Global Marketing and R&D

Global Marketing and R&D Discussion Section April 13, 2007 Brian Chen/Sanny Liao

Globalization • Last week: globalization of production • This week: globalization of market

Identifying markets • Def:Market segmentation refers to • identifying distinct groups of consumers whose purchasing behavior differs from others in important way (e.g geography, demography, social-cultural factors) • Examples: • Toyota/Lexis, Old Navy/Gap/Banana Republic, anything else? • Can market segmentation extend beyond national borders? • Yes.

What factors should firms consider in order to target each market segment? • Product attributes • Distribution strategy • Communication strategy • Pricing strategy

How do product attributes differ across markets? • Cultural Differences • Hamburgers do not sell in Islamic countries • Economic Development Differences • Kodak sells a lower end camera in Russia • Product and technical standards/(Market Segmentation) • Different DVD regional coding

How do firms adjust their distribution strategy across different markets? • The US has less concentrated urban areas and extensive use of cars; Japan has a highly concentrated population, little use of cars in urban centers, and government protection of small retailers •  more small retailers, and fewer large chains and malls in Japan. I.e. less retail concentration • Other factors that may affect retail concentration: • economic development (car ownership), transportation systems, etc. • You are a toothpaste manufacturer in China who sells to millions of small retailers, is it worthwhile for you to contact and supply to each retailer? • No.  fragmented retail systems are more likely to use intermediaries (longer channel length) • Other factors that may affect channel length: • internet shopping, large discount superstores such as Wal-Mart

Distribution strategies – cont’d • In Japan, relationships between manufacturers, wholesalers, and retailers often go back decades •  very hard for outsider to break into. Japan has high channel exclusivity • Outsiders can break into the Japanese market more easily with new products • Developing countries often have lower quality downstream retailers •  poor channel quality • Which distribution strategy to take? • Benefit and cost analysis.

How do firms adjust their communication strategy to different markets? BARRIERS TO INTERNATIONAL COMMUNICATION • Cultural barriers • A Benetton ad campaign features a black woman breast-feeding a white baby, and a another one shows a black man and a white man handcuffed together – fared well in France but accused of promoting white racial domination in U.S. • Matsushita and the cartoon Internet guide fiasco • Source and country of origin effects • Made in Japan, Made in China stickers carry different connotations to buyers • Noise Levels • Competition from other advertisers

Communication strategy, cont’d PUSH VS. PULL STRATEGIES • Push strategy: emphasizes on selling • Requires a large sales force • Good for complex products or when firms need to educate potential consumers about the features of the product • Pull strategy: emphasizes on creating demand • Less costly when the potential market is big • More effective if there is little need to educate customers • More effective when channel length is short • More cost-effective when media is widely available

How do firms adjust their pricing strategy to different markets? • Def: price discrimination exists • when consumers in different countries/markets are charged different prices for the same product. • Why? • What are the necessary conditions for this to be successful? • Ability to keep markets separate • Difference price elasticity of demand (firms can usually charge a higher price in inelastic markets)

Pricing strategies, cont’d • Other pricing strategies: • Predatory pricing: • price out the competitor • Multipoint pricing: • compete in different markets • Experience curve pricing: • economies of scale • Regulatory influences • Antidumping regulations • Under GATT, 2 criteria – “less than fair value” and “material injury to a domestic industry” • Competition policies – penalizes monopolistic practices

Finally • Importance of new product development • Creative destruction • How to achieve fast product development • Location of R&D • Integration of R&D, marketing and production • Cross functional teams • Building global R&D capabilities

Discussion: The globalization of Japanese Anime日本製アニメの国際化 • Anime (アニメ) is an abbreviation of the word "animation". Outside Japan, the term most popularly refers to animation originating in Japan. To the West, not all animation is considered anime; and anime is considered a subset of animation.

Death Note • Death Note(デスノート) is a Japanesemanga series originally written by Tsugumi Ohba (大場つぐみ）and illustrated by Takeshi Obata（小畑健）. The series primarily centers around a high school student who decides to rid the world of evil with the help of a supernaturalnotebook.

Characters　主人公 Light Yagami/夜神月 Ryuk/リューク L/エル Near/ニア Misa Amane/弥　海砂 Rem/レム

Internationalization??国際化？？ Mello/メロ Madonna in “Jump”

Death Note Episode 1デスノート　エピソード１ • http://video.yahoo.com/video/play?vid=1111677233&fr=slv8-msgr

Discussion Questions討論質問 • Is the success of Japanese anime in countries like the United States indicative of the emergence of a global youth culture? • Are there any product attributes that may hinder cross-cultural comprehension? • What social and technological forces are making it possible for Japanese anime to transcend national borders? • How does the development of the new series of cartoons differ from the way Japanese anime has traditionally been developed? Why is this change being made? • Do you think that Death Note will be successful in your country? Why? Why not?

Global Marketing and R&D