THE PENNSYLVANIA STATE UNIVERSITY AT HARRISBURGTHE CAPITAL COLLEGE

Middletown, Pennsylvania

School of Business Administration

MRKT 477.1

FALL 2001 Instructor: Dr. Erdener KaynakClass Time: M & W: 8:30-9:45 AM Office: E-356, Olmsted Bldg.Class Room: E-315 Office Phone: 948-6343Office Hours: M & W: 10:00 AM -12:30 PM E-Mail: K9X@PSU.EDU

TR: 5-6 PM & 8:30-9:00 PM (Other times whenI am in my office or by appointment)

Prerequisite: MRKT 370

INTERNATIONAL MARKETING

MAIN TEXTS: Warren J. Keegan and Mark C. Green, Global Marketing Management, Second Edition, Prentice Hall Inc., Englewood, New Jersey, 2000, 594 pages.

SUPPLEMENTARY TEXTS: Available on reserve shelves of the Heindel Library on a two-hour basis or overnight.

Erdener Kaynak (Ed.), Global Business: Four Key Marketing Strategies, International Business Press, New York, 1994, 432 Pages.

A. Coskun Samli; R. Still and J. S. Hill, International Marketing: Planning and Practice, Macmillan Publishing Company, New York, 1993, 456 pages.

Sak Onkvisit and John J. Shaw, International Marketing: Analysis and Strategy, Second Edition, Macmillan Publishing Co., New York, 1993, 905 pages.

Warren J. Keegan. Global Marketing Management, Englewood Cliffs, NJ: Prentice-Hall, Inc., 1999, 639 pages.

Michael R. Czinkota and Ilkka A. Ronkainen, International Marketing, Fifth Edition, Harcourt Brace and Company, Orlando, Florida, 1998, 860 pages.

SCHOLARLY JOURNALS OF INTEREST:

Journal of International Business Studies, Journal of Marketing, Columbia Journal of World Business, Management International Review, Journal of International Consumer Marketing, Journal of the Academy of Marketing Science, California Management Review, Business Horizons, Harvard Business Review, Journal of Business Research, International Management, Journal of Global Marketing, Long Range Planning and Sloan Management Review, (Only those journals which are available at Heindel Library are listed).

PRACTIONER-ORIENTED PERIODICALS OF INTEREST:

Business Week, The Wall Street Journal, Time, Newsweek, Fortune, Marketing News, Business Marketing, Advertising Age and Forbes.

MRKT 477.1 Page 2

COURSE OBJECTIVE:

The objective of this course is to introduce students to a systematic application of marketing principles in a global business environment. The course will provide marketing students with a conceptual understanding that will enable them to apply marketing management concepts and techniques within a multinational context. A conceptual understanding of the global market environment will be developed at the outset. Developing specific elements of an integrated marketing program for foreign markets will then be addressed. The overall process of managing an integrated marketing program, (i.e, analyses, planning, organizing, and controlling of the international marketing effort) will be discussed in the final phases of the course. Discussion of important contemporary issues such as global e-commerce and the future of international marketing will conclude the course.

COURSE CONTENT:

The literature on international marketing is so diverse and rich and no single or group of texts adequately cover the task to be accomplished. Emphasis throughout the course will be placed upon the marketing problems/opportunities of overseas trading of U.S. companies. Within this general perspective, efforts will be made to use as much applied material as possible. Hence, the content of the course will be as follows:

(a) lectures and seminars based on pertinent chapters of the main textbook as well as related writings in the field of international marketing management;

(b) discussion and analysis of cases;

(c) the use of outside speakers, when appropriate, recognized as having expertise to cover certain aspects of international marketing;

(d) the assignments of tasks to students in those areas where they profess an interest - these tasks to act as a basis for continuous assessment and class discussion.

ORGANIZATION:

The course is comprised of three major parts. Each part provides the conceptual background for the succeeding part. In each part, cases are assigned to provide the student with an understanding of the major concepts and techniques involved. These cases become increasingly more complex as the course progresses until all of the objectives of the course are accomplished.

