final consumers in global market
Process of creating a brand personality or image
(a) Defining the target consumer in global market; (b) Finding out what they need, want and like; (c) Building a consumer personality profile; and (d) Creating the global product or brand image to match that profile.
Supply Chain Management (SCM)
Is a process for managing the flows of goods, service and information between suppliers, retailer and the final customers
consumerism is viewed as
a product of "cultures that value self-interest, material and wealth accumulation, status, novelty, and individualism.
pricing SHOULD NEVER BE considered
a static element
consumerism is
activities by consumer groups, government agencies, and at times business organizations that are designed to protect the consumer.
The government does not have the ability to analyze the labor practices of all foreign plants
and cannot force them to adhere to American standards.
Business ethics
are essential rules of conduct that guide actions in the marketplace—standards against which most people in a cultural judge what is right and what is wrong, good or bad.
Private label products
are products made to the retailers specifications and not sold at other retail stores
Global products
are the results of components and manufacturing operating in several countries
Marks &Spencer
(retail chain store in UK) benefiting from tech because support of industry increasing demand for speed, frequent delivery and collaborative planning along value chain
Countries have widely varying laws regarding marketing practices legally and illegally.
---Finland prohibits newspaper or TV advertising for political groups, religion, alcohol, weight-loss products, or "immoral literature." ---United Kingdom does not allow cigarette or liquor advertising on TV. Russian government banned cigarette and alcohol ads after the fall of communism.
Advances in media promote global consumerism
--A combination of western mass media and advertising of global brands will inevitably lead the developing world into emulative forms of consumption (Wilk, 1996). --Multinationals are paying special attention as young Indians become more connected to global entertainment by economic liberalization. --Given high economic growth rates in many parts of the developing countries, the rapid spread of digital media, advertising, and consumer goods, we must consider what kind of consuming future we can expect and how to protect global consumers, whatever their aspirations.
The market for credit cards promotes global consumerism
--Consumerism is further encouraged by increasing the usage of credit cards, loans, and other instruments of debt. --total consumer debt in early 2019 rose to $13.67 trillion (Federal Reserve Bank of New York, 2019). --For the global market, one tenth of the world's population is shopping online --In 2018, it was estimated that more than 1.8 billion consumers worldwide have shopped over the Internet (Clement, 2019). For most of these online purchases, credit card was the most popular payment option online.
Economic growth of global consumers promotes global consumerism
--Global consumers are becoming affluent with the rapid growth of economy, spending two third of a country's Gross Domestic Product (GDP). --With accelerating globalization and advance in technology, consumers can have more chance for shopping in terms of marketing mix (e.g., product, price, place, and promotion). ---consumers are more sophisticated and have different levels of desire or needs, which lead to global consumerism with diverse claims over the world.
On the other hand, advances in information technology and online shopping will provide major improvements in consumerism as consumers will have access to vast amounts of more and better information The new rights for consumers in the information age has been suggested:
--The right to be educated about product strengths and weaknesses. --The right to trust source of product information. The right to a state-of-the-art information infrastructure that empower consumers to efficiently use their time, money, and energy. --The right of all consumers, whether urban or rural, rich or poor, to access the information infrastructure. --The right to privacy, preventing sellers and others from abusing personal information gained in product transactions.
Liberalization of international retailing promotes global consumerism.
--Through the distribution via generally high supermarkets and global advertising, people across the world trusted the universal products with a generally high standard of quality --. By offering similar products and services worldwide, supermarkets and shopping malls made the consumer a global customer -consumerism turned into a global trend.
Underage Drinking and Smoking: Consumerism as a symbol of prestige and unattainable status
--can be seen as a motivation for underage drinking and smoking. ---Nearly one-third of high school students and nearly 45% of college students report having engaged in drinking more than five drinks in one sitting. ---One million young consumers begin smoking every year, and the vast majority of new recruits for the cigarette industry are adolescents (75%).
consumer connection
-90% of the U.S. population has internet access for getting info and services in June 30, 2019 -internet users are rapidly growing worldwide with penetration rate of 57.3% -worldwide internet population was about 4.536 billion -China has worlds largest internet population of 854 mill --Followed by India (560 mill) ---U.S. (292.9 mill --Indonesia (171 mill
Netflix's success can be attributed to two strategic moves-
-A three- stage expansions process into new markets and the ways it worked with those markets
Apparel E-commerce
-Apparel is the largest retail categories in Commerce -US online apparel sales reached $103.13 billion in 2019 and are expected to increase 194.4 billion in 2023 -Apparel companies are earning about US $102.8 billion in e-commerce market -concerns about product displays and how well potential customers can interact with items by more advanced tech - -To CONSUMERS Apparel fit problems ARE THE BIGGEST REASON they are hesitant to buy online apparel -Tenth street Hat offers an AR option on their product pages, enabling shoppers to elect items tagged "Virtual Try On" ---This increased 33% engagement levels in the online store
Radio Frequency Identification (RFID)
Is using a special tag or label embedded with a computer chip and antenna; which is one of such advances that show the potential to transform how business is conducted for sales, distribution, promotions, and customer management
To identify the best position, global product positioning basically uses the same techniques as in domestic marketing
It is a mapping process of the visual representation of how the target consumer will views the all the brands of each category within the market. - Choosing a position for a product is mapping the product's location in the mind of the consumer
The Ansoffs Growth Matrix is
a tool that helps businesses decide their product and market strategy -Ansoffs product/market growth matrix suggests that businesses's attempts to grow determine whether it markets new or existing products in new or existing markets
Price can be adjusted drastically when the product is imported into foreign territory where issues of...
a) currency stability and (b) pricing-to-market are present.
objective of skimming is to
achieve the highest possible contribution in a short time period. For a marketer to use this approach, the product has to be unique, and some segments of the market must be willing to pay the high price.
