Jhan_12

Chapter Twelve Global Products : 

Chapter Twelve Global Products MKT568 Global Marketing Management Dr. Fred Miller 3-1

Sample Essay Question : 

Sample Essay Question HerbalGlow is Korean producer of natural skin care products. The firm wishes to build upon its success in Asian markets by expanding to Europe, North and South America. Identify and describe the three general international marketing strategies. (6 points) For each element of the marketing mix (product, price, promotion and distribution), identify and describe one benefit of a global strategy and one constraint to implementing such a strategy. (12 points) Which of the three general marketing strategies do you recommend to HerbalGlow? Explain why. (2 points)

Marketing Strategy Options : 

Marketing Strategy Options Multidomestic strong cultural influences, localize and adapt Global similar buyer preferences, global customers/competitors Globalized localization integrate sourcing, production and marketing seek balanced growth coordination of marketing across countries globalize as much as possible, localize when necessary

Multidomestic versus Global Markets:Key Differences : 

Multidomestic versus Global Markets:Key Differences Exhibit 11.1

A Multidomestic Industry : 

A Multidomestic Industry

The Value of Global Brands : 

The Value of Global Brands Take the Ten Second Brand Test

The Value of Global Brands : 

The Value of Global Brands What brands do you remember? American Express Wall Street Journal McDonalds Nike Coke Perrier Mobil Phillips Haagen Das 3M Daily Telegraph Honda Motorola Johnson and Johnson Hertz Levi’s Mars Seven Up Campbell’s Sony Rover Kellogg’s British Airways Apple IBM Michelin Dell Club Med What brands do you recognize?

Globalized Localization: Coca Cola : 

Globalized Localization: Coca Cola

Globalized Localization: McDonald’s : 

Globalized Localization: McDonald’s

Standardization and its Problems : 

Standardization and its Problems Standardization advantages: cost, customer preference, quality, global customer/segments disadvantages: off-target, lack of uniqueness, protectionism, local competitors Globalization limits and pitfalls limits:industry, resource, marketing mixes pitfalls: research, over-standardization, poor follow-up, narrow vision, rigid implementation Localization vs Adaptation

The Tradeoff Between Standardization and Adaptation : 

The Tradeoff Between Standardization and Adaptation 12-2 Fully standardized Exhibit 12.1 Fully adapted Incremental manufacturing cost Combined costs Cost of lost sales

Strong Local Brands : 

Strong Local Brands

Global Brand Management : 

Global Brand Management Developing new global products idea generation preliminary screening concept research – focus groups, concept testing, target research sales forecast test marketing Globalizing successful brands diffusion factors – advantage, compatability, perceived complexity, trialability, observability globalization potential-sensible, favorable, available, complement, regional changeover tactics - fade, axing, forewarning

Low Globalization Potential : 

Low Globalization Potential

The “Zoo” of Product Branding : 

The “Zoo” of Product Branding RCA Jordache Merrill Lynch Mercury Kangaroo Shoes Schlitz Camel Trix Exxon Greyhound MGM John Deere Kiwi Mustang Playboy Kellog;s FF Hartford VW Rabbit Kellog’s CF Borden’s Milk

Global Brand Management : 

Global Brand Management Brand Management, Top 100 Global Brands Brand equity, global brands, brand portfolio/mix Counterfeit products Counterfeit vs gray trade Actions against counterfeit goods

Global Value of the Nescafe Brand : 

Global Value of the Nescafe Brand $US $5 billion $700 mil $25 billion $90 billion Global sales of Nescafe Nescafe’s global promotion Value of Nescafe brand Value of Nestle’s brands $113 billion – Market capitalization $23 billion – Book value of assets

Localizing the Nescafe Brand : 

Localizing the Nescafe Brand

Evolution of a European Brand : 

Evolution of a European Brand

A Tale of Two Beers : 

A Tale of Two Beers

Anheuser Busch in Europe : 

Anheuser Busch in Europe

Czech Budvar in USA : 

Czech Budvar in USA

Significance of Private Brands : 

Significance of Private Brands

Flanker Brand Example : 

Flanker Brand Example The Current Sarotti Brand

Cola Wars Video : 

Cola Wars Video In which countries, with what strategy and with what success has Mecca Cola chosen to challenge Coca Cola? In which countries, with what strategy and with what success has Qibla Cola chosen to challenge Coca Cola? How has Coca Cola responded to these challenges?

