Discussion Questions

1. Define strategic planning. How does strategic planning for international marketing
differ from domestic marketing?
Strategic planning is a systemized way of relating to the future. It is an attempt to
manage the effects of external uncontrollable factors on the firm's strengths,
weaknesses, objectives, and goals to attain a desired end. Further, it is a commitment of
resources to a country market to achieve specific goals.
The principles of planning are not in themselves different between international and
domestic marketing, but the intricacies of the operating environments of the MNC (host
country, home, and corporate environments), its organizational structure, and the task of
controlling a multicountry operation create differences in the complexity and processes
of international planning. Strategic planning on an international level allows for rapid
growth of the international function, changing markets, increasing competition, and the
ever-varying challenges of different national markets. The plan blends the changing
parameters of external country environments with corporate objectives and capabilities
to develop a sound, workable marketing programme.

2. Discuss the benefits to an MNC of accepting the global market concept.

Economies of scale in production and marketing are the most frequently cited benefits.
Black & Decker Manufacturing Company (electrical hand tools, appliances, and other
consumer products) realized significant production cost savings when they adopted a
global strategy. They were able to reduce not only the number of motor sizes for the
European market from 260 to 8 but also 15 different models to 8.
The savings in the standardization of advertising can be substantial. PepsiCo has saved
an estimated $10 million per year by using the same film for TV ads in individual national
markets.
Transfer of experience and know-how across countries through improved coordination
and integration of marketing activities is also cited as a benefit of globalization. Unilever,
N.V., successfully introduced two global brands originally developed by two subsidiaries.
Their South African subsidiary developed Impulse body spray and a European branch
developed a detergent that cleaned effectively in European hard water.
Another benefit derived from globalization is a uniform global image. Global recognition
of brand names and/or corporate logos accelerates new product introductions and
increases the efficiency and effectiveness of advertising. Uniform global images are
increasingly important as satellite communications spread throughout the world.
Establishing a brand image in emerging markets is an important strategy as these
markets evolve. In many of the emerging markets, assurance of product quality is
difficult for the consumer to attain. Without institutions such as Underwriters Laboratory,
FDA (Food and Drug Administration), and Good Housekeeping seals or merchandise
return policies to use as proxy variables for quality, safety or protection against faulty
products the consumer must depend on the reputation of the merchant and the brand
name.
Control and coordination of operations is another often-mentioned benefit of
globalization. It is easy to imagine the difference in controlling one or two worldwide
advertising projects in 40 countries versus 40 different country-specific advertisements.
The same quality standards, promotional campaigns, product inventories, and spare
parts inventories are easier to control and manage with a global strategy than with a
multidomestic strategy.

3. Define the concept of quality. How do the concept of quality and TQM relate?
Quality and TQM should be one and the same. Quality is the delivery of a product that
meets the standards the customer dictates. TQM is the management process that
ensures that quality is delivered to the customer.
For many companies, quality is defined internally from the firm's view and is measured in
terms of compliance with predetermined product specifications or standards, and with
minimum defects. This concept works if the specifications meet the needs of the market
and if the product is delivered to the customer in a manner that fills the customer's
needs. The assumption is that a product conforming to exact standards is what the
market wants. There is, however, some evidence that quality viewed from within a
company may result in "quality for quality's sake" and yet not fully meet customer
expectations of a quality product.
Defining quality as customer satisfaction means the marketer must continually monitor
the customer's changing requirements as well as competitive offerings and adjust
product offerings as needed, since the customer evaluates a company's product relative
to competing products. Your product may be the "best engineered" in the market with
zero defects, but if it does not fulfill all your customer's expectations as well as a
competitor's does, the competition wins.

