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global marketing
Global Marketing 5th Edition Johny K Johansson - Solutions
1. Strategy. Global advertising often involves products and services that are positioned similarly across markets, that is, those whose advertised benefits can be the same.As we saw in Chapter 7, it is not necessary that market segments or usage conditions be identical, but the product’s appeal
Usage: The usage conditions are similar across markets
Features: The product features desired are the same.
Symbols: The symbols used (especially the logo) carry the same meaning across countries.
3. The communication objectives realistically achieved through various media differ among countries. The so-called hierarchy of effects—which traces the effects of advertising through brand awareness to knowledge, attitude, liking, trial, and adoption(see Exhibit 16.5)—can be used to illustrate
2. There are some countries where a scarcity of available media has made advertising a competitive weapon of limited usefulness. Since advertising represents mass communication and thus requires mass media, successful advertising campaigns are very dependent on a well-developed and functioning
1. Advertising expenditures create barriers to entry into an industry. A new firm bent on entering a market usually needs to match the advertising expenditures of existing firms in order to enter successfully. A global firm with established presence can use high advertising spending to “raise the
Cinema advertising used to be strong in countries such as Argentina and Singapore, where films are popular pastimes and advertisers have good access to theaters. The relatively insignificant role of cinema is mostly a reflection of increased TV penetration
Print media are strong in countries such as France, Germany, and Sweden, mostly attributable to relatively limited availability of commercial broadcasting.
Radio, although not big, is still a viable media, with strong presence in Canada, Mexico, New Zealand, South Africa, and even the United States. The government monopoly control that used to limit commercial radio in Europe and elsewhere has now been eased and there are a number of commercial
Television advertising is strong in Eastern Europe, Latin America, and Saudi Arabia, but not very prominent in most of Europe compared to print media. The limitations of commercial time available in Europe undoubtedly contribute to the low percentages for television. The Eastern European figure is
Generally the higher the GDP, the more is spent on advertising in per capita terms.The more developed the country, the more money is allocated to advertising.
Advertising intensity varies a great deal between countries. Advertising is simply not a very common form of communication in some countries and may not be an effective promotional tool there.
4. Do we have a promotional advantage simply because of more promotional spending overall? For example, the advantage of a firm’s brand might reside in saturation levels of advertising, not achievable by competitors with less financial resources. Nike has often been accused of this tactic because
3. Are the advertising media we need available and do we have access to them? This is usually not a problem in the United States where media are plentiful and legally independent of advertisers and ad agencies. It is more likely to occur in other countries where some media have much less
2. Do we have an FSA because our creative advertising concept and execution is superior to competition, as in the “Put a tiger in the tank” slogan of Exxon? If yes, does the concept have universal appeal? The tiger in the tank might be a great concept, but what about the alleged superiority of
1. Is the promotional advantage lodged in superior in-store merchandising and sales promotions rather than media advertising? Are we better at working with store managers, for example? If yes, the company should realize that regulations of promotional schemes and store access vary considerably
5. Develop a global campaign that involves headquarters and ad agency managers but also local representatives whose knowledge will help formulate and implement the strategy.
4. Evaluate when a global advertising agency is at an advantage over local rivals and when independent local advertising agencies in multinational networks can offer stronger local talent.
3. Avoid the pitfalls of standardized and translated messages by following a patternstandardization approach with unified slogan, visualization, and image but with local execution in terms of language, spokespersons, and copy.
2. Help design pan-regional advertising campaigns that are cost-efficient and more effective than multidomestic advertising as markets integrate.
1. Understand how spending on advertising increases as countries grow more affluent because new products and services appear and customers need more information.
25. Direct marketing will be discussed in more detail in Chapter 17.
24. This section draws on Cavusgil and Sikora, 1988, Danzon, 1998, and Kyle, 2007.
23. From a study reported in The Journal of Commerce; see Johnson, 1995c.
22. The smaller companies can be competitive by focusing on certain key routes and terminals and offering specialized services, a niche strategy; see Barnard, 1995b.