Global companies use centralized management to
achieve this type of standardized retail operation
In the third phase Netflix
focused on adding more languages, optimizing its personalization algorithms, and expanding its support for a range of device, operation, and payment parternships
, Chinese workers who make shoes for Nike at a Wellco Factory are paid 16 cents /hour (the living wage for a small family is about 87 cents)
for a 12 hour shift, 7 days a week. The workers are fined if they refuse overtime, and they're not paid an extra rate for overtime hours (Sweatshops and Globalization, 2006).
E-commerce is becoming a
foreign market entry method -focused on domestic sales -large number of companies started receiving order from customer in other countries, resulting in concept of international internet marketing -
Consumerism Is becoming more important in
globalization of markets, so that consumer education should be more in tune with the social ramifications of consumerism on a global scale.
a firm may identify only target markets where products can be marketed with little or no modification,
that is, standardization.
the success of skimming depends on ..
the ability and speed of competitive reaction
As the world marketplace becomes smaller due to
the advance in technologies of communications and media, the consumer responsibility should become greater.
Also, Netflix has been seing steady increases of subscribers in India
the company will lower its subscription plan to expand its overall subscriber base (Singh, 2019)
Product is defined as
the complex set of tangible and intangible elements that distinguishes it form the other entities in the marketplaces
A concentrated strategy means that ...
the firm decides to serve one of several potential segments of the market
firms typically use pricing as a differentiation tool
the international marketing manager may have no choice but to accept prevailing world market price
In global community, social responsibility has surfaced as
the new environmentalism, advertising health claim, and advertising to children.
The organic market is growing in popularity
the organic clothing industry has recently increased substantially. As of 2018, sales of U.S. organic fiber products (primarily, apparel, but also home domestics) reached $1.8 billion in sales, up from 1.6 billion in 2017 (Organic Trade Association, 2019
as more segments are targeted and more of the product is made available
the price is gradually lowered
Price escalation is
the pricing disparity in which goods are priced higher in a foreign market than in the home market; caused by the added costs involved in exporting products from one country to another (Cateora & Graham, 2007).
when penetration pricing is used ,
the product is offered at a low price intended to generate volume sales and achieve high market share, which would compensate for lower-per-unit return.
Price changes usually follow changes in
the product's stage in the life cycle. -As the product matures, more pressure will be put on the price to keep the product competitive despite increased competition and less possibility of differentiation.
Fabric mills charged high premiums for
the smaller batches ordered and the extra consideration of cleaning the equipment for the production of organic textile.
logistics refers to
the system of moving merchandise from producer to consumer
With multiple-product pricing,
the various items in the line may be differentiated by pricing them appropriately to indicate, ---for example, an economy version, a standard version, and the top-of-the-line version. --other items in line are expected to make up for lost contribution of "fighting brand" example, car washes. Basic wash could be $2, wash and wax $4, and the whole package $6.
Nature Baby (www.naturebaby.co.nz ) began in 1998,
with the growth of their family spurred the need for "natural, chemical free products that ensured the preservation of a beautiful world for [their] children to grow up in" .
From a global perspective, consumerism is viewed as
"a culture of peace" with respect to diversity, tolerance, sustainability, equality, empowerment, universal welfare, humanitarianism, and consumer education.
sweatshops
"workplace where workers are subject to extreme exploitation, including the absence of a living wage or benefits, poor working conditions, and arbitrary discipline, such as verbal and physical abuse"
A firm has 4 basic alternatives in approaching global market
(1) selling the same product in the global marketplaces, (2) modifying products for different countries and/or regions, (3) designing new products for foreign markets, and (4) incorporating all the differences into one product design and introducing a global product.
4 components to social responsibility
(a) economic responsibility, (b) legal responsibility, (c) ethical responsibility, and (d) discretionary responsibility.
international pricing situations are provided as pricing challenges:
(a) pricing for a new market entry, (b) changing price either as an attack strategy or in response to competitive changes, and (c) multiple-product coordination in cases of related demand - which are technically the same as problems encountered in domestic markets. -the scope of these pricing situations will vary according to degree of foreign involvement and type of market encountered
in first time pricing for new entry market the general alternatives are
(a) skimming, (b) following the market price, and (c) penetration pricing.
Marketers have to position their international marketing strategy into one of the following three categories:
(a) standardized, (b) differentiated, or (c) concentrated.
consumer product or brand perception can be visualized by ..
a positioning map , by 2 dimensions or multidimensional scales
The Hyperledger Fabric Blockchain based food traceability system
-Built for the two products worked -For pork in china it allowed uploading certificates of authenticity to blockchain, bringing trust to a system where that used to be a issue AND for mangos in the U.S. the time needed to trace their provenance went from 7 days to 2.2 seconds
In second stage of Netflix's expansion
-Earliest int expansion was to Canada in 2010 Using traditional model of expansion -Then a faster more extensive expansions, patterning with local stakeholder
several reasons why global consumerism plays an important role in maintaining global marketplace
-Economic growth of global consumers promotes global consumerism. -The market for credit cards promotes global consumerism. -Liberalization of international retailing promotes global consumerism. -Advances in media promote global consumerism.