4. Cost containment and technological improvement are said to be the basis for
competition. Why? Discuss.
Global competition is placing new emphasis on some basic tenets of business. It is
reducing time frames and focusing on the importance of quality, competitive prices, and
innovative products. Expanding technology is shortening product life cycles and creating
greater opportunities for innovative products. A company no longer can introduce a new
product with the expectation of dominating the market for years while the idea spreads
slowly through world markets. Shorter product life cycles mean that a company must
maximize sales rapidly to recover development costs and generate a profit by offering its
products globally. Along with technological advances have come enhanced market
expectations for innovative products at competitive prices.
As global competition intensifies, profit margins are squeezed. To stay profitable,
companies need to find ways to keep costs within a range that permits competitive
pricing. Global sourcing, a major driving force behind companies producing goods
around the world, is used to minimize costs and risks. It is rapidly becoming a
prerequisite to competing in today's marketplace.
Lower costs are not the only advantage to global sourcing; flexibility and dependability
are also important benefits. Worldwide sources strengthen the reliability of quality and
supply. Companies can achieve technical supremacy by securing access to innovative
technology from offshore sources and, perhaps, prevent competitors from obtaining the
technology as well. The uniqueness of a company's needs and their availability lead a
company to source globally. To establish a foothold in markets that might otherwise be
closed, companies may source some goods to comply with a country's local-content
requirements.

5 What is meant by positioning? Explain!

Positioning is not what you do with the product, but what you do to the customer’s mind.
The better you understand the mind, the better you understand how positioning works.
This means that companies are battling to capture the minds of the customer. This task
has become more difficult due to an overload of information and communication by
companies and other organisations such as Green Peace and WTO. The market is no
longer responsive to old strategies due to the fact that there are simply too many
companies, too many products and too much communication/information in the market.
The most effective way of positioning a company/product is to know your customer
segment and concentrate on understanding this target group and create an image that
matches with their needs/wants. Advertising is only one way to communicate with
customers; companies communicate with their markets in many ways. Positioning is
thus considered a systematic way to find a window into the customer’s mind. It has to be
done at the right time and under the right circumstances. Moreover, it has to be done
constantly and consistently. Companies such as Sony and Gillette try to position
themselves as most innovative and leaders in their industries, and they have
consistently tried to do that through communication.

6. Explain the three points that define a global approach to international marketing.
As discussed in an earlier chapter, there is still debate about the extent of global markets
today. A reasonable question concerns whether a global marketing strategy is possible
only when a completely standardized marketing mix can be achieved. Global marketing
strategy and the globalization of markets are two separate although interrelated ideas.
One has to do with efficiency of operations, competitiveness and orientation, the other
with the homogeneity of demand across cultures. A global marketing strategy can be
cost effective and competitively advantageous without absolute homogeneity in global
market demand when standardization across markets is sought. There are at least three
points that help define a global approach to international marketing: 1) the world is
viewed as the market (that is, sets of country markets); 2) homogeneous market
segments are sought across country market sets; and, 3) standardization of the
marketing mix is sought wherever possible but adapted whenever culturally necessary.

7. Branding is considered a part of strategy – discuss how valuable branding is for a

consumer products company – give examples!
Library project.