21. See “SKF,” 1993.
20. Change is under way, however. As of 1995, the RoadRailer system was in operation in Bayern in the south of Germany, with the first trains going from Munich across the Alps through the Brenner Pass with BMW cars destined for Milano and Verona in Italy, a trip of eight hours (see Barnard, 1995a).
19. See Koenig, 1995. As was discussed in Chapter 10, when P&G found its truck shipments delayed at the border, the company helped invest in improved port facilities in St. Petersburg and shipped products to Russia from Germany by boat across the Baltic.
18. These megaports may have to be built away from existing port sites because of a lack of land area, and they may also be built by the global alliance partners rather than the port authorities since the latter are limited in their actions by local governments. See DiBenedetto, 1995.
17. Price competition among ocean carriers is guided by “conferences,” loose agreements between industry participants, sometimes aided by governments, which attempt to regulate competition.These conferences have at times lost power as individual carrier lines refused to go along, but
16. See Tirschwell, 1995.
15. The emphasis on speed has made even small savings important. For example, in mid-1995 Federal Express induced the U.S. Trade Representative to pressure Japanese authorities for landing rights at Kobe’s New International Airport even though other Japanese airports were available and landing in
14. See “How Levi’s Works,” 1993.
13. This power advantage has become one reason why manufacturers aim to develop more global brands; see, for example, Simmons, 1990.
12. From Govindarajan and Gupta, 2001, and www.wal-martchina.com.
11. For a striking example, see “Dell,” 1992.
10. Data from International Marketing Data and Statistics, 2001.
9. Alexander, 1990, discusses the variety among national retailers in more detail.
8. See “L’eggs Products, Inc,” Harvard Business School case no. 9-575-090, 1979.
7. Typical examples include, from the retailing end, Sears in the United States, Virgin stores in Britain, and the FNAC chain in France. Manufacturers moving forward include Compaq and Dell in personal computers, both selling their products mainly through telemarketing; and many luxury goods makers
6. See Munns, 1994.
5. Although this consolidation has perhaps gone furthest in the United States, even Japan with its notorious large numbers and levels of wholesalers is moving toward larger units; see Czinkota and Kotabe, 1993.
4. Because of a lack of comparable data, the exhibit does not show the large number of people employed in wholesaling in Japan. While most European countries are on par, relative to the population, and the United States has relatively few establishments, each of larger scale, the Japanese have many
3. As the empirical study by Bello et al., 1991, demonstrates, where the multiple channels are not in direct competition, independent distributors can still provide strong benefits to the manufacturers in terms of market knowledge and specialized services.
2. Rosson, 1987, demonstrates some of the conflicts that can arise between manufacturers and independent distributors and how they lead to termination of contracts.
5. Using library and Internet resources, investigate one of the successful cases of an introduction of a new approach to channels in foreign countries (Avon, 7-Eleven, Toys “R” Us, or L. L. Bean, for example). What customer factors were important determinants of the success? What did
4. Use the Web sites of FedEx, DHL, and UPS to analyze how the service is marketed. What are the competitive advantages of each? How do the firms attempt to keep air freight distribution from becoming a commodity?
3. Discuss how the phenomenon of gray trade affects the ability of the global marketer to control distribution. How can the difficulties be overcome? How will the emergence of the Internet spawn more gray trade, or will it?
2. Why is coordination of global logistics so complex? What technological innovations have made coordination easier?
1. Compare and contrast the food retailing systems in two countries you are familiar with. Why have the differences occurred? Is a convergence under way?
5. Defend a brand against parallel distribution and gray trade by close management and control of distribution channels.
4. Explain how global logistics and transportation are important determinants of financial performance, and their efficiency has been improving dramatically.
3. Analyze globally coordinated channels by starting with a clear understanding of how the firm-specific advantages (FSAs) depend on distribution channel design.
2. Help design local distribution channels that account for the original mode of entry and allow local managers to play important roles in implementation.
