Ch 15 Mini Sim on Global Marketing

As firms look overseas for opportunities, they must evaluate the global marketing environment before deciding whether or not to go global. The global marketing environment is complex and dynamic; therefore, a careful review of all types of factors must be completed. Drag each description to the appropriate environmental factor. When you have categorized all the items, click the Submit button (not word for word, but easy to decipher answers from choices)

-Drinking tea at weddings and offering tea as a sign of respect is an element of Chinese culture. -Income inequality is an economic factor. In countries with high income inequality, there are a large number of households with very high and very low incomes. -Stability is a political-regulatory factor that is fueled by governmental decision making and political history. -The number of coffee houses currently in China is a competitive factor.

The venture capitalists feel that there is profit potential in each of the three countries they identified: Turkey, Australia, and China. They suggest that you and the owners review the key data provided on the three countries and choose which country you would like to open the first international Caffè Gustoso in. Carefully consider each of the competitive, economic, cultural, and political-legal factors for each country before choosing where to start the expansion.

Australia

There are a number of factors to consider in global market analysis including economic, political-legal, competitive, and cultural factors. Key data for each of the three finalist countries are provided to Caffè Gustoso's owners and you. That afternoon, you meet with the owners privately to discuss the data you received. Which of the factors analyzed do you think will most affect the success or failure of the coffee shops?

Cultural: Annual Coffee Consumption

Another important decision facing the owners of Caffè Gustoso is organization of its international marketing activities. Companies typically manage their international activities in one of three ways: creating an export department, creating an international division, or becoming a global organization. The owners are eager to move forward with their international marketing effort and want your recommendation on how Caffè Gustoso should manage its international efforts. As you make your recommendation, keep Caffè Gustoso's product, level of international marketing experience, and financial commitment in mind. Select an option from the choices below and click Submit.

International division: Create an international division at Caffè Gustoso that handles all international business including joint ventures and direct investments.

With the decision to enter the Australian market finalized and relevant research gathered, you turn your attention to determining the best mode of market entry. Firms can choose from export, joint venture, and direct investment strategies. Although exporting minimizes financial commitment, it limits the firm's control and profit potential. Direct investment has the greatest profit potential and greatest control for the firm, but includes significant commitment and financial risk. Review the market entry strategies Caffè Gustoso is considering and choose the one that is most appropriate for the Australian market. Select an option from the choices below and click Submit.

Joint venture: Partner with an Australian investor to create a local business that shares possession and control.

Communicating with its new target market is an important task for Caffè Gustoso. In your next meeting with the owners, you tell them that there are two basic communication strategies: keep communication the same or adapt the communication for the new market. You first address the issue of the advertising message for the Australian market. Caffè Gustoso's current advertising slogan is "Love the coffee, love your day," which is presented against a backdrop of customers drinking coffee while relaxing in a comfortable setting. The owners want your recommendation as to whether they should keep the message the same or adapt the communication into something new for the Australian market. Select an option from the choices below and click Submit.

Keep: Utilize the same advertising message in Australia

To address the final marketing tactic, you draw the owners' attention to its channels of distribution. You inform the Caffè Gustoso ownership that if they want to be strong competitors, they need to design and manage an efficient global value delivery network. One of the owners stops you and says, "I don't really understand what you are telling me. Can't we just do the same thing in Australia as we do in the United States when it comes to distribution?" You decide to address this question by first addressing the differences between the U.S. and Australian distribution chains. Will you characterize the Australian distribution chain as shorter than, equivalent to, or longer than the U.S. distribution chain? Select an option from the choices below and click Submit.

Longer: Tell the owners that the Australian distribution chain will be longer than the U.S. chain

Price is an important marketing tactic to consider when entering a foreign market. Providing guidance for this decision are the many economic factors including gross domestic product (GDP), unemployment rate, poverty level, and average income. To make a pricing recommendation, you refer to the economic comparison between Australia and the U.S. How should you price Caffè Gustoso's product in Australia compared to its product in the United States? Select an option from the choices below and click Submit.

Lower: Drop the price to a level lower than in the U.S.

With the market entry strategy determined, you turn your attention to the marketing tactics beginning with product. Coffee drinking is strongly influenced by a country's culture. Based on your research into the Australian market, which of these three product strategies would be the best for Caffè Gustoso in its new market? Select an option from the choices below and click Submit.

Product adaptation: Replace Caffe Gustoso's high-sugar, expresso-based drinks with lower sugar options for the Australian market.