Marketing

Business

Quiz 9 :

Developing New Products and Managing the Product Life Cycle

Quiz 9 :

Developing New Products and Managing the Product Life Cycle

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Evo: The Challenge of Going Global While Bryce Phillips, founder of active sports retailer evo, was skiing in Japan, he was surprised to learn that several skiers at the lodge owned evo products. Although it is evo's intention to become a more global company, the organization does not regularly export to other countries. Yet, even with little export activities, customers from other countries are seeking out evo sports gear. Evo, short for "evolution," was founded as an online retailer in 2001 and opened its Seattle-based retail store four years later. While the retail store provides customers with a physical location to look for products, the online store allows evo to carry a greater selection and extend its global reach. The company caters to active sports enthusiasts with products like ski gear, wakeboards, snowboards, skateboard gear, and street wear. From the beginning, Phillips wanted to use the Web to spread the word about evo worldwide. "When we think about the future, we think about being a global brand in the context that, for the kind of customers that we'd like to attract, we'd like to attract them all over the world," Phillips said. "And being on the Web, the word travels, and your brand can travel very, very quickly." Approximately 5 percent of evo's business comes from outside the United States, and the Web's global reach has increased demand for evo's products. Yet, despite these favorable global prospects, evo has been constrained somewhat in its ability to ship internationally. "We are confined in some ways by a lot of our dealer agreements," said Nathan Decker, senior director of e-commerce at evo. He provides two reasons for why vendors create exclusive dealer arrangements with evo: (1) to avoid saturating markets overseas; and (2) to maintain control over their products in order to compete fairly in the global marketplace. By limiting distribution, manufacturers are able to exert some control over other elements of the marketing mix, such as price. The evo website contains a list of brands that the company cannot ship overseas due to contractual agreements. If consumers from foreign countries try to order these brands, they will receive notification that their order has been canceled. Because retailers often do not own many of the brands they sell, manufacturers can maintain the right to determine where their products are sold and how much to distribute to the company. This represents a major challenge for retailers that want to go global. On the other hand, large retail companies that have a lot of power, such as Walmart, have a better ability to negotiate with manufacturers on global distribution. As evo grows as a brand, the company may gain the power to negotiate more favorable distribution terms with its vendors. Additionally, dealer contracts cannot prevent consumers themselves from sending the products overseas. As Phillips found out firsthand, the company's popularity has spilled over into other countries. Technology has enabled the company to engage in viral marketing, which aids in increasing the company's global brand exposure. For instance, when mountain gear manufacturer Rossignol decided to launch its skis globally through the evo website, the news was posted on ski websites throughout the world. Evo has also been featured in magazines that have international circulations. Evo hopes to work with its vendors to make global selling more feasible. "Once we kind of work through that and get the green light from some of our bigger vendors, I think that it'll become more of a strategic focus," Decker said. In the meantime, evo is finding additional ways to increase its global presence. For instance, the company launched evoTrip as a service for adventurous sports enthusiasts who want to travel. EvoTrip arranges the trips with the goal to connect people to local cultures, communities, and sports. In addition to increasing its customer base, evoTrip allows the organization to form relationships with consumers overseas. Global opportunities are likely to increase as evo continues to grow. In 2011, the company released its first customer catalogue, and Phillips has expressed a desire to open more stores across the nation. The organization is also exploring the possibility of expanding its own line of evo-branded products. In doing so, the organization would not be constrained by contractual obligations from its vendors. Creating a global brand remains an important part of evo's endeavors. According to Phillips, "Everything we do, whether it be something we buy or something we sell [or] something we invest in, is connected globally. What should evo's marketing strategy be to go global?
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E marketing strategy to go global:
• Focus on their image, so that they reach to the position to negotiate with their vendors on distribution limit and pricing matters.
• Increase number of new products under E brand. To reach to the large number of customer
• Open new stores so that customer can physically check the product.
• Organize some events globally so that new customer can know and understand about E products.
• Branding of E product,

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How does international marketing differ from domestic marketing?