QR systems can save the cost for production in several ways:
-Enormous inventories carried by textile mills, apparel manufacturers and retailer can be reduced - it should be possible to reduce incidences of forced markdowns that result from orders of goods that fail to sell as expected -The third area where QR can result in cost savings involves "Stock Outs" or situations where business is lost because a customer cannot find apparel in the desired style or size because it is out of stock. -QR system permit smaller initial orders, all owing stores to recorder more of a product that proves to be popular
RFID application can help retailers
-Help retailers manage their inventory more effectively by preventing overstocking and removing expired perishable items from the shelves -apply RFID tech to business actions
Part of Netflix's three stage expansion
-Netflix did not try to enter all markets at once -It selected its initial adjacent markets in terms of geography and psychic distance, or perceived differences between markets
Global growth of Netlix
-Netflix's global growth is a big factor in the company success. by 2017 it was operating in over 190 countries, and today close to 73 mill of its some 130 mill subscribers outside of the U.S.
Cycle of technological innovation
-Productivity in apparel industries which utilizes mostly hand-working and sewing machines advanced faster than the manufacturing average between 1975, and 1985 -computer assisted machines promised dramatic gains, increasing product and process innovation in 1990's -investment in new plant and state of the art equipment increased from $2 billion in 1987 to nearly $3 mill in 1999 --this has included development and use if shuttle less looms, robotics "nanotechnology"
Other important approaches to pricing (strategies)
-Psychological Pricing -Optional Product Pricing: -Captive Product Pricing -Product Bundle Pricing -Promotional Pricing -Geographical Pricing -Value Pricing
RFID adds value is by
-improving efficiency in warehouse operations, due to its ability to read tags without direct line of sight -systems capital cost is less than 10% of annual cost of using barcodes
RFID adoption in worlds next major manufacturing center
-RFID adoption is progressing in U.S., and Europe, particularly in warehouses and distribution centers of several hundred suppliers to : Best Buy Tesco Target Walmart U.S. Dept. of Defense -China has been aware of relationship with key customers (mega-retailers) like Walmart and Tesco
Trends in Global Apparel Retailers Include:
-Speed to Market: Short lead time for fast fashion cycle -Zero Inventory: Low quantities, scarce supply -More style: More choice, more chance of hitting it right
Centralized management means
-That policies related to the product line, merchandising, service, advertising, and prices are determined at the corporate level
How does this technology benefit Walmart?
-The blockchain technology enables Walmart to trace products across its supply ecosystem, making them to manage and control product distribution immediately when they have a serious issue with products.
Blockchain importance of supply chain management
-This technology can be used for tracking products through supply chain from producer to distributer, to buyers -retailers like Walmart and De Beers have been adopted to make sure products in their supply chains come from right sources -thus greater transparency
Managing Technology in a global market
-U.S accounts for about 40% of worldwide investments in IT , it will hit $2.7 trillion by 2020 -Most major IT companies are located in the U.S. should be focal point of Global IT economy -China is second only to the U.S. with regard to mobile phones, has 854 mill ppl have access to the internet, is worlds biggest producer of personal computers -india is among the leading software countries in the world , attracting foreign direct investment not only in manufacturing, also for research and development, from high tech leaders around the globe including the U.S. -Companies must invest in technological resources and organizational competencies that , if combined create advantage -technological investments are essential for participation in a hi-technology industry but do not guarantee success -technology should be supported by excellent organizational and marketing skills. This has clear implications for strategy making and execution technology is expected also to transform the concept of the firm in another ways
Retailers using a multinational strategy ..
-adapt their retail offerings as they enter foreign markets --They consider their retail subsidiaries as a portfolio of businesses that they must manage and adapt to each market they enter
The positioning of the product in consumers minds will
-add to its perceived value -Core product may indeed be the same or highly similar to those of competitors, leaving the marketers with the other tangible and augmented features of the product to achieve differentiation
supply chain networks
-apparel manufacturers must be faster and more flexible than their competitors to rapidly respond to consumer demands and adapt to current and future trends -
According to Lodging Magazine Annual Report
-checking in at first place is the number of hits(visits) at 48% -Then purchase or bookings 37% -Then visitor feedback 26% -completed response forms 14% -Brand recognition 11% -Conversions generated from other sites 10% -Click through 9% -Page views 3% -customers can reduce wait time or order electronically -companies would be able to build customer database and analyze their activities using web analytics and data mining program
RFID widespread adoption
-could improve supply chain efficiency such as real time tracking, safety monitoring, and overall warehouse operations -Leads to increase in sales volumes and improves profitability of vendors and retailers -RFID tags are perceived to be coded with a great deal more information than barcodes Retailers can store and transmit data, such as when the product item is manufactured, expiration dates for perishable items, and a record of the temperature at which an item is shipped
RFID system
-first launched as a pilot at two stores in 2012 -company studied technology effectiveness for 11 months - project expanded in 12 locations in 2013 -Is not the STANDARD at all new store openings in North America
Dell computer Corporation
-has expanded its strategy of selling computers over internet to foreign sites ( Malaysia, Australia, Hong Kong, New Zealand, Singapore, Taiwan)
Firms success depends on ..
