Global Marketing Section A Part 1 1. 2. 3. 4. 5. 6. 7.

EPRG Network D According to OECD website 34 Value = Benefit/ Cost b b Call any time Cave Dwellers are people who do not interact much with others and hence do not spread the usage by word of mouth 8. False 9. A spin-out, also known as a spin-off or a starburst, refers to a type of corporate action where a company "splits off" sections of itself as a separate business 10. Armenia Part 2 1. Hofstede identified four dimensions of culture in his study of national influences: Power distance - The degree to which a society expects there to be differences in the levels of power. A high score suggests that there is an expectation that some individuals wield larger amounts of power than others. A low score reflects the view that all people should have equal rights. Uncertainty avoidance reflects the extent to which a society accepts uncertainty and risk. Individualism vs. collectivism - individualism is contrasted with collectivism, and refers to the extent to which people are expected to stand up for themselves, or alternatively act predominantly as a member of the group or organization. However, recent researches have shown that high individualism may not necessarily mean low collectivism, and vice versa[citation needed]. Research indicates that the two concepts are actually unrelated. Some people and cultures might have both high individualism and high collectivism, for example. Someone who highly values duty to his or her group does not necessarily give a low priority to personal freedom and self-sufficiency Masculinity vs. femininity - refers to the value placed on traditionally male or female values. Male values for example include competitiveness, assertiveness, ambition, and the accumulation of wealth and material possessions.

2. Diffusion of Innovations is a theory that seeks to explain how, why, and at what rate new ideas and technology spread through cultures. The book proposed 4 main elements that influence the spread of a new idea: the innovation, communication channels, time, and a social system. That is, diffusion is the process by which an innovation is communicated through certain channels over time among the members of a social system. Individuals progress through 5 stages: knowledge, persuasion, decision, implementation, and confirmation. If the innovation is adopted, it spreads via various communication channels. During communication, the idea is rarely evaluated from a scientific standpoint; rather, subjective perceptions of the innovation influence diffusion. The process occurs over time. Finally, social systems determine diffusion, norms on diffusion, roles of opinion leaders and change agents, types of innovation decisions, and innovation consequences. To use Rogers model in health requires us to assume that the innovation in classical diffusion theory is equivalent to scientific research findings in the context of practice, an assumption that has not been rigorously tested. 3. Disaffected Survivors: Lacking power & affluence, this segment harbors little hope for upward mobility & tends to be either resentful or resigned. This segment is concentrated in high-crime, urban inner city neighborhoods. Despite Disaffected Survivors lack of social status, their attributes nevertheless tend to affect the rest of the society. 4. Piggyback marketing is an arrangement in which one firm distributes a second firm's product or service. The second company adds value by offering a more complete solution to the foreign market. The second company piggybacks its products on to the international market, without incurring the marketing and distribution costs associated with exporting. Case Study Caselet 1 1. Company A is transnational Company as it not only has presence in a large number of countries it also has a localized team in each country and the process of decision also on the SBU in the country. A transnational corporation has a truly global presence spread across countries. Yet, it would be too much of a simplification to call a company transnational if it has a presence in several countries or has transactions in several currencies. The real quality of a transnational corporation is obviously the ability to pursue a judicious blend of local responsiveness through customisation, cost reduction through standardization and optimum value chain configuration. For example, a company with a well thought out manufacturing network in different countries, to make it currency neutral would be more transnational that one which exports from its home country and uses hedging tools such as forward contracts to eliminate foreign exchange risk. Similarly, a company which develops a network of operations that make it less vulnerable to political risks in individual overseas markets, would be more transnational than one which does not have such a network. Transnational corporations combine various attributes that are well