Each student is expected to be prepared to discuss all cases and analytical problems assigned during the term. Students will be graded on class participation. In addition to this, each student will be graded on his/her performance on individual case assignments, mid-term examination and a small project.

In this course, attendance is mandatory. It is strongly recommended that students do not miss classes since class participation and discussions can be an important component of the course grade. Students are strongly urged to contact the instructor ahead of time for possible delays in meeting deadlines. Those students who hand in their assignments late without any legitimate excuse will be penalized by five percent per each calendar day. In case of illness, please provide a doctor's note.

Since there are no perfect solutions to the cases assigned, students will be graded on: (a) organization, (b) understanding, (c) originality of ideas and solution alternatives, (d) breadth and depth of coverage of the issues, (e) clarity of exposition,

and (f) thoroughness in integration of the multiple components of the case. Students will be expected to avoid the common errors listed on the last page of this syllabus in their analyses of the cases.

MRKT 477.1 Page 3

GRADING: One Pass-In Case 20% (8-10 pages written report)*Case Presentation and Discussion 15% (5% presentation and 10% discussion)Class Participation and 15%

In-Class Discussions*Short Incidents 20% (3-5 pages written report)Three Quizzes /Exams 30% (10% each)

100%

*Please submit two copies of each assignment.

SHORT INCIDENT ASSIGNMENT

As an individual, you are expected to write a short report about success and/or failure stories of 2 companies related to one of the topics given below. The companies you are going to select should operate internationally/globally and should be based on articles or reports published between 1998 through 2001. You critically evaluate their practices and make certain recommendations as to what they should do in the future to be able to become more successful. You can select 2 success and 2 failure stories or any other combination related to a particular topic of the course. Your case stories can all be success and/or failures. You may use CD-ROM (ABI-INFORM, Proquest, Lexis etc), Business Periodicals Index and Company Annual Reports. You are expected to attach copies of the articles you have used. Please do not use textbook material for this assignment. Only the most recent published material needs to be used.

INCIDENTS TO CHOOSE FROM

1. Regional Market Characteristics and How to Penetrate Them. (i.e., NAFTA, EU, APEC, etc.), August 29

2. International Market Environment such as Economic, Demographic, Social, Legal- political and Technological and Their Impact on U.S. Firm Performance, September 5 3. International Marketing Research at Industry/company levels, Forecasting Potential Demand by U.S. Companies in International Markets, September 12

4. How to Enter Into Russian Federation, Japan, China, European Union Markets, through such entry modes as passive involvement (exporting), semi-active involvement (joint-ventures) and active involvement (direct foreign investment), September 19

5. Product Differentiation and Product Positioning in International Markets, September 26

6. Pricing for International Markets, October 3

7. International Communication/Advertising Strategy, October 17

8. Managing International Channels of Distribution, October 24

9. Organizational Arrangements in International Markets, October 31

10. International Marketing of Services, November 7

11. Countertrade, November 14

MRKT 477.1 Page 4

12. Global Green Marketing, November 21

13. Global E-commerce, November 28

14. Global Sourcing, December 5

COURSE ASSIGNMENT:

You are expected to be prepared to discuss all cases and analytical problems assigned during the term. You are required to attend classes regularly as you will be graded on class participation. In addition to this, you will be graded on your performance on individual cases and short incidents.

It is expected that you present your interpretation of the subjects discussed, pointing out strengths and weaknesses. You are strongly urged to contact the instructor ahead of time for possible delays in meeting deadlines.

