Professional Documents
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Case Study Answers - Chapters (Word)
Case Study Answers - Chapters (Word)
Part 1
1. Why was Sappé able to penetrate the Eastern European market? How did the brand’s success in its
domestic market facilitate this entrance?
ANS: There are a wide variety of answers to this question but some key points include:
• Forming strategic alliances
• Understanding the target market's need and wants
• Focusing on product taste as well as positioning
• Innovation.
2. What are the main risks and challenges that Sappe continues to face? How should it deal with these
challenges?
ANS: There are a wide variety of answers to this question but some key points include:
• Product life-cycle saturation
• Minimal barriers to entry - easy to copy
• Highly competitive market can lead to increases in marketing costs
• Reliance on market prices for key inputs makes margins susceptible to volatility
• Solutions:
• Continued investment in product innovation
• Expansion into underdeveloped markets
• Forming exclusive partnerships with suppliers to stabilise input prices.
3. Was Sapanan’s process in searching for and selecting suitable partners appropriate? Are there any
other ways to find suitable importers who could support the company’s brand building activity?
ANS: There are a wide variety of answers to this question but some key points include:
• The challenges/risks of using small distributors (lack of experience, free reign on marketing
materials, risk of copycats)
• The challenges/risks of using established distributors (demanding promotional plans, marketing
budgets and product launchsupport).
4. Identify three ways that Sappe protected their brand and product in European markets?
ANS: There are a wide variety of answers to this question but some key points include:
• The use of trademarks
• Modifying machines used in production to make it harder for competitors to replicate the
product
• Using unique packaging design.
Part 2
1. Should La Casa de Las Botas embrace expansion or should it maintain the status quo? What changes
may need to occur if La Casa de Las Botas were to expand internationally and further develop the
fashion segment?
ANS: There are a wide variety of answers to this question but some key points include:
• The impact of expansion on brand image, equity and positioning
• Expansion may require revising the payment process, developing a line of 'off the shelf' boots
that do not require custom measurements in order to meet increased demand, establishing a
network of distributors that have an understanding of current market trends, strengthening
their online presence and services.
2. How can the demand for custom-made boots be estimated in an underserved foreign market?
ANS: There are a wide variety of answers to this question but some key points include:
• Direct competitors as well as trends in the broader high-end footwear market
• Barriers to entry including tariffs and taxes which would impact pricing decisions and ultimately
demand.
• Social/cultural factors (leather boycotts, time poor society not willing to wait)
• Economic conditions.
3. How should La Casa de Las Botas address online ordering and customer payment methods for both
individual customers and distributors?
ANS: There are a wide variety of answers to this question but some key points include:
• La Casa de Las Botas would need to forecast how an online ordering and payment system would
impact on the balance between supply and demand.
• Online ordering and payment would create operating efficiencies
• Consider how online ordering would impact the experiential aspects of the purchase process
(the store atmospherics, the face-to-face customer service when taking measurements and
determining style.
4. Identify a barrier that impedes La Casa de Las Bota's expansion as well as protects the custom
equestrian boot market from saturation.
ANS: There are a wide variety of answers to this question but some key points include:
Skilled labour constraints: The skills required in producing custom equestrian boots to a high standard
take approximately five years to acquire.
Part 3
1. The case describes the macro-environmental challenges that X-Pertex faces. What proactive actions
could the company take in facing these challenges?
ANS: There are a wide variety of answers to this question but some key points include:
• Determining the macro-environmental challenges (price volatility of inputs, political instability,
unreliable infrastructure such as communications)
• Proactive solutions may include:
• Moving production off-grid to decrease reliance on unreliable infrastructure (power and
communications)
• Forming partnerships with mills in bordering countries for seamless outsourcing in the event of
civil/political unrest
• Overcoming price volatility through the establishment of long-term trade agreements with
suppliers.
2. Identify three actions that have contributed to X-Pertex's survival within the global marketplace.
ANS: There are a wide variety of answers to this question but some key points include:
• Placing a high importance on customer relationships and customer service
• Empowering their employees and creating a positive internal company culture
• Expanding their online presence to facilitate better communications.
3. Conduct some online research into the textile industry and the denim market. Can you identify any
emerging trends that X-Pertex could capitalise on?
ANS: There are a wide variety of answers to this question but some key points include:
• Organic Cotton - http://textileexchange.org/wp-content/uploads/2017/02/TE-Organic-Cotton-
Market-Report-Oct2016.pdf
• Recycled cotton
• Advanced Denim - http://www.bpt.archroma.com/markets/casual-business-wear/denim/
• Fashion trends - luxury denim, complex blends, fast fashion
• Technology infused wearables eg. inbuilt heating technology.
