Global marketing - Hollensen 2020.pdf

Global Marketing Svend Hollensen 8th edition Praise for Global Marketing ‘Currently the best, most detailed global marketing textbook available in terms of theoretical depth and practical relevance….This is one of the most comprehensive textbooks in the mar...

Global Marketing Svend Hollensen 8th edition Praise for Global Marketing ‘Currently the best, most detailed global marketing textbook available in terms of theoretical depth and practical relevance….This is one of the most comprehensive textbooks in the market that offers rich discussions on theories on the international and the general marketing/management.’ Dr Sandra Awanis, Lecturer in International Marketing, Lancaster University Management School ‘Excellent level of detail in each chapter to support learning around strategic global marketing decisions. The video case studies are a huge bonus and really help to bring the subject alive.’ Giovanna Battiston, Senior Lecturer, Sheffield Hallam University ‘This book provides detailed insights and knowledge about how strategic decisions are made in international/ global marketing. The writing on each topic is rich and thorough and includes all the key models and theories, as well as relevant and top quality case studies for students to understand the main contents and test their ­understanding.’ Dr Qing Shan Ding, Senior Lecturer in Marketing, Huddersfield Business School, University of Huddersfield ‘The best textbook on global marketing I have come across! The case studies provide an excellent basis for class discussion.’ Dr Elisabeth Götze, Senior Lecturer in Marketing, Vienna University of Economics and Business ‘Social media are changing the way companies are engaging and interacting with their worldwide customer base. Svend Hollensen has captured all the latest trends in social media marketing very well with interesting models and new cases in his new eighth edition of Global Marketing.’ Philip Kotler, S. C. Johnson & Son Distinguished Professor of International Marketing, Kellogg School of Management, Northwestern University ‘It is likely the best textbook on international marketing. It is well written and a very good introduction to the different subjects, covering a wide range of aspects of international marketing. The cases and questions used are also of very good quality.’ Robson S. Rocha, Ph.D., Associate Professor, Department of Management, Aarhus University ‘The world today truly is flat, and a sound global perspective is an absolute must for all students. Svend Hollensen’s Global Marketing provides a thorough and comprehensive treatment that delivers on this need.’ Professor Michael R. Solomon, Professor of Marketing, Haub School of Business, Saint Joseph’s University, USA ‘A superior text which provides the most current and comprehensive overview of all facets of international marketing through text and pragmatic case studies, including timely coverage of social marketing, blockchain technology, IoT and AI topics of increasing impact to both the global marketing student and practitioner.’ Dwight R. Thomas, Professor Emeritus, Athabasca Open University, Canada ‘International marketing involves multidisciplinary, complex analysis in an increasingly challenging world. Global Marketing has the most complete coverage with a clever, organized flow for all related topics, providing excellent theory, updated application examples and criteria for the best interpretation of international marketing situations, making it a key reference textbook to complement lectures of all levels.’ Mg. Jorge V. H. Almada, Professor of International Marketing, Economics Department, Universidad Torcuato Di Tella, Argentina; Professor of International Marketing, Engineering and Management School, Instituto Tecnólgico de Buenos Aires, Argentina ‘Global marketing is taken to a new level with the impact of new technologies and industry 4.0. This eighth edition textbook provides comprehensive, up-to-date coverage of trends such as artificial intelligence, the Internet-of- Things (IoT), blockchain and social media marketing, showing how these can and must be integrated into the global marketing process. Coupled with informative models, exhibits and case studies, this textbook is highly recommended.’ Dr Kon Sen Choeng, former Marketing Division Faculty Member, Nanyang Technological University  Global Marketing  At Pearson, we have a simple mission: to help people make more of their lives through learning. We combine innovative learning technology with trusted content and educational expertise to provide engaging and effective learning experiences that serve people wherever and whenever they are learning. From classroom to boardroom, our curriculum materials, digital learning tools and testing programmes help to educate millions of people worldwide – more than any other private enterprise. Every day our work helps learning flourish, and wherever learning flourishes, so do people. To learn more, please visit us at www.pearson.com/uk  Global Marketing 8th edition Svend Hollensen Harlow, England London New York Boston San Francisco Toronto Sydney Dubai Singapore Hong Kong Tokyo Seoul Taipei New Delhi Cape Town São Paulo Mexico City Madrid Amsterdam Munich Paris Milan PEARSON EDUCATION LIMITED KAO Two KAO Park Harlow CM17 9SR United Kingdom Tel: +44 (0)1279 623623 Web: www.pearson.com/uk _______________________________ First published 1998 by Prentice Hall (print) Second-sixth editions published 2001, 2004, 2007, 2011 by Pearson Education Limited (print) Sixth-seventh editions published 2014, 2017 by Pearson Education (print and electronic) Eighth edition published 2020 (print and electronic) © Prentice Hall Europe 1998 (print) © Pearson Education Limited 2001, 2011 (print) © Pearson Education Limited 2014, 2017, 2020 (print and electronic) The right of Svend Hollensen to be identified as author of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988. The print publication is protected by copyright. Prior to any prohibited reproduction, storage in a retrieval system, distribution or transmission in any form or by any means, electronic, mechanical, recording or otherwise, permission should be obtained from the publisher or, where applicable, a licence permitting restricted copying in the United Kingdom should be obtained from the Copyright Licensing Agency Ltd, Barnard’s Inn, 86 Fetter Lane, London EC4A 1EN. The ePublication is protected by copyright and must not be copied, reproduced, transferred, distributed, leased, licensed or publicly performed or used in any way except as specifically permitted in writing by the publishers, as allowed under the terms and conditions under which it was purchased, or as strictly permitted by applicable copyright law. Any unauthorised distribution or use of this text may be a direct infringement of the author’s and the publisher’s rights and those responsible may be liable in law accordingly. All trademarks used herein are the property of their respective owners. The use of any trademark in this text does not vest in the author or publisher any trademark ownership rights in such trademarks, nor does the use of such trademarks imply any affiliation with or endorsement of this book by such owners. Pearson Education is not responsible for the content of third-party internet sites. ISBN: 978-1-292-25180-6 (print) 978-1-292-25183-7 (PDF) 978-1-292-25182-0 (ePub) British Library Cataloguing-in-Publication Data A catalogue record for the print edition is available from the British Library Library of Congress Cataloging-in-Publication Data Names: Hollensen, Svend, author. Title: Global marketing / Svend Hollensen. Description: 8th edition. | Harlow, England ; New York : Pearson, 2020. | Includes bibliographical references and index. | Summary: “Globalization is the growing interdependence of national economies - involving primarily customers, producers, suppliers and governments in different markets. Global marketing therefore reflects the trend of firms selling and distributing products and services in many countries around the world”— Provided by publisher. Identifiers: LCCN 2019044341 | ISBN 9781292251806 (hardback) | ISBN 9781292251820 (epub) Subjects: LCSH: Export marketing. | Export marketing—Case studies. Classification: LCC HF1416.H65 2020 | DDC 658.8/4—dc23 LC record available at https://lccn.loc.gov/2019044341 10 9 8 7 6 5 4 3 2 1 24 23 22 21 20 Cover image © Don Farrall / Stone / Getty