-how good its product or service is and on how well the firm is able to differentiated by their composition, by country of origin , and by tangible feature such as warranty
For Global marketplace supply chain Networks
-more complicated and extended -Global retailers need to pay special attention to supply chain management -Especially for fashion products, effective supply chain might be competitive advantage for faster fashion cycle -Zara (Successful Spanish retailing giant) relies on communication technique to take control of almost every aspect of design --production and distribution for fast fashion it takes 5 weeks from design, fabric cut, sewing in local factories, finishing and sending to warehouse, to store
Wireless RFID handheld readers
-provide up to date access to inventory and customer info stored in centralized database
Logistics plays an important part in ..
-retail strategy of global companies
RFID tech gaining traction in Europe
-retialers there push technology beyond the case- pallet level tagging supply chain applications that are prevalent in U.S. -Each of these European companies like the U.S. retailer Walmart has initiatives that involve suppliers affixing passive RFID tags to cases, containers, or pallets. -Europes cultural climate may make it easier for metro and other retailers to push RFID deployment -Europeans are online, self checkout registers are prevalent throughout the continent -Tesco has installed 285 self checkout units In 96 of its U.S. stores -chips have been embedded in plastic cards to London subway & train riders can automatically pay for trips -Retailers don't have to treat carefully to avoid perception RFID infringes on consumer privacy, a strong point of contention of Europe
Challenge for Walmart
-when outbreak of food borne disease happens it takes days/weeks to find its source . Better traceability could help save lives by allowing companies to act faster and protect livelihoods of farmers by only discarding produce from affected farms -Walmart though blockchain tech might be a good fit for the decentralized food supply ecosystem -Walmart , together with its technology partner IBM, ran 2 proof concept projects to test the system - One project was about tracing mangos sold in Walmart US stores and the other aimed to trace pork sold in its China Stores
Xanomi is another brand of organic baby clothing that was inspired by the birth of the founders' children (Satkofsky, 2001).
. They began their business in 1995 and experienced difficulties in establishing profit returns because of the high costs of processing the organic materials they desired --The Xanomi brand realized that their success is based upon the sustainable niche they had captured. If their price range was reasonably structured, the clientele was considerate enough to adhere to it.
Multinational retailer have decentralized management to ..
..allow them to be more sensitive to cultural nuances --mulitnational retailers often use mixed management teams made up of native and expatriate executives
Multinational retailers usually concentrate their expansion in a ..
..limited number of countries, attempting to gain market share --French hypermarkets moving into Spain illustrates this approach
Another issue of business ethics is advertising health claims
44% of consumers read most health and nutritional information on the package. -their awareness is heightened by the potential harm that cigarettes, liquor, drugs, and even coffee can cause. FDA (Food and Drug Administration) developed rules in 1990. ---advertisers must substantiate their claim for foods with " scientific evidence", and marketers must eliminate "no-cholesterol" claims on vegetable oils.
Multinational companies have a potential market of
1.3 billion people in China because Chinese consumers are willing to pay more for foreign luxury brands they can show their status publicly.
Most companies do not use a ..
100% global strategy
A research on the sweatshop issue realized that
54.8% of respondents did not perceive the use of sweatshop labor to be an issue in the US. Approximately half believed that US apparel manufacturers pay employees a livable wage. The majority of 76% of female respondents were interested in having sweat free labels. Overall, 83% of respondents were more likely to purchase products with a no sweatshop labor, than garments without the label and 84% of consumers would pay five percent more for sweatshop labor free apparel. Therefore, many companies are aware of brand name "No Sweat" for response to globalization with business ethics.
Addictive and compulsive consumption: Consumer behavior has a dark side.
An individual's purchasing activity can evolve into an addictive and compulsive act of consumption. One can become addicted to many consumer products or services, including cigarettes, drugs, alcohol, exercise, TV, video game, collecting, and so on.
From a global market perspective explain the influence of ecological responsibility and environmentalism as they relate to green initiatives.
As consumers become more environmentally conscious, they support companies who are ecologically responsible and concerned about environments in manufacturing and positioning their products/services. It becomes norm among consumers in a global market, thus companies who respond to this movement proactively will be chosen and supported by consumers.
However, notions of right and wrong do differ among people, organizations and cultures
Because each culture has its own set of values, beliefs and customers, ethical business behaviors are defined quite differently around the world.
British consumers insist on a softer, more luxurious texture than their less discriminating continental and America cousins.
British toilet paper is four grams heavier per square meter because it contains more fiber than European tissues. Extensive consumer testing has established that British consumers are not willing to be fobbed off with anything less.
ACTNOW fashion challenge
But mindsets are changing as consumers and industry leaders become more informed. The apparel industry consumes more energy than the aviation and shipping industry combined, accounting for 10 per cent of the global carbon emissions. Chemicals from dyes make their way into the environment, polluting the air, water, and also harming marine life.
Compulsive behavior is an
irresistible urge to perform an irrational act, such as gambling, binge eating, and in this case, shopping.