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Domestic marketing: It is the process of selling a company's products and services in the manufacturer's home country. Language barriers do not generally exist in domestic marketing and collection and interpretation of the data on domestic marketing trends and customer demand is much faster and easier to perform.
Risks associated with domestic marketing are lesser and it also require lesser financial resources as comparison to international marketing.
International marketing: It is the process of marketing and selling company's product in more than one country. In other words, it is an application of marketing concepts across countries. The process of international marketing is very complex and risky and requires a large amount of financial resources.
Based on the above two definitions, we can differentiate between domestic and international marketing in following ways:
1) Domestic marketing is the process of selling in the manufacturer's local market while international marketing is the sales and promotion of goods across countries.
2) Domestic marketing is less risky in comparison to international marketing.
3) Domestic marketing in comparison to international marketing wants lesser financial resources.
4) Domestic marketing generally deals with only one type of customers whereas international marketing pacts with diverse sets of customers with varying tastes.

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Evo: The Challenge of Going Global While Bryce Phillips, founder of active sports retailer evo, was skiing in Japan, he was surprised to learn that several skiers at the lodge owned evo products. Although it is evo's intention to become a more global company, the organization does not regularly export to other countries. Yet, even with little export activities, customers from other countries are seeking out evo sports gear. Evo, short for "evolution," was founded as an online retailer in 2001 and opened its Seattle-based retail store four years later. While the retail store provides customers with a physical location to look for products, the online store allows evo to carry a greater selection and extend its global reach. The company caters to active sports enthusiasts with products like ski gear, wakeboards, snowboards, skateboard gear, and street wear. From the beginning, Phillips wanted to use the Web to spread the word about evo worldwide. "When we think about the future, we think about being a global brand in the context that, for the kind of customers that we'd like to attract, we'd like to attract them all over the world," Phillips said. "And being on the Web, the word travels, and your brand can travel very, very quickly." Approximately 5 percent of evo's business comes from outside the United States, and the Web's global reach has increased demand for evo's products. Yet, despite these favorable global prospects, evo has been constrained somewhat in its ability to ship internationally. "We are confined in some ways by a lot of our dealer agreements," said Nathan Decker, senior director of e-commerce at evo. He provides two reasons for why vendors create exclusive dealer arrangements with evo: (1) to avoid saturating markets overseas; and (2) to maintain control over their products in order to compete fairly in the global marketplace. By limiting distribution, manufacturers are able to exert some control over other elements of the marketing mix, such as price. The evo website contains a list of brands that the company cannot ship overseas due to contractual agreements. If consumers from foreign countries try to order these brands, they will receive notification that their order has been canceled. Because retailers often do not own many of the brands they sell, manufacturers can maintain the right to determine where their products are sold and how much to distribute to the company. This represents a major challenge for retailers that want to go global. On the other hand, large retail companies that have a lot of power, such as Walmart, have a better ability to negotiate with manufacturers on global distribution. As evo grows as a brand, the company may gain the power to negotiate more favorable distribution terms with its vendors. Additionally, dealer contracts cannot prevent consumers themselves from sending the products overseas. As Phillips found out firsthand, the company's popularity has spilled over into other countries. Technology has enabled the company to engage in viral marketing, which aids in increasing the company's global brand exposure. For instance, when mountain gear manufacturer Rossignol decided to launch its skis globally through the evo website, the news was posted on ski websites throughout the world. Evo has also been featured in magazines that have international circulations. Evo hopes to work with its vendors to make global selling more feasible. "Once we kind of work through that and get the green light from some of our bigger vendors, I think that it'll become more of a strategic focus," Decker said. In the meantime, evo is finding additional ways to increase its global presence. For instance, the company launched evoTrip as a service for adventurous sports enthusiasts who want to travel. EvoTrip arranges the trips with the goal to connect people to local cultures, communities, and sports. In addition to increasing its customer base, evoTrip allows the organization to form relationships with consumers overseas. Global opportunities are likely to increase as evo continues to grow. In 2011, the company released its first customer catalogue, and Phillips has expressed a desire to open more stores across the nation. The organization is also exploring the possibility of expanding its own line of evo-branded products. In doing so, the organization would not be constrained by contractual obligations from its vendors. Creating a global brand remains an important part of evo's endeavors. According to Phillips, "Everything we do, whether it be something we buy or something we sell [or] something we invest in, is connected globally. What are the unique product features that could make evoa global brand?