8. What is the importance of collaborative relationships to competition?

The competitive environment of international business is changing rapidly. To be
competitive in global markets a company must meet or exceed new standards for quality
and new levels of technology. There is an increasing change of pace for product
development and profitability. Cost efficient, technologically advanced products are
being offered by competitors and demanded in established markets as well as in
markets rising from formerly Marxist-socialist economies. Opportunities abound the
world over, but to benefit, firms must be current in new technology, have the ability to
keep abreast of technological change, have distribution systems to capitalize on global
demand, have cost-effective manufacturing, and have capital to build new systems as
necessary.
The accelerating rate of technological progress, market demand created by global
industrialization and the creation of new middle classes will result in tremendous
potential in global markets. But, along with this surge in global demand comes an
increase in competition as technology and management capabilities spread beyond
global companies to new competitors from Asia, Europe, and Latin America. Although
global markets offer tremendous potential, companies seeking to function effectively in a
fragmented global market of five billion people are being forced to stretch production,
design/engineering, and marketing resources and capabilities because of the intensity of
competition and the increasing pace of technology. Improvements in quality and staying
on the cutting edge of technology are critical and basic for survival but often are not
enough. Restructuring, reorganizing and downsizing are all avenues being taken by
firms to strengthen their competitive positions. Additionally, many multinational
companies are realizing they must develop long term, mutually beneficial relationships
throughout the company and beyond to competitors, suppliers, governments, and
customers. In short, multinational companies are developing orientations that focus on
building collaborative relationships to promote long-term alliances and they are seeking
continuous, mutually beneficial exchanges.
The environment facing multinational companies demands flexibility, quality, cost
containment, cutting edge manufacturing skills and a rapid response to market changes
to sustain a competitive advantage. The strengths and capabilities a company must
have to be a major player are enormous and few companies can cover all the bases all
of the time. To shore up weaknesses, companies are entering relationships with others
to share what each does best whether in marketing, research or manufacturing.
Collaborative relationships are becoming a common way to meet the demands of global
competition and a successful collaboration means that each achieves more together
than either can accomplish alone.

9. Discuss what is meant by Relationship Marketing and how it does differ from
traditional marketing.
Relationship Marketing is the category of collaborative relationships that focuses on the
marketing process. Like all relational collaborations, relationship marketing has as its
focus the creation, development, and support of successful relational exchanges
throughout the marketing process. The ultimate goal is to achieve a competitive
advantage by establishing long-term, mutually beneficial associations with loyal, satisfied
customers, which means repeat sales and referrals, and thus, market share and revenue
growth. A consulting company study estimates that a decrease in customer defection
rate of 5 percent can boost profits by 25 to 95 percent. The adage that 20 percent of
your customers account for 50 to 80 percent of your profits has some merit. It has
always been good business to focus company resources on the best customers rather
than those who are strictly price shoppers. Relationship marketing strengthens that
focus.
To build a sustainable relationship with customers, businesses are changing their
attitudes toward internal relationships and between themselves and traditional
competitors, suppliers, distributors, and retailers. It becomes a matter of working with
customers and all others involved, to produce goods that best serve the customers'
needs.

10. In phases 1 and 2 of the international planning process, countries may be dropped
from further consideration as potential markets. Discuss some of the conditions in each
phase that may exist in a country that would lead a marketer to exclude a country.
In phase one of the planning process, there are a host of reasons why a country would
no longer be considered. On balance, those countries that do not offer sufficient
potential for further consideration will be eliminated. Some of the reasons why this may
occur are that product acceptance within the country could not be achieved without
extensive investment and new product development, and the firm does not have
sufficient resources to make that investment; the legal structure may be such that it
would be impossible for the company to function within that country. Competition in the
country is such that, based on the company's objectives, resources, etc., it is felt that it
would not be a profitable venture. In other words, any problem that would lead to
minimum market potential, minimum profit, minimum return on investment, unacceptable
competitive levels, unacceptable political stability, unacceptable legal requirements, etc.,
may all lead to the dropping of a country.
While the major reasons for dropping a country in phase one centre around general
environmental constraints, the reasons that a country may be dropped in phase two
center around the more specific questions of what cultural environmental adaptations
are necessary for successful acceptance of the company's marketing mix, and will
adaptation costs allow for profitable market entry. In phase two, the marketing mix is the
focal point of analysis. Still, the final determination of whether or not a country is dropped
depends upon the anticipated profitability of the market after necessary adaptations are
made.

11. Assume that you are the director of international marketing for a company producing
refrigerators. Select one country in Asia and one in Europe and develop screening
criteria to use in evaluating the two countries. Make any additional assumptions about
your company that are necessary.
This is a library-type project. Whatever the details of the screening criteria, the major
points that should be considered are: (1) company objectives and goals, (2) product-use