and in the end compared within
group so that the most profitable markets could be chosen. Moreover, another
market research should be organized for local market which will be focused on
increasing satisfaction of existing customer as well as definition of new potential
target groups.
Step 3: Formulating a research design
Gather the relevant data from secondary or primary sources, or both. Mayos
International Marketing Department should analyze available secondary information
as a useful first step. Information required ranges from the general statistical data to
understand target markets preferences in the healthcare industry to specific market
information about media and other efficient means of delivering information to the
target market for decisions about promotion. To find out which countries value the
US health care highly and where Mayo Clinic services may have a competitive
advantage over local ones we should conduct a multicultural research. It involves
countries with different languages, economies, social structures, behavior, and
attitude patterns towards taking care of their health. There are many studies
conducted and statistical documents available online for the secondary dada
research. These data are more widely available because they are commonly
reported by the United Nations and other international agencies. Once

approximations for health trends and preferences are established, Mayo will have
more understanding of what additional primary research is needed.
Step 4: Doing fieldwork and collecting data
In order to ensure the best quality, two methods of market research are
recommended to be used: quantitative and qualitative. Primary research will be
conducted by focusing on one country at a time and using native speaking research
agents. Outside vendors who know the culture and the language will be necessary
due to cultural differences that may lead to unwillingness or inability to participate,
collect, or interpret responses if surveys are conducted by US marketers. The main
goal is to gather as much cultural and historical information about our target
market. While conducting a survey the target market has to be a random sample in
a specific sample frame. This way every population member will have an equal
chance to be surveyed. This is a key of having a true random sample and avoiding
bias.
It is also recommended to conduct research about the local health providers and
availability of resources to treat the common and rare diseases found in such
countries. Qualitative data will be collected to find out preferences and criteria
people look for in a good health provider in their home country and whether they are
satisfied or not.
The primary research will be gathered by means of mail and email surveys, focus
groups, personal phone and face-to-face interviews, as well as direct observation of
people in clinics and insurance offices. The methods will vary according to customs
and cultural differences among countries.
Step 5: Preparing and analyzing data
After conducting and processing research, Mayo Clinic researchers should analyzed
gathered data. Analysis of the quantitative data should deliver insight into obtain
specific
responses
regarding
aspects
of the respondents behavior, intentions, attitudes, motives and demographic
characteristics. Quantitative research provides the marketer with responses that can
be presented with precise estimations. Qualitative research with open-ended or indepth, and unstructured responses reflects peoples thoughts and feelings on the
subject. The purpose of the research is to formulate and define problem or situation
more clearly and to determine relevant questions to be examined in subsequent
research. It is also used to stimulate ad message ideas and where interest centers
on gaining an understanding of a market.
Step 6: Preparing and presenting the report
Based on the results of analyzed data, the final report documenting the market
research should be prepared. The report should include description of the research
methodology, data gathering process overview as well as the results and
conclusions. Once all the research is collected, processed, and conclusions are
drawn; the Mayo Clinic marketing department can decide on the best strategy to
build awareness and, potentially, increase its international sales revenues.

3.2 Swiffer, higher, stronger, dearer.

Sport and advertising, crazy prices...


Sport special quality that make it unlike almost any other sort on TV program
Watch sport on live no replay
Sport became an essential part of business strategy of television channel.
US TV right 20 billion a year
Big money because big audience (super bowl) AND targeting on people who
watch sport: young men with cash to spend!!
BEER, cars, new TV full HD.....
Highest concentration of young people
Winner take all ex David Beckam, he made almost half of his fortune with
advertisement.
So big business they want create some special "super league" to create new
event too make even more money!!!!

3.3 Marketing on the bottom of the pyramid


Poor people not considerate because of money, but poor people easy to influence
with money, ex: ITC India, go to farmer, long work but now acquire
Motorola special phone cheap phone 500 h battery for people without permanent
electricity.
BOP require creative financing
CEMEX give furniture cheap and customer build themselves
ICICI bank: bank for poor but efficiently, group of support, help each other
BOP market require effective distribution.
Unilever: 1000 shaki-amma (comon way to traveling) to distribute to small villages,
poor but cheap distribution so cheap price... today 1300 poor women are selling
unilever product to 50000 villages in 12 states of India.
BOP market require affordable packaging.
Sales women ex: in Africa they sell you ice-cream cheap because the packaging is
nothing, really basic, Nestle in China
BOP market create health benefits
Action from World Health Organization supporting by Hindustan Lever Company
against soap problem
HLC make a sensible campaign to village to prevent them against soap problem
(soap in river...)