Image Print edition typeset in 10/12 and Sabon MT Pro by SPi Global Print edition printed in Slovakia by Neografia NOTE THAT ANY PAGE CROSS REFERENCES REFER TO THE PRINT EDITION  Brief contents Preface xx Acknowledgements xxxiv Publisher’s acknowledgements xxxvi Abbreviations xliv About the author xlviii Part I The decision whether to internationalize 1   1 Global marketing in the firm 3   2 Initiation of internationalization 51   3 Internationalization theories 76   4 Development of the firm’s international competitiveness 101 Part I Case studies 145 Part II Deciding which markets to enter 167   5 Global marketing research 169   6 The political and economic environment 203   7 The sociocultural environment 235   8 The international market selection process 261 Part II Case studies 299 Part III Market entry strategies 311 9  Some approaches to the choice of entry mode 315 10  Export modes 332 11 Intermediate modes 354 12 Hierarchical modes 385 13 International sourcing decisions and the role of the subsupplier 405 Part III Case studies 431 viii  Brief contents Part IV Designing the global marketing programme 445 14 Product decisions 452 15 Pricing decisions and terms of doing business 511 16 Distribution decisions 550 17 Communication decisions (promotion strategies) 587 Part IV Case studies 640 Part V Implementing and coordinating the global marketing programme 661 18 Cross-cultural sales negotiations 663 19 Organization and control of the global marketing programme 691 Part V Case studies 724 Index 738  Contents Preface xx Acknowledgements xxxiv Publisher’s acknowledgements xxxvi Abbreviations xliv About the author xlviii Part I The decision whether to internationalize 1 1 Global marketing in the firm 3 Learning objectives 3 1.1 Introduction to globalization 4 1.2 The process of developing the global marketing plan 4 1.3 Comparison of the global marketing and management style of SMEs and LSEs 7 Exhibit 1.1 LEGO’s strategic drift 10 Exhibit 1.2 Economies of scale with Nintendo Game Boy 12 1.4 Should the company internationalize at all? 14 1.5 Development of the ‘global marketing’ concept 15 Exhibit 1.3 Helly Hansen uses ‘localization’ through geo-targeting technology 18 Exhibit 1.4 Persil Black and Persil Abaya = glocalization (same product, but different packaging and market communication) 18 1.6 Forces for global integration and market responsiveness 19 Exhibit 1.5 McDonald’s is moving towards a higher degree of market responsiveness 21 1.7 The value chain as a framework for identifying international competitive advantage 22 1.8 Value shop and the ‘service value chain’ 28 1.9 Global experiential marketing 32 Exhibit 1.6 Case Construction Equipment is using experiential marketing 35 Exhibit 1.7 IKEA’s use of AR 36 1.10 Information business, ‘Big Data’ and the virtual value chain 37 1.11 Artificial Intelligence (AI) and its influence on global marketing 38 1.12 Summary 40 Case studies 1.1 Green Toys, Inc.: a manufacturer of eco-friendly toys goes international 41 1.2 Hunter Boot Ltd: the iconic British brand is moving into exclusive fashion 45 1.3 Nivea 48 1.4 Uber 48 Questions for discussion 49 References 49 x  Contents 2 Initiation of internationalization 51 Learning objectives 51 2.1 Introduction 52 2.2 Internationalization motives 52 Exhibit 2.1 Jägermeister: the famous herbal liqueur is going global as a result of ‘managerial urge’ in the family-owned company 54 Exhibit 2.2 Global marketing and economies of scale in Japanese firms 57 Exhibit 2.3 Internationalization of Haier – proactive and reactive motives 60 2.3 Triggers of export initiation (change agents) 61 2.4 Internationalization barriers/risks 65 Exhibit 2.4 De-internationalization at British Telecommunications (BT) 68 2.5 Summary 70 Case studies 2.1 LifeStraw: Vestergaard-Frandsen transforms dirty water into clean drinking water 71 2.2 Elvis Presley Enterprises Inc. (EPE): internationalization of a cult icon 73 2.3 TOMS Shoes 74 Questions for discussion 75 References 75 3 Internationalization theories 76 Learning objectives 76 3.1 Introduction 77 3.2 The Uppsala internationalization model 79 3.3 The transaction cost analysis (TCA) model 83 3.4 The network model 86 3.5 Born globals 88 Exhibit 3.1 K-pop – a ‘born global’ phenomenon has worldwide success 89 3.6 Summary 93 Case studies 3.1 Bumble: the ’Feminist Tinder’ is expanding fast 94 3.2 BYD electrical cars: the Chinese electric car manufacturer is considering sales worldwide 95 3.3 Reebok 98 Questions for discussion 98 References 98 4 Development of the firm’s international competitiveness 101 Learning objectives 101 4.1 Introduction 102 4.2 Analysis of national competitiveness (the Porter diamond) 103 4.3 Competition analysis in an industry 107 4.4 Value chain analysis 112 Exhibit 4.1 Hilti is selling the ‘use’ – not the product 113 4.5 The sharing economy 123 4.6 The sustainable global value chain 126 4.7 Corporate social responsibility (CSR) 126 Exhibit 4.2 Chiquita – integrating CSR in the resource base 129 4.8 The value net 130 Exhibit 4.3 Value net – cooperation/competition between competitors within each airline alliance. The three alliances are competing against each other 131 4.9 Blue ocean strategy and value innovation 132  Contents  xi 4.10 Summary 134 Case studies 4.1 William Demant hearing aids: different threats appear on the horizon 135 4.2 DJI Technology Co. Ltd: a Chinese ‘born global’ is dominating the world market for drones with its Phantom and Mavic drones 138 4.3 Nike 142 Questions for discussion 142 References 142 Part I Case studies I.1 Electrolux: a white goods manufacturer is considering growth opportunities ­worldwide 145 I.2 Nintendo Switch 151 I.3 Cereal Partners Worldwide (CPW): the no. 2 world player is challenging the no. 1, Kellogg 158 Part II Deciding which markets to enter 167 5 Global marketing research 169 Learning objectives 169 5.1 Introduction 170 5.2 The changing role of the international researcher 170 5.3 Linking global marketing research to the decision-making process 171 5.4 Secondary research 173 5.5 Primary research 177 5.6 Other types of marketing research 188 5.7 Marketing research based on Web 3.0 192 Exhibit 5.1 Amazon.com – sustaining a competitive advantage through market research and analytics 194 5.8 Setting up an international marketing information system (MIS) 194 5.9 Summary 195 Case studies 5.1 Teepack Spezialmaschinen GmbH: organizing a global survey of customer satisfaction 196 5.2 LEGO Friends: one of the world’s largest toy manufacturers moves into the girls’ domain 198 5.3 e-Bikes in China 200 5.4 Hondajets: Honda enters the small-sized business jet market 200 Questions for discussion 201 References 202 6 The political and economic environment 203 Learning objectives 203 6.1 Introduction 204 6.2 The political/legal environment 204 Exhibit 6.1 Huawei Technologies Corporation: the role of home government in the internationalization process – good and bad 206 Exhibit 6.2 Google is experiencing political risk in China 210 6.3 The economic environment 215 6.4 The European Economic and Monetary Union and the euro 220 xii  Contents 6.5 BRIC – the slowing growth is hitting the emerging countries 223 Exhibit 6.3 Chotukool – Indian Godrej is creating a disruptive innovation (a low-cost refrigerator) for the BOP market 224 6.6 ‘Bottom of pyramid’ (BOP) as a market opportunity 226 Exhibit 6.4 Voltic Cool Pac – distribution of water in Ghana (up to 2011) 228 6.7 Summary 229 Case studies 6.1 G-20 and the economic and financial crises: what on earth is globalization about? Protests during a meeting in Buenos Aires, Argentina, November 2018 230 6.2 Danfoss Power Solutions: which political/economic factors would affect a manufacturer of hydraulic components? 232 6.3 Debate on globalization 233 Questions for discussion 233 References 234 7 The sociocultural environment 235 Learning objectives 235 7.1 Introduction 236 7.2 Layers of culture 237 Exhibit 7.1 Electrolux adapts its vacuum cleaner for the Japanese market 239 7.3 High- and low-context cultures 239 7.4 Elements of culture 241 Exhibit 7.2 In China the Citroën C4 brand name was changed to Citroën c-Quatre 241 Exhibit 7.3 Sensuality and touch culture in Saudi Arabian versus European ­advertising 244 Exhibit 7.4 Polaroid’s success in Muslim markets 247 7.5 Hofstede’s model (the ‘4 + 2’ dimensions model) versus the GLOBE model 248 Exhibit 7.5 Pocari Sweat – a Japanese soft drink expands sales in Asia 250 7.6 Managing cultural differences 250 7.7 Convergence or divergence of the world’s cultures 251 7.8 The effects of cultural dimensions on ethical decision-making 252 Exhibit 7.6 The quest for beauty opens a huge market for whitening products in Asia 253 7.9 Summary 255 Case studies 7.1 Cirque du Soleil Inc.: the show that revolutionized the circus arts is expanding its global scope 255 7.2 The Ikea catalogue: are there any cultural differences? 