beyond the reach of companies which predominantly compete in their domestic markets. We now examine these attributes. 2. Following are the attributes Capabilities A truly global firm not only has unique resources that can be leveraged in markets across the world, but also continues to develop new capabilities in response to changes in the environment. Global companies strike a balance between capability leverage and capacity building. Multidimensionality In the past, companies could compete by being good at one thing reaping global scale efficiencies or maximizing responsiveness to the needs of local markets. The old paradigm was either to tightly coordinate from the centre and achieve global standardization or to leave subsidiaries free to come up with suitable strategies to serve local markets efficiently Value chain configuration A transnational company configures its value chain across different countries to ensure that activities are located in those countries where they can be performed most efficiently and effectively. Consider Li & Fung, Hong Kongs largest export trading company. Contestability A global company needs to have the capability to compete in any overseas market. While it can be selective about the markets it wants to enter (based on their structural attractiveness,) it should have the ability to compete in any market if global considerations demand this. Market spread A global company earns a significant portion of its revenues in overseas markets. Yet, as mentioned earlier, this is not a sufficient condition for a company to be called global. Some Indian software companies, for example, typically generate a sizeable chunk of their revenues in the US, but cannot be considered global, because they have an insignificant presence in other overseas markets. For a truly global company, geographic spread is important. In the ideal case, a company with a global market presence would generate the same market share in each country. Assume the company operates in 100 countries. If it has a market share of say 30% in each of these countries, it would be more global than another company which operates in fewer countries but has, say, a 40% global market share because of its dominance in a few individual markets. Answer 3 Each term is distinct and has a specific meaning which define the scope and degree of interaction with their operations outside of their home country. Following are the four types of companies:

1. International companies are importers and exporters, they have no investment outside of their home country. 2. Multinational companies have investment in other countries, but do not have coordinated product offerings in each country. More focused on adapting their products and service to each individual local market. 3. Global companies have invested and are present in many countries. They market their products through the use of the same coordinated image/brand in all markets. Generally one corporate office that is responsible for global strategy. Emphasis on volume, cost management and efficiency.

4. Transnational companies are much more complex organizations. They have invested in foreign operations, have a central corporate facility but give decision-making, R&D and marketing powers to each individual foreign market. Caselet 2. 1. I would bring about the following changes: a. Shift in Headquarers I would shift the headquarters to UK from US because UK was doing much better than US and the currency translation would then not impact my profitability. b. Streamline manufacturing Processes: I would get consultants to help me streamline the manufacturing processes and hence bring down my cost by more than 50%. In any business manufacturing cost and COGS are an important component and needs to be nrought down if we want to increase profits. c. I would diversify into a lot of related business such as gift business. Parker has also been seen as a gift rather than a pen. Hence instead of coming with cheaper pen I would diversify into costlier gift segment. d. I would take a call on what level of decentralization do I want. If the level of decentralization is high I would make the head of SBUs completely responsible for their act of omission and commission. 2. The following examples show two specific cases of execution failure by Parker Pen. (a) At a corporate level, Parker Pen targeted almost all market segments. However at the business level, management failed to introduce products which would cover the market segments with middle and lower income levels. This allowed competitors with inexpensive products to take up

the market. Hence, I would make sure that there is a complete synergy between planning and implementation. (b) Some of the marketing campaign failed to adjust to the local environment. For example, when Parker Pen first expanded their market to Latin America, they wanted their advertisement to say, "It won't leak in your pocket and embarrass you." The company did not realize that the Spanish word "embarazar" has two meanings; it means "to embarrass," and it also means to "impregnate." So, to some unsuspecting people, the ad read: "It won't leak in your pocket and make you pregnant." Hence I would streamline the marketing efforts in such a way that the company is able to make the best of a focus and concorted decision. The advertisement would be localized to meet the requirement of particular areas. A3. I would discard the present structure where in decentralization has come without enough transfer of responsibility. Thus, I would aim at bringing about a structure which not only promotes growth at all levels but also brings about the change that leads to an environment where results are valued. There should also be a complete check on decisions being taken by decentralized management which is against the principle of the company. The strategy needs to be developed at headquarters and planning should be done at the SBUs. If this structure is followed it would bring a direction to the process of decision making. A4. Following are the six methods I will use to overcome resistance to change: EDUCATION AND COMMUNICATION Resistance can be reduced through communicating with employees to help them see the logic of a change. This tactic basically assumes that the source of resistance lies in misinformation or poor communication:.