How has charming used the 4 P's of product positioning (product, price, place, and promotion) to appeal to customers in U.K.
Charmin identified British (Place) consumers like soft and luxurious texture toilet paper (product) which is heavier and contains more fiber than European tissues. Charmin succeeded to promote (promotion) the quality of the product and consumers pay more (price) for the product than other European consumers do.
Describe Charmin's global pricing strategy as it relates to the difference in price between charmin toilet paper in the U.S. vs the U.K.
Charmin used market pricing strategy in U.K since British consumers pay twice more for toilet paper for its quality (softer and more luxurious) than U.S. and other European consumers.
issues of sweatshops include
Child Labor Unequal Employment Overworked Employees Hazardous /Inhumane Workplaces
optional product pricing
Companies will attempt to increase the amount customer spend once they start to buy. Optional 'extras' increase the overall price of the product or service. For example airlines will charge for optional extras such as guaranteeing a window seat or reserving a row of seats next to each other.
Technological innovation
is a macro process concerned with spread of new technology within the marketplace
Although product standardization is generally increasing, there are still substantial difference in company practices depending on the products marketed and where they are marketed.
For instance, industrial products, such as steel, chemicals, and agricultural equipment and technology incentive products (e.g., automobile, computer, and mobile phone) tend to be less culturally grounded and warrant less adjustment than consumer goods. -those products are more likely to require a standardization strategy for global markets
geographical pricing
Geographical pricing is evident where there are variations in price in different parts of the world. For example rarity value, or where shipping costs increase price.
Global strategy for global companies and retailers
Global companies have several characteristics. They are generally vertically integrated, including backward vertical integration and forward vertical integration. -If the company were to acquire a textile plant, it would be moving toward the raw materials, an instance of backward vertical integration.
Another factor distinguishes the British preference for a special toilet paper roll.
Go to any supermarket and you will be confronted by an extraordinary choice of more than 50 colors, sizes, and brands. reason for this variety apparently is that the British shopper insists that toilet paper match the color scheme of the bathroom. On the continent, consumers settle happily for white, with pink thrown in as a wild alternative.
Outline main reasons H&M might be motivated as a company to make this purchasing decision.
H & M aimed to reduce the negative social and environmental effects of traditional cotton growing and to motivate growers to invest in organic cotton growing as they use more organic cotton for products.
In what ways can you observe the role of global consumerism in the global market in the example of H&M?
H & M attempts to highlight the sustainable way to consume products through its organic clothing, motivating growers to invest in organic cotton growing.
H&M's effort to invest organic cotton aims at reducing the environmental impact of cotton growing.
H&M is working to improve conventional cotton growing through the Better Cotton Initiative (BCI). The company has been committed to measurably reduce the negative social and environmental effects of cotton growing using conventional ways.
product bundle pricing
Here sellers combine several products in the same package. This also serves to move old stock. Videos and CDs are often sold using the bundle approach.
Global product positioning
Is the location of a product in the mind of the global consumer mental image
The business value of consumerism by children has a positive effect on business, as well as other "important economic, social, health, and environmental and other costs to be considered."
In the United States, approximately $2 billion USD is spent solely on advertising to this young market of consumers. This indicates an industry awareness of its influence and profit potential. In 1997, an estimation of $188 billion USD represented the total influence of children on parental purchases, which was a dramatic increase from $20 billion USD in the 1970s. The United States is not alone in these dramatic expenditures. The European Union reports revenues up to $930 million from the television networks.
Skimming price
Is one of the pricing strategy to achieve the highest possible contribution in a short time period. For a marketer to use this approach, the product has to be unique, and some segments of the market must be willing to pay the high price
Outline the Pricing approach that Levi Strauss has taken in their 501 jeans.
Levi Strauss has taken "Skimming price" in international markets. The company sells jeans at discount prices to foreign buyers and they put premium price for the quality and uniqueness of the jeans. This approach can be used where consumers are willing to pay premium for the foreign brand and product and may need to be adjusted the price when there is less competition to buy the product.
Would you describe Levi Strauss as a global company or a multinational company?
Levis Strauss is a multinational company as they offer different pricing across countries according to the brand and product values the market perceive.
The product must be managed in a way to counteract the potential effects of inflation
Marketing managers must be willing to negotiate with foreign government, adapt to changes in the local markets, and predict incidences that require pricing changes.
Companies have taken other actions to promote environmental controls.
McDonald's switched from plastic to paper wrapping and uses recyclable products to build its restaurants while Pepsi-Cola has introduced 2-liter bottles made from 25% recycled materials
Centralized management
Means that policies related to the product line, merchandising , service, advertising, and prices are determined at the corporate level
Netflix and its communication
Netflix has worked with, and responded to, the new markets its entered. -Netflix has partnered with key local companies and worked with cell phone and cable operators to make its content available as part of their existing video on demand offerings -The company implemented in all markets the same customer centric model of operations and tried different approaches in different markets
Reebok will not work with enterprises using child labor or forced or obligatory labor including the forced labor of political prisoners.
Nike's corporate memorandum states that their suppliers/subcontractors must conform to local legislation respecting child labor and must certify that they do not use forced labor in the manufacture of their merchandise.
promotional pricing
Pricing to promote a product is a very common application. There are many examples of promotional pricing including approaches such as BOGOF (Buy One Get One Free).