3.4: Continued Growth for Zara and Inditex

Basic stuff: "fast fashion" 2 week delivery, take example on haute couture, cheaper
faster, 2 week delivery
Pression on customer if you dont buy it know tomorrow too late. And it is working!
No promotion only placement (in 4P marketing-mix)
2008: grow fast, lots of new opening shops around the world but problem is that now
Inditex need to slow down because cost too high -> cut cost, more flexibility
working time, more efficient "no time out"
Contract with airplane company, cargo plan, cheaper
2009: 7.6 percent decline profit. 1st half of year.
Really difficult to sell online but they will do it in Europe thanks to first big logistic
challenges
Result sales increase again, Inditex continue to grow up and open new shops.
They are thinking about creating the application.
Inditex, founded by Amancio Ortega, operates six different chains: Zara, Massimo
Dutti, Pull&Bear, Bershka, Stradivarius, and Oysho. Since 2003 and 2008, Inditex has
added Zara Home and Uterque to its collection. The retail chains were meant to
operate as separate business units within a structure, which included six support
areas and nine corporate departments.
Main competitors: H&M and GAP
1. What are the ways that Inditex ensures that fast fashion is truly fast?
Inditex ensures that its fashion is fast through its supply chain efforts. They have
created new methods to enable store managers to order and display merchandise
faster and added cargo routes for shipping goods. The company ships clothing
straight from the factory to stores and makes two-thirds of its goods in Spain and
nearby countries, compared to most competitors who manufacture most of their
clothing in Asia. Inditex has their sales managers monitoring computers, which are
reporting sales at every store around the world. When a garment does well or fails,
they are able to quickly tell designers if they need to come up with new ideas. They
also have generated in house store fronts where they develop new marketing
promotions every two weeks.
2. What are the important attributes of a fast fashion retailer to
customers? To store managers?
Retailer to costumer:
Give new product fast to shops;
Stocked stores with new designs twice a week;
Ship clothes straight from the factory to stores to improve product availability;
The important fast fashion attributes to the customer is that the retailer is
providing the latest fashion to them as soon as it comes out. They want to make
sure that they are getting the latest trends first and that they are not buying out
dated clothing. It is also important to the customer that the retailer has what they
are looking for when they come. They do not want the retailer to be out of stock
every time they come in. If they are out of stock, the attribute of having their
suppliers close to the retailers means that they would be able to re-stock their
merchandise fairly quick.
Retailer to store managers:
Have information about rate of sale of new collection as fast as possible;

New collection has labels in time of arrival (to make fast identification and
hang on store) ;
Store managers use hand-held computers that show how garments rank by
sale, so clerks can re-order bestsellers in less than an hour.

4. Briefly describe five opportunities for continued growth during the next
five years for Zaras parent, Inditex, SA.
Launch stores in the Americas along with establishing new distribution
centers. The same as with China and Russa.
Focus on online expansion.
Expand aggressively into international markets.
Continue to find creative ways to keep the stores looks fresh.

4.1 Tambrands Overcoming Cultural


Resistance
1. Tambrands wisdom of becoming Procter & Gamble
Tambrands: no capabilities for international growth, lack of infrastructure for global
distribute, no brand awareness in potential markets
P&G: large international distribution network, global marketing capabilities,
knowledge about different markets, brand awareness in other countries
Procter & Gamble buyout of Tambrands will allow them to position them again in the
tampons market. For Tambrands global distribution and international marketing
capabilities as well as the infrastructure and deep customer knowledge of P&G was
the only possibility for international growth. Without the decision about joining the
P&G company Tambrands with its narrow infrastructure and lack of brand awareness
wouldnt be able to go global. Obviously there are some negative aspects for
Tambrands about joining the big international company but it brings rather more
opportunities and leverages P&G strengths. Before approaching P&G for the buyout
Tambrands has analyzed their capabilities in terms of global expansion with clear
statement: Tambrands could not continue to be profitable if its major market was
the U.S. and that to launch a global marketing program was too risky to do it alone.
2. Tambrands marketing strategy of marketing each cluster in similar way
The goal of the segmentation is to create customer-centric strategy. However,
Tambrands marketing strategy doesnt seem to follow the main objective
segmentation. Although they have adjusted the communication the certain clusters,
they seem to follow one type of advertisement. Their marketing costs covering
advertisement is around $65 million. Tambrands segmentation showed that clusters
are much different between each other when it comes about the attitude towards