COURSE OUTLINE

DATE TOPICS TO BE COVERED ASSIGNMENTS

August PART I: INTRODUCTION

22 Orientation Ch. 1, pp:1-30Introduction to Global MarketingCourse Objectives and Methodology, Overview of the

International Marketing Management Process The Case Analysis Framework

PART II: THE GLOBAL MARKETING ENVIRONMENT

27 & 29 The Global Economic Environment Ch. 2, pp:46-74

Case 1: McDonald’s Adjust Its Local Recipe While Expanding Globally

Short Incident 1

September September 3, 2001 – Labor Day Holiday No Classes The Global Trade Environment: Regional Market 5 Characteristics and Preferential Trade Agreements Ch 3, pp: 85-120

Case 2: Europe Goes Bananas for.. pp: 124-125 Incident 2

MRKT 477.1 Page 5

10 & 12 Social and Cultural Environment Ch. 4, pp: 126-159

Case 3: Euro Disney pp: 160-161

Incident 3

17 & 19 The Political, Legal, and Regulatory Environments of Global Marketing Ch. 5, pp: 164-199

Case 4: Trademark Infringement in World Markets pp: 200-201

SPOT QUIZ I

Incident 4

24 & 26 Global Information Systems and Market Research Ch. 6, pp: 207-237

Case 5: Research Points Whirlpool Toward a Global market pp: 238-240

Incident 5

PART III: GLOBAL STRATEGY

October

1 & 3 Going Global: Segmentation, Targeting, and Positioning Ch. 7, pp: 241-268

Case 6: Harper Collins: Is the “Global Book” a Reality? pp: 269-270

Incident 6

October 8 – 9 FALL BREAK – NO CLASSES

10 Sourcing Strategies: Exporting and Importing Ch. 8, pp: 271-300

15 & 17 Global Market Entry Strategies: Licensing, Investment, and Strategic Alliances Ch. 9, pp: 306-340

Case 7: Federal Express Encounters Turbulence In the Global Package Express Business pp: 341-342

Incident 7

SPOT QUIZ II

MRKT 477.1 Page 6

DATE TOPICS TO BE COVERED ASSIGNMENTS

PART IV: THE GLOBAL MARKETING MIX

24 & 26 Product and Brand Decisions Ch. 11, pp: 377-413

Case 8: Acer Inc. pp: 35-38

Incident 8

31 Pricing Decisions Ch. 12, pp: 422-455November 2 Case 9: LVMH and Luxury Goods Marketing pp: 456-459

Incident 9

7 & 9 Global Marketing Channels Ch 13, pp: 460-493 Case 10: Toys “R” Us in Japan pp: 494-495

Incident 10

14 & 16 Global Marketing Communications Decisions: Ch. 14, pp: 496-532 Advertising

Case 11: Benetton Group S.p.A. pp: 533-534Incident 11

SPOT QUIZ III

21 Global Marketing Communications Decisions: Sales Ch. 15, pp: 535-562 Promotion and Personal Selling

NOVEMBER 23-24 THANKS GIVING HOLIDAY - NO CLASSES

PART V: MANAGING THE GLOBAL MARKETING EFFORT

28 & 30 Leading, Organizing, and Controlling the Global Ch 16, pp: 563-589Marketing Effort

Case 12: Wolkswagen AG pp: 590-592

Incident 12

December Global E-CommerceNotes and Articles to be Distributed

5 & 7

MRKT 477.1 Page 7

December 8 Classes end. Last day to withdraw.======================================================================================

PLEASE NOTE:

TAPING OF LECTURES WITHOUT AUTHORIZATION IS STRICTLY FORBIDDEN

SUGGESTIONS FOR ANALYZING A MARKETING CASEDr. Erdener Kaynak

In analyzing a case:

a. Read through the case quickly to determine its general nature. Then reread and begin to sort out facts. During subsequent readings it will probably be desirable to outline and re-arrange the material in the case, or to prepare tabulations and charts that permit a more ready comparison of available data.

b. After you have mastered the facts and other information in the case, isolate the major problem to be solved. (In the earlier cases in the course the problem is stated at the end of the case. If so, use this as guideline in problem formulation identifying symptoms of a problem).

c. Determine the major topics around which the analysis is to be undertaken. Some major points for analysis commonly encountered in problem analysis are:

(1) The market and its influence on problem and decision making

(a) present market(s)(b) potential market(s)(c) size and/or characteristics of market(s)(d) buying habits and motives of customer(s)

