answer 9 questions with online sources for each question

FEB 22, 2017 BAD 351 Marketing International IRAN CASE International Marketing 11e: Terpstra, Foley, Sarathy 2 • From research, identify the key elements of Culture that will influence a marketing plan to Iran. • Qualitatively and using the Hofstede technique and data • Compare Iran to two neighboring countries on economic health: o BOP, exchange rate fluctuations, protection of intellectual property, trends in major exports. C O U N T RY S E L E C T I O N I N -C L A S S C A S E 3 International Marketing 11e: Terpstra, Foley, Sarathy • You have been assigned to a 2 -person group. • Using tables 7 -3 and supplemental material calculate "GDP, PPP" and "GDP, PPP per capita" • Using tables 7 -5 to 7 -9, a set of weights and supplemental material, choose selection variables, calculate point values and final rankings for 5 countries. • Assignment will be timed. • Each group will briefly present and justify choices. • Each group will submit a one page summary of the final rankings by 11am Thursday. 4 International Marketing 11e: Terpstra, Foley, Sarathy 1 of 2 Influences that lead a company to standardize or adapt its products. Product attributes that are considered, in addition to the basic product itself, in formulating international product policy. Strategies companies use in new product development for international markets. 5 International Marketing 11e: Terpstra, Foley, Sarathy 2 of 2 How companies manage their new product development. International product development best practices, including customer involvement and cooperation in product development. Global research and development activities and associated key issues, including the location of research and development (R&D) activities and coordination techniques. 6 International Marketing 11e: Terpstra, Foley, Sarathy 7 International Marketing 11e: Terpstra, Foley, Sarathy • International marketing satisfies consumers’ needs in foreign markets. • International product policy should be the cornerstone around which other aspects of the global marketing mix are designed and integrated. 8 International Marketing 11e: Terpstra, Foley, Sarathy Existing products Should existing products be adapted or standardized to best meet global buyer needs? New products How can new products be developed for global markets? Two main questions should be addressed: 9 International Marketing 11e: Terpstra, Foley, Sarathy Indirect Exporting - a foreign market entry mode in which the manufacturer is not the exporter; instead, a third party conducts the export transaction. The Upside: Companies prefer a product standardization strategy as it lowers costs and is easier to manage. The D ownside: Companies may be forced to use a product adaptation strategy due to consumer needs and wants 10 International Marketing 11e: Terpstra, Foley, Sarathy QUIZ High Costs of Adaptation •Includes R&D, manufacturing, and training costs Industrial Products •Tend to be more standardized than consumer goods Convergence and Similar Tastes in Diverse Country Markets •Convergence leads to greater standardization Predominant Use in Urban Environments •Urban markets may be standardized across country markets Marketing to Predominantly Similar Countries •Choosing similar countries may limit adaptation required 11 International Marketing 11e: Terpstra, Foley, Sarathy Centralized Management and Direct Exporting •Exporting typically results in fairly standard products Country of Origin Effects •Strong links to the home country may encourage standardization Economies of Scale in Production •Standardization allows for production economies Economies of Scale in Research & Development Costs •Standardization allows for higher returns to R&D costs Economies of Scale in Marketing •Promotion materials are likely similar for standardized products Differences in Technical Standards •Health, safety, and technical standards vary by market Consumer and Personal Use Products •The more “personal” the product, the more likely that use will vary Variation in Consumer Needs and Differing Use Conditions •Use varies by skill, economic and climate conditions, etc. 12 International Marketing 11e: Terpstra, Foley, Sarathy Variations in Ability to Buy – Different Income Levels •Ability to buy limits price point of products Market’s Level of Economic Development •Economic development is linked to technological advancement The Influence of Governments •Government regulations (e.g., local content, taxation) vary 13 International Marketing 11e: Terpstra, Foley, Sarathy 1 of 2 New Product Development (NPD) - the process of bringing a new product or service to market, including research and development, technology commercialization, and product testing. NPD also includes modification of existing products. A firm’s NPD strategy centers on two major tasks: Understanding consumer needs, conditions of use, and their ability to buy the products Leveraging