E-commerce (electronic commerce)
Refers to the process of buying, selling, exchanging products, services, and information via computer. -this term is often used in the industry to describe online retailing via the internet , where the customer and retailer communicate through and interactive electronic computer system
Main pricing strategies
Skimming pricing, market pricing, penetration pricing, price changes, and multiple-product pricing are the main pricing strategies.
A large consumer products marketer's product line for any given market may include global product, regional products, as well as purely local products.
Some of these products developed for one market may later be introduced elsewhere, including the global marketers' home market.
Quick Response (QR)
System is a retailing strategy for production through supply-chain management technique in holding minimal inventory "lean retailing" and avoiding overstocking, while customers want to buy.
In attempt to stop discount store not in the manufacturer's official distribution channel from selling "unauthorized" Levi's
Tesco, a U.K. supermarket chain, was sued by Levi-Strauss & Company.
A good example of a company that generally uses a global strategy but does not carry 100% private label merchandise is...
The Body Shape -Body shop adjusts its product offerings and prices according to the location it is entering
GreenOrder, the company to help companies maximize the sustainability value, reviewed Interbrand's 100 best global brands in 2007.
The company ranked Toyota as the most successful at using green initiatives and its efforts enhanced its brand value. GreenOrder, company rated high on Toyota's efforts to communicate its environmental achievements with consumers. --oyota has been promoting its well-established green programs which began in the 1960s to provide modes of transportation that have the least impact on the environment. --Toyota's hybrid offerings, coupled with internal green effort such as returnable packaging, composting, and waste elimination programs, promoted the company's consciousness on the environment.
In the last decade, the organic apparel industry has been buoyed by the dramatic innovations in technology.
The industry experienced a market transition from the specific niche of green consumer extremists to a more mass-market interest due to the advent of fiber construction allowing for greater variety and comfort than ever before.
India is the world's second largest market for smartphone.
The number of smartphone users in India is expected to increase to about 442.5 million in 2022 (Statista, 2019).
First, segmentation has emerged as a key marketing planning tool as a foundation for effective strategy formulation in American and international companies.
The segmentation is to analyze markets, find target market and capitalize on a superior competitive position. --This can be accomplished by selecting one or more groups of users as targets for marketing activity and developing unique marketing programs to reach these prime prospects.
Global retailers sell only ..
Their private label products or products for which the manufacturers carry product risk
Levi Strauss for selecting a trade partner, child labor is not acceptable.
There is prohibition of the use of forced or prison labor at any stage in the production process.
Proctor & Gamble captured 10 percent of the market in less than five months after offering a stronger Charmin, but it may have gone too far
There were complaints that the "wet strength" of Charmin was unsuitable for U.K. toilets
Benetton uses a network of subcontractors to produce its product ..
These subcontractors use the same know-how, technology, and standards to provide a uniform product for Benetton. This dependence on a private label line means these retailers require a longer lead time before production is completed.
How diverters work
They come into a store in groups and buy every pair of Levi's 501 jeans they can, "says one store manager. He says he has seen two or three vans full of people come to the store when there is a sale and buy the six-pair-a-day limit, returning day after day until the sale is over --The Levi's are then channeled to a diverter, who exporters them to unauthorized buyers throughout the world. Many eventually end up in discount stores and are sold at discounted prices relative to those distributed through approved channels.
Companies must consider the social marketing issues when providing these taboo products.
They must be aware of the issues of (a) availability, (b) marketing exposure, and (c) warning labels: "alcohol may complicate pregnancy."
psychological pricing
This approach is used when the marketer wants the consumer to respond on an emotional, rather than rational basis. For example, 'price point perspective' 99 cents not one dollar.
value pricing
This approach is used where external factors, such as recession or increased competition force companies to provide 'value' products and services to retain sales (e.g., value meals at McDonalds).
Although the increasing number of companies have been participating in green actions for better environments, consumers in developed and affluent countries(
U.K, Germany, and the US) seem to be less concerned than consumers in countries that are directly suffering effects (e.g., China, Hong Kong, India).
prices of Levi 501s
U.S. retail prices for Levi's 501s are $30 to $40 a pair; in Germany, they are sold to authorized wholesalers for about $40, and authorized retailers sell them at about $80. The difference of $40 or so makes it economically possible for a diverter to buy 501s in the United States and sell them to unauthorized dealers who then sell them for $60 to $70, undercutting authorized German retailers.
Walmart results from IBM concept projects
Walmart can now trace origin of over 25 products from 5 different suppliers using a system powered by Hyperledger Fabric -Company plans to roll out the system to more products and categories in the near future
captive product pricing
Where products have complements, companies will charge a premium price where the consumer is captured. For example, a razor manufacturer will charge a low price and recoup its margin (and more) from the sale of the only design of blades which fit the razor.
Blockchain is
a computer file used for storing data (information) Using the form of a string of binary "bits" -when piece of permission info (or "block") gets entered into chain, other computers in network are notified -This makes falsifying info difficult because change of info is open for all to see
Price changes are called for when
a new product is launched, when a change occurs in overall market conditions (such as a change in the value of the billing currency), or when there is a change in the exporter's internal situation, such as costs of production.
as a labor intensive industry,
apparel and textiles need to recognize sweatshop issues on hazardous workplace and overworked employees.
