Marketing

EXAMPLE 1

Marketing Principles and Practices

Professor Jones

5/4/2020

Interview with a Marketer

Marketing differs in countries across the world due to the vast diversity of cultures, social

and political systems, and economic conditions that exist. As a result, professionals around the

globe apply numerous techniques to satisfy the needs and wants of their consumers. However,

how do marketing strategies differ when selling a foreign product to domestic customers?

Research material and information discussed in the interview demonstrate that significant

differences exist between marketing a foreign product to United States versus Ukrainian

consumers, specifically regarding market penetration, reaching the consumer, and purchaser’s

disposition.

Successful foreign firms enter the U.S. market using various marketing techniques. Their

methods usually differ depending on the type of company and product offered. John Quelch, the

author of “How to Penetrate the US Market,” mentions four foreign companies that found

success in the U.S. market. For example, Royal Bank of Scotland acquired regional banks in

America to build up a strong retail market share. IKEA used its “location selection expertise and

their established global supply chains to offer exceptional category-killer prices” (Quelch, 2008).

ING, a Dutch bank corporation, chose to offer its services to U.S. consumers only online. British

home appliance maker, Dyson, selected Best Buy as its retailer in America. These examples

suggest that choosing the right approach to market penetration, such as purchase of domestic

companies, low prices, unique distribution, and collaboration with a known retailer, can

contribute to the foreigner’s success. Additionally, authors of MKTG12 Principles of Marketing

state, “In the past, foreign firms penetrated U.S. markets by concentrating on price, but the

emphasis has switched to product quality” (Lamb, Hair, McDaniel 2019). Consequently, foreign

EXAMPLE 2

firms looking to expand their business to United States must also offer excellent product quality

to be able to compete with domestic organizations.

In efforts to expand into the U.S. market, foreign businesses must consider how they

intend to reach the U.S. consumer. Although different tactics can be applied, a preliminary step

would be to research and analyze the customer profile and trends in America. A thorough

overview of such information is available on Santandertrade.com in the article “United States:

Reaching the Consumer.” Some noteworthy trends include that “young people are more likely to

pay attention to promotions and compare prices” and that even though Americans tend to remain

loyal to brands, 10% of them are willing to try other brands if the price is lower

(Santandertrade.com). This suggests that even though superior quality is a competitive

advantage for foreign firms, they must also consider offering low prices to cost-conscious

Americans. Another identified trend is preference for responsible consumption. According to the

source, “Some 48% of consumers say they want to change their habits to reduce their impact on

the environment” (Santandertrade.com). Therefore, foreign producers should consider making

their products environmentally friendly to interest the American consumer. When choosing

among advertising options, data suggests focusing on TV and online commercials. Finally, the

most important trend to be aware of is that “some 70% of Americans consider it significant to

buy American products” (Santandertrade.com). Such preference must warn foreign firms that

their products must be excellent enough to surpass such a patriotic view.

The strong preference for domestic products observed in Americans can be explained by

consumer ethnocentrism construct. Ethnocentric consumers think that “purchasing imported

products is wrong because, in their minds, it hurts the domestic economy, causes loss of jobs,

and is plainly unpatriotic” (Shimp, Sharma 1984). Thus, it is not about hating the products

EXAMPLE 3

manufactured in a different country, but rather about supporting the domestic producer.

Furthermore, this belief can “influence significantly purchase decisions in scenarios where

locally produced products are viewed as superior to products produced in other parts of the

world” (Neese, Haynie 2015). This bias towards domestic goods explains why it is more difficult

to penetrate the American market and why foreign producers must employ a greater amount of

marketing techniques when trying to do so. In fact, a real-life example of this concept was

featured in Ad Age. In his article “Buick Super Bowl Ad Criticized for Vehicles Not Made in

U.S.,” John Irwin described American public’s disapproval of General Motors featuring foreign-

made vehicles in a 2017 Super Bowl advertisement. This shows the American preference for

products manufactured in the U.S., in efforts to benefit domestic economy, produce jobs, and

promote patriotism.