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E deals in sports product in very unique category, their demand are limited but around the world. Very few renowned company deals in such products.
E uses new technology to reach to their customers. E reached to their customers by website. This becomes easier for their customer to place the order. Company uses latest technology to sell their product in market place. This concept becomes more helpful to the company to fulfil go global concept.
Unique range of product and latest technology to reach their customer make Evo unique in their field.

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Starbucks Faces Global Opportunities and Barriers Although Starbucks has become an important part of America's coffee culture heritage, the idea for the company came from outside its country of origin. While on a business trip in Milan, Italy, in 1983, Starbucks founder and CEO Howard Schultz noticed the popularity of coffee shops as a community gathering place. He realized that, for Italians, coffee was not so much a beverage as it was a social experience. Schultz decided to replicate this coffee culture in the United States, turning Starbucks into the "third place" consumers would frequent after home and work. Starbucks opened up its first international store in Vancouver, British Columbia, in 1987. Today, the company is a multinational powerhouse with more than 15,000 stores in 50 countries. Globalization offers many advantages to Starbucks. As the coffee industry becomes increasingly saturated in the United States, international expansion allows Starbucks to take advantage of untapped opportunities in other countries. However, global expansion has not always been so easy. Starbucks has learned that while it must ensure consistency of quality, it must also customize to adapt to local tastes. For example, in the United Kingdom, Starbucks was not initially popular with British consumers. In response, Starbucks began to renovate its stores to create a unique look so that each store fi t into the local neighborhood environment. The company rebounded, and today it has approximately 700 stores in the UK with plans to begin opening franchises in the country. Starbucks also faces sociocultural barriers in China. The company entered China in 1999 and has since grown to about 550 stores, but what has been particularly challenging for Starbucks is to find a way to get past cultural barriers. In 2007, the company closed its store in the Forbidden City after criticism from the Chinese media. Due to the backlash from Chinese citizens, Starbucks once again customized its offerings, with more Chinese-inspired food products and coffee-free beverages (Chinese consumers drink an average of three cups of coffee annually). To show support for Chinese business operations, the company opened a coffee farm and processing facilities within the country and reorganized to form a new China and Asia Pacific division. Starbucks must work to ensure that its Western roots and expansion plans do not clash with Chinese values, since the country offers a highly lucrative market. Sales in the coffee market grew 20 percent in 2011 from the year before. However, while the coffee market is booming, Starbucks has also come across economic barriers. Because operating costs are higher in China, and labor costs are increasing, the price of Starbucks drinks in China is 50 to 75 percent higher than in the United States. This makes it harder for Starbucks to attract China's large population of lower-income consumers, and plans to increase prices to keep up with rising costs have angered middle-income customers. Starbucks must additionally find a way to overcome these barriers to increase its reach among the Chinese population. Perhaps one of Starbucks' most celebrated successes is its entry into the Indian market. This success is particularly significant due to political barriers for foreign multinationals in India. Until recently, the Indian government mandated that foreign firms could only operate in the country if they created 50-50 joint ventures with domestic fi rms. The Indian government changed the law to allow companies that only sell one brand of products to develop wholly owned subsidiaries in the country. However, Starbucks opted to create a 50-50 joint venture with Indian firm Tata Global Beverages. Such a joint venture has many advantages, including an easier transition into the Indian market (Tata Global Beverages is part of the largest business group in the country). On the other hand, Starbucks must still contend with socioeconomic and economic barriers. Not only is India more of a tea-driven society, but most domestic coffee companies sell their beverages at a fraction of Starbucks' prices in the United States. Becoming affordable enough to attract the average Indian consumer will require changes in Starbucks' marketing strategies. Interestingly, there is one notable country in which Starbucks is absent: Italy. While Starbucks modeled itself after Italian-style coffee shops, major differences between the two coffee cultures might hinder Starbucks' acceptance. For instance, the amount of espresso and the proper times to offer certain drinks like cappuccinos (never for breakfast or after heavy meals in Italy) are very different from American coffee-drinking habits. To succeed in Italy may require Starbucks to significantly customize its shops and beverages to appeal to Italian tastes. What appear to be some of the most significant barriers Starbucks is facing when expanding into foreign countries?