Table of Contents
Chapter 1 .................................................................................................................................... 1
Chapter outline ....................................................................................................................... 1
Chapter objectives .................................................................................................................. 1
Suggestions for teaching ........................................................................................................ 2
Suggested links to online video material ............................................................................... 2
Questions for discussion ........................................................................................................ 4
Critical analysis questions...................................................................................................... 8
Chapter 2 .................................................................................................................................. 10
Chapter outline ..................................................................................................................... 10
Chapter objectives ................................................................................................................ 10
Suggestions for teaching ...................................................................................................... 10
Suggested links to online video material ............................................................................. 11
Questions for discussion ...................................................................................................... 12
Critical analysis questions.................................................................................................... 16
Chapter 3 .................................................................................................................................. 19
Chapter outline ..................................................................................................................... 19
Chapter objectives ................................................................................................................ 19
Suggestions for teaching ...................................................................................................... 19
Suggested links to online video material ............................................................................. 20
Questions for discussion ...................................................................................................... 21
Critical analysis questions.................................................................................................... 23
Chapter 4 .................................................................................................................................. 25
Chapter outline ..................................................................................................................... 25
Chapter objectives ................................................................................................................ 25
Suggestions for teaching ...................................................................................................... 25
Suggested links to online video material ............................................................................. 26
Questions for discussion ...................................................................................................... 28
Critical analysis questions.................................................................................................... 29
Chapter 5 .................................................................................................................................. 31
Chapter outline ..................................................................................................................... 31
Chapter objectives ................................................................................................................ 31
Suggestions for teaching ...................................................................................................... 32
Suggested links to online video material ............................................................................. 32
Questions for discussion ...................................................................................................... 34
Critical
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Learning Australia 364
International Marketing 4e, Chapter case study answers
Chapter 1
1. What were the key motivations for international corporations such as Las Vegas Sands and Genting
International to set up multi-billion casino investments in Singapore?
ANS: [There are a wide variety of answers to this question but some key points include:
• Singapore's legal and regulatory influence on foreign investment (tax breaks)
• Singapore's shift to a more globalised perspective
• Competitive forces from neighbouring Asian countries.]
2. What are the main positive and negative influences the IRs will bring to Singapore?
ANS: [There are a wide variety of answers to this question but some key points include:
• Negative social impact of gambling on residents
• IR's positive impact on the job market, employment and foreign investment in tourism
• IR's positive impact on destination competitiveness
• The growing tourism industry's negative influence on population skill gaps]
3. What steps have the Singaporean government taken to mitigate the influence of the IRs?
ANS: [There are a wide variety of answers to this question but key points include:
• Government legal and regulatory measures surrounding gambling
• Government initiatives to build skilled labour force in the face of a growing tourism industry
(increases in unskilled employment opportunities).]
Chapter 2
1. What has allowed IKEA to be successful with a relatively standardised product and product line?
ANS: [There are a wide variety of answers to this question but some key points include:
• cost leadership
• the outsourcing of manufacturing to low labour-cost countries
• High volume production to achieve economies of scale
• Exclusive suppliers operating under IKEA terms
• Unique promotional strategies
• Value-added dimension
• Consumers as active participants]
2. Which features of the ‘young people of all ages’ are universal and can be exploited by a
global/regional strategy?
ANS: [There are a wide variety of answers to this question but some key points include:
• A universal desire for everyday products which are durable, high quality and functional
• A product range that is underpinned by high social and environmental standards.]
Chapter 3
1. How can institutions, such as the European Commission, create business opportunities? How could
Fonterra originally benefit from the preferential access to the common European market?
ANS: [There are a wide variety of answers to this question but some key points include:
• Institutions can influence the flow of trade, reduce barriers to international trade and provide
support mechanisms.
• Fonterra's preferential treatment, in the form of reduced tariffs, gives the company a
competitive advantage over other foreign exporters within the dairy sector in the form of higher
profit margins. Reduced trade barriers also aid in the formation of joint-ventures and
partnerships with local brands]
2. Why did Fonterra lose a significant part of the butter quota? Was the problem a political or legal
issue? Provide some examples of other political or legal factors affecting the conduct of international
business
ANS: [There are a wide variety of answers to this question but some key points include:
• Fonterra's loss of the butter quota can be attributed to a legal decision by the European Court of
Justice.
• Other political and legal factors affecting international business include legislative import and
export restrictions, legal standards, export subsidies, government procurement, service and
investment barriers and anticompetitive practices.]
3. Discuss the consequences of the new trading system between the EU and New Zealand introduced in
2007 and the recessionary measures employed by the EU in 2009 with regard to Fonterra’s European
operations.
ANS: [There are a wide variety of answers to this question but some key points include:
• Placing limits on how much market share a foreign importer can have
• Tariff reductions for butter imported under quota is a measure that both offsets foreign
importers loss of market share and decreases the event of surplus
• 2009 saw EU export subsidies reintroduced, making EU farmers more competitive in the global
marketplace and putting Fonterra in a less favourable position, particularly due to New
Zealand's policy of zero export price assistance..]
4. Why has Fonterra changed its strategic focus since 2011? What impact will this have on New Zealand
dairy farmers and on Fonterra?
ANS: [There are a wide variety of answers to this question but some key points include:
The formation of strategic partnerships to overcome trade barriers and gain a larger share in foreign
markets.]