257 7.3 Allergan – the maker of Botox and breast implants 259 Questions for discussion 259 References 260 8 The international market selection process 261 Learning objectives 261 8.1 Introduction 262 8.2 International market selection: SMEs versus LSEs 262 8.3 Building a model for international market selection 263 Exhibit 8.1 Bosch Security Systems: IMS in the Middle East for fire detection systems 276 8.4 Market expansion strategies 281 Exhibit 8.2 Sunquick’s waterfall approach 281  Contents  xiii Exhibit 8.3 An example of the ‘trickle-up’ strategy 283 Exhibit 8.4 Bajaj is selecting new international markets ignored by global leaders 287 8.5 The global product/market portfolio 288 8.6 Summary 288 Case studies 8.1 Waymo: the driverless Google car is finding future growth markets 290 8.2 Philips Lighting: screening markets in the Middle East 295 8.3 Oreo (Mondelēz) 297 Questions for discussion 297 References 298 Part II Case studies II.1 SodaStream: managing profitable growth in an increasingly competitive global environment 299 II.2 The Female Health Company (FHC): the female condom is seeking a foothold in the world market for contraceptive products 305 II.3 Rolex: the luxury watch maker is facing increasing competition in the world market 308 Part III Market entry strategies 311 9 Some approaches to the choice of entry mode 315 Learning objectives 315 9.1 Introduction 316 9.2 The transaction cost approach 316 9.3 Factors influencing the choice of entry mode 318 Exhibit 9.1 Zara is modifying its preferred choice of entry mode, depending on the psychic distance to new markets 322 9.4 Summary 324 Case studies 9.1 Jarlsberg: the king of Norwegian cheeses is deciding on entry modes into new markets 324 9.2 Jissbon: is acquisition the right way to gain market shares in the Chinese condom market? 326 9.3 Understanding entry modes into the Chinese market 329 9.4 Müller Yogurts – entering the US market by Müller Quaker Joint Venture and exit again two years later 329 Questions for discussion 330 References 330 10 Export modes 332 Learning objectives 332 10.1 Introduction 333 10.2 Indirect export modes 335 10.3 Direct export modes 339 Exhibit 10.1 Lofthouse of Fleetwood’s (Fisherman’s Friend) decision criteria when selecting new distributors 341 10.4 Cooperative export modes/export marketing groups 347 10.5 Summary 348 xiv  Contents Case studies 10.1 Lysholm Linie Aquavit: international marketing of the Norwegian Aquavit brand 348 10.2 Parle Products: an Indian biscuit manufacturer is seeking agents and cooperation partners in new export markets 350 10.3 Honest Tea 352 Questions for discussion 352 References 353 11 Intermediate modes 354 Learning objectives 354 11.1 Introduction 355 11.2 Contract manufacturing 355 11.3 Licensing 356 11.4 Franchising 359 Exhibit 11.1 Build-a-Bear workshop’s use of the indirect franchising model in Germany – Austria – Switzerland 361 11.5 Joint ventures/strategic alliances 365 Exhibit 11.2 Irn-Bru’s distributor alliance (Y coalition) with Pepsi Bottling Group (PBG) in Russia 367 Exhibit 11.3 Safedom: a Chinese condom manufacturer needed a partner with which to enter the European market 376 11.6 Other intermediate entry modes 376 11.7 Summary 379 Case studies 11.1 Hello Kitty: can the cartoon cat survive the buzz across the world? 379 11.2 KABOOKI: licensing in the LEGO brand 381 11.3 Marriott 383 Questions for discussion 384 References 384 12 Hierarchical modes 385 Learning objectives 385 12.1 Introduction 386 12.2 Domestic-based sales representatives 387 12.3 Resident sales representatives/foreign sales branch/foreign sales subsidiary 387 12.4 Sales and production subsidiary 389 12.5 Subsidiary growth and integration strategies 390 12.6 Region centres (regional HQ) 391 12.7 Transnational organization 393 12.8 Establishing wholly owned subsidiaries – acquisition or greenfield 394 12.9 Location/relocation of HQ 394 12.10 Foreign divestment: withdrawing from a foreign market 395 Exhibit 12.1 Tesco’s withdrawal from Japan in 2012 –later in China 396 Exhibit 12.2 Walmart’s withdrawal from the German market 398 12.11 Summary 399 Case studies 12.1 Ralph Lauren Corporation: Polo moved distribution for South-East Asia in-house 400 12.2 Durex condoms: SSL sell Durex condoms in the Japanese market through its own organization 402 12.3 Starbucks 403 Questions for discussion 403 References 404  Contents  xv 13 International sourcing decisions and the role of the subsupplier 405 Learning objectives 405 13.1 Introduction 406 13.2 Reasons for international sourcing 407 13.3 A typology of subcontracting 409 13.4 Buyer–seller interaction 410 13.5 Development of a relationship 413 13.6 Reverse marketing: from seller to buyer initiative 416 13.7 Internationalization of subcontractors 417 Exhibit 13.1 An example of Japanese network sourcing: the Mazda seat-sourcing case 419 13.8 Project export (turnkey contracts) 419 13.9 Summary 420 Case studies 13.1 ARM: challenging Intel in the world market of computer chips 421 13.2 Bosch Indego: how to build B2B and B2C relationships in a new global product market – robotic lawnmowers 425 13.3 Kone elevators and escalators 428 Questions for discussion 429 References 430 Part III Case studies III.1 Tinder dating app: the famous dating app brand is facing increasing competition from e.g. Badoo 431 III.2 Spotify: the online music-streaming company is growing fast but is suffering ­financial imbalance 436 III.3 Autoliv Airbags: transforming Autoliv into a global company 440 Part IV Designing the global marketing programme 445 14 Product decisions 452 Learning objectives 452 14.1 Introduction 453 14.2 The dimensions of the international product offer 453 14.3 Developing international service strategies 453 Exhibit 14.1 Salesforce.com as provider of CRM ‘cloud’ services 459 14.4 The product life cycle 459 Exhibit 14.2 The iOS (Apple)/Android (Google) global contest in the smartphone business 463 Exhibit 14.3 Threadless T-shirt crowdsourcing business 466 14.5 New products for the international market 468 Exhibit 14.4 Product invention – solar-powered portable charging systems for India 472 14.6 Product positioning 472 Exhibit 14.5 Chinese piano manufacturers are experiencing the ‘country of origin’ (COO) effect 473 Exhibit 14.6 Madame Tussauds – a brand that brings people closer to celebrities on a global basis 474 xvi  Contents 14.7 Brand equity 475 14.8 Branding decisions 476 Exhibit 14.7 Unilever’s Snuggle fabric softener – an example of local brands in multiple markets 478 Exhibit 14.8 Kellogg under pressure to produce under Aldi’s own label 481 Exhibit 14.9 Shell’s co-branding with Ferrari and LEGO 482 Exhibit 14.10 Roundup – a global brand for multiple markets 483 Exhibit 14.11 Maggi – local brands for multiple markets through acquisitions 484 14.9 Sensory branding 485 Exhibit 14.12 Starbucks’ expanding product line strategy is causing problems for its ‘scent marketing strategy’ 487 14.10 Implications of the internet for collaboration with customers on product decisions 488 14.11 Internet of Things (IoT) and its use for marketers 490 Exhibit 14.13 Google’s use of IoT in the form of the smart thermostat, Nest 492 14.12 3-D printing – a possible new industrial revolution in customization 493 Exhibit 14.14 Coca-Cola Israel increases its sales of their mini bottle though a ‘Mini Me’ 3-D Print campaign 495 14.13 Global mobile app marketing 496 Exhibit 14.15 L’Oréal is extending the customers’ buying experience with the mobile app Makeup Genius 497 14.14 ‘Long tail’ strategies 498 14.15 Brand piracy and anti-counterfeiting strategies 499 Exhibit 14.16 The next stage in pirating, faking an entire company – NEC 500 14.16 Summary 500 Case studies 14.1 Danish Klassic: launch of a cream cheese in Saudi Arabia 501 14.2 Zippo Manufacturing Company: has product diversification beyond the lighter gone too far? 505 14.3 Burberry branding 506 14.4 Tequila Avión 507 Questions for discussion 508 References 508 15 Pricing decisions and terms of doing business 511 Learning objectives 511 15.1 Introduction 512 15.2 International pricing strategies compared with domestic pricing strategies 512 15.3 Factors influencing international pricing decisions 512 15.4 International pricing strategies 517 Exhibit 15.1 German car manufacturers are using ‘skimming’ price strategy in China 518 Exhibit 15.2 A ‘market pricing’ (‘mass point’) strategy in use: the Converse brand is making a comeback under Nike ownership 519 Exhibit 15.3 Volkswagen Group’s product portfolio approach to pricing 523 Exhibit 15.4 The Gillette price premium strategy 524 Exhibit 15.5 Dollar Shave Club 527 15.5 Implications of the internet for pricing across borders 535 15.6 Terms of sale and delivery 537 15.7 Terms of payment 539 15.8 Export financing 541 15.9 Summary 544  Contents  xvii Case studies 15.1 Harley-Davidson: how should the pricing strategy be affected by the new EU tariffs in 2018? 