(2) The product and its influence on problem(s) and decision making

(a) characteristics of the product(s)(b) classification of the product(s)

(3) Channels of distribution and/or institutions and their influence on problem(s) and decision making

(4) Reaction of middlemen, customers, or others (if not included in above) and influence on problem(s) and decision making

(5) Reaction of salesmen and/or other company personnel and influence on problem(s) and decision making

(6) Competition-types of: reaction of; probable future action of, and influence on problem(s) and decision making

(7) Effectiveness of retaliation (of competition, middlemen, personnel, others) and effect on problem(s) and decision making

(8) Importance of goodwill and effect on problem(s) and decision making

(9) Position of the company in the industry and effect of this on problem(s) and decision making (if not included in (6) above)

MRKT 477.1 Page 8

(10) Financial position of the company and effect on problem(s) and decision making

(11) Importance of price; elasticity of demand, and effect on problem(s) and decision making

(12) Effect on other product lines and/or affiliated companies

(13) Seriousness of the problem; degree or urgency; time and funds available before action must be taken, and the effect or influence of these factors on decision making

(14) Economic conditions within and without the industry, and effect on problem(s) and decision making

(15) Effect on volume, costs, and profit, and the influence of these factors on problem(s) and decision making

(a) Immediate(b) Short run(c) Medium run(d) Long run

(15) Does probable profit commensurate with risk involved?.

d. The foregoing list is not to be all-inclusive or necessarily in order of importance. Not all points will require consideration in each case, and some cases will involve areas of analysis not listed above

e. Proceed with the analysis of the major points or areas.

(1) For the purposes of this course, the analysis is the most important part of the report. At this time the reasoning whereby the recommended course of action is arrived at carries more weight than actual decision.

(2) The analysis consists in part, at least, of studying the problem form any different aspects and attempting to foretell the probable effect upon, or reaction of, the many factors which influence the success or failure of a certain course of action.

(a) As the analysis proceeds, alternative courses of action or possible solutions to the problem will come to mind. These must be examined also and their feasibility appraised in much the same way as is the original problem. In fact, as the analysis progresses, it may be discovered that the problems originally stated require modification, or that the whole approach to the case needs to be changed.

(b) To be complete, the analysis must take into consideration not only the strong points of each argument presented, but the weaknesses of each as well. The analysis of one set of factors will indicate one course of action. The analysis of these will indicate a different solution. It is important to recognize in advance the alternatives.

(c) Occasionally some assumptions must be made. These should be logical and set forth clearly. Do not make unnecessary assumptions or assumptions which are contrary to facts already given in the case.

(d) In a few instances more data may be desirable. Use should then be made of the secondary sources available in the library or elsewhere. You may even want to contact outside experts for more information.

(3) Based on the analysis, arrive at one or more possible decisions as to the proper course of action to be taken in order to solve the problems facing the firm. If, as is customary, more than one solution appears reasonable, choose the one which, all factors considered, seems to contain the greatest strength and the fewest disadvantages. Be sure that your arguments are based upon the facts of the case, upon logical and clear-cut reasoning, and upon such assumptions as are made.Please also use your knowledge of marketing concepts and techniques.

MRKT 477.1 Page 9

NECESSARY STEPS POINTS GIVEN

SITUATIONAL ANALYSIS 15%

It is unnecessary to regurgitate the case and its history. Your analysis must be specific and include a discussion of pertinent information. The purpose of the analysis is to analyze case information and should lead to problem identification and the decision of alternative courses of action. Your situational analysis must be fully reinforced with sufficient reasoning and well organized. The analysis should be subdivided into five major categories:

i) Analysis of the Company and its Objectives ii) Analysis of the 4 p's of Marketing (Product+Price+Promotion+Channels)iii) Analysis of the Competition iv) Analysis of the Environment v) Analysis of the Distribution vi) Analysis of the Marketvii) Analysis of the Government/Legal Framework

STATEMENT OF PROBLEMS AND/OR OPPORTUNITIES 15%

*State major and underlying problems. Give explanation of these. Take into consideration company objectives as well as short and long term goals.

