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 Japanese manga 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 supernatural notebook.

Characters 　主人公 Light Yagami/ 夜神月

Misa Amane/ 弥　海砂

L/ エル

Near/ ニア

Ryuk/ リューク

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?