Chapter 4
1. How can companies learn from Honda’s investment in the Indian market?
ANS: [There are a wide variety of answers to this question but some key points include:
• Having a sound understanding of the legal and political system of a foreign market before
embarking on international marketing efforts.
3. Can joint venture partners protect themselves from dissolution and what happens when your partner
becomes your competitor?
ANS: [There are a wide variety of answers to this question but some key points include:
• Anticipate and plan for changes that may occur through continued monitoring of the marketing
environment
• Risk management practices and insurance programs.]
Chapter 5
1. To what extent would you classify Aboriginal culture as embodying individualist or collectivist
tendencies?
ANS: [There are a wide variety of answers to this question but some key points include:
• Aboriginal culture exhibits collectivist tendencies, with a strong emphasis on community, shared
symbolism and storytelling.
• Aboriginal art, however, can also have individualist tendencies, depicting an individual's
perspective of their land and life experiences.]
2. What cultural issues should marketers be aware of when selling Aboriginal artwork?
ANS: [There are a wide variety of answers to this question but some key points include:
• Establishing and nurturing local ties to the artist and their community;
• Recognising the cultural significance and symbolic meaning underpinning Aboriginal art;
• Acknowledgement of country.]
3. Evaluate the statement ‘Aboriginal artwork should be sold when, where and under whatever
conditions retailers choose’.
ANS: [There are a wide variety of answers to this question but some key points include:
• ethics behind 'cultural borrowing' and profiting from indigenous culture in the absence of
communication, consultation and consent.]
4. What measures can marketers take to ensure Aboriginal culture is upheld through the sale of
Aboriginal artworks?
ANS: [There are a wide variety of answers to this question but some key points include:
• Adhering to Codes of Conduct and ethical practices put in place to protect Aboriginal artists and
their culture;
• Consultation and consent for the use of Indigenous cultural material;
Chapter 6
1. Why is Lonely Planet a global success?
ANS: [There are a wide variety of answers to this question but some key points include:
• In-depth primary research as part of the product development process;
• Using research to understand Lonely Planet's customers what they want and how they go about
fulfilling their needs.
• Adapting their product to the digital environment to maintain competitive and relevant.]
2. How has Lonely Planet been able to provide and market guidebooks that are useful across languages
and cultures?
ANS: [There are a wide variety of answers to this question but some key points include:
• Using a global network of collaborators who each have an understanding of their local market
(in product research, print, translation services and distribution).
• The formation of strategic partnerships eg. with Amazon
• Using both online and offline channels to meet a wide target market]
3. How could Lonely Planet guidebooks help marketers develop effective marketing strategies in
targeted foreign markets?
ANS: [There are a wide variety of answers to this question but key points include:
• The guidebooks themselves are a source of secondary research into a foreign markets culture,
economy and competitive environment.
Chapter 7
1. Based on the information provided in this case study and also information available on the internet,
conduct a Political, Economic, Social, Technological and Legal (PESTL) analysis of the retail market in
India.
2. Explain how the change in FDI Indian policy benefitted Wal-Mart. Why is the Indian market
strategically important to Wal-Mart?
ANS: [There are a wide variety of answers to this question but some key points include:
• FDI for multi-brand retailers
• FDI in food retailing
• FDI in e-commerce
• Projected growth for India's retail sector
• The competitive environment.]
3. What challenges has Walmart faced throughout their expansion into India?
ANS: [There are a wide variety of answers to this question but some key points include:
• FDI policy
• Political opposition to foreign investors
• Undeveloped infrastructure and the impact on supply chain management.]
4. Analyse the advantages and disadvantages to Wal-Mart of the joint venture with Bharti Enterprises.
This case study was written in 2018. Conduct some research on the latest strategic partnerships
affecting Wal-mart within both the online and offline retailing environments in India?
ANS: [There are a wide variety of answers to this question but some key points include:
• Overcoming trade barriers through strategic partnerships
• Adhering to FDI policy.]
Chapter 8
1. Consider Li & Fung’s weakness in the European market. In doing so, you might want to take a closer
look at Spain’s Inditex, owner of retailer Zara. Inditex is well known as a rapid response retailer,
changing over its fashion items very quickly, with very short lead times. But it does so by owning
much of and keeping tight control over its supply chain, choosing to supply its stores from its own
production facilities close to its headquarters in Spain. This ownership and tight control approach is,
of course, directly opposed to Li & Fung’s non-ownership and loose control approach.
a. Might differences in the business environment in Asia and Europe have something to do with
these differences between Li & Fung and Inditex? What differences do you think might be
important?
ANS: [There are a wide variety of answers to this question but some key points include:
• The macro environmental factors are likely to be the biggest factors here. This could include
cultural and social factors, the way business is conducted in the current economic and political
environment, and uptake in technology.]
b. What would you recommend for Li & Fung in terms of increasing its competitiveness in
Europe?
ANS: [There are a wide variety of answers to this question but some key points include:
• Build more relationships with local suppliers to ensure responsiveness if continued
• Ensure local trends are maintained in production of goods to be sold in Europe
• Source raw materials at low cost from Asia.]