the firm’s R&D expertise, experience, and intellectual property to develop products that can satisfy consumer needs in different countries QUIZ 14 International Marketing 11e: Terpstra, Foley, Sarathy 2 of 2 New Product NPD is also dependent on the mode of entry Global companies must take into account the global business environment, market characteristics, and varying consumer needs. Both domestic and global companies need a strong new product development strategy to remain competitive. Licensing offers less freedom in product selection. • Appropriate licensees may not be available for all products. • Licensees may not have satisfactory technology. • The licensee’s product line can limit the licensor’s product line. The joint -venture approach also restricts a firm’s product line. • When the national partner has complementary products, the product -line possibilities of the international partner are confined. Wholly owned foreign operations offer the greatest flexibility. • A firm can produce products in its foreign plants suited to local market needs, use conditions, competitive situation, and purchasing power. With exports only, a firm has the freedom to choose as many or as few products as it wants in each market. Foreign Market Entry 15 International Marketing 11e: Terpstra, Foley, Sarathy 16 International Marketing 11e: Terpstra, Foley, Sarathy QUIZ 17 International Marketing 11e: Terpstra, Foley, Sarathy Next -generation products should be developed out of existing core competencies and the product platforms and families that are built on these competencies. Product platforms are built on the firm’s core competencies and product families are marketed to customers. To stay competitive with new product development, firms need to innovate and strengthen core competencies. The “bedrock” layer is the firm’s core competencies. Product Platform - a common technology, design, architecture, or formula base on which a line of products are developed. Product Family - a collection of products built on a common platform of technology, design, architecture, or formula. Effective product development has distinct layers. QUIZ 18 International Marketing 11e: Terpstra, Foley, Sarathy QUIZ 19 International Marketing 11e: Terpstra, Foley, Sarathy 20 International Marketing 11e: Terpstra, Foley, Sarathy • Segmenting consumers based on their likes and dislikes related to sensory factors such as taste and smell. • Sensory segmentation divides customers according to their responses to sensory product characteristics. • Allows for the development of a limited range of products within a product line to satisfy a large number of product needs across countries QUIZ 21 International Marketing 11e: Terpstra, Foley, Sarathy • Flavor type, flavor level, color, use of a sweetener, acidity, and cloud • These variables can be altered during manufacturing and testing • Customers may ultimately be grouped into low, medium, and high impact seekers depending on the sweetness and color of the soda For example, a soda manufacturer might characterize sensory perceptions as: 22 International Marketing 11e: Terpstra, Foley, Sarathy Companies face the certainty that current - generation technology will become obsolete. Their own new products could make current - generation products obsolete. If not, the commoditization of their products leads to lower margins and less cash to spend on R&D. The dilemma is incremental improvements while also creating next -generation new products. Plan to cannibalize their products by deliberating creating new products rather than wait for competitors to do so. QUIZ 23 International Marketing 11e: Terpstra, Foley, Sarathy Product -line Extensions - developing a new product (or model) primarily based on an existing product which offers new or enhanced characteristics or benefits. The Upside: • broaden the appeal of a brand to customers • offer additional products to domestic and international markets The D ownside: • may become “filler” products without high value added • may have a limited impact on the firm’s sales See Table 9 -4 in the textbook for more Pros and Cons of Product -Line Extensions 24 International Marketing 11e: Terpstra, Foley, Sarathy Utilizes a project approval team (PAT) composed of employees from multiple departments A Stage -Gate Model to Manage NPD 1 of 2 This approach balances technological, financial, and marketing issues but may be difficult to coordinate if the PAT is globally geographically divided. The PAT evaluates the NPD project in several phases: Idea generation Feasibility study (including market potential and return on investment) Product development (prototyping and initial manufacturing for testing) Product launch 25 International Marketing 11e: Terpstra, Foley, Sarathy Job rotation of engineers, transfer of R&D teams to production, and the centers of excellence. Supplier relationships are a critical element Japanese Model 2 of 2 Suppliers may