PARTICIPATION It's difficult for individuals to resist a change decision in which they participated. Prior to making a change, those opposed can be brought into the decision process FACILITATION AND SUPPORT Change agents can offer a range of supportive efforts to reduce resistance. When employee fear and anxiety are high, employee counseling and therapy, new-skills training, or a short paid leave of absence may facilitate adjustment. NEGOTIATION Another way for the change agent to deal with potential resistance to change is to exchange something of value for a lessening of the resistance. For instance, if the resistance is centered in a few powerful individuals, a specific reward package can be negotiated that will meet their individual needs.
MANIPULATION AND COOPTATION Manipulation refers to covert influence attempts. Twisting and distorting facts to make them appear more attractive, withholding undesirable information, and creating false rumors to get employees to accept a change are all examples of manipulation.

COERCION Last on the list of tactics is coercion; that is, the application of direct threats or force upon the resisters. Section C Answer 2
When doing business in Japan (or any other foreign market) there is always a risk of being scammed by people, usually bilingual professionals and executives, who while purporting to be experts in the various aspects of doing business in Japan, China (or wherever you happen to be doing business) will, with a smile and a bow, happily help divert your precious cash into their corporate coffers while of course using those myths of doing business in Japan as justification for their failure to produce results. Doing business in Japan will be extremely expensive if the costs are not properly controlled and your stockholders, especially private angel investors, will naturally expect that those costs of doing business in Japan will be tightly controlled. Lets face it, success when doing any business, not just when doing business in Japan, is not just about having a great product and an aggressive, intelligent and winning attitude - more often it is the ability to manage cash, deliver early successes on a shoestring budget and intelligently reinvest the proceeds of those surceases to build consistent growth. Those few venture capitalists whom I know have often mentioned to me that companies with otherwise great prospects failed "..because they simply spent too much too soon..". So, if the company wants to be doing business in Japan, does not yet have the $billions cash reserves of Microsoft, Oracle or IBM but nevertheless wants to compete and succeed here and President, Board and stockholders share Bruce C's cash management philosophy, just how do you set about getting maximum value from every penny you spend doing business in Japan - the country that has the reputation of being "..the most expensive place on Earth.."? When doing business in Japan, just as when doing business in any other market you enter, you have 3 choices of how you spend your cash: you can 'spend money like water' (maybe in the expectation of drowning your competitors) you can starve your subsidiary of resources in the hope that it will somehow become more competitive you can create a 'securely' funded (not over-funded) subsidiary that can confidently 'get out there and get the job done'

Hence, under the given circumstances I believe it is a right decision.

Answer 1: The demand for cold drink would depend on a great extent on the life style of the people of the country. For example in India consumption of cold drink is more in urban areas than rural areas. Our consumption of goods obviously is a function of our culture. Only by producing and selling things and services does capitalism in its present form work, and the more that is produced and the more that is purchased the more we have progress and prosperity. The single most important measure of

economic growth is, after all, the gross national product (GNP), the sum total of goods and services produced by a given society in a given year. It is a measure of the success of a consumer society, obviously, to consume. However, the production, processing, and consumption, of commodities requires the extraction and use of natural resources (wood, ore, fossil fuels, and water); it requires the creation of factories and factory complexes whose operation creates toxic byproducts, while the use of commodities themselves (e.g. automobiles) creates pollutants and waste. Yet of the three factors environmentalists often point to as responsible for environmental pollution population, technology, and consumption consumption seems to get the least attention. One reason, no doubt, is that it may be the most difficult to change; our consumption patterns are so much a part of our lives that to change them would require a massive cultural overhaul, not to mention severe economic dislocation. A drop in demand for products, as economists note, brings on economic recession or even depression, along with massive unemployment.