2. Li & Fung has recently moved in a couple of new strategic directions by working for more licensed
or sub-brands (LL Cool J at Sears, Metro7 at Wal-Mart), by working directly with more brand owners
rather than retailers (Liz Claiborne’s Lucky Jeans and Juicy Couture, Levi’s Signature and Red Tab),
and by creating its own brands, often through acquisition.
a. Given what you know of Li & Fung, is this a good move for the company? What is required of
a firm as it alters a distribution channel or its place in a distribution channel? What is
required of a firm in managing a consumer brand? Does Li & Fung have the necessary skills to
succeed in these areas?
ANS: [There are a wide variety of answers to this question but some key points include:
• This is a major change from their traditional approach which was exclusively derived from
manufacturing.
• This new change involves keeping knowledge up to date with production and end user fashion
habits
• Extra costs may be acquired through this new approach which may not be sustainable in the long
term, though may allow them to weather the trade wars in the short term.]
b. What other actions might Li & Fung take in order to ensure it stays strong in the US market?
ANS: [There are a wide variety of answers to this question but some key points include:
• Ensure they continually invest in market research and maintain knowledge on current fashion
trends, and staying ahead of these trends.
• Build relationships with new, local suppliers that are able to provide value or save costs.]
3. Recently there appears to be a marked trend away from outsourcing and offshoring, with a number of
firms bringing supply chains back within or at least closer to home markets. Part of the reason is a
reduction in the wage differential between countries (and the fact that those still having really low
wages might not have the distribution systems to compete), and part is likely due to other aspects
of supply chains becoming more important (control, rapid response, social responsibility concerns).
How would a firm like Li & Fung be affected by this trend? What opportunities and/or threats do
you see?
ANS: [There are a wide variety of answers to this question but some key points include:
• Local producers may be more likely to choose a local manufacturer, instead of utilizing Li and Fung’s
extensive manufacturing system.
• Opportunities could be to focus more on establishing local manufacturing hubs, instead of having
manufacturing occurring across the globe.]
Chapter 9
1. What effect on goodwill do you think counterfeit goods would have on the Apple brand?
ANS: [There are a wide variety of answers to this question but some key points include:
• If consumers purchase what they believe to be authentic products, and they are delivered
counterfeit products, they may develop a poor brand image.
• Even though in this case Apple was not aware of, nor at fault for the problem, this indirect
attitude could still eventuate
• A customer may not realise the product if counterfeit and judge the product on the poor
perceived quality.]
2. To what extent do you think the counterfeit issue can be resolved by the government, brands or third-
party marketplaces such as Amazon?
ANS: [There are a wide variety of answers to this question but some key points include:
• Individually, each institution has a role to play; government, NGOs, third party marketplaces as
well as the brands themselves.
• Without a shift in cultural values, demand for cheap, counterfeit products will not lessen.
• When all parties work together, the best effect can be seen. The government can legislate to
provide a deterrent for producing products, the NGOs can raise awareness among consumers
and retailers, marketplaces can remove advertising and listings for counterfeit products, and the
brands themselves can build high quality products that consumers demand.]
3. What types of product features can brands build into their products to minimise the threat of
counterfeiting?
ANS: [There are a wide variety of answers to this question but some key points include:
• Brands can focus on providing high quality goods so that consumers want to only purchase the
original products.
• Brands can also design products with features which are difficult to replicate, or which contain
proprietary software. For example, Louis Vuitton goods are very expensive and are produced
with a high degree of quality and care. For example, the stitching should be perfectly straight,
and the pattern on authentic leather will perfectly match up.]
Chapter 10
1. If no immediate change regarding the Novel Food Regulation (EU) is foreseen, what could be an
alternate use of camu camu?
ANS: [There are a wide variety of answers to this question but some key points include:
• To avoid camu camu being classified as a novel food, they should position the product as a
dietary supplement.
• Camu camu could form the main ingredient as a produced food product (such as a health food
bar) that could then be sold. This way, the product is not identified as a novel food, and avoids
classification as such.]
2. What brand strategy is Navitas following to ‘adapt’ camu camu to the US market?
ANS: [There are a wide variety of answers to this question but some key points include:
• This strategy is known as product adaption and has been done for regulatory reasons.
• This allows the product to be branded in such a way to allow the food to be sold in the US
market, where it otherwise wouldn’t.]
3. Would you recommend that Peru use the same brand strategy Navitas is using in the US and in other
international markets?
ANS: [There are a wide variety of answers to this question but some key points include:
• Strategies should be ascertained after a thorough analysis of the macro marketplace and factors
only.
• It is likely that a different approach be adopted in Peru as there is different social attitudes and
familiarity with camu camu, different regulations and other competitive factors.]
Chapter 11
1. Parker Pen has gone back to its roots of crafting fine writing instruments as luxury consumer symbols.
Are there any new emerging markets that they can focus on that have a similar culture of writing or gift
giving?
ANS: [There are a wide variety of answers to this question but some key points include:
• Japan
• Middle East.]
2. This case predominantly looks at the growth of the luxury consumer goods market in China. How
could the services sector tap into this trend?