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Many firms, including Procter Gamble, FedEx, and Occidental Petroleum, wish to do business in eastern Europe and in the countries that were once part of the former Soviet Union. What events could occur that would make marketing in these countries more difficult? What events might make it easier?
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When formulating marketing strategy, one of the issues a company must consider is whether or not to pursue international markets. Although international markets present increased marketing opportunities, they also require more complex decisions when formulating marketing plans. To assist you in relating the information in this chapter to the development of your marketing plan, focus on the following: Using Figure 9.1 as a guide, determine the degree of international involvement that is appropriate for your product and your company. img The information obtained from these questions should assist you in developing various aspects of your marketing plan found in the "Interactive Marketing Plan" exercise at www.cengagebrain.com.
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Starbucks Faces Global Opportunities and Barriers Although Starbucks has become an important part of America's coffee culture heritage, the idea for the company came from outside its country of origin. While on a business trip in Milan, Italy, in 1983, Starbucks founder and CEO Howard Schultz noticed the popularity of coffee shops as a community gathering place. He realized that, for Italians, coffee was not so much a beverage as it was a social experience. Schultz decided to replicate this coffee culture in the United States, turning Starbucks into the "third place" consumers would frequent after home and work. Starbucks opened up its first international store in Vancouver, British Columbia, in 1987. Today, the company is a multinational powerhouse with more than 15,000 stores in 50 countries. Globalization offers many advantages to Starbucks. As the coffee industry becomes increasingly saturated in the United States, international expansion allows Starbucks to take advantage of untapped opportunities in other countries. However, global expansion has not always been so easy. Starbucks has learned that while it must ensure consistency of quality, it must also customize to adapt to local tastes. For example, in the United Kingdom, Starbucks was not initially popular with British consumers. In response, Starbucks began to renovate its stores to create a unique look so that each store fi t into the local neighborhood environment. The company rebounded, and today it has approximately 700 stores in the UK with plans to begin opening franchises in the country. Starbucks also faces sociocultural barriers in China. The company entered China in 1999 and has since grown to about 550 stores, but what has been particularly challenging for Starbucks is to find a way to get past cultural barriers. In 2007, the company closed its store in the Forbidden City after criticism from the Chinese media. Due to the backlash from Chinese citizens, Starbucks once again customized its offerings, with more Chinese-inspired food products and coffee-free beverages (Chinese consumers drink an average of three cups of coffee annually). To show support for Chinese business operations, the company opened a coffee farm and processing facilities within the country and reorganized to form a new China and Asia Pacific division. Starbucks must work to ensure that its Western roots and expansion plans do not clash with Chinese values, since the country offers a highly lucrative market. Sales in the coffee market grew 20 percent in 2011 from the year before. However, while the coffee market is booming, Starbucks has also come across economic barriers. Because operating costs are higher in China, and labor costs are increasing, the price of Starbucks drinks in China is 50 to 75 percent higher than in the United States. This makes it harder for Starbucks to attract China's large population of lower-income consumers, and plans to increase prices to keep up with rising costs have angered middle-income customers. Starbucks must additionally find a way to overcome these barriers to increase its reach among the Chinese population. Perhaps one of Starbucks' most celebrated successes is its entry into the Indian market. This success is particularly significant due to political barriers for foreign multinationals in India. Until recently, the Indian government mandated that foreign firms could only operate in the country if they created 50-50 joint ventures with domestic fi rms. The Indian government changed the law to allow companies that only sell one brand of products to develop wholly owned subsidiaries in the country. However, Starbucks opted to create a 50-50 joint venture with Indian firm Tata Global Beverages. Such a joint venture has many advantages, including an easier transition into the Indian market (Tata Global Beverages is part of the largest business group in the country). On the other hand, Starbucks must still contend with socioeconomic and economic barriers. Not only is India more of a tea-driven society, but most domestic coffee companies sell their beverages at a fraction of Starbucks' prices in the United States. Becoming affordable enough to attract the average Indian consumer will require changes in Starbucks' marketing strategies. Interestingly, there is one notable country in which Starbucks is absent: Italy. While Starbucks modeled itself after Italian-style coffee shops, major differences between the two coffee cultures might hinder Starbucks' acceptance. For instance, the amount of espresso and the proper times to offer certain drinks like cappuccinos (never for breakfast or after heavy meals in Italy) are very different from American coffee-drinking habits. To succeed in Italy may require Starbucks to significantly customize its shops and beverages to appeal to Italian tastes. Describe Starbucks' global strategy. Is it engaging in more of a globalization or customization approach?