Global retailers supply stores
around the worlds from several centralized warehouses, which they fully automate and integrate
Certain product features may be eliminated as an imperceptible value to the foreign target market
as well as the option of downsizing the products for their specific use.
Media directed at children correlates with the increase in television watching behavior.
children of the age range of two to seventeen spend up to 18,000 hours annually in front of the television. ---In Sweden, advertising directed at children has been banned during their prime time watching hours "due to findings that children under ten are incapable of telling the difference between a commercial and a program. ---Therefore, advertising is heightened by the fact that children from ages 6 to 13 spend more time in front of the television than they do in school. Research found that (1) children between ages 3 and 5 had difficulty distinguishing between TV programming and commercials; and (2) preteens are likely to respond to the immediate influence of a commercials.
Global marketing ranges from
export-import trade to licensing and compromises multinational activities such as joint ventures
price serves as a means of
communication with the buyer by providing a basis for judging the attractiveness of an offer --PRICE IS ALSO the MAJOR competitive tool in meeting and beating competitive offerings that are marketed as similar substitutes
Final customer price is determined based on ..
competitive prices, and then production and marketing must be adjusted costs, as well as confidence that the product life cycle is long enough to warrant entry into market -It is a reactive approach and may lead to problems if sales volumes never rise to sufficient levels to produce a satisfactory return.
Retailers of private label lines
concentrate on products with a long life cycle, avoiding fashion-sensitive merchandise that is more risky. - Foot Locker sells national brands but negotiates for exclusive features such as colors or detailing for its stores.
"positioning" refers to
consumers' perception of brand, or the company, as compared with that of competitor's brands
benefit of standardization is
cost savings in production and marketing.
Non-pulp diapers were promoted in Britain. A Blue Angel Label for products in Germany
declared environmentally sound. Also, a line of green products support to make Canada the Greenest government in the world"
The feasibility range for price setting established by
demand, competition, cost, and legal considerations may be narrow or wide in a given situation EX: pricing of commodity VS an innovation
concentrated marketing is less expensive than ..
differentiated marketing and is the appropriate choice for a new business with limited resources or a firm diversifying in a market outside of its core business
An exporter may ..
elect not to change price even though the result may be lower profitability. --However, if a decision is made to change prices, related changes must also be considered.
nanotechnology
employs technique from molecular engineering to improve fabric performance, and the creation of "smart" fabric
Diverters are
enterprising people who legally buy 501s at retail prices, usually during sales, and then resell them to foreign buyers. --It is estimated that Levis Strauss sells millions of dollars of Levi's abroad at discount prices- all authorized sales.
In order to promote clothing made from organic cotton,
he company marked "organic cotton" or "organic cotton mix" labels for all clothing made with organic cotton. --H&M has been contributing to using more organic cotton in its clothing and will continue to increase volumes by at least 50 percent a year in the next five years.
basic assumption of penetration pricing is that...
he lower price will increase sales, which may not always be the case. The cost of marketing and manufacture are kept at a minimum. Supermarkets often have economy brands for soups, spaghetti, etc.
In dressing rooms RFID readers
identify all merchandise a customer brings inside and displays info on garment on interactive video touch screen display
the value of global consumerism in the realm of consumer sciences becomes more necessary in order to
impart the consideration of sustains the global marketplace as a whole
The focus on consumerism ties directly with an
individual's self-respect and self-esteem in conjunct with the materialism. --Therefore, each type of consumer needs to be understood from the point of view of a global perspective..
Decentralized management
is a way to manage and adapt to each market they enter which is to allow them to be more sensitive to cultural nuances
Consumerism
is activities by consumer groups, government agencies, and at times business organizations that are designed to protect the consumer.
compulsive behavior
is an irresistible urge to perform an irrational act, including gambling, eating disorder or shopping.
Global strategy
is centralized management to achieve standardized retail operation
multinational strategy
is decentralized management adapt their retail offerings as they enter foreign markets
Sweatshop
is defined as a workplace where workers are subject to extreme exploitation, including the absence of a living wage or benefits, poor working conditions and arbitrary discipline, such as verbal and physical abuse.
Product
is defined as the complex of tangible and intangible elements that distinguishes it from the other entities in the marketplaces
Price penetration
is lower price strategy intended to generate volume sales and achieve high market share, which would compensate for lower-per-unit return. -The basic assumption of penetration pricing is that the lower price will increase sales, which may not always be the case
price is the only element of the marketing mix that ..
is revenue generating whereas all other elements entail costs
a concentrated strategy
is targeting a single segment of the global market, whereas the differentiated global marketing strategy is directing the product /service towards two or more different target segments
Environmentalism
is the green movement to promote environmental controls including waste disposal, recycling trash, air pollution, acid-rain emissions and gasoline consumption by encouraging car-pooling, mass transit and walking.
price should NOT be determined in
isolation from other marketing mix elements -PRICE MAY BE used effectively in POSITIONING the product in the marketplace
if an increase in price is required,
it may at least initially be accompanied by increased promotional efforts.
prices, along with cost determine
long term viability of the enterprise
As a response to integration efforts around the world, especially in Europe,
many international marketers are indeed standardizing many of their marketing approaches, such as branding and packaging, across markets.
if similar products already exist in the target market
market pricing can be used
with premium price
marketers can use a high price where there is uniqueness about the product or service --this approach is used where substantial competitive advantage exists -such high prices are charged for luxuries
price penetration approach requires ..
mass markets, price-sensitive customers, and decreasing production and marketing costs as sales volumes increase.
consumerism has continually focused on
materialism, which is away from acknowledging the consequences of one's actions upon the rest of society.