ANS: [There are a wide variety of answers to this question but some key points include:
• Tailoring transportation, banking, beauty, hospitality or personal shopping to appeal to luxury
consumers
• Consider barriers to entry.]
3. What challenges have luxury brands faced when entering into the Chinese market?
ANS: [There are a wide variety of answers to this question but some key points include:
• Regulations on corporate gift giving
• A slowing economy
• Increasing competition from both national and foreign competitors
• Understanding/adapting to the cultural environment.]
Chapter 12
1. How would you describe Airbnb's pricing strategy?
ANS: [There are a wide variety of answers to this question but some key points include:
• Consider both the pricing strategy of hosts and the pricing strategy of Airbnb (in the form of
service fees).
• Examine the characteristics of standardised, dual and market-differentiated pricing strategies in
relation to Airbnb's service fee structure.]
2. What are the main costs Airbnb needs to consider when setting prices?
ANS: [There are a wide variety of answers to this question but some key points include:
• Unlike traditional hotels, Airbnb do not have the degree of physical assets to account for
• How online based operations overcome manufacturing, logistic and export costs
• The largest costs would include host insurances, software and platform development and
marketing costs.]
3. How will external factors, such as regulatory challenges and threats from competitors, impact on
Airbnb's profitability?
ANS: [There are a wide variety of answers to this question but some key points include:
• Regulations have the potential to impact negatively on the supply of Airbnb accommodation as
hosts face increasing taxes as well as legal implications.
• Competitive threats come from both the hotel industry as well as companies within the sharing
economy looking to imitate Airbnb's service offering. A competitor could enter the market with
lower service fees in order to gain market share.]
Chapter 13
1. Explain how the use of chat bots might be different depending if the business sells goods or provides
a service.
ANS: [There are a wide variety of answers to this question but some key points include:
• Chat bots used for a service provider are likely to play a larger role and be more customer
service oriented. Programming them to be friendly and be able to answer a large range of
questions would be useful here. You could also use chat bots to book in a service. Eg. taking
bookings through the bot, not a website.
• Chat bots for a retailer or product manufacturer are more likely to ask similar questions on the
qualities of the product (eg. what is the price, what is the size). One interesting application of
chat bots for products is in the beauty industry, where chat bots have been used to guide
consumers to which products are best suited to their skin, before redirecting them to a sales
page to purchase these products. See these links for more information:
• https://techcrunch.com/2017/05/15/helloava-launches-a-chatbot-for-personalized-skin-care-
recommendations/
• https://techcrunch.com/video/helloava-a-skincare-consultant-in-your-
pocket/591a0d33955a3135a9d77306/.]
2. Apply the marketing communications process (Fig 13.1) to the use of the TacoBot. How does this
differ to traditional advertising mediums?
ANS: [There are a wide variety of answers to this question but some key points include:
• The TacoBot was very untraditional in that it used a pull approach to communication. The
sender of the message is originally the customer. The receiver of the message is a bot; a type of
software that is automated to reply in certain ways. As the bot is receiving the message and will
then reply, bots are not likely to be distracted by ‘noise’ and so the communication can be more
effective than traditional communication.]
ANS: [There are a wide variety of answers to this question but some key points include:
• Measuring the success of a chatbot is difficult, and depends on the metrics used. These metrics
are likely to be influenced by the reason for having a bot. Eg. If the aim of the bot is to convert
sales, an online sales metric may be useful. But what if a customer chooses to make a purchase
from another medium (eg. in-store?). That is not always possible to track sales, unless using
coupon codes or similar.
• Often Chat Bots are used for customer service reasons. At the end of a conversation, the
customer could be asked ‘was your question answered?’ to ascertain if the conversation was
effective.
• In the example of TacoBot, as it was utilised through Twitter, Twitter metrics were used,
including tweets, retweets etc. In this case social listening softare may be useful to also track the
content and salience of conversations about the Tacobot, using the hashtag or about the
TacoBell brand itself.]
4. How could the use of a chat bot help a service firm to reduce customer service staff expenses?
ANS: [There are a wide variety of answers to this question but some key points include:
• Chat bots can be used to service basic customer enquiries instead of staff. This is useful if the
same questions are asked often, or if the service can in some ways be automated. For example,
booking in a service.
• Eg. A chat bot could be used by a customer to book a hairdresser appointment, instead of
redirecting to a static booking page. This could redirect customers from calling the hair dresser
(relieving staff of basic call answering duties, allowing them to give more haircuts and thus be
more profitable).]
Chapter 14
1. How have Amazon.com’s international marketing efforts been assisted through the use of social
media?
ANS: [There are a wide variety of answers to this question but some key points include:
• Leveraging social media to disseminate product information, raise brand awareness, drive brand
loyalty and increase sales.
• Spark facilitates customer interaction and generates consumer insights
• Social media has opened Amazon to a 2-way conversation with customers.]
2. Is there a chance social media could be problematic for an international organisation such as
Amazon.com? What are some of the ways that social media could be an issue?