On the other side of the spectrum, exists the theory of consumer xenocentrism. In broad

terms, xenocentrism is “favoritism toward out-groups coupled with negative stereotypical

perceptions of one's own group (the in-group)” (Balabanis, Diamantopoulos 2016). Consumer

xenocentrism, then, is a “phenomenon of flagrant preferences toward foreign products that go far

beyond the utilitarian superiority of such products over domestic goods” (Balabanis,

Diamantopoulos 2016). Simply put, there exist countries in which people prefer buying foreign-

made products because of negative connotations towards their own country of origin. In those

countries, foreign organizations are likely to emphasize foreignness as the main marketing

strategy, in contrast to the tactics used in penetration of the U.S. market.

In order to compare approaches to selling foreign products in United States and Ukraine,

Yuriy Lukavyy was interviewed. Yuriy Lukavvy was born and raised in Ukraine. He graduated

from the Institute of Economics and Entrepreneurship with a degree in Marketing Management.

EXAMPLE 4

Lukavyy worked in marketing for 15 years, until he emigrated to United States of America in

2010. His last job was as a sales manager at Frank-Lemex, an exclusive representative of a

German factory, Frank, in Ukraine. The factory manufactured spare parts for agricultural

machinery / tillage equipment, so his firm specialized in selling fast-wearing parts for European-

made plows to Ukrainian farmers.

Market penetration of a German producer into a Ukrainian market was different from

methods used by foreign companies in the United States. According to Lukavyy, German owners

of his firm found a German-speaking individual with interest in sales, “rented a warehouse,

brought samples or whatever parts they thought would sell in Ukraine, and let her sell.” In turn,

she gathered a team of experienced salesmen and started up the firm. Such an approach is

unique, as the German producers delegated all power to a single Ukrainian representative,

allowing her to create her own firm and only supporting her partially. In fact, Lukavyy says that

German owners had no influence on the advertising or selling techniques and did not partake in

creating prices. They supplied the warehouse with products and collected money. Everything

else was ran by Ukrainian salesmen. Furthermore, emphasis on superior quality of the German-

made parts helped Frank-Lemex successfully penetrate the Ukrainian market. Lukavyy says that

the parts that his firm sold were “quite expensive and not comparable with Ukrainian

counterparts.” Therefore, they chose to concentrate on the quality and “German quality raised no

doubts.”

Having a team of Ukrainian salesmen was crucial for reaching the Ukrainian consumer

with German products. The employees knew what kind of customers they needed and actively

sought them out. They knew the Ukrainian mentality better and were able to effectively target

the consumer. Lukavyy says that the consumer must have had foreign machinery (European or

EXAMPLE 5

American), must have been willing to spend a good amount of money, and must have been

flexible enough to get rid of stereotypes and try alternative parts that the firm sold. When

reaching the target consumer, Lukavyy’s firm had two main techniques: personal sales and

exhibitions. In order to conduct personal sales, Lukavyy would travel throughout Ukraine to

meet with farmers. In fact, during these personal sales, Lukavyy was able to approach the price

of his products differently. He says, “If he bought his parts from an original manufacturer, we

would say that our manufacturer produces parts of the same quality, but lower price. But if he

bought his parts from a cheaper manufacturer, we did not emphasize the price as much. We had

an individual approach to each customer in that sense.” An important part of the exhibitions, the

second approach to reaching the consumer, was the display of several of the firm’s plows.

Lukavyy says that “For those who work with such machinery, it’s very important to not only see

but also to touch. It’s a method to have an influence on the psyche.” In addition to touching,

prospective costumers were also able to review catalogues and brochures, as well as to take a

souvenir home. Exhibitions were followed up with phone calls to interested individuals and sales

were made either by phone or on site.

In contrast to the ethnocentric American consumer who is less inclined to buy a foreign-

made product, a Ukrainian citizen demonstrates strong tendencies towards xenocentrism.

Products from abroad, specifically Europe and North America, are viewed as superior to those

produced domestically. Lukavyy explains this occurrence by the collapse of the Soviet Union.

He says, “After the breakup of Soviet Union, the quality did not only not get better, but actually

got significantly worse. Factories went into decline, almost all of production stopped.” The

worsened quality of most Ukrainian products led people to distrust and partially abandon the

domestic producer. In fact, such an attitude was beneficial for Lukavyy’s firm, as they sold

EXAMPLE 6

machinery parts manufactured in Germany. Lukavyy explains that they put great emphasis on the

country of origin of their products when advertising. He says, “our major focus was on the fact

that we sell German products, German quality, and German reliability.” He adds that even

significantly lower domestic prices could not compete with the undeniable dominance of foreign

producers in his segment of the market. As a result, Lukavyy’s firm was able to successfully

penetrate the Ukrainian market, satisfy the consumer, and even significantly expand their product

line.