544 15.2 Gillette Co.: is price standardization possible for razor blades? 546 15.3 Vaseline pricing strategy 547 Questions for discussion 548 References 549 16 Distribution decisions 550 Learning objectives 550 16.1 Introduction 551 16.2 External determinants of channel decisions 552 16.3 The structure of the channel 554 Exhibit 16.1 Burberry: the iconic British luxury brand targets 25 of the world’s wealthier cities 557 16.4 From single-channel to omnichannel strategy 558 Exhibit 16.2 Dell’s use of the multichannel distribution strategy 559 16.5 Managing and controlling distribution channels 561 16.6 Blockchain technology and its influence on international marketing and SCM 566 Exhibit 16.3 Maersk’s use of blockchain in their shipping 568 16.7 Implications of the internet for distribution decisions 569 16.8 Online retail sales 570 16.9 Smartphone marketing 572 16.10 Channel power in international retailing 573 Exhibit 16.4 The ‘banana split’ model 574 16.11 Grey marketing (parallel importing) 577 16.12 Summary 578 Case studies 16.1 De Beers: forward integration into the diamond industry value chain 579 16.2 Tupperware: the global direct distribution model is still working 581 16.3 DHL 584 Questions for discussion 585 References 585 17 Communication decisions (promotion strategies) 587 Learning objectives 587 17.1 Introduction 588 17.2 The communication process 588 Exhibit 17.1 Husqvarna’s consumer wheel 591 17.3 Communication tools 592 Exhibit 17.2 LEGO Ninjago’s 360-degree marketing communication 597 Exhibit 17.3 Ricola is using celebrity endorsement in the international marketing of its herbal drops 601 Exhibit 17.4 Ambush marketing strategy – Dutch Bavaria vs Anheuser Busch’s Budweiser during the Fifa World Cup 2010 603 17.4 International advertising strategies in practice 609 Exhibit 17.5 Jarlsberg® cheese – cross-border communication 611 17.5 Implications of the internet for communication decisions 612 17.6 Social media marketing 613 Exhibit 17.6 Abena is using ‘influencer marketing’ to penetrate the US diaper market 620 17.7 Categorization of social media 621 xviii  Contents 17.8 The social media funnel 624 17.9 Development of the social media marketing plan 625 17.10 Developing a viral marketing campaign 629 Exhibit 17.7 Fox Business (Trish Regan) is selling a political statement 631 17.11 Summary 632 Case studies 17.1 Helly Hansen: sponsoring fashion clothes in the US market 633 17.2 Morgan Motor Company: can the British retro sports car brand still be successful after 100 years? 634 17.3 BMW Motorcycles 637 Questions for discussion 638 References 638 Part IV Case studies IV.1 Swarovski: the jewellery/crystal manufacturer is expanding into e-commerce and social media 640 IV.2 Levi Strauss: expanding in new international markets 647 IV.3 Guinness: how can the iconic Irish beer brand compensate for declining sales in the home market? 651 Part V Implementing and coordinating the global marketing programme 661 18 Cross-cultural sales negotiations 663 Learning objectives 663 18.1 Introduction 664 Exhibit 18.1 Google gives a clock as gift in China 664 18.2 Cross-cultural negotiations 665 Exhibit 18.2 Euro Disney becomes Disneyland Resort Paris – Disney learns to adapt to European cultures 674 18.3 Intercultural preparation 675 18.4 Coping with expatriates 676 18.5 Knowledge management and learning across borders 679 18.6 Transnational bribery in cross-cultural negotiations 682 18.7 Summary 683 Case studies 18.1 ZamZam Cola: marketing of a ‘Muslim’ cola from Iran to the European market 684 18.2 TOTO: the Japanese toilet manufacturer seeks export opportunities for its high-tech brands in the US 686 18.3 Dunkin’ Donuts 687 18.4 Stella & Dot 688 Questions for discussion 689 References 689 19 Organization and control of the global marketing programme 691 Learning objectives 691 19.1 Introduction 692 19.2 Organization of global marketing activities 692 19.3 The global account management organization 697  Contents  xix Exhibit 19.1 Danfoss Power Solutions’ GAM 707 19.4 Controlling the global marketing programme 708 19.5 The global marketing budget 714 19.6 The process of developing the global marketing plan 718 19.7 Summary 718 Case studies 19.1 Mars Inc.: merger of the European food, pet care and confectionery divisions 719 19.2 Henkel: should Henkel shift to a more customer-centric organization? 719 19.3 McDonald’s 721 Questions for discussion 722 References 722 Part V Case studies   V.1 Tencent: the Chinese online giant is seeking new alliances 724 V.2 Huawei smartphones: expanding into the international markets for smartphone 727 V.3 Tetra Pak: how to create B2B relationships with the food industry on a global level 732 Index 738 Lecturer Resources ON THE WEBSITE For multiple choice questions to accompany this book, please visit go.pearson.com/uk/he/resources For password-protected online resources tailored to support the use of this textbook in teaching, please visit go.pearson.com/uk/he/resources  Preface Globalization is the growing interdependence of national economies – involving primarily customers, producers, suppliers and governments in different markets. Global marketing therefore reflects the trend of firms selling and distributing products and services in many countries around the world. It is associated with governments reducing trade and investment barriers, firms manufacturing in multiple countries and foreign firms increasingly competing in domestic markets. For many years, the globalization of markets, caused by the convergence of tastes across borders, was thought to result in very large multinational enterprises that could use their advantages in scale economies to introduce world-standardized products successfully. In his famous 1994 book, The Global Paradox, John Naisbitt has contradicted this myth, especially the last part:1 The mindset that in a huge global economy the multinationals dominate world busi- ness couldn’t have been more wrong. The bigger and more open the world economy becomes, the more small and middle-sized companies will dominate. In one of the major turn-arounds in my lifetime, we have moved from ‘economies of scale’ to ‘dis- economies of scale’; from bigger is better to bigger is inefficient, costly and wastefully bureaucratic, inflexible and, now, disastrous. And the paradox that has occurred is, as we move to the global context: the smaller and speedier players will prevail on a much expanded field. When the largest corporations (e.g. IBM, ABB) downsize, they are seeking to emulate the entrepreneurial behaviour of successful SMEs (small and medium-sized enterprises) where the implementation phase plays a more important role than in large companies. Since the behaviours of smaller and (divisions of) larger firms (according to the above quotation) are convergent, the differences in the global marketing behaviour between SMEs and LSEs (large-scale enterprises) are slowly disappearing. What is happening is that the LSEs are downsizing and decentralizing their decision-making process. The result will be a more decision- and action-oriented approach to global marketing. This approach will also char- acterize this book. In light of their smaller size, most SMEs lack the capabilities, market power and other resources of traditional multinational LSEs. Compared with the resource-rich LSEs, the complexities of operating under globalization are considerably more difficult for the SME. The success of SMEs under globalization depends in large part on the decision and imple- mentation of the right international marketing strategy. The primary role of marketing management, in any organization, is to design and exe- cute effective marketing programmes that will pay off. Companies can do this in their home market or they can do it in one or more international markets. Going international is an enormously expensive exercise, in terms of both money and, especially, top management time and commitment. Due to the high cost, going international must generate added value for the company beyond extra sales. In other words, the company needs to gain a competi- tive advantage by going international. So, unless the company gains by going international, it should probably stay at home. 1 Naisbitt, J. (1994) The Global Paradox, Nicholas Brealey Publishing, London, p. 17.  