ANS: [There are a wide variety of answers to this question but some key points include:
• Allows customers to share negative experiences
• Allows merchants and customers to convene in a space where Amazon doesn't have control (Facebook
groups).
• Management and monitoring of social media efforts requires extensive resources.]
3. Two business principles of Amazon.com are customer relationship management and information
management. Discuss these principles and connect your discussion to social media use in an
international context.
ANS: [There are a wide variety of answers to this question but some key points include:
• For CRM, social media can be used to address complaints, reward customer loyalty (through
social media promotions) and build a deeper relationship.
• For IM, social media can play a role in generating information (i.e. consumer insights, brand
awareness data), as well as for the distribution of information.]
4. Amazon use different social media platforms in different ways, for example, using Facebook for
promotions and using Twitter for content marketing. Why do you think Amazon have done this?
ANS: [There are a wide variety of answers to this question but some key points include:
• Using appropriate social media channels to support different elements within the marketing mix
• Using Twitter to support public relations
Using Facebook and Pinterest to support sales and promotional activities.]
Chapter 1
Introduction to international marketing
Chapter outline
● What is international marketing?
● Globalisation
Chapter objectives
1 Understand and define the rationale behind international marketing
2 Appreciate the linkages between international marketing and international trade
3 See the benefits and challenges to which international marketing exposes consumers,
suppliers, competitors and countries
4 Outline the process of strategic planning in the context of the global marketplace
5 Examine both the external and internal factors that determine the conditions for development
of strategy and resource allocation
Key outcomes/points to consider: This video shows the importance and value of innovation in a
globalised world where different markets will have different requirements. The video reflects on
how technology is positively impacting today’s education sector and benefiting students and
teachers in terms of access to online materials, online test systems, and students’ performance
review. What other similar services are likely to benefit students? What could an international
technology services firm learn from ENEZA?
3 What effect has the Brexit process had on the UK’s position in the international market?
The impact of Brexit on trade and investment channels will be most severely felt in the UK,
which will impact the status of the UK in the global economy. In economic terms, this will be
most evident in trade policy. While the UK has the ability to strike new trade deals based on
domestic priorities, it will have less leverage and be a lower priority than the EU for other
countries, as it represents a much smaller market. The UK also faces the huge challenge of
renegotiating trade agreements with the EU, as it will no longer be party to the extensive
international trade arrangements that come with EU membership. This includes renegotiating
potential tariffs on goods it wants to export, product standards that goods sold in the EU must
meet, and movement of people. The impact of Brexit will lead to the increase in trade costs
and is predicted to reduce the trade between the UK and the Europe.
You could use this published report as a guiding document for further discussion:
https://www.global-counsel.co.uk/sites/default/files/special-
reports/downloads/Global%20Counsel_Impact_of_Brexit.pdf
4 What is the danger in oversimplifying the globalisation approach? Would you agree with
the statement, ‘If something is working in a big way in one market, you better assume it
will work in all markets’?
Students should understand the complexity of a market that is increasingly becoming more
homogeneous. Oversimplifying can include not taking into consideration that globalisation is
not the same as standardisation, and therefore global organisations need to adapt to a certain
degree and understand that each country will have unique characteristics. Factors such as
cultural, religious, language, legal and political differences, for instance, need to be taken into
consideration.
Encourage students to access the ‘Search Me! Marketing online database’ to answer this
question.
6. Discuss the notion of ‘bigger is better’. Should companies always try to grow their
market presence and look for opportunities to acquire or merge with other companies?
Size can become a major asset, and many companies have followed a growth strategy to
strengthen their market presence. This strategy partly explains the increase in many mergers
and acquisitions in industries such as aerospace, pharmaceuticals and telecommunications.
Hence, when General Electric (GE) announced it would spin off its appliance unit, five
possible buyers emerged, each wanting to boost its global position:
7 Carrefour has adapted many aspects of its products offerings and processes to fit the
different consumer demands in various countries? Why?
The video ‘Carrefour – A China shopping experience’ (see below) of a Carrefour shopping
experience in China highlights a few differences in Carrefour shops in China and is a good
starting point to start discussing this question.
http://www.youtube.com/watch?v=1lYVm0hLXFo&feature=BFa&list=PL2D8662D382204
7D1
Retailers such as Carrefour need to adapt to the local ways of doing business and local cultures.
There are some significant differences in the shopping behaviour and demands of consumers,
thus retailers need to adapt their product assortment and shops to the local way of doing
business. Also, different countries have different supply chains and business practices.
The following link can be useful when answering this question:
http://bear.warrington.ufl.edu/oh/IRET/Student%20Experience/Carrefour%20Essay%20
Edited.pdf
3 Choose one large multinational company in the luxury market (for example, Louis
Vuitton) and discuss the challenges and opportunities of entering an emerging market –
for example, Brazil. A SWOT analysis (strengths, weaknesses, opportunities, threats)
can be used for this task.
Strengths: Well-known brand, strong brand positioning (i.e. luxury, quality, status)
Weakness: high product prices, limited and exclusive distribution channels, narrow segments
of buyers
Opportunities: development of economy of Brazil, potential growth of luxury market in Brazil
Threats: rising competition with other exclusive brands such as Gucci, counterfeiting products
Note that the weaknesses and threats can be potential challenges to enter into the market.