Combination of research and information gathered during the interview leads to the

conclusion that there exists a vast difference between marketing a foreign product to an

American versus Ukrainian consumer. Such disparity is evident in approaches towards

penetration of the market and attainment of customers, as well as in consumer bias towards

domestic or foreign products. Whereas a foreign producer in America must develop unique

strategy to enter the U.S. market, study and satisfy consumer tendencies, and overcome strong

bias towards domestic products, simple validation of foreign quality seems to satisfy the

Ukrainian consumer. It is likely that the level of development of each country causes the

variance. Consumers in a developed country such as United States are satisfied and proud of

their domestic goods and require a greater amount of promotion to change their preferences in

favor of a foreign product. Consumers in a developing country such as Ukraine are aware of the

inferiority of their domestic goods and therefore demonstrate preference and trust towards

products manufactured outside of their home country.

In addition to conclusions about marketing practices, the interview provided some insight

on Ukraine as a whole. I learned more about the causes and consequences of Ukraine’s

underdevelopment and about the limitations of domestic business activities in the country. This

EXAMPLE 7

experience gave me insight about what I could have been doing if I stayed in Ukraine and further

justified my parents’ decision to move to the United States. I realized that business success in

Ukraine can either be achieved by a foreign producer/investor, or through corrupt actions (not

discussed in this report).

The interview did not significantly change my views on pursuing a career that has to do

with marketing. I still do not see myself as a salesperson, which is what the interviewee mostly

focused on when describing his own experience. I don’t think I have the talent or the personality

to be able to sell effectively. When it comes to advertising, I am not sure I am creative enough to

influence people to buy a certain product. However, the research part of the project sparked my

interest. I thoroughly enjoyed learning about consumer behavior theories and the psychology

behind consumer decisions. I don’t think that I would necessarily commit to pursuing a related

career, but I will be interested to explore these subjects further. Overall, the interview and the

preparation process also introduced me to a whole new set of marketing topics, which I find

interesting and hope to learn more about in the future.

Works Cited

EXAMPLE 8

“United States: Reaching the Consumer.” Santandertrade.com, Banco Santander, S.A - 2019,

Apr. 2020, santandertrade.com/en/portal/analyse-markets/united-states/reaching-the-

consumers.

Balabanis, George, and Adamantios Diamantopoulos. “Consumer Xenocentrism as Determinant

of Foreign Product Preference: A System Justification Perspective.” Journal of

International Marketing, vol. 24, no. 3, 2016, pp. 58–77, www.jstor.org/stable/43966594.

Irwin, John. “Buick Super Bowl Ad Criticized for Vehicles Not Made in U.S.” Ad Age, Ad Age,

6 Feb. 2017, adage.com/article/special-report-super-bowl/buick-super-bowl-ad-criticized-

vehicles-made-u-s/307877.

Lamb, Charles W., et al. MKTG12: Principles of Marketing. Cengage, 2019.

Neese, William T., and Jeffrey J. Haynie. "The Influence of Comparative Advertising on

Consumer Ethnocentrism in the American Automobile Market.” Journal of Marketing

Theory and Practice 23.3 (2015): 321-37. ProQuest. Web.

Quelch, John. “How to Penetrate the US Market.” Harvard Business Review, Harvard Business

School Publishing, 23 July 2014, hbr.org/2008/03/how-to-penetrate-the-us-market.

Shimp, Terence A., and Subhash Sharma. “Consumer Ethnocentrism: Construction and

Validation of the CETSCALE.” Journal of Marketing Research, vol. 24, no. 3, 1987, pp.

280–289. JSTOR, www.jstor.org/stable/3151638.

Appendix: Interview

1. What is your educational background?

EXAMPLE 9

a. I have a degree in Marketing Management. I graduated from the Institute of

Economics and Entrepreneurship in Ternopil, Ukraine. It was a new profession in

Ukraine, because I studied at the time when Ukraine became independent. Before its

independence, it was a totalitarian and communist country and marketing did not

exist. There was planned economy, factories were told what to manufacture, who to

sell to, at what prices and in what amounts. When Ukraine became independent, it

went through the transformation from totalitarian to capitalistic country. So marketing

was new, and nobody knew what it was, so I was among the first marketing

professionals in Ukraine.