1. Understand not only how the wholesale and retail structure of a local market reflects the country’s culture and economic progress, but also how new channel modes may be successful if timing and conditions are right.
24. See “Pharma Swede: Gastirup,” case no. 14, in Kashani, 1992
23. Adapted from Assmus and Wiese, 1995.
22. See Simon, 1995.
21. The following discussion draws on the excellent study by Assmus and Wiese, 1995.
20. The figures for the European Union come from Simon, 1995.
19. From Simon, 1995.
18. Personal interview in Tokyo with Hans Olov Olsson on July 12, 1994. Mr. Olsson was then president of Volvo Japan.
17. The pressure of aggressive competitive pricing at entry is perhaps most commonly observed in new electronics products.
16. See Terry, 1994.
15. See Johansson and Erickson, 1986.
14. See Chao, 1993.
13. Adapted from Mattsson, 1975.
12. Because of the difficulty of transportation into an area such as Manaus and the standardized manufacturing processes involved, most of the plants built for this booming free trade zone are basically turnkey operations. See Brooke, 1995.
11. These are only highlights of the countertrade options. The book by Alexandrides and Bowers, 1987, can be suggested for further reading.
10. See Loughlin, 2003.
9. This section draws on Livingstone and Grossman, 2002.
8. See Kapadia, 2001. Special thanks to Nick Matthews of KPMG, Melbourne, for transfer pricing sources.
7. This practice lies behind the charges from foreign entrants that Japan’s market is closed, as in, for example, the ongoing battle between Kodak and Fuji. See “Fuji Denies,” 1995.
6. See Johansson, 1989. The depreciating dollar in 2007-08 did of course change this picture dramatically. The trade conflict between the United States and Japan in mid-1995 concerning luxury cars again illustrated that exchange rate shifts alone will not necessarily change prices;see Pollack,
5. See Kotler, 1997, pp. 505–6.
4. See Anderson et al., 1993.
3. Because the experience effect can’t be documented in advance, companies that price on the basis of anticipated costs can be convicted of dumping based on historical costs.
2. See Abell and Hammond, 1979, Chapter 3.
1. The logistics aspects of the gray trade problem will be covered in Chapter 15, “Global Distribution.”
5. What are the problems in implementing a coordinated pricing system to control gray trade?
4. From a marketing viewpoint, what are the advantages and disadvantages of allowing local units to set their own prices?
3. As a marketing manager for a non-European business, what obstacles would you face in attempting to coordinate prices between European countries? Why would you attempt it?
2. Why are so many foreign-made products cheaper in the United States, while very few Americanmade products are cheaper abroad? How will global electronic commerce change this?
1. With the coming of the global marketplace on the Internet, will all prices be the same all over the globe? Why, or why not? What are the ways in which the prices in local markets can still be different?
5. When local representatives are less resourceful, formalization of procedures can be helpful in ensuring that the appropriate factors are taken into account when local prices are set
4. In the low standardization case, when marketing is multidomestic in orientation with locally adapted mix elements, headquarters’ role will be less directive.Local managers are likely to be better informed about local conditions than headquarters.
3. But if local resources are weak, centralization of the pricing decisions may be necessary, creating limits beyond which prices may not deviate.
2. If local resources are on a high level, economic controls tend to be preferable, since raising and lowering transfer prices or rationing will send clear signals to local representatives without imposing final prices.
1. When marketing standardization is high, target segments and the elements of the marketing mix are known well enough for headquarters to help set local prices.
6. Could there be currency exchange problems if we try to repatriate the earnings from sales in a third country?
5. Are there any import barriers to the received goods (so that we will have trouble disposing of the goods at home, say)?
4. Does the invoiced price incorporate extra transaction costs?
3. How can we maximize the cash portion?
2. Can the received goods be sold?
1. Is this the only way the order can be secured?
10. Prepare tax returns.
9. Evaluate year-end or cycle-end tax position against goals.
8. Simulate a transfer pricing audit by outside advisers.
7. Spot-check the process within the company.
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