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When formulating marketing strategy, one of the issues a company must consider is whether or not to pursue international markets. Although international markets present increased marketing opportunities, they also require more complex decisions when formulating marketing plans. To assist you in relating the information in this chapter to the development of your marketing plan, focus on the following: Discuss the concepts of customization and globalization for your product when moving to international markets. Refer to Table 9.7 for guidance in your discussion. img The information obtained from these questions should assist you in developing various aspects of your marketing plan found in the "Interactive Marketing Plan" exercise at www.cengagebrain.com.
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Why do you think this chapter focuses on an analysis of the international marketing environment?
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Why are the largest industrial corporations in the United States so committed to international marketing?
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If you were asked to provide a small tip (or bribe) to have a document approved in a foreign nation where this practice is customary, what would you do?
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Windshield wipers were invented by Mary Anderson in 1903, when she observed that streetcar drivers in New York City had to open the window when it rained in order to see. Her invention consisted of a long arm with a rubber blade that was operated by hand from inside the cab. By 1916, all passenger vehicles were fitted with these manual windshield wipers; starting in the early 1920s, a variety of automatic systems began to appear. In 1936, the first windshield washer unit became available as an option, adding another technological breakthrough in automotive technology. Flash forward to the present. Now, every vehicle utilizes windshield-washing fluids-usually consisting of a mixture of ethylene glycol, isoproponal, and water- that are reasonably effective at removing dirt, bugs, and other debris. The efficacy of windshield washing fluids decreases, however, in cold weather. Indeed, in winter months, these fluids do not spray properly and can sometimes even freeze. Recently, a few companies have begun to manufacture windshield-washing fluid heaters, which instantly heat the windshield-washing fluid to approximately 50°C (132°F) at the driver's touch. The system comes in a kit, which takes only 15 minutes to install. The first benefit, of course, is that the heated windshield-washer fluid reduces the amount of scraping of ice and snow needed by the driver beforehand. Heated windshield-washing fluid also sprays more consistently, helping to reach all parts of the windshield and is more effective at dissolving dirt and bugs. The manufacturing companies also claim that the fluid will help windshield wipers last longer. Many countries have long and cold winters, but Russia instantly comes to mind as a potential global market. Evaluate Russia in terms of its environmental forces for these manufacturers of windshield-washer fluid heaters. Based on approximately 275 motor vehicles per 1,000 people in the Russian population, what percentage of the market do you think that companies selling this product can capture (industry sales)? Which mode of entry seems best for one of these manufacturers? They are usually mid-sized companies with limited capital, international experience, and knowledge. How much customization would a product like this require for Russia?
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How will NAFTA affect marketing opportunities for U.S. products in North America (the United States, Mexico, and Canada)?