Chapter 2
Chapter outline
● Understanding individual markets through data
o GDP and Income
o Population
o Consumption patterns
o Infrastructure
● The economic, social and cultural effects of industrialisation
● Regional economic integration
● Future insights
Chapter objectives
1 Evaluate markets by analysing the data
2 Discuss the economic, social and cultural effects of industrialisation
3 Understand the impact of regional economic integration on international trade
in China in 2010). Another approach to overcoming this dilemma is to assign exercises so that
students may discuss these issues.
Activities may include:
• updating the tables presented in the chapter’s case studies and discussing the significance of
the changes that may have emerged
• developing country- or product-specific exercises similar to those that feature in discussion
questions 2 (see below)
• selecting a specific market (and product) for class discussion and asking small groups to
research different economic data related to the issue.
Issues, such as a lack of data for every market and out-of-date information, may present critical
issues for international marketers. For students in developed industrialised nations, data may seem
easily available and accessible. Often, marketing educators find that ‘Let’s collect the data’
becomes the default answer to many of their questions. The problem is that some of the desired
data may not even exist. There are some countries that have not had a census for 20 or 30 years.
Encourage students to access the ‘Search Me! Marketing online database’ to find more information
that can assist them in answering the questions for discussion.
2 Using available data, assess the market potential for (a) power generators and (b) consumer
appliances in (i) the Philippines, (ii) Jordan, (iii) Spain and (iv) Nigeria.
The Philippines
The Philippines has allocated $274 million for investment in rural electricity programs. This
has allowed businesses to build new power generation capacity, access government funding
to build grids and set up the additional infrastructure required to supply power.
The Philippines has been urbanising extensively over the last few years. The country has
developed a strong middle-class consumer population that is willing to experiment with and
adopt new consumer appliances.
http://documents.worldbank.org/curated/en/482401468294949474/pdf/520830BRI0IFC01ici
ty0to0Rural0Areas.pdf
https://www.adb.org/sites/default/files/evaluation-document/167391/files/pper-phi-
electricity-market.pdf
https://www.reportbuyer.com/product/1167261/consumer-appliances-in-the-philippines.html
Jordan
Jordan is a moderate, developing nation in the Middle East. Most of it is still highly rural and
much of the population has a traditional lifestyle. The government owns and operates most of
the infrastructure, and access to the market may be difficult for electricity providers.
Due to many Jordanian’s traditional lifestyles, there may be little demand for consumer
appliances. For many, a lack of access to electricity devalues the purchase of consumer
appliances.
http://www.venturemagazine.me/2015/12/time-to-build/
Spain
The Spanish electricity distribution and control apparatus markets grew by 14% in 2015, due
to strong recovery in the country’s residential construction market and the launch of a new
power grid modernisation project. The electricity industry saw no new investment in
conventional (fossil fuel) projects in 2015. Instead, Spain believes that optimising the use of
pumped hydroelectricity that can be stored and used later is more efficient.
Spain recorded an average GDP growth of 3.2% in 2015, up from 1.4% in 2014, supported by
expansionary monetary policy, low oil prices, a looser fiscal stance and the depreciation of the
euro. Consumption has been particularly strong, boosted by rising real disposable incomes as
a result of increasing employment, tax reductions and falling prices.
Despite political instability, Spain’s GDP continued to grow in 2017. Moreover, the demand
for consumer appliances is rising due to rising consumers’ purchasing power.
http://www.euromonitor.com/consumer-appliances-in-spain/report
https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Energy-and-
Resources/gx-er-market-reform-spain.pdf
Nigeria
The Nigerian currency was devalued in 2016. The devaluation of currency implies that
imported products and products that require imported materials become relatively more
expensive, as disposable income remains the same while the price of a particular good may
increase. As a result, this led to an increased preference for smaller and cheaper retail products,
particularly consumer appliances. More established brands of consumer appliances suffered a
decline in their sales volume due to this increased price sensitivity
Nigeria is a developing country economy. It has a significant electricity generation deficit.
This is partly because Nigeria has recently begun to recover from recession that reduced an
already small pool of funds available for infrastructure investment. Market realities have
driven Nigerian consumers to more energy efficient products and products that are not as
sensitive to interrupted or limited power supply.
http://www.euromonitor.com/consumer-appliances-in-nigeria/report
3 From the international marketer's point of view, what are the opportunities and
problems caused by increased urbanisation in developing countries?
Increased urbanisation in developing countries is advantageous for international marketing
because it centralises the potential market, thereby centralising the market research and
advertising areas. Urbanisation also simplifies the logistics of product distribution. The greater
ease of distribution to urban areas reduces product costs, and the savings may be passed on to
consumers, which increases the likelihood of consumption.
In urban areas, one phenomenon of marketing is that people are influenced by the consumption
habits of those around them through the demonstration effect. This means that advertising may
affect more people than it directly reaches. In contrast, in rural areas where there are few shops
displaying wide arrays of products, consumers may not be as aware of the goods available to
satisfy their existing needs.