have considerable responsibility for developing complex parts to meet customer specifications. work with few suppliers develop long -term partnerships with suppliers require continuous improvement from suppliers in quality, speed, and time to supply require lower prices and fewer numbers of parts involve a limited number of key suppliers early in the design and development of new products 26 International Marketing 11e: Terpstra, Foley, Sarathy Firms need to recognize when to stop new product development. Management advocacy: Champion the project and maintain its high -priority status Performance: Meet commercial objectives in a timely fashion and at a reasonable cost Innovation context: Technologies must be within the capability of the firm’s experience Performance threshold: project’s performance must match the level of time and money invested in it The following variables impact if a project should be terminated: 27 International Marketing 11e: Terpstra, Foley, Sarathy Lead users often best understand the features for next -generation products. I nvolving customers often improves the likelihood of customer acceptance. Allow users to have trial -and - error learning Provide users a solution space Allow users to build or suggest add -ons Ensure that user - designed solutions can be implemented Toolkits for customer feedback. Observe Customers QUIZ -design a car 28 International Marketing 11e: Terpstra, Foley, Sarathy Benefits of Decentralized Product Development • Allows subsidiaries and national groups to participate • Allows for seeking new products outside the firm • Allows for greater creativity and potential for innovation • Allows for products that meet local market needs Local Market Needs • Some products require continuous local testing • Some products are designed to consumer tastes rather than technological standards • Local use conditions often cannot be simulated in a laboratory Consortium partners have complementary assets. Consortiums for NPD have additional benefits such as creation of a common standard or formation of a new company. 29 International Marketing 11e: Terpstra, Foley, Sarathy As the costs of developing new products rise and diverse technologies are needed, consortium approaches are increasingly being used. Testing ensures the product meets specifications and performance requirements. This might mean testing in multiple countries. A product must be tested under realistic conditions. 30 International Marketing 11e: Terpstra, Foley, Sarathy QUIZ REVIEW 6 - 9 International Marketing 11e: Terpstra, Foley, Sarathy 31 CH 6 MARKET RESEARCH Secondary/Primary/Quant/ Qual Biases : Acquiescence and Social Desirability Incomplete Data Gap or cluster analysis SIMAR International Marketing 11e: Terpstra, Foley, Sarathy 32 33 International Marketing 11e: Terpstra, Foley, Sarathy The Firm’s Corporate Environment The Marketing Environment The Competition The Product Marketing Mix Firm -Specific Historical Data The international marketing manager needs to gather data on six categories of information: In many cases, research would be done on a market -by -market basis. 1 2 3 4 5 6 GAP MAP - CLUSTER ANALYSIS 7/20/15 New Prod. Mktg 34 Twizzlers 40% Cape Cod Chips Criteria for Successful Segmentation © 2016 Cengage Learning. All Rights Reserved. 8 -3 Substantiality Identifiability and Measurability Accessibility Responsiveness Segment must be large enough to warrant a special marketing mix. Segments must be identifiable and their size measurable. Members of targeted segments must be reachable with marketing mix. Segment responds to a marketing mix differently than other segments. CH 7 FOREIGN MARKET SELECTION Market Size Potential Demand - 3 elements PPP Market Screening – 4 steps International Marketing 11e: Terpstra, Foley, Sarathy 36 The international marketing manager can assess potential demand using the following indicators in the following areas: Size of Market Nature of the Economy Infrastructure of the Nation International Marketing 11e: Terpstra, Foley, Sarathy 37 Reduces the set of potential opportunities from 200 -plus countries to a manageable list of researchable markets. Converting the data into comparable indicators Weighing each indicator Analyzing the results Identifying indicators for the selection criteria In -depth research, both secondary and primary, follows the screening of markets to the short list. Market Screening in Four Steps International Marketing 11e: Terpstra, Foley, Sarathy 38 1 2 3 4 2 of 7 International Marketing 11e: Terpstra, Foley, Sarathy 39 CH 8 FOREIGN MARKET ENTRY 4 Modes of Market Entry License and Joint Venture FDI Distribution How to pick a partner International Marketing 11e: Terpstra, Foley, Sarathy 40 41 International Marketing 11e: Terpstra, Foley, Sarathy 42 International Marketing 11e: Terpstra, Foley, Sarathy 1 of 2 Financial and Pricing Considerations Marketing Support Considerations Communication Market Exclusivity