tampons usage. This segments should be targeted in a different way (not only by
different communication).
P&G should used Tambrands knowledge about clusters and apply it to their
educational programs. There should be organized deeper research in terms of
creating more tailored educational programs. Moreover, those programs should take
into consideration the country development status, cultural differences and touchy
subject within the feminine hygiene products in certain countries.
3. Cultural resistance in identified clusters
Cluster 1: United States, United Kingdom, Australia already use tampons and
many feel they know all they need to know about the product
Resistance: women feeling that they know all that should be known about the
product (not exactly it has to be true)
Approach: promotional actions which aims about testing the knowledge about
tampons and later giving them brochures which will extend women knowledge
Cluster 2: France, Isreal, South Africa about 50% use tampons, some concerns
about virginity remain and tampons are often considered as an unnatural products
that block the flow
Resistance: concerns about virginity issues as well as the consideration about the
product as an unnatural
Approach: Educational programs increasing knowledge about the product as well the
virginity
Cluster 3: Brasil, China, Russia tackling the virginity issues, lack of knowledge of
about how to use tampons
Resistance: lack of knowledge how to use the product as well as the concern about
virginity issues
Approach: Educational programs increasing knowledge about the product (technical
aspect of how to use it) as well the virginity
4. The approach that can be used to reach the goal of marketing each
cluster in similar way
Out of the approached identified in the exercise 3 there is no universal approach
which would fit all the issues form different clusters. Moreover, cluster 2 and cluster
3 might be educated in a similar way which will include educational programs coping
with lack of knowledge how to use tampons, women attitude towards product (as an
unnatural one) as well as the virginity aspect. However, mentioned above approach
cannot be applied to the cluster 1 which is characterized by rather good knowledge
about the product as well as high rates of usage.
5. P&G marketing strategy in Venezuela with its Mexican model

Generally P&G model includes educational problems which are the base for position
tampons in the market. Product which are used for hygiene and also are connected
to touchy issues should be promoted with special programs which not only attract
people to buy but also educate people on the product usage. Reopening the
Brazilian market should also use the educational programs although market research
should be organized before the launch of those programs. Mentioned research
should cover the issues specific for the Brazilian market and later be the base for
creation Brazilian-centric educational program.

4.2 Iberia Airlines Builds a BATNA


1. Negotiation strategies and tactics of key executives involved
IBERIA AIRLINES (Dupuy) Iberias chief financial officer and the man who led its
search for well-known airplane manufactures participate in a real horse race while
negotiation. Excellent skills and professionalism of Iberias Dupuy who appears to
have played the game to perfection. His critical task was to strengthen his BATNA
(best alternative to a negotiated agreement). It had been a long time since Iberia
had bought Boeing aircraft. He went to great lengths to bring the Boeing executives
into the bidding contest, including offering to fly the 14 hours to Seattle. Another
brilliant move was to bring the used Singapore Airlines 747s into consideration. He
had also done a good job during the 1995 (another bad market year for aircraft
manufacturers) negotiations with Airbus by including the resale price guarantees.
Dupuys strategic and manipulation skills led to hit the price target during
negotiation between Airbus and Boeing.
AIRBUS (Leahy) Airbuss top salesman determined to finally reach the global
domination over Boeing, eager to do whatever it takes to get the advantage over
Boeing. During the negotiation he used the argument that Airbus ensure better
investment return due to less expensive price and its similarity to other Iberias
planes. His determination led to win the bidding. However, he gave away too much
in price which might have negative consequences later. After the end of negotiation
he faced the fact that Iberia has neglected the confidentiality agreement about price
guarantees. During the negotiation he talked also about disadvantages of Boeing
not only about the advantages of Airbus which seems to be ethical. Leahy even
disturbed family holidays when he got frustrated. In order to win the deal, he
constantly cut the price finally reaching the Dupuys demand.
BOEING (Bright) chief salesman for Europe which after the Dupuys invitation to
bidding was eager to sign the contract with Iberia which would help Boeing to stem
the tide. He pitched the Boeing airplanes as the revenue machine based on the
more seats as well the lower operating cost. Hes an aerospace designer which felt
that Boeing planes are undervalued because of Dupuys price demands. Due to the
Boeing strategy he didnt offer any resale values guarantees. He has proper
negotiation skills which focus on bringing the advantages of Boeing planes rather