Recently urbanised areas in developing countries differ from urban settings in developed
countries, and marketers must adjust their techniques accordingly. For example, in developing
countries people moving to urban centres have often left behind poor economic situations and
are looking for new opportunities in the city. However, many of these new urban dwellers
send most of their income to support family members outside the city. Thus, they may only
have enough money to purchase subsistence items until they have saved more. Additionally,
newly developed urban areas may lack the infrastructure to support the use of certain products.
For example, many of the suburbs in Manila, the Philippines, do not have electricity. This
would greatly impact a company planning to market electrical appliances or any energy-related
products there.
It should be noted that explosive urbanisation might complicate international marketers’
operations in the country in question, and elsewhere. An excellent example of this is the infant
formula controversy involving 25 large multinational companies, but for which Nestlé has
received most of the negative publicity. In this case, urbanisation has meant that women have
replaced breastfeeding with substitutes, such as infant formula, the proper preparation of
which may be difficult if not impossible in developing countries.
Moreover, the recent urbanisation in developing countries has also caused some social issues,
such increased crime rates, and some cities do not have the necessary structure to
accommodate such a high number of people, which can generate problems such as high traffic
and energy issues.
GNP growth in the 1990s was 12.3% annually, making it an attractive market. This level of
growth in a large economy is enough to allow for new competitors to enter the market.
Some high-priced products have a high demand in low-income countries due to their social
prestige. For instance, motorcycles and television sets in China have a high demand, regardless
of their high-price in relation to the wages.
5 The pattern in consumer expenditure varies among countries and within them. What
does the current pattern of expenditure in China tell about opportunities for companies
from Australia and New Zealand?
The fast growth of the Chinese economy resulted in an increasing number of medium- and
high-class consumers. These high- and medium-class consumers generate an increasing
demand for consumer goods.
The high- and medium-income classes have generated an extremely significant increase in
luxury goods. China is now the world’s largest market for luxury goods. Thus, the Chinese
market has a great demand for luxury items, which can be explored by international
companies.
It is important to take into consideration the differences among urban and rural areas. For
instance, many Chinese do not own common household appliances. However, with the
increasing number of urban middle-class Chinese consumers, such appliances will be in heavy
demand in the near future. Also, China is currently the main export destination for Australian
services, and, as the numbers show, there is an increasing participation of services in the
Chinese GDP, leading to opportunities for Australian and New Zealand companies.
http://www.austrade.gov.au/Export/Export-Markets/Countries/China/Market-profile
http://www.economist.com/news/business/21579015-life-getting-harder-purveyors-luxury-
china-growth-prospects-are-still
http://dfat.gov.au/trade/resources/trade-at-a-glance/pages/default.aspx
Major export destinations, 2017
1 China
2 Japan
3 United States
3 Republic of Korea
5 United Kingdom
6 New Zealand
7 India
8 Singapore
9 Thailand
10 Germany
Another useful web resource is the Composition of Trade statistics produced by the Australian
Government Department of Foreign Affairs and Trade: http://dfat.gov.au/about-
us/publications/Documents/cot-2016-17.pdf.
2 Using the statistical sources available through your library, such as the IMF Directory
of Trade Statistics (DOTS), trace the changes in the direction of exports of your country
over the past three decades. What do these changes tell us about the opportunities and
challenges facing international marketing?
The data reveals that Australia has increased trade with China over the period 2015–17 (see
http://data.imf.org/regular.aspx?key=61726507).
The data shows the improving economic relations and trade between Australia and China. This
is mainly because China and Australia recently announced a free trade agreement (ChAFTA).
This resulted in positive outcomes for both China and Australia in terms of growing income
from foreign investments. ChAFTA opens up the opportunity for greater market access to
China, with the elimination of tariff charges on Australian export products including dairy,
seafood, beef and lamb. On full implementation of CHAFTA, 99.9% of Australian products
in the manufacturing, resources and energy sectors will be exported to China without tariffs,
which will further improve the trade between the two countries. Consider the following
resources for further discussion on how these tariffs would influence the trade between
Australia and China:
https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Foreign_Affairs_Defen
ce_and_Trade/Completed_inquiries/2004-07/china/report01/index
https://asialinkbusiness.com.au/china/getting-started-in-china/china-australia-free-trade-
agreement-chafta
growing’. How would you assess this statement, and what other factors would make you
consider Japan as a potential market?
The economy of Japan is a highly developed and market-oriented economy. It is the third
largest in the world by nominal GDP and the fourth largest by purchasing power parity (PPP),
and is the world's second-largest developed economy. Therefore, the claim of ever-growing
economy is believable as it is a potential market for international marketers. Consider looking
at the following resource for reasons to invest in Japan:
https://www.jetro.go.jp/ext_images/en/invest/pamphlets/whyjapan_en_201707.pdf.
The other factors to consider Japan as a potential market include the following:
• improving GDP growth
• declining corporate tax rate
• increasing per capita income
• developed infrastructure
• increasing demand and supply.