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Starbucks Faces Global Opportunities and Barriers Although Starbucks has become an important part of America's coffee culture heritage, the idea for the company came from outside its country of origin. While on a business trip in Milan, Italy, in 1983, Starbucks founder and CEO Howard Schultz noticed the popularity of coffee shops as a community gathering place. He realized that, for Italians, coffee was not so much a beverage as it was a social experience. Schultz decided to replicate this coffee culture in the United States, turning Starbucks into the "third place" consumers would frequent after home and work. Starbucks opened up its first international store in Vancouver, British Columbia, in 1987. Today, the company is a multinational powerhouse with more than 15,000 stores in 50 countries. Globalization offers many advantages to Starbucks. As the coffee industry becomes increasingly saturated in the United States, international expansion allows Starbucks to take advantage of untapped opportunities in other countries. However, global expansion has not always been so easy. Starbucks has learned that while it must ensure consistency of quality, it must also customize to adapt to local tastes. For example, in the United Kingdom, Starbucks was not initially popular with British consumers. In response, Starbucks began to renovate its stores to create a unique look so that each store fi t into the local neighborhood environment. The company rebounded, and today it has approximately 700 stores in the UK with plans to begin opening franchises in the country. Starbucks also faces sociocultural barriers in China. The company entered China in 1999 and has since grown to about 550 stores, but what has been particularly challenging for Starbucks is to find a way to get past cultural barriers. In 2007, the company closed its store in the Forbidden City after criticism from the Chinese media. Due to the backlash from Chinese citizens, Starbucks once again customized its offerings, with more Chinese-inspired food products and coffee-free beverages (Chinese consumers drink an average of three cups of coffee annually). To show support for Chinese business operations, the company opened a coffee farm and processing facilities within the country and reorganized to form a new China and Asia Pacific division. Starbucks must work to ensure that its Western roots and expansion plans do not clash with Chinese values, since the country offers a highly lucrative market. Sales in the coffee market grew 20 percent in 2011 from the year before. However, while the coffee market is booming, Starbucks has also come across economic barriers. Because operating costs are higher in China, and labor costs are increasing, the price of Starbucks drinks in China is 50 to 75 percent higher than in the United States. This makes it harder for Starbucks to attract China's large population of lower-income consumers, and plans to increase prices to keep up with rising costs have angered middle-income customers. Starbucks must additionally find a way to overcome these barriers to increase its reach among the Chinese population. Perhaps one of Starbucks' most celebrated successes is its entry into the Indian market. This success is particularly significant due to political barriers for foreign multinationals in India. Until recently, the Indian government mandated that foreign firms could only operate in the country if they created 50-50 joint ventures with domestic fi rms. The Indian government changed the law to allow companies that only sell one brand of products to develop wholly owned subsidiaries in the country. However, Starbucks opted to create a 50-50 joint venture with Indian firm Tata Global Beverages. Such a joint venture has many advantages, including an easier transition into the Indian market (Tata Global Beverages is part of the largest business group in the country). On the other hand, Starbucks must still contend with socioeconomic and economic barriers. Not only is India more of a tea-driven society, but most domestic coffee companies sell their beverages at a fraction of Starbucks' prices in the United States. Becoming affordable enough to attract the average Indian consumer will require changes in Starbucks' marketing strategies. Interestingly, there is one notable country in which Starbucks is absent: Italy. While Starbucks modeled itself after Italian-style coffee shops, major differences between the two coffee cultures might hinder Starbucks' acceptance. For instance, the amount of espresso and the proper times to offer certain drinks like cappuccinos (never for breakfast or after heavy meals in Italy) are very different from American coffee-drinking habits. To succeed in Italy may require Starbucks to significantly customize its shops and beverages to appeal to Italian tastes. What are some of the most significant obstacles to expansion in Italy, and how can Starbucks overcome them?
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Procter Gamble has made a substantial commitment to foreign markets, especially in Latin America. Its actions may be described as a "globalization of marketing." Describe how a shoe manufacturer (e.g., Wolverine World Wide) would go from domestic marketing to limited exporting, to international marketing, and finally to a globalization of marketing. Give examples of some activities that might be involved in this process.
