Transcript Chapter 3 Effects of IT on Strategy and Competition

Part 3
CUSTOMER BEHAVIOR
AND E-MARKETING.
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6: Consumer Buying Behavior
7: Business Markets and
Buying Behavior
8: Reaching Global Markets
9: Digital Marketing and Social
Networking
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Chapter 8
Reaching Global Markets
Professor Jason C. H. Chen, Ph.D.
School of Business Administration
Gonzaga University
Spokane, WA 99258
[email protected]
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Marketing Applications
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 5. Use the information on windshield-wiping fluid heaters
and the Russian market included in the text. Based on
approximately 275 motor vehicles per 1,000 people in the
Russian population,
 a. What percentage of the market do you think that
companies selling this product can capture (industry
sales)?
 b. Which mode of entry seems best for one of these
manufacturers (trading company, licensing, offshoring or
others)? They are usually mid-sized companies with
limited capital, international experience, and knowledge.
 c. How much customization would a product like this
require for Russia?
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 a. What percentage of the market do you think that
companies selling this product can capture (industry sales)?
 Answer: Responses to this question (percentage of the
market) will vary for each student, but the estimates for
industry sales should be realistic.
 b. Which mode of entry seems best for one of these
manufacturers (trading company, licensing, offshoring or
others)? They are usually mid-sized companies with limited
capital, international experience, and knowledge.
 Answer: Suggestions for mode of entry will also vary, but
students should justify the level of risk (i.e., trading
companies are low-risk while offshoring is high risk).
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 c. How much customization would a product like this
require for Russia?
 Answer: Most students may answer that a windshield-wiper
fluid heater would need little customization because weather
conditions remain the same across borders. However, it is
possible that the heater would need to be customized to
meet international manufacturing needs or the income level
of Russian consumers.
 Link (Do Windshield Washer Heaters Really Work? )
 https://www.youtube.com/watch?v=IN8EZ7NhMSU
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 1. Click on “International” near the bottom of the web
page. Select a country to which you would like to send
flowers. Summarize the delivery and pricing information
that would apply to that country.

 International delivery information is located at the bottom of
the home page and is divided by region. Students’ answers
will vary based on the choice of country.

 2. Determine the cost of sending fresh-cut seasonal
flowers to Germany.

 Depending on the arrangement, prices vary from $79.99 to
$240.99 (as of press time).
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 3. What are the benefits of this global distribution system
for sending flowers worldwide? What other consumer
products could be distributed globally through the
Internet?

 Students will be able to list several benefits of global
distribution, including the ability to send gifts to friends and
family who are spread out across the world. Today, almost
any consumer products can be distributed globally through
the Internet, so you may want to ask students what types of
products cannot be distributed online.
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Internet Exercise
 FTD

 Founded in 1910 as Florists’ Telegraph Delivery,
FTD was the first company to offer a “flowers-bywire” service. FTD does not deliver flowers itself,
but it depends on local florists to do it. In 1994,
FTD expanded its toll-free telephone-ordering
service by establishing a website. Visit the site at
www.ftd.com, and answer the following:
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 1. Click on “International” near the bottom of the web
page. Select a country to which you would like to send
flowers. Summarize the delivery and pricing information
that would apply to that country.

 International delivery information is located at the bottom of
the home page and is divided by region. Students’ answers
will vary based on the choice of country.

 2. Determine the cost of sending fresh-cut seasonal
flowers to Germany.

 Depending on the arrangement, prices vary from $79.99 to
$240.99 (as of press time).
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 3. What are the benefits of this global distribution
system for sending flowers worldwide? What other
consumer products could be distributed globally
through the Internet?

 Students will be able to list several benefits of global
distribution, including the ability to send gifts to
friends and family who are spread out across the
world. Today, almost any consumer products can be
distributed globally through the Internet, so you may
want to ask students what types of products cannot be
distributed online.
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Video Case 8.1
 EVO:
 THE CHALLENGE OF GOING
GLOBAL
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 Summary

 Evo is an active sports retailer that has unexpectedly
become a global distributor. Founded as an online store in
2001, the company opened its Seattle-based retail store
four years later; this combination of e-commerce and
physical stores allows evo to carry a greater selection and
extend its global reach while providing customers with a
way to interact with its products. Approximately 5 percent
of evo’s business comes from outside the United States, but
the company has been constrained by its relationships with
international vendors. Evo hopes to work with its vendors to
make global selling more feasible. In the meantime, the
company continues to ship directly to consumers and
engage with its fans through the Internet.
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 1. What are both the positive and negative outcomes from
using exclusive dealer agreements that restrict global
distribution?

 Vendors create exclusive dealer arrangements with evo to
avoid saturating markets overseas and to maintain control
over their products. By limiting distribution, manufacturers
are able to exert some control over other elements of the
marketing mix, such as price
____.
 Because retailers often do not own many of the brands they
sell, manufacturers can maintain the right to determine where
their products are sold and how much to distribute to the
company. If consumers from foreign countries try to order
these brands, they will receive notification that their order has
been canceled.
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 2. What are the unique product features that could
make evo a global brand?

 Evo creates global brand exposure through the
________.
Internet The company launched evoTrip as a
service for adventurous sports enthusiasts who want
to travel. EvoTrip arranges the trips with the goal to
connect people to local cultures, communities, and
sports.
 In addition to increasing its customer base, evoTrip
allows the organization to form relationships with
consumers overseas. Evo’s fans also find ways to
ship the company’s products internationally.
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 3. What should evo's marketing strategy be to go
global?

 Evo should continue to build strong relationships
with global consumers and with its vendors to
make global selling more feasible. The company
might also choose to continue to open more
physical stores and create its own brand of products
that it could distribute internationally.
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