2. What kind of working experience did you gain upon graduating?

a. I held several jobs. My first job was as a Marketing Manager at a commercial firm,

Technotern, which bought everything and sold everything. Such business was also

very new in Ukraine. I started with selling beer. My city had its own beer factory, so

all the beer came from there. My objective was to research the beer market in the city

(about 300,000 population in the city, so about 1 million in the region). I had to

research the market volume and the possibility of selling a new type of beer which

was made in Kiev (capital). My colleagues and I learned that the beer will be

demanded, and we became the exclusive representatives of that factory in our city.

Later, at the same firm, I also conducted marketing research to find out if consumers

in my city (and the region) would buy a new, better variety of buckwheat. I found that

demand existed, and we started producing and selling this new product.

Later, I worked at an artificial leather factory. I was the Head of the Sales Department

there, first, and then became the Head of the Marketing Department. I worked on

market research, diversification, promotion of new products, market launching,

advertising, but didn’t work on sales as much.

3. Please describe what company you worked for last; its specialization?

a. My last job before leaving the country was at Frank-Lemex. It was an exclusive

representative of a German factory, Frank, in Ukraine. The factory manufactured

spare parts for agricultural machinery / tillage equipment. We mostly specialized in

fast-wearing parts for European-made plows, so our customers already had to own

European machinery. Our job was to influence them to buy the parts from us and not

from the original producer of the machinery. We were successful in doing so, because

of our flexible pricing policy and operational pace of delivery (about 1 month).

Later, we went through an expansion, so we added a greater variety of products to our

catalogue. We started selling not only fast-wearing parts for plows, but parts for most

kinds of agricultural machinery.

4. How did your company penetrate Ukrainian market with German products?

a. German company that I worked for had one contact in Ukraine – my boss. The

German owners found her, rented a warehouse, brought samples or whatever parts

EXAMPLE 10

they thought would sell in Ukraine, and let her sell. She found a couple of guys who

knew how to sell, and they started up the firm.

5. So, the rest of expansion and selling was done by Ukrainian employees?

a. Yes. The German owners did not have any influence on how the advertising and

selling was done. They did not partake in creating prices. We had to give back the

money for the supply and delivery and everything else was done by our firm.

6. Do you think that it’s better that Ukrainian employees were selling German products?

a. Yes, because Ukrainian mentality is very different from German. I would also say

that Ukrainian people believe other Ukrainians more than Germans.

7. How did you reach your target consumer at Frank-Lemex?

a. We had two main ways of reaching the target consumer: personal sales and

exhibitions. For personal sales, we had to travel throughout the country to meet up

with different farmers. On site, we would talk about the machinery that they used and

encouraged them to buy our parts. During the exhibitions, we displayed several

variations of a plow (with our parts) so that the people who came up to us could touch

the equipment. For those who work with such machinery, it’s very important to not

only see but also to touch. It’s a method to have an influence on the psyche. We also

created and distributed many catalogues, brochures, and supplies/souvenirs (pens,

hats, erasers, bottle openers, etc.). Usually we did not have much time to talk to

interested individuals, so we took their contact information (about 100-200 people)

and upon our return home, we followed up with all of them by phone. With some

individuals we could make a sale on the phone, but we had to travel to most other

interested individuals to meet with them in person.

8. I was always interested to know, why is it important to give out souvenirs to people at

interest fairs or exhibitions like you described?

a. They serve as reminders of your business for the people. For example, they can hang

up a calendar with our logo and plow parts on their wall and remember which

company can sell what they need. Later, our follow-up call will serve as an additional

reminder to do business with us.

9. What is the consumer profile of your target audience/consumer?

a. The consumer must have had foreign machinery. Also, the consumer must have been

progressive/innovative. Of course, it was possible to buy cheap analogies from China

or Ukraine, but they were of low quality. So, the consumer must not be cheap, he

must understand that good quality costs money. He must be flexible to get rid of

stereotypes and reject original parts to try alternative parts that we sold.

10. Since you worked in a German company, did you employ any German advertising or selling

techniques?

a. No, all techniques were Ukrainian to effectively target the Ukrainian consumer.