Preface  xxi The task of global marketing management is complex enough when the company oper- ates in one foreign national market. It is much more complex when the company starts oper- ations in several countries. Marketing programmes must, in these situations, adapt to the needs and preferences of customers that have different levels of purchasing power as well as different climates, languages and cultures. Moreover, patterns of competition and methods of doing business differ between nations and sometimes also within regions of the same nation. In spite of the many differences, however, it is important to hold on to similarities across borders. Some coordination of international activities will be required, but at the same time the company will gain some synergy across borders, in the way that experience and learning acquired in one country can be transferred to another. Objectives This book’s value chain offers the reader an analytic decision-oriented framework for the development and implementation of global marketing programmes. Consequently, the reader should be able to analyse, select and evaluate the appropriate conceptual frameworks for approaching the five main management decisions connected with the global marketing process: (1) whether to internationalize; (2) deciding which markets to enter; (3) deciding how to enter the foreign market; (4) designing the global marketing programme; and (5) implementing and coordinating the global marketing programme. Having studied this book, the reader should be better equipped to understand how the firm can achieve global competitiveness through the design and implementation of market-responsive programmes. Target audience This book is written for people who want to develop effective and decision-oriented global marketing programmes. It can be used as a textbook for undergraduate or graduate courses in global/international marketing. A second audience is the large group of people joining ‘global marketing’ or ‘export’ courses on non-university programmes. Finally, this book is of special interest to the manager who wishes to keep abreast of the most recent developments in the global marketing field. Prerequisites An introductory course in marketing. Special features This book has been written from the perspective of the firm competing in international markets, irrespective of its country of origin. It has the following key features: a focus on SMEs as global marketing players; a decision/action-oriented approach; a value chain approach (both the traditional product value chain and the service value chain); a value network approach (including different actors vertically and horizontally); a social media marketing approach is integrated throughout the book; coverage of global buyer–seller relationships; extensive coverage of born globals and global account management (GAM), as an exten- sion of the traditional key account management (KAM); presents new interesting theories in marketing, for example, service value chain, Service Dominant (SD) Logic, value innovation, Blue Ocean Strategy, social media marketing, xxii  Preface Internet-of-Things (IoT), corporate social responsibility (CSR), global account manage- ment, viral branding and sensory and celebrity branding; aims to be a ‘true’ global marketing book, with cases and exhibits from all parts of the world, including Europe, the Middle East, Africa, the Far East, North and South America; provides a complete and concentrated overview of the total international marketing plan- ning process; many new up-to-date exhibits and cases illustrate the theory by showing practical applications. Outline As the book has a clear decision-oriented approach, it is structured according to the five main decisions that marketing people in companies face in connection with the global mar- keting process. The 19 chapters are divided into five parts. The schematic outline of the book in Figure 1 shows how the different parts fit together. Global marketing research is considered to be an integral part of the decision-making process; therefore it is included in the book (Chapter 5), so as to use it as an important input to the decision about which markets to enter (the beginning of Part II). Examples of the practice of global marketing by actual companies are used throughout the book, in the form of exhibits. Furthermore, each chapter and part ends with cases, which include questions for students. What’s new in the eighth edition? The new eighth edition is concentrated around three major themes: ‘glocalization’, ‘internet of everything’ and ‘social media marketing’. The glocalization concept which runs through- out this new edition enables international marketers to utilize the synergies arising from being both ‘local’ and ‘global’ at the same time. An important aspect of this new edition is its emphasis on the so-called ‘Internet of Everything’ and ‘Internet of Things’ (IoT), which is becoming incorporated in all parts of the daily communication and buying behaviour Figure 1 Structure of the book Part I: The decision whether to internationalize Chapters 1–4 Part II: Deciding which markets to enter Chapters 5–8 Part III: Market entry strategies Chapters 9–13 Part IV: Designing the global marketing programme Chapters 14–17 Part V: Implementing and coordinating the global marketing programme Chapters 18–19  Preface  xxiii of consumers around the world. Consequently, this increasing ubiquity of the internet is reflected in its inclusion in every chapter and in most of the cases and exhibits. The inte- gration of ‘social media marketing’ maybe plays the most important role in this edition of Global Marketing. The book is still structured around the well-known stages that SMEs go through when they internationalize as shown in Figure 1. The book’s chapters and cases are totally updated with newest journal articles and com- pany information. Besides that, the following new issues are introduced in the individual chapters: Chapter 1: the concept of providing customer value is now extended by adding ‘Artificial Intelligence (AI)’ and its focus on the global marketing planning process (section 1.11). AI allows international marketers to adopt a data-driven approach with the objective of making predictive sense of their global digital customers’ diverse behaviours across chan- nels and devices. By analysing historical browsing and transactional patterns, marketers can identify relevant global customer segments. Chapter 4: The section about the ‘sharing economy’ is expanded by adding the ‘­sharing– exchange continuum’ which is a model of consumption whereby goods and services are not owned by a single user, but rather only temporarily accessed by members of a net- work and underutilized assets are shared, either for free or for a fee (section 4.5). Chapter 6: shows the role of home government in the case of Chinese Huawei Technol- ogies Corporation. Chapter 14: now contains an extended section about how Internet-of-Things (IoT) can be integrated into the global marketing process (section 14.11), which is highly dependent on the acquisition of the new skills for the marketer. As the IoT becomes a reality, the interactions between consumers and things undergo emergence and contribute something greater than the sum of the parts resulting in new consumer experiences embodying design and complexity. Chapter 15: introduces the concept of ‘subscription-based pricing’ (section 15.5). ‘Sub- scription pricing’ is a business model where a customer must pay a (e.g. monthly) sub- scription to have access to a product or service. The strategy was initially developed by magazines and newspapers, but an increasing number of companies and websites are now using this model for their products and services. The