that criticism of the competitor. He showed the commitment to the bidding by


eventually lowering the price go all out to win this bid. Bright at the end of
bidding showed the negotiation aggressiveness by cutting the price so it could hit
the price target. In the end they lost the deal and Bright made the statement that he
hasnt been able to hit Dupuys numbers.
2. Overall aircraft makers marketing strategy
Airbus and Boeing are competing for market share through price cuts. In a volatile
industrial market this guarantees major advantages in the bidding process. We, of
course, cannot and would not advise collusion between the aircraft manufacturers.
But, both firms would be better off with less aggressive price discounting. A good
marketing strategy would explore other avenues for winning industrial accounts
such as: after-sales service, guarantees, staff training etc.
3. Key factors which ultimately sent the order to Airbus
One of the main factors were in fact the strong personal and political relationships
between the top executives at the European firms clinched the deal. This
emphasizes the great importance of relationship building in the business. Moreover,
Airbus hit the Dupuys price target and agreed to most of Iberias terms of asset
guarantees, maintenance cost limitation and attractive financing terms. Leahys
determination to win edged out Boeings aggressive package.
4. Iberia is once again on the market for jet liners. How should Bright
handle a new inquiry
The question is whether to win the deal by lowering the price to the edge were the
deal might no longer is profitable. Bright should stay in line with general Boeing
practices by which they have lost the deal with Iberia. However, they might search
for different deals which dont require that much price competition during the
bidding but the focus is rather on quality, assurance and planes probable revenues.

4.4 National office Machine - Motivating


Japanese salespeople: Straight salary or
Commission?
National Offices Machine NOM

leader in US, already implant in UE


leader in US with "successful and aggressive sales"

Nippon Cash Machine NCM

huge company in Japan

Nippon/America business Machine Corporation NABMC

NOM propose to NCM to work together

NOM invest on NCM: multiplication by 2 salesforce in a year managing by NOM


personal.
New salesforce must be young and Japanese.
Management problem cultural HR: Nippon way VS US way!!!
Nippon: foundation on Japanese management, spending life time with employees,
promotion through seniority, single company union, NEVER dismissal even if no work
to do, passive attitude, work for life, 9 am to 5 pm, open space, accommodation,
pension at 55 years old.
US: Data analyze, optimization, every time new product, everywhere to make more
profits, salary ++ good job, bonus ++.... "Competition each other"
NOM start implementation; push to creative talent, best seller....
People change their mind, few years ago western companies was place to avoid,
today student want it

4.6 Making Socially Responsible and Ethical


Marketing Decisions: Selling Tobacco to
Third World Countries
1. The ethical and social responsibility implications of the situations
described

Different tar levels in cigarettes which are the base of unethical treating
undeveloped countries U.S. 17mg, Kenya 22.3mg, Malaysia 29.7mg, South
Africa 31.1mg
Candy-flavored cigarettes advertising focused on youth which might lead to
increase of smoking teenagers
People in developing countries dont have a long enough life expectancy to
worry about smoking-related problems - representative of tobacco company

Generally, tobacco advertising isnt a bad thing. However, due to the specific issues
connected to the cigarettes tobacco companies should follow the corporate social
responsibility in their strategies. This means they should check whether their
marketing strategies and promotions activities dont have negative consequences in
terms of immoral target groups, lack of awareness about the health problems
related to smoking. Tobacco companies shouldnt be banned to promote their

product but surely there should be some restrictions (like no smoking ads on hours
were cartoons are shown in TV or on the child channels). Moreover tobacco
companies should treat all people equally this means equal level of tar substances
in cigarettes for all countries. Different level of tar in cigarettes show violation of
human rights in terms of equality and racism.
2. The alternative strategy for tobacco companies

Stop targeting youth and sponsoring child events


Clear and visible message with health warning
Campaigns and educational programs increasing health issues concerning
smokers
Equal tar level in cigarettes for all countries

3. The U.S government supporting U.S tobacco companies interests abroad


From the economical point of view, tobacco business generates for governments
high amounts of money. Considering the value of that business, U.S. government
should be supporting the international presence of U.S. tobacco companies.
Governments should also take care of the people well-being. Generally, cigarettes
are legal and shouldnt be banned. Everyone has their right to do what they want,
including smoking. However, governments while supporting tobacco international
expansion should also monitor the quality of cigarettes as well as the promotion
activities so that smoking wouldnt be advertised to youths, etc.
4. Should the company be forced to stop marketing a product which is not
illegal such as cigarettes?
No. Everyone has rights to decide on their own what they want to do. There are
many legal, a bit harmful things but customers have their own will so they are able
to choose if they want to buy it or not. Considering marketing issues, I think that
those companies should have the possibility to promote their product but it should
be done in socially responsible way and the most ethically as it can be.