International Business take-home exam

Marketing and Diversification

BUAD 841 Fall 2017

Kurt Norder, Ph.D.

International Marketing and Coca-Cola

Agenda

2

� Today we will… � Cover Admin:

� Fish bowl debate team 1 & 2 on Mktg – Coca-Cola � Fish bowl debate team 2 & 3 next week on Ecco Ops � Fish bowl debate team 1 & 3 following week on GM Finance

� Connect previous topics to international marketing � Team exercise and debate discussion of Coca-Cola

International Marketing and Coca-Cola

Introduction �Marketing principles in foreign markets are similar to those in

domestic markets � Product � Price � Promotion � Place

�However, some or all elements may need to be adapted to better fit local markets

International Marketing and Coca-Cola

Marketing Strategies �Marketing strategy depends on marketing orientation

� Production … lower prices or higher quality … commodities � Sales … assumes foreign customer similar to domestic (global?) � Customer … varies by country, but constant within � Strategic marketing … adapt product by degree � Social marketing … integrate all stakeholder perspectives … CSR

International Marketing and Coca-Cola

Segmenting �Combination of people and situation

�Same people, different choice based on place and time �Demographics (income, age, gender, ethnicity, religion, etc.) �Psychographics (attitudes, values, lifestyles)

�Different ways to target markets �By country �By global segment �Using multiple criteria

International Marketing and Coca-Cola

Why Firms Alter Products �Firms alter products for �Legal considerations �Labeling requirements … GMO or origins �Environmental protection regulations �Indirect legal considerations

�Cultural considerations �Economic considerations

International Marketing and Coca-Cola

Geographic Diversification versus Concentration

Diversify or Concentrate: The Role of Product and Market Forces

International Marketing and Coca-Cola

Pricing Strategies �Pricing tactics

� Skimming strategy … high and move lower � Penetration strategy … low to capture market share � Cost-plus strategy … maintain margins

�Export price escalation �Fluctuations in currency value

International Marketing and Coca-Cola

Pricing Strategies Why Cost-Plus Pricing Pushes Up Prices

International Marketing and Coca-Cola

Promotion Strategies �Promotion

� the presentation of messages intended to help sell a product or service

�Push-pull mix � Push

� uses direct selling techniques � Pull

� relies on mass media

International Marketing and Coca-Cola

Promotion Strategies �Advantages of standardized advertising

� lower cost � better quality at local level � common global image � rapid entry into multiple countries

�However, firms could have problems with � translation � legalities � market needs

International Marketing and Coca-Cola

Branding Strategies �Advantages of a worldwide brand

� global image � global player identification

�Problems with global brands � language � brand acquisition … keep it or merge it? � country-of-origin … wine from Argentina vs. France � generic and near-generic names … control over the brand image?

International Marketing and Coca-Cola

Distribution Strategies �Does the company have (or can it build) control over channels?

�Assuming the best channels are even known �Channel control can be a competitive advantage, e.g. first mover

�2-way street … like dating (or arranged marriages) �Distributors are qualified, reliable, and after-sales service �Distributors choose products to handle

� Firms must convince they are viable � offer incentives � successful products (bait) bundled with new products,

International Marketing and Coca-Cola

Distribution Strategies �Factors that can contribute to distribution cost differences

among countries include �Infrastructure conditions �The number of levels in the distribution system �Retail inefficiencies �Size and operating hour restrictions �Inventory stock-outs

International Marketing and Coca-Cola

Distribution Strategies �E-commerce and the Internet

� Opportunities � can replace traditional sales methods � faster customer service

� Problems � cannot differentiate sales programs between countries � still must comply with local laws

International Marketing and Coca-Cola

Managing the Marketing Mix � Gap analysis

� a method for estimating a company’s potential sales by identifying prospective customers it is not serving adequately � Usage � Product line � Distribution � Competitive

International Marketing and Coca-Cola

Managing the Marketing Mix Gap Analysis

International Marketing and Coca-Cola

Coca-Cola Diversification

� As Coca-Cola diversifies into new beverage categories, is the situation becoming more global or more fragmented across markets?

� What organizational challenges is the firm facing as it pursues diversification?

� What specific recommendations concerning mode and speed of entry would you make to Coca-Cola as it introduces non-carbonated drinks worldwide?