pricing model is illustrated by the Dollar Shave Club example. Chapter 16: now shows and explains the whole process from the single channel strategy to the omnichannel strategy (section 16.4). Rather than working in parallel, omnichannel implies integration and orchestration of channels such that the customer experience of engaging across all the channels is more efficient or pleasant than using single channels in isolation. Also, this chapter contains a section about blockchain technology (section 16.6) and its influence on international marketing and SCM. This new technology will change business execution and international marketing strategies. With blockchain, anyone can transfer valuable assets from one person to another person without a third-party trust middleman. Chapter 17: now contains a totally new way of dividing social media into four categories (Value Play, Value Sell, Value Share and Value Create), in order to optimize the social media marketing mix and maximize the Value Capture (net profit/bottom line) from the social media marketing plan (section 17.7). Furthermore, the chapter also presents the ‘social media funnel’ and the key metrics connected to the three stages of a typical customer buying process: Awareness, Engagement and Action (section 17.8). Finally, the chapter now contains a more detailed stage plan for the development of the social media marketing plan (section 17.9). Several new exhibits with real updated company examples are added to various chapters. Many completely new and exciting chapter case studies are now available: xxiv  Preface Case study 3.1: Bumble – the ‘feminist’ Tinder is expanding fast Case study 3.2: BYD electric cars – the Chinese electric car manufacturer is considering sales worldwide Case study 4.1: William Demant hearing aids – different threats appear on the horizon Case study 5.3: e-Bikes in China Case study 8.1: Waymo – the driverless Google car is finding future growth markets Case study 9.2: Jissbon – is acquisition the right way to gain market shares in the Chinese condom market? Case study 9.4: Müller Yogurts entering the US market by Muller Quaker Joint Venture and exiting again two years later Furthermore, completely new part cases have been added: Case I.1: Electrolux – a white goods manufacturer is considering growth opportunities worldwide Case I.2: Nintendo Switch – a ‘Blue Ocean Strategy’ come-back in the games console market Case II.3: Rolex – the luxury watch maker is facing increasing competition in the world market Case III.1: Tinder dating app – the famous dating app brand is facing increasing compe- tition from e.g. Badoo Case III.2: Spotify – the online music-streaming company is growing fast but is suffering financial imbalance Case IV.1: Swarovski – the jewellery/crystal manufacturer is expanding into e-commerce and social media Case IV.2: Levi Strauss – expanding in new international markets Case V.1: Tencent – the Chinese online giant is seeking new alliances Case V.2: Huawei smartphones – expanding into the international markets for smartphones The following exhibits are also new in the book: Exhibit 6.1: Huawei Technologies Corporation – the role of home government in the internationalization process – good and bad Exhibit 14.13: Google’s use of IoT in the form of the smart thermostat, Nest Exhibit 14.14: Coca Cola Israel increases its sales of its Mini Bottle through a ‘Mini Me’ 3-D campaign Exhibit 16.3: Maersk’s use of blockchains in its shipping Exhibit 17.6: Abena is using ‘influencer marketing’ for penetrating the US diaper market Exhibit 17.7: Fox Business is ‘sellling’ a political statement In total Seven (chapter cases) and nine (part cases) = 16 new cases have been added to the book. In total the book contains 62 chapter cases + 15 part case studies (three per part) = 77 updated case studies in all. Furthermore 6 completely new exhibits have been added to the book. Pedagogical/learning aids One of the strengths of Global Marketing is its strong pedagogical features: Chapter objectives tell readers what they should be able to do after completing each chapter. Real-world examples and exhibits enliven the text and enable readers to relate to market- ing models. End-of-chapter summaries recap the main concepts. Questions for discussion allow students to probe further into important topics.  Preface  xxv Each chapter contains three or four case studies, which help the student relate the models presented in the chapter to a specific business situation. Part cases studies – for each part there are three comprehensive case studies covering the themes met in the part. To reinforce learning, all case studies are accompanied by questions. Case studies are based on real-life companies. Further information about these companies can be found on the Internet. Company cases are derived from many different countries representing all parts of the world. Tables 1 and 2 present the chapter and part case studies. Multiple choice questions. Part case studies: each part is introduced by a case which highlights a general decision problem from the part. Table 1 Chapter case studies: overview Chapter Case study title, subtitle and related Country/area Geographical Target ­websites of company target area market headquarters B2B B2C Chapter 1 Case study 1.1 US US, World ✓ ✓ Global marketing Green Toys, Inc. in the firm A manufacturer of eco-friendly toys is going international www.greentoys.com Case study 1.2 UK World ✓ Hunter Boot Ltd The iconic British brand is moving into exclusive fashion www.hunterboots.com Case study 1.3 Germany World ✓ Nivea www.nivea.com Case study 1.4 US World ✓ Uber Chapter 2 Case study 2.1 Switzerland World ✓ ✓ Initiation of LifeStraw (developing internationalization Vestergaard-Frandsen transforms dirty water countries) into clean drinking water www.vestergaard.com Case study 2.2 US World ✓ Elvis Presley Enterprises Inc. (EPE) Internationalization of a cult icon www.elvis.com Case study 2.3 US World ✓ TOMS Shoes (developing www.toms.com countries) Chapter 3 Case study 3.1 US World ✓ Internationalization Bumble theories The ‘feminist’ Tinder is expanding fast www.bumble.com Case study 3.2 China World ✓ ✓ BYD electric cars The Chinese electric car manufacturer is considering sales worldwide www.byd.cn xxvi  Preface Table 1 Continued Chapter Case study title, subtitle and related Country/area Geographical Target ­websites of company target area market headquarters B2B B2C Case study 3.3 US World ✓ ✓ Reebok www.reebok.com www.adidas-group.com Chapter 4 Case study 4.1 Denmark World ✓ ✓ Development of the William Demant hearing aids firm’s international Different threats appear on the horizon competitiveness www.demant.com Case study 4.2 China World ✓ ✓ DJI Technology Co. Ltd A Chinese ‘born global’ is dominating the world market for drones with its Phantom www.dji.com Case study 4.3 US World ✓ Nike www.nike.com Chapter 5 Case study 5.1 Germany World ✓ Global marketing Teepack Spezialmaschinen GmbH research Organizing a global survey of customer satisfaction www.teepack.com Case study 5.2 Denmark World ✓ LEGO Friends One of the world’s largest toy manufacturers moves into the girl’s domain www.lego.com Case study 5.3 China World ✓ e-Bikes in China https://www.youtube.com/ watch?v=NvaO3hP3i7w Case study 5.4 Japan World ✓ HondaJets Honda enters the small-sized business jet market http://www.hondajet.com/ Chapter 6 Case study 6.1 US World ✓ ✓ The political G-20 and the economic and financial crises and economic What on earth is globalization about? Protests environment during a meeting in Buenos Aires, Argentina, November, 2018 https://g20.org/en/ Case study 6.2 Denmark, US, World ✓ Danfoss Power Solutions Germany Which political/economic factors would affect a manufacturer of hydraulic components? www.powersolutions.danfoss.com Case study 6.3 US US ✓ ✓ Debate on globalization No website available  Preface  xxvii Table 1 Continued Chapter Case study title, subtitle and related Country/area Geographical Target ­websites of company target area market headquarters B2B B2C Chapter 7 Case study 7.1 Canada World ✓ The sociocultural Cirque du Soleil Inc. environment The show that revolutionized the circus arts is expanding its global scope www.cirquedusoleil.com Case study 7.2 Sweden, World ✓ IKEA catalogue Holland Are there any cultural differences? www.ikea.com Case study 7.3 Ireland/US ✓ ✓ Allergan The maker of Botox and breast implants www.allergan.com Chapter 8 Case