*Identify strengths and weaknesses of company.

*Opportunities available to the company-develop and explain these ideas in full.

ALTERNATIVE COURSES OF ACTION 35%

You must identify all possible alternative courses of action.

You must devise a strategy for each and fully explain your reasoning. Alternatives must be reinforced by evaluating the pros (advantages) and cons (disadvantages) of each in point form. If alternatives are given in the case, do not regurgitate these. Further elaborate on these, developing a sufficient strategy for each.

RECOMMENDED STRATEGY 20%

You must firmly validate your reasoning for your selected course of action. Back up your recommended strategy by your knowledge of marketing concepts and techniques as well as your independent knowledge of various functional areas of business.

IMPLEMENTATION 15%

You must show what services are needed and how they are going to be used and what organizational arrangements should be in place. Duties and responsibilities of individuals should be determined. Timing decisions also need to be made. You must further outline the major components of the chosen course of action and elaborate on why it is appropriate to the problem. Please take short and long term goals into consideration when devising a strategy.

TOTAL SCORE 100%

MRKT 477.1 Page 10

GENERAL STRUCTURE OF A MARKETING PLAN WILL COVER THE FOLLOWING:

I. Situational Analysis

(a) Demand(b) Competition(c) Distribution structure(d) Legal and political environment(e) Non-marketing factors*

II. Problems and/or Market Opportunities

III. Marketing Strategy

(a) Objectives(b) Methods and procedures used

Strategic Options

(1) Product strategy(2) Distribution strategy(3) Price strategy(4) Promotion strategy

(a) Mass media advertising(b) Personal selling(c) Sales promotion(d) Publicity

IV. Marketing Tactics

(a) Who

(b) What

(c) When

(d) Where

(e) How

Non-marketing factors include buildings, equipment, personnel and financial resources.

COMMON ERRORS ENCOUNTERED IN STUDENT CASE REPORTS(Please try to avoid these)

1. Students simply repeat and rehash data provided in the case.

Use data, don't just give it back.

2. Some students conclude that the data are inadequate and no decision may be reached. It is better to use what you have or get more from the library or from data banks and from company sources.

3. Failure to deal adequately with numbers.

MRKT 477.1 Page 11

If you are given numerical data, be sure to analyze them using quantitative analysis procedures such as trend, cross-classification, pricing, cost break-even and margin analyses, and other methods you know.

4. Failure to pursue analysis to a logical conclusion.

Don't stop halfway through; cover all the important issues. Remember that your analysis of the data is more important than the solution you recommend or the conclusions at which you arrive.

5. Failure to organize report adequately.

Reports should begin with a short problem statement, move to an analysis section with appropriate headings and subheadings, and end with a set of specific recommendations. Some students simply string together a series of random compound sentences. This is not acceptable. Your analysis should flow and have continuity and it must be logical and consistent.

6. Failure to be decisive.

This is especially important when you are making your final recommendations. Also, when you encounter conflicting data, don't hedge, state your assumptions and fly with them. A bad decision is better than no decision.

7. Excessive grammatical errors.

Avoid incomplete and awkward sentences. Pay particular attention to your sentence structuring. Be careful with tense; avoid the use of I, we, it. Once a student employs those words they are often overused. Also, avoid colloquial expressions. Do not shorten words.

8. Failure to read report after it is typed.

Correct all grammatical errors and be sure all pages and tables are included in the proper order. Submit a clean and tidy report. Don't forget that you are portraying an image of yourself through your written report.

9. Late submission of assignments.

Be punctual in handing in the assignments. Don't forget that we are all relying on you on that day. Your delay, or worse, no show, will disrupt the class and can have a detrimental effect on your final grade.

