IMT - 17: INTERNATIONAL MARKETING

PART - A

Q1. What are the benefits and disadvantages of MNCs to host countries? How do MNCs influence international relations?

Q2. Explain the purchasing power parity theory.

Q3. How does the culture of a particular region affect the marketing mix? Explain with examples.

Q4. How is a foreign market selected?

Q5. Explain some foreign market entry strategies.

PART - B

Q1. Discuss tariff and non-tariff barriers and point out the differences between the two.

Q2. Briefly discuss the concept of international market research. Why is it undertaken? What are the

chief sources of information in India?

Q3. What is the role of the Commerce Ministry in helping exporters? Explain the role of EEPC.

Q4. What do you understand by 'standardization'? How is it different from 'adaptation' or 'customization'? Explain with some examples.

Q5. Explain some pricing strategies used in international marketing.

PART - C

Q1. Analyze the concept of dumping.

Q2. How can an exporter get insured against the uncertainty of payments from exports? Examine the role of ECGC in this regard.

Q3. Examine the role of advertising agencies in international marketing.

Q4. Analyze the foreign trade policy (2004-2009).

Q5. Discuss some errors that may occur in international trade documentation.

CASE STUDY - 1

In 1992, Micra, the small Nissan car, cost $20,000 in Denmark. That made it the most expensive car in its class. The price of the new model was up 20 per cent from the year before. Historically, only 35.4 per cent of Micra owners buy another Micra. The reason usually given is price. Moreover, due to the continuing recession, car sales in Denmark were at their lowest in 30 years. Only 9,000 small cars are sold each year, in a good year in Denmark.

To make the problem even more difficult, marketing costs had increased by at least 10 per cent in each of the past five years. Nissan Denmark addressed this situation by developing and executing a truly innovative database marketing programme. They were able to do this because they had very little to lose and much to gain:

     (i) Given the economic situation described above no one inside or outside the company expected success.

(ii) Even a small success would be greeted with great satisfaction.

(iii) Management was willing to take a chance on a really bold programme because the situation was becoming quite critical.

Working with their advertising agency, management decided that the only way to reverse the trend was to develop and execute an ongoing relationship-building campaign, specially targeting currently satisfied customers. This new programme was in addition to the ongoing print campaign, the objective of which had been awareness of the Nissan to chnance Micra. This campaign had been running in Denmark for several years. The advertising agency brought in a research firm and a direct marketing agency to assist in the development and execution of the new relationship building campaign. Nissan Denmark had several objectives, some short-term and others long-term. The key was using a test drive to motivate the previous or the current Micra owners to purchase the new Micra.

The first short-term objective was to sell 200 Nissan Micras through a test drive programme. The second was to reduce the average marketing cost below the current $400 per car. The first long-term objective was to develop an ongoing communication/relationship maintenance programme for current Micra owners. The second was to develop ongoing methodology to target the highest sales potential customers.

By accomplishing these objectives, Nissan could develop targeted mailing to get potential buyers to test drive a new Micra, or other Nissan models as part of an ongoing promotional programme. Nissan accomplished all its objectives, both short-term and long-term, by a few steps that were carefully organized and managed.

By hiring both a direct marketing agency and a respected market research firm, Nissan and its general advertising agency ensured that whatever programme was developed was based on a higher level of expertise than the ad agency alone would have been able to provide to the client. Together, all four team members - client, general agency, direct marketing agency and research firm, developed marketing questions, hypotheses and an initial approach to the problem.

Questions:

1. What marketing research methods were used by Nissan Micra for its sales?

2. Develop a strategy outline and a mailing plan for the clients.

3. Prioritize the mailing and develop a data-driven plan.

CASE STUDY - 2

Failure of Accord hybrid

The cancellation of the Honda Accord hybrid by the Japanese automaker should be recorded as one of the most spectacular marketing failures of the last five years. Honda announced that the new Accord will not have a hybrid version. But why? The Toyota Prius sold 77,000 in the US in just the first five months of the year. Honda, meantime, sold 1,700 Accord hybrids and 13,900 Civic hybrids. Ford also sold just 9,252 Escape hybrids. The Accord hybrid features the company's third-generation electric assist drive-train, matched with a modified version of the V6 that has cylinder deactivation technology. With 253 hp and 232 lb-ft of torque, it is the most powerful Accord in the lineup. The hybrid system captures electrical energy during braking or deceleration and stores it in the vehicle's special battery pack. Also, the system features the ability to shut off the engine during vehicle stops for further efficiency gains. The car's fuel economy is rated at 28 mpg city/35 mpg highway, which is similar to the fuel economy of the standard four-cylinder Accord.

A couple of things. The engineers at Honda got carried away with rational thinking. They talked themselves into the idea that a load of people would be impressed with getting four cylinder fuel economy with six cylinder power. Not so much. The typical Accord buyer is not that interested in horsepower. And to pay $9,000 more for the hybrid than the four-cylinder made sense to very few customers. Honda thought that the car would sell itself since it gets so much sales and showroom traffic for Accord anyway. The Accord has been the second best selling passenger car in the US for some time. Honda did no discernible marketing or public relations promotion for the Accord hybrid. It's not easy distinguishing any of the hybrids in the market today from the Toyota Prius. Honda needs to review all of its marketing.

Questions:

1. Was the decision on keeping standard advertising decisions across the globe justified? How could they have done better in increasing and promoting awareness?

2. What do you think are the reasons for the failure of the company to achieve its targets, specially considering the competitor's success?

3. What were the shortcomings in the market research conducted by Honda while launching a hybrid product in the US markets?