study 8.1 US World ✓ ✓ The international Waymo market selection The driverless Google car is finding future process growth markets www.waymo.com Case study 8.2 Holland World ✓ Philips Lighting Screening markets in the Middle East www.philips.com Case study 8.3 US World ✓ Oreo (Mondelēz) www.oreo.com Chapter 9 Case study 9.1 Norway World ✓ ✓ Some approaches Jarlsberg to the choice of The king of Norwegian cheeses is deciding on entry mode entry modes into new markets www.jarlsberg.com Case study 9.2 China Europe, World ✓ Jissbon Is acquisition the right way to gain market shares in the Chinese condom market? www.jissbon.cn Case study 9.3 World China ✓ Understanding entry modes into the Chinese market No website available Case study 9.4 Germany US ✓ ✓ Müller Yogurts www.muellergroup.com Chapter 10 Case study 10.1 Norway Germany, the ✓ ✓ Export modes Lysholm Linie Aquavit rest of the International marketing of the Norwegian world Aquavit brand www.linie.com xxviii  Preface Table 1 Continued Chapter Case study title, subtitle and related Country/area Geographical Target ­websites of company target area market headquarters B2B B2C Case study 10.2 India World ✓ ✓ Parle Products An Indian biscuit manufacturer is seeking agents and cooperation partners in new export markets www.parleproducts.com Case study 10.3 US World, US ✓ Honest Tea www.honesttea.com Chapter 11 Case study 11.1 Japan World ✓ ✓ Intermediate entry Hello Kitty modes Can the cartoon cat survive the buzz across the world? www.sanrio.com Case study 11.2 Denmark World ✓ ✓ Kabooki Licensing in the LEGO brand www.legowear.dk Case study 11.3 US World ✓ ✓ Marriott www.marriott.com Chapter 12 Case study 12.1 US World, Asia ✓ ✓ Hierarchical modes Polo Ralph Lauren Polo moves distribution for South-East Asia in-house www.ralphlauren.com Case study 12.2 UK World ✓ ✓ Durex Condoms SSL will sell Durex condoms in the Japanese market through its own organization www.durex.com Case study 12.3 US World ✓ ✓ Starbucks www.starbucks.com Chapter 13 Case study 13.1 UK World ✓ International ARM sourcing decisions Challenging Intel in the world market of and the role of the computer chips subsupplier www.arm.com Case study 13.2 Germany World ✓ ✓ Bosch Indego How to build B2B and B2C relationships in a new global product market – robotic lawnmowers www.bosch.com Case study 13.3 Finland World ✓ Kone elevators and escalators www.kone.com  Preface  xxix Table 1 Continued Chapter Case study title, subtitle and related Country/area Geographical Target ­websites of company target area market headquarters B2B B2C Chapter 14 Case study 14.1 Denmark Saudi Arabia ✓ ✓ Product decisions Danish Klassic Middle East Launch of a cream cheese in Saudi Arabia www.arla.com (regarding the Puck brand) Case study 14.2 US World ✓ ✓ Zippo Manufacturing Company Has product diversification beyond the lighter gone too far? www.zippo.com Case study 14.3 UK World ✓ Burburry branding www.burberry.com Case study 14.4 US World ✓ Tequila Avión www.tequilaavion.com Chapter 15 Case study 15.1 US US, Europe ✓ Pricing decisions Harley-Davidson and terms of doing How should the pricing strategy be affected by business the new EU tariffs in 2018? www.harley-davidson.com Case study 15.2 US World ✓ ✓ Gillette Co. Is price standardization possible for razor blades? www.gillette.com Case study 15.3 US US, World ✓ Vaseline pricing strategy www.vaseline.com Chapter 16 Case study 16.1 South Europe, World ✓ ✓ Distribution De Beers Africa, UK, decisions Forward integration into the diamond industry Luxembourg value chain www.debeers.com Case study 16.2 US World ✓ ✓ Tupperware The global direct distribution model is still working www.tupperware.com Case study 16.3 Germany World ✓ DHL www.dhl.com Chapter 17 Case study 17.1 Norway US ✓ ✓ Communication Helly Hansen decisions Sponsoring fashion clothes in the US market www.hellyhansen.com xxx  Preface Table 1 Continued Chapter Case study title, subtitle and related Country/area Geographical Target ­websites of company target area market headquarters B2B B2C Case study 17.2 UK World (Europe ✓ ✓ Morgan Motor Company and US) Can the British retro sports car brand still be successful after 100 years? www.morgan-motor.co.uk Case study 17.3 Germany US, World ✓ ✓ BMW Motorcycles www.bmwmotorcycles.com www.bmw.com Chapter 18 Case study 18.1 Iran Europe, ✓ ✓ Cross-cultural sales ZamZam Cola Middle East negotiations Marketing of a ‘Muslim’ cola from Iran to the European market www.zamzamrefreshment.com Case study 18.2 TOTO The Japanese toilet manufacturer seeks export opportunities for its high-tech brands in the US www.toto.co.jp/en/ Case study 18.3 Dunkin’ Donuts www.DunkinDonuts.com www.dunkinbrands.com Case study 18.4 US World ✓ ✓ Stella & Dot www.stelladot.com Chapter 19 Case study 19.1 US World ✓ ✓ Organization and Mars Inc. control of the Merger of the European food, pet care and global marketing confectionery divisions programme www.mars.com Case study 19.2 Germany World ✓ ✓ Henkel Should Henkel shift to a more customer-centric organization? www.henkel.com Case study 19.3 US World ✓ McDonald’s www.mcdonalds.com  Preface  xxxi Table 2 Part case studies: overview Part Case study title, subtitle and related Country/area Geographical Target ­websites of company target area market headquarters B2B B2C Part I The decision Case study I.1 Sweden World ✓ ✓ whether to interna- Electrolux tionalize A white goods manufacturer is considering growth opportunities worldwide www.electrolux.com Case study I.2 Japan World ✓ Nintendo Switch A ‘Blue Ocean Strategy’ come-back in the games console market? www.nintendo.com Case study I.3 Switzerland, World ✓ ✓ Cereal Partners Worldwide (CPW) US The no. 2 world player is challenging the no. 1, Kellogg www.generalmills.com/en/Company/Busi- nesses/international/joint-ventures www.nestle.com/asset-library/documents/ media/news-and-features/2011-february/ cpw-brochure.pdf Part II Deciding Case study II.1 Israel/US World ✓ ✓ which markets to SodaStream enter Managing profitable growth in an increasingly competitive global environment www.sodastream.com Case study II.2 US World (gov- ✓ ✓ The Female Health Company (FHC) ernmental The female condom is seeking a foothold in organizations) the world market for contraceptive products www.femalehealth.com Case study II.3 Switzerland World ✓ ✓ Rolex The luxury watch maker is facing increasing competition in the world market www.rolex.com Part III Market entry Case study III.1 US World ✓ strategies Tinder dating app The famous dating app brand is facing increas- ing competition from e.g. Badoo www.match.com, www.tinder.com Case study III.2 Sweden World ✓ Spotify The online music streaming company is grow- ing fast but is suffering financial imbalance www.spotify.com Case study III.3 Sweden, US World ✓ Autoliv Airbags Transforming Autoliv into a global company www.autoliv.com xxxii  Preface Table 2 Continued Part Case study title, subtitle and related Country/area Geographical Target ­websites of company target area market headquarters B2B B2C Part IV Designing Case study IV.1 Austria World ✓ ✓ the global market- Swarovski ing programme The jewerelly/crystal manufacturer is ­expanding into e-commerce and social media Case study IV.2 US World ✓ ✓ Levi Strauss Expanding in new international markets Case study IV.3 UK, Ireland World ✓ ✓ Guinness How can the iconic Irish beer brand compen- sate for declining sales in the home market? www.diageo.com www.guinness.com Part V Implement- Case study V.1 China World ✓ ing and coordinat- Tencent ing the global mar- The Chinese online giant is seeking new keting programme alliances www.tencent.com Case study V.2 China World ✓ ✓ Huawei Expanding into the international markets for smartphones www.huawei.com Case study V.3 Sweden World ✓ Tetra Pak How to create B2B relationships with the food industry on a global level www.tetrapak.com  1 2 3 4 5 6 7 8 9 A Arctic Ocean Arctic Ocean GREENLAND (Den.) B ICELAND SWEDEN RUSSIA NORWAY FINLAND EUROPE EST. ASIA CANADA UNITED LAT. KINGDOM DEN. RUS. LITH. C NETH. Nor th IRELAND POL. BEL. NORTH BEL.GER. Atlantic LUX. CZE.SLO.UKRAINE FRANCE AUS.HUN. MOL. KAZAKHSTAN Ocean MONGOLIA SWITZ. SLOV. SER.ROM. GEORGIA AMERICA CRO. KOS. BOZ. & ALB. BUL. ARM. UZBEK. KYRG. PORT. SPAIN HERZ. ITALY MAC. TURKEY TURKMEN. TAJIK. N. KOREA UNITED STATES GREECE CYP. AZER. S. KOREA TUNISIA LEB. SYR. CHINA JAPAN D IRAQ IRAN AFGH. MOROCCO ISR. BHUTAN JOR. KUW. Pacific PAKISTAN NEPAL BAHAMAS ALGERIA LIBYA