EXAMPLE 11

11. U.S. Consumer profile suggests consumer trend that “Made in America” is an important

issue. “70% of Americans consider it significant to buy American products.” Are “made in

Ukraine” products just as popular in Ukraine?

a. No, Ukrainian products are not popular in Ukraine. That’s because during the Soviet

Union, the quality of Ukrainian (Soviet) products was fairly good, but after the

breakup of Soviet Union, the quality did not only not get better, but actually got

significantly worse. Factories went into decline, almost all of production stopped. The

only well-produced products were steel and rolled metal products. Everything else

was bad, so all of Ukraine’s outlook was into Europe and United States. Ukrainians

were not proud of their products and did not even want to buy them, because they

were not of good quality and underdeveloped.

12. Whereas U.S. consumers show tendencies of ethnocentrism (locally produced products are

viewed as superior to products produced in other parts of the world) in their buying

behaviors, would you consider Ukrainian consumers to show xenocentrism (favoritism

toward out-groups coupled with negative stereotypical perceptions of one's own group (the

in-group))?

a. Yes, I completely agree. Ukrainians think that European products are much better.

For this segment of the market, they are completely sure that Ukrainian producers fall

behind 50 or even 100 years and cannot compare to other modern European or

American producers.

13. Was the fact that your products were manufactured in Germany an important information

cue?

a. Yes, for an average Ukrainian the word “German” was associated with quality,

reliability, and superiority. Therefore, in our advertisement, our major focus was on

the fact that we sell GERMAN products, German quality, and German reliability.

14. Did you emphasize German manufacturer as a selling technique?

a. Yes. We did not make a big focus on the superiority of German manufacturer in

contrast to domestic producer. But it was obvious. People knew that Ukrainian

products, especially of this segment, showed no competition to the German products.

15. So, people knew it from experience?

a. Yes, yes, all of them were Ukrainian and started out with Ukrainian products. So,

they all knew from experience that Ukrainian producer could not make a good

enough product.

16. "In the past, foreign firms penetrated U.S. markets by concentrating on price, but the

emphasis has switched to product quality.” When selling your products, what information did

you emphasize more than other?

a. Our products were quite expensive and not comparable with the Ukrainian

counterpart. We did not make a point about the price. Most importantly, we talked

about the quality, German quality raised no doubts. Second, we emphasized the

EXAMPLE 12

delivery time. Costumer service, after the purchase, was also important. The price

was the last thing that we mentioned, because it was quite high.

How we approached talking about the price was dependent on the customer. If he

bought his parts from an original manufacturer, we would say that our manufacturer

produces parts of the same quality, but lower price. But if he bought his parts from a

cheaper manufacturer, we did not emphasize the price as much. We had an individual

approach to each customer in that sense.

17. According to some research, country of origin does not matter to consumers much if the price

and quality of the product varies. Only if the price and quality of domestic and foreign

products are the same, people consider the country of origin and make a decision towards

domestic product. Did you see the same pattern when selling German products to Ukrainian

consumers?

a. Ukrainian price was much lower, but the quality of the products was not good.

Because of this, Ukrainian products were not in competition. In 90% of cases, at that

time already, it was almost impossible to buy Ukrainian parts for a Ukrainian

machine.

18. Some research suggests that there is a direct relationship between product quality evaluation

and the perceived degree of economic development of the country of origin. Do you agree?

Have you seen this relationship when working with your consumers?

a. Yes. I think that an average Ukrainian person does not make a big difference between

developed foreign countries. For example, Germany, United Kingdom and United

States are the top countries that Ukrainian consumer has no doubt about the quality

about their products. They are considered as the strongest countries, strongest

producers, and most reliable products.

b. Since we represented a German manufacturer, we did not bring up any others and

talked only about our manufacturer.

19. What did you like the most about working in marketing?

a. Personal sales. If you successfully win the consumer over and if he actually changes

his long-time provider in your favor and becomes your regular customer and you

make money off of him, it makes you the happiest.

20. Do you see a bright future for marketing in Ukraine?

a. Yes, of course. I think that Ukraine is moving towards capitalism. I think that

marketing there can be like that in the world. Marketing is the foundation for the

activities of any organization and any enterprise. Market decides everything. The

success of the business depends on the market, but also knowing how to influence

that market, influence demand, create or correct demand, adjusting it to yourself,

that’s great. I just think that Ukraine needs time for such development.

21. Do you think that Ukraine can catch up to other countries in marketing?

a. Ukraine never had its own marketing; it’s always looking towards America. I don’t

think it will be able to catch up, but I just hope it’s only behind only 5-6 steps.