INTERNATIONAL MARKETING CASES: PURPOSE, USE, AND GUIDE TO ANALYZING THEM

There are essentially two different approaches to education. If one polarizes the issue, one approach presupposes that education should consist of accumulating important pieces of knowledge in classified and systematized form. It teaches accepted truths. The other approach presupposes that education consists of acquiring the ability to act in the presence of new experience. It is concerned with precedents only so far as they lead to initiative.* It regards the power of thinking and not the acquisition of facts as the ultimate educational ideal. In our dynamic, fast-changing global environment, emphasis on the latter approach is necessary. The case itself consists of a problem or situation that the organization in question has to solve in some way.

Cases act as a substitute for experience. The teacher must develop an appreciation among students of the complexity of modern business problems. The student must place, or be taught to place, himself or herself mentally in a position of responsibility when proposing solutions to the problem if that is not his or her natural bent. The process of learning must switch from one in which the teacher lectures and the student passively absorbs to one in which teacher and student are partners in a joint process of learning and the teacher, in part, acts as a catalyst.

MRKT 477.1 Page 12

In analyzing an international marketing case, the following questions are listed as a guide to the student:

1. What are the objectives of the organization or group involved? 2. What is (are) the major problem(s)? 3. What are the chief sub-problems? 4. What are the pertinent pieces of information contained in the case? 5. What are all the feasible alternatives for a solution to the problem(s) and sub-problems? 6. What information not contained in the case would you like to have to aid in selecting from the various possible

solutions? Is this additional information worth obtaining from a time and cost viewpoint? How would you use this information?

7. How would you go about obtaining this additional information? What specific research tools, if any, would you use? 8. What assumptions are you making in the face of the unavailable information? What is the reasoning behind these

assumptions? 9. What are all the advantages and disadvantages of each feasible solution?10. Which alternative would you finally choose and why?11. Given the chosen alternative, what plan of action would you recommend as optimal?12.

THE FORMAT FOR INTERNATIONAL MARKETING CASE ANALYSIS IS STATED BELOW**

1. Analysis of the Situation

Do not restate the case. Emphasize only the information that you think is critical to your decision process. Two levels of analysis are useful. The first, the macro level, attempts to understand the structure of the international marketing situation for all the firms involved. The second, the micro level, looks at the position of each firm in the particular situation, and at the strategy of each.

1.1 Macro Level. (Country Level Analysis): Nature of the market (region, country, market segment(s), and sub-segment(s) including uncontrollable factors such as:

-Environment: economic, cultural, social, technological, political, and legal-Market size-Consumer segments and their wants or needs-Product segments-Channels of distribution-Other relevant macro factors pertaining to the case.

1.2 Micro Level. (Company Level Analysis): Current marketing objectives of each competitor firm:

Current strategy: Target market, Product, Promotion, Place (distribution), and Price

Strengths and weaknesses of each competitor

2. Identification of the Problem and/or Opportunity

It is obviously crucial to identify the main problem correctly; since the case solution focuses on whatever has been stated as the problem. One tip that has proved to be helpful is to identify whatever sub-problems may exist, then to check if all sub-problems relate to the main problem. If they do not then it is worthwhile to think again whether the main problem as stated is the correct one.

MRKT 477.1 Page 13

3. Identification and Evaluation of Alternative Strategies

Make sure alternative strategies are complete and consistent, and discuss pros and cons of each one in point form. Only realistic options should be presented. In some cases, decisions may have to be made to reduce the number of alternatives. Also state any reasonable assumptions you are making where you lack information.

4. Recommended Strategy with Justifications

Elaborate on the alternative(s) that you think is/are best for the firm to use in the immediate future.

5. Suggested Plan for Implementation of the Proposed Strategy

This includes timing, organizational change, and other issues critical to your carrying out the proposed course of action.

* Arthur Stone Dewing, "An Introduction to the Use of Cases," in the Case Method of Instruction, Cecil E. Fraser, ed. (New York: McGraw-Hill Book Company, Inc., 1971).

** Partially adapted from K. L. McGown's class notes (Montreal, Quebec, Canada, Concordia University, 1984).