QATAR Ocean HAITI DOMINICAN WESTERN EGYPT TAIWAN Tropic of Cancer SAHARA SAUDI U.A.E. BANG. MEXICO CUBA REPUBLIC AFRICA INDIA ARABIA OMAN MYAN. Hawaii BELIZE PUERTO RICO MAURITANIA MALI NIGER HOND. JAMAICA SENEGAL ERIT. YEMEN THAI. LAOS PHILIPPINES GUATEMALA GAMBIA BURK. CHAD SUDAN NICARAGUA GUYANA DJIBOUTI CAM. FASO NIGERIA VIETNAM EL SALVADOR VENEZUELA SURINAME GUINEA-BISSAU E COSTA RICA GUINEA C. AFR. ETHIOPIA BRUNEI FRENCH SIERRA CAM. REP. SRI LANKA PANAMA COLOMBIA BENIN SOMALIA MALAYSIA GUIANA LEONE RWANDAUGANDA Equator LIBERIA KENYA ECUADOR TOGO GABON SOUTH DEM. REP. BURUNDI PAPUA IVORY EQ. GUINEA OF CONGOTANZANIA INDONESIA NEW COAST GUINEA AMERICA CONGO MALAWI GHANA REPUBLIC E U Pacific PERU BRAZIL IQ ANGOLA ZAMBIA Indian F Ocean BOLIVIA MB ZIM. MADAGASCAR NAMIBIA Ocean ZA Tropic of Capricorn PARAGUAY BOTS. MO AUSTRALIA SOUTH SWAZILAND CHILE URUGUAY AFRICA LESOTHO ARGENTINA NEW G ZEALAND South Atlantic Ocean OCEANIA H Source: Daniels, John; Radebaugh, Lee; Sullivan, Daniel, International Business, 12th © 2009. Reprinted and electronically reproduced by permission of Pearson Education, Inc., Upper Saddle River, New Jersey. Preface  xxxiii  Acknowledgements Writing any book is a long-term commitment and involves time-consuming effort. The ­successful completion of a book depends on the support and generosity of many people and the realization of this book is certainly no exception. I wish to thank the many scholars whose articles, books and other materials I have cited or quoted. However, it is not possible to acknowledge everyone by name. In particular, I am deeply indebted to the following individuals and organizations. I thank you all for your help and contributions: University of Southern Denmark Management at the University of Southern Denmark provided the best possible environment for writing and completing this project. I would especially like to thank the IER Department (Kolding and Sønderborg) at University of Southern Denmark for its support during the writing process. Colleagues provided encouragement and support during the writing process. I would especially like to thank the Secretaries, Charlotte Lund Hansen, and the Project Coordina- tor, Simon Kleinschmidt Salling, at the University of Southern Denmark, Campus Sønder- borg for their helpfulness and support during the writing process. The library at the University of Southern Denmark provided articles and books from different worldwide sources. Reviewers Reviewers provided suggestions which were useful in improving many parts of the text. In the development of this text, a number of reviewers have been involved, whom I would like to thank for their important and valuable contribution. Endorsers I would like to thank the users of the book who have endorsed my Global Marketing on Amazon, on my LinkedIn profile or on other social media. I am especially grateful to the backcover endorsers of this edition: Professor Philip Kotler, Northwestern University, USA and Dr Elisabeth Götze, Senior Lecturer, Vienna University. I would also like to thank my co-author and friend, Professor Dr. Marc Oliver Opresnik, Lübeck University, Germany, for his general support. Case contributors Wim Wils, Fontys Eindhoven, for Case 8.2: Philips Lighting. Vlad Stefan Wulff, for Case 19.2: Henkel.  Acknowledgements  xxxv I also wish to acknowledge the help from the following firms whose managers have pro- vided valuable material that has enabled me to write the cases mentioned. I have been in direct personal contact with most of the case companies and thank the managers involved for their very useful comments. In particular, I would like to thank: Chapter cases The founders of Green Toys, Inc. for Case 1.1 on Green Toys. Family Vestergaard-Frandsen for Case 2.1 on LifeStraw. Elvis Presley Enterprises, Inc. for Case 2.2 on EPE. Teepack Spezialmaschinen GmbH, Düsseldorf, Germany for Case 5.1 on Teepack Spezialmaschinen. LEGO, Billund, Denmark on Case 5.2 on LEGO Friends. Danfoss Power Solutions for Case 6.2 on Danfoss Power Solutions. IKEA, Sweden for Case 7.2 on the IKEA Catalogue. Jarlsberg, Norway for Case 9.1 on Jarlsberg. Arcus AS, Oslo, Norway for Case 10.1 on Lysholm Linie Aquavit. Sanrio, Europe for Case 11.1 on Hello Kitty. Kabooki, Ikast, Denmark for Case 11.2 on Kabooki. Polo Ralph Lauren, USA for Case 12.1 on Polo Ralph Lauren. ARM, Cambridge, UK for Case 13.1 on ARM. Vaseline, UK for Case 15.3 on Vaseline pricing strategy. Morgan Motor Company, UK for Case 17.2 on the Morgan Motor Company. Henkel, Germany for Case 19.2 on Henkel. Part cases Autoliv AB, Stockholm, Sweden for Case III.3: Autoliv airbags. IMAX Corporation, Toronto, Canada for Case III.4: Imax Corporation. I would like to thank The Tussauds Group for their contribution to Exhibit 14.4. I would also like to thank Husqvarna AB (Sweden), especially Vice President for Brand and Marketing, Torsten Bollweg, for his permission to show the ‘Husqvarna consumer wheel’ in Exhibit 17.2. I would also like to thank LEGO and Danfoss for their contributions to different exam- ples in the book. I am grateful to my publisher, Pearson Education. I would like to thank Portfolio Man- ager, Tom Hill and Content Producer, Melanie Carter for their commitment to this book project. I also extend my greatest gratitude to my colleagues at the University of Southern Den- mark for their constant help and inspiration. Finally, I thank my family for their support through the revision process. I am pleased to dedicate this version to Jonna, Nanna and Julie. Svend Hollensen University of Southern Denmark, Sønderborg, March, 2020 [email protected] Publisher’s acknowledgements Text 8 John Wiley & Sons Inc.: Johnson, G. (1988) ‘Rethinking incrementalism’, Strategic Man- agement Journal, 9, pp. 75–91; 9 University of California Press: (Figure 1.3) Mintzberg, H. (1987) ‘The strategy concept I: five Ps for strategy’, California Management Review, 30(1), pp. 11–24. Copyright © 1987, by Regents of the University of California. Reprinted from the California Management Review, Vol. 30, No. 1; 12 Academy of Management: Gupta, A.K. and Govindarajan, V. (2001) ‘Converting global presence into global competitive advantage’, Academy of Management Executive, 15(2), pp. 45–56; 14 American Marketing Association: (Figure 1.6) Solberg, C.A. (1997) ‘A framework for analysis of strategy devel- opment in globalizing markets’, Journal of International Marketing, 5(1), pp. 9–30. Reprinted with kind permission of American Marketing Association; 22 Larry Light: Larry Light, McDonald’s executive vice president and global chief marketing officer; 23 Simon & Schuster: (Figure 1.10) Adapted with the permission of The Free Press, a Division of Simon & Schuster, Inc. from Competitive Advantage: Creating and Sustaining Superior Perfor- mance by Michael E. Porter. Copyright © 1985, 1998 Michael E. Porter. All rights reserved; 24 SAGE Publications: Asugman, G., Johnson, J.L. and McCullough, J. (1997) ‘The role of after-sales service in international marketing’, Journal of International Marketing, 5(4), pp. 11–28; 29 John Wiley & Sons Inc.: (Table 1.2) based on Stabell, C.B. and Fjeldstad, Ø.B. (1998) ‘Configuring value for competitive advantage: on chains, shops, and networks’, Stra- tegic Management Journal, 19, pp. 413–437; 33 Harvard Business School Publishing: Pine, B.J. and Gilmore, J.H. (1998) ‘Welcome to the experience economy’, Harvard Business Review, July/August, pp. 97–105; 36 Emerald Group Publishing Limited: (Exhibit 1.7) Based on Lung-Huang, T. and Liu, F.H. (2014) ‘Formation of augmented reality – interactive technology’s persuasive effects from the perspective of experiential value’, Internet Research, 24(1), pp. 82–109; 37 Harvard Business School Publishing: (Figure 1.16) based on Rayport, J.F. and Sviokla, J.J. (1996) ‘Exploiting the virtual value chain’, McKinsey Quarterly, 1, pp. 21–36; 38 Pearson Education: Based on Marchand, D.A. (1999) ‘Hard IM choices for senior managers’, Part 10 of ‘Your guide to mastering information management’, Financial Times/ Prentice Hall, 5 April; 53 Pearson Education: (Table 2.1) Adapted from International Mar- keting and Export Management, 2nd edn., Addison Wesley (Albaum, G., Strandskov, J., Duerr, E. and Dowd, L. (1994)), p. 31, reprinted by permission of Pearson Education Ltd; 57 Emerald Group Publishing Limited: (Exhibit 2.2) Genestre, A., Herbig, P. and Shao, A. (1995) ‘What does marketing really mean to the Japanese’?, Marketing Intelligence