Marketing managers may have to adjust their distribution channels in order to
minimize costs in order to have a flexible export pricing strategy.
French hypermarkets
moved into Spain in the mid to late 1970's --they now have the dominant market share there --Japanese dept moved into Hong Kong in the same way, dominating the dept store market share within just a few years
Global product positioning is the
ocation of a product in the mind of the global consumer "mental image." -It is partly controlled by the marketers with marketing mix such as product attributes, price, distribution channel, and advertising for sales promotions
Multinational retailers
often use mixed management teams made up of native and expatriate executives
global pricing is
one of the most critical and complex issues in international marketing -a companys global pricing policy may make or break its overseas expansions efforts
A lead time is the ...
period between when the design for a product is completed and when production is finishes
Global marketing is concerned with
planning and conducting transactions across national borders to satisfy the objectives of individuals and organizations
price MAY BE used effectively in
positioning the product in the marketplace -it may be a major determinant in how the product is to be distributed
Product positioning involves using the marketing mix (the 4 P's) to
present a product to a selected target markets in the most favorable way, in order to gain market share.
supply chain management
process for managing the flow of goods, services, and information between suppliers, retailer and final customers
consumer goods (e.g., foods, clothing) generally require
product adaptation strategy because of their higher degree of cultural grounding. -The degree of change introduced in consumer goods depends not only on cultural differences but also on economic conditions in the target market.
H&M has been invested the use of organic cotton in its clothing since 2004 as an effort to reduce the environmental impact of cotton growing. Its investment has been focused on two parts:
promoting organic cotton by consumer demands and improving conventional cotton growing in an organic way. -planned to gradually use more organic cotton that is grown without chemical pesticides or synthetic fertilizers. In that way, the company believe that they can contribute to motivating growers to invest in organic cotton growing.
RFID
radio frequency identification, similar to barcodes -SYSTEM ENABLES its stores to know hat goods are available in the back room to be restocked on sales floor and purchased -REDUCES amount of time stores employees spent counting inventory and INCREASES merchandise visibility
Products may have to be assembled or partly manufactured in foreign markets in order to
reduce its costs
Positioning
refers to consumers perception of brand, or the company as compared with that of competitors brands
innovation
refers to new products that require significant adjustments to established
Corporate Social Responsibility (CSR)
refers to the duty of the organization to respect individuals' right and promote human welfare in its operations.
Logistics
refers to the system of moving merchandise from producer to consumer. Warehouses, transportation systems, and computer information networks are part of the logistic system
Business ethics are essentially
rules of conduct that guide actions in the marketing place—the standards against which most people in a culture judge what is right and what is wrong, good or bad.
After markets have been segmented
targeting aims at evaluating and comparing the identified segments in order to select one or more as prospect(s) with the highest potential.
Body shop and their global strategy
they replicate their standard format throughout the world. It doesn't matter what country you are in, the Body Shop has a standardized and recognizable retail format. Other retailers change their products and strategy to adapt to other parts of the world; they use a multinational strategy.
A "positioning map" is a
two-dimensional rendition of this competing market segment and affords multidimensional angles in which to perform market analysis.
RFID information can
used to automatically create advance ship notices or proof of delivery receipts
Apart of logistic systems are
warehouses -Transportation systems -computer information networks
The EDF (Environmental Defense Fund)
was developed in awareness of waste disposal and encouraging to recycle trash. --, it is an effort in changing packaging from plastics to paper. Also the EPA (Environmental Protection Agency) was specifically to recognize the issues of air pollution and acid-rain emissions. It recognizes the negative impact of gasoline consumption by encouraging car-pooling, mass transit, and walking.
How does this technology benefit consumers?
when an outbreak of a food borne disease happens , the blockchain technology can enable companies to trace products and act fast. -this helps stop the outbreak and save lives.
Ecological issue has begun in Western Europe
where the Green movement took root as a political movement in the early 1980s to protest acid rain's detrimental impact on Europe's forests. --Greens pressured federal, state, and local agencies in their countries to mobilize; and these agencies made the message clear to industry.
H&M's continued investment in organic cotton has led its development of "sustainable cotton',
which is made from organic, recycled or cotton approved by the Better Cotton Initiative. The company aims at transitioning to 100% sustainable cotton by 2020.
Another way way diverters work
wholesalers to buy quantities in excess of their needs and then divert the excess to foreign buyers.
American Apparel, the largest single garment factory in the United States has an immigrant success story
y. It is not a typical garment factory. They provide electronic music playing in the showroom, hip, edgy, sexually suggestive photo ads on every wall, and a thriving team spirit among the workers ---Every afternoon, workers take a 10-minute break for synchronized stretching exercises, and a team of massage therapists roam the factory floor to offer free neck rubs all day ---Earning twice the California minimum wage, employees get subsidized lunches, subsidized health insurances, free on-site English class and free bus tokens-even company bicycles to get to and from work......Owner Charney says American apparel is "sweatshop free."