The New Shoes simulation offers three regions in which your athletic company ope

Question

The New Shoes simulation offers three regions in which your athletic company operates. The foreign region may be an option for your organization as the simulation develops. Which strategies would be best suited to meet the needs of your foreign market? Explain how you will determine the best strategy for your athletic business and provide support for your response as well. Finally, share two examples of organizations that have made marketing mistakes when entering the global marketplace and the consequences of their mistakes.

Explanation / Answer

When launching a product into foreign markets firms can use a standard marketing mix or adapt the marketing mix, to suit the country they are carrying out their business activities in.

International Marketing Mix: Product

Basic marketing concepts tell us that we will sell more of a product if we aim to meet the needs of our target market. In international markets this will involve taking into consideration a number of different factors including consumer's cultural backgrounds, religion, buying habits and levels of personal disposable income. In many circumstances a company will have to adapt their product and marketing mix strategy to meet local "needs and wants" that cannot be changed. McDonalds is a global player however, their burgers are adapted to local needs. In India where a cow is a sacred animal their burgers contain chicken or fish instead of beef. In Mexico McDonalds burgers come with chilli sauce. Coca-cola is some parts of the world taste sweeter than in other places.

International Marketing Mix: Promotion

As with international product decisions an organisation can either adapt or standardise their promotional strategy and message. Advertising messages in countries may have to be adapted because of language, political climate, cultural attitudes and religious practices. For example a promotional strategy in one country could cause offence in another. Every aspect of promotional detail will require research and planning one example is the use of colour; red is lucky in China and worm by brides in India, whilst white is worn by mourners in India and China and brides in the United Kingdom. Many organisation adapt promotion strategies to suit local markets as cultural backgrounds and practices affect what appeals to consumers.

International Marketing Mix: Pricing:

Pricing on an international scale is a complex task. As well as taking into account traditional price considerations such as fixed and variable costs, competition and target groups an organisation needs to consider additional factor such as

the cost of transport
tariffs or import duties
exchange rate fluctuations
personal disposal incomes of the target market
the currency they want to be paid in and
the general economic situation of the country and how this will influence pricing.

The internet has created further challenges as customers can view global prices and purchase items from around the world. This has increased the level of competition and with it pricing pressures, as global competitors may have lower operating costs.

International Marketing Mix: Place:

The Place element of the marketing mix is about distributing a product or service to the customer, at the right place and at the right time. Distribution in national markets such as the United Kingdom will probably involve goods being moved in a chain from the manufacturer to wholesalers and onto retailers for consumers to buy from. In an overseas market there will be more parties involved because the goods need to be moved around a foreign market where business practices will be different to national markets. For example in Japan there are approximately five different types of wholesaler involved in the distribution chain. Businesses will need to investigate distribution chains for each country they would like to operate in. They will also need to investigate who they would like to sell their products and services to businesses, retailers, wholesaler or directly to consumers. The distribution strategy for each country a business operates in could be different due to profit margins and transportation costs.

Prior to designing an international marketing mix a business should carry out a PEST analysis for every country they would like to operate in. This will help them determine what elements of the marketing mix can be standardised and which elements will need adjustments to suit local needs. It may well be that a business is able to use a standard marketing mix in the majority of cases and only need to adjust it on the rare occasion. Or every country may need its own marketing mix.

1. Nestlé in Africa

Accused of aggressively marketing its baby formula in impoverished markets where clean water was not readily available, which caused children to be sick, Nestlé was hit with a boycott that started in 1977 and continues to this day in various regions around the world. "They went in and tried to convince people that this was the modern thing to do," says Mittelstaedt. "They assumed there would be clean water, when there wasn't any, and the natural method would have been perfectly fine." While Mittelstaedt says it was the wrong product in the wrong market at the wrong time — Nestlé may have done better selling nutrients to mothers — Lavin says that niche marketing, perhaps focusing on affluent women who needed an alternative to breast feeding, would have given Nestlé a foothold in Africa without causing so much ire.

2. BP in the Gulf of Mexico

The 2010 oil spill was the largest accidental marine oil spill in the history of the petroleum industry, causing extensive damage to wildlife habitats, as well as local fishing and tourism industries. The oil and gas industry is unusual in that it's global — cultural differences don't have much impact except at the retail level. So, while the U.K.-based company followed the advice of experts in applying the same standards in its offshore operations as it did to its domestic ones, the problem was that BP's global standards were weak and poorly executed. "They put money ahead of safety," says Cohan. This made their branding, which positioned them as a greener kind of energy company, seem especially misleading. "The vulnerability you have in a disaster will be significantly greater in foreign markets," says Lavin. "There is no home market good will."

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