Chapter Twelve Global Products : 

Chapter Twelve Global Products MKT568 Global Marketing Management Dr. Fred Miller 3-1

Target Market Definition, Size and Purchasing Power : 

Target Market Definition, Size and Purchasing Power Define your target market by age and income classifications in the SPSS dataset. Use this definition to analyze statistical data on this market (review previous slides) To calculate size of target market in number of people, Determine the number of people in your chosen age range (Data tables for Population Pyramids) Multiply the result by the percentage of people in your chosen income range (SPSS Crosstabs) To calculate purchasing power, multiply the product of the previous step by your country’s per capita income (from Part 1 of your report, World Bank)

Slide 28: 

Determine target population by age Visit the Population Pyramid site of the US Census Burearu and select the current year. Determine the number of people in the target market you have defined, in this case, 5,840,087

Slide 29: 

Screen for Income Determine percent of population in the defined income range, in this case 42% Multiply target population by this percentage to calculate number of people in target market, in this case, 5,840,087 * .42 = 2,452,837

Slide 30: 

Calculate Purchasing Power Multiply TM population by Per Capita GNI from World Bank or CIA to calculate purchasing power. In this case, 2,452,837 * $26,900 = $65,981,315,300

Pro Forma Income Statement : 

Pro Forma Income Statement $14,832,000, using the formulaeVolume (CY+1) = CY Industry Sales * (1+Growth Rate) 1,030,000,000 = (1,000,000,000) * 1.03 Sales = Volume * Schmidt’s SoM * Price$14,832,000 = 1,030,000,000 * .012 * $1.20 $23,260,284, using the formulaeVolume (CY+2) = Volume(CY+1) * (1+Growth Rate) 1,050,600,000 = 1,030,000,000 * 1.02 Price(CY+2) = Price(CY+1) + Price Increase(CY+2)$1.23 = $1.20 + $0.03Sales = Volume * Schmidt’s SoM * Price$23,260,284 = 1,050,600,000 * .018 * $1.23

Pro Forma Income Statement : 

Pro Forma Income Statement $9,888,000, using the formulaProduction Costs = Volume * Schmidt’s SoM * Cost per Liter$9,888,000 = 1,030,000,000 * .012 * $.80 $15,128,640, using the formulaProduction Costs = Volume * Schmidt’s SoM * Cost per Liter$15,128,640 = 1,050,600,000 * .018 * $.80 $4,944,000, using the formulaGross Margin = Sales – Production Costs $4,944,000 = $14,832,000 - $9,888,000

Pro Forma Income Statement : 

Pro Forma Income Statement $8,131,644, using the formulaGross Margin = Sales – Production Costs $8,131,644 = $23,260,284 - $15,128,640 $741,600, using the formula Sales Costs = Sales * Agent’s Commission $741,600 = $14,832,000 * .05 $1,163,014, using the formula Sales Costs = Sales * Agent’s Commission $1,163,014 = $23,260,284 * .05

Pro Forma Income Statement : 

Pro Forma Income Statement $889,920, using the formula Promotion Costs = Sales * Promotion as % of Sales (CY+1) $889,920 = $14,832,000 * .06 $1,163,014, using the formula Promotion Costs = Sales * Promotion as % of Sales (CY+2) $1,163,014 = $23,260,284 * .05

Pro Forma Income Statement : 

Pro Forma Income Statement $3,312,480, using the formula Contribution Margin = Gross Margin - Sales Costs – Promotion Costs $3,312,480 = $4,944,000 - $741,600 - $889,920 $5,805,616, using the formula Contribution Margin = Gross Margin - Sales Costs – Promotion Costs $5,805,616 = $8,131,644 - $1,163,014 - $1,163,014

Pro Forma Income Statement : 

Pro Forma Income Statement Identify three estimates to be revised. Describe revision and explain reasoning. Increase CY+1 market growth rate to 3.2% because Brahma’s new entry will stimulate increased sales Decrease share of market estimate in CY+1 to .9% because of greater competition from the Corona brand will lower SoM Increase promotion costs as % of sales in CY +1 to 8% to provide more funds for advertising to match Brahma’s promotion for introduction of Corona brand