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To successfully implement marketing strategies in the international marketplace, a marketer must understand the complexities of the global marketing environment. Which environmental forces (sociocultural, economic, political/legal/regulatory, ethical, competitive, or technological) might a marketer need to consider when marketing the following products in the international marketplace, and why? a. Barbie dolls b. Beer c. Financial services d. Television sets
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Evo: The Challenge of Going Global While Bryce Phillips, founder of active sports retailer evo, was skiing in Japan, he was surprised to learn that several skiers at the lodge owned evo products. Although it is evo's intention to become a more global company, the organization does not regularly export to other countries. Yet, even with little export activities, customers from other countries are seeking out evo sports gear. Evo, short for "evolution," was founded as an online retailer in 2001 and opened its Seattle-based retail store four years later. While the retail store provides customers with a physical location to look for products, the online store allows evo to carry a greater selection and extend its global reach. The company caters to active sports enthusiasts with products like ski gear, wakeboards, snowboards, skateboard gear, and street wear. From the beginning, Phillips wanted to use the Web to spread the word about evo worldwide. "When we think about the future, we think about being a global brand in the context that, for the kind of customers that we'd like to attract, we'd like to attract them all over the world," Phillips said. "And being on the Web, the word travels, and your brand can travel very, very quickly." Approximately 5 percent of evo's business comes from outside the United States, and the Web's global reach has increased demand for evo's products. Yet, despite these favorable global prospects, evo has been constrained somewhat in its ability to ship internationally. "We are confined in some ways by a lot of our dealer agreements," said Nathan Decker, senior director of e-commerce at evo. He provides two reasons for why vendors create exclusive dealer arrangements with evo: (1) to avoid saturating markets overseas; and (2) to maintain control over their products in order to compete fairly in the global marketplace. By limiting distribution, manufacturers are able to exert some control over other elements of the marketing mix, such as price. The evo website contains a list of brands that the company cannot ship overseas due to contractual agreements. If consumers from foreign countries try to order these brands, they will receive notification that their order has been canceled. Because retailers often do not own many of the brands they sell, manufacturers can maintain the right to determine where their products are sold and how much to distribute to the company. This represents a major challenge for retailers that want to go global. On the other hand, large retail companies that have a lot of power, such as Walmart, have a better ability to negotiate with manufacturers on global distribution. As evo grows as a brand, the company may gain the power to negotiate more favorable distribution terms with its vendors. Additionally, dealer contracts cannot prevent consumers themselves from sending the products overseas. As Phillips found out firsthand, the company's popularity has spilled over into other countries. Technology has enabled the company to engage in viral marketing, which aids in increasing the company's global brand exposure. For instance, when mountain gear manufacturer Rossignol decided to launch its skis globally through the evo website, the news was posted on ski websites throughout the world. Evo has also been featured in magazines that have international circulations. Evo hopes to work with its vendors to make global selling more feasible. "Once we kind of work through that and get the green light from some of our bigger vendors, I think that it'll become more of a strategic focus," Decker said. In the meantime, evo is finding additional ways to increase its global presence. For instance, the company launched evoTrip as a service for adventurous sports enthusiasts who want to travel. EvoTrip arranges the trips with the goal to connect people to local cultures, communities, and sports. In addition to increasing its customer base, evoTrip allows the organization to form relationships with consumers overseas. Global opportunities are likely to increase as evo continues to grow. In 2011, the company released its first customer catalogue, and Phillips has expressed a desire to open more stores across the nation. The organization is also exploring the possibility of expanding its own line of evo-branded products. In doing so, the organization would not be constrained by contractual obligations from its vendors. Creating a global brand remains an important part of evo's endeavors. According to Phillips, "Everything we do, whether it be something we buy or something we sell [or] something we invest in, is connected globally. What are both the positive and negative outcomes from using exclusive dealer agreements that restrict global distribution?
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When formulating marketing strategy, one of the issues a company must consider is whether or not to pursue international markets. Although international markets present increased marketing opportunities, they also require more complex decisions when formulating marketing plans. To assist you in relating the information in this chapter to the development of your marketing plan, focus on the following: Review the environmental analysis that was completed in Chapter 3. Extend the analysis for each of the seven factors to include global markets. The information obtained from these questions should assist you in developing various aspects of your marketing plan found in the "Interactive Marketing Plan" exercise at www.cengagebrain.com.
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What factors must marketers consider as they decide whether to engage in international marketing?
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This chapter discusses various organizational approaches to international marketing. Which would be the best arrangements for international marketing of the following products, and why? a. Construction equipment b. Cosmetics c. Automobiles
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