Case Solution- International Marketing 165473

3.1 International Market Research at Mayo Clinic Question - Assume you are the new marketing vice president at the Mayo Clinic. The CEO and the board have decided to expand their international sales revenues by 100 percent over the next five years. Write a memo to your staff outlining the marketing research that will be needed to such a strategy. Be specific about sources of secondary data and the best places and media for gathering primary data. Also, be specific about the best methods to use.

Outlining the market research which needs to be done in order to the growth strategy Step 1: Definition of the problem Existing customers:   

Determine current satisfaction level of patients and factors that cause satisfaction or dissatisfaction Perception of doctors, medical technology, nursing care, physical facilities, management and ethics Perception of Mayo Clinic

New potential markets:    

Perception of health insurance, medical care (public and private) in different markets Perception of doctors, medical technology, nursing care, physical facilities, management and ethics Satisfaction or dissatisfaction of medical care services Local competitors as well as local pricing of medical care services

Step 2: Development of the approach to the problem Quantitative and qualitative research based on data about potential market. Each potential market should be evaluated separately and in the end compared within group so that the most profitable markets could be chosen. Moreover, another market research should be organized for local market which will be focused on increasing satisfaction of existing customer as well as definition of new potential target groups. Step 3: Formulating a research design Gather the reliant data from secondary or primary sources, or both. Mayo’s International Marketing Department should analyze available secondary information as a useful first step. Information required ranges from the general statistical data to understand target market’s preferences in the healthcare industry to specific

market information about media and other efficient means of delivering information to the target market for decisions about promotion. To find out which countries value the US health care highly and where Mayo Clinic services may have a competitive advantage over local ones we should conduct a multicultural research. It involves countries with different languages, economies, social structures, behavior, and attitude patterns towards taking care of their health. There are many studies conducted and statistical documents available online for the secondary dada research. These data are more widely available because they are commonly reported by the United Nations and other international agencies. Once approximations for health trends and preferences are established, Mayo will have more understanding of what additional primary research is needed.

Step 4: Doing fieldwork and collecting data In order to ensure the best quality, two methods of market research are recommended to be used: quantitative and qualitative. Primary research will be conducted by focusing on one country at a time and using native speaking research agents. Outside vendors who know the culture and the language will be necessary due to cultural differences that may lead to unwillingness or inability to participate, collect, or interpret responses – if surveys are conducted by US marketers. The main goal is to gather as much cultural and historical information about our target market. While conducting a survey the target market has to be a random sample in a specific sample frame. This way every population member will have an equal chance to be surveyed. This is a key of having a true random sample and avoiding bias. It is also recommended to conduct research about the local health providers and availability of resources to treat the common and rare diseases found in such countries. Qualitative data will be collected to find out preferences and criteria people look for in a good health provider in their home country and whether they are satisfied or not. The primary research will be gathered by means of mail and email surveys, focus groups, personal phone and face-to-face interviews, as well as direct observation of people in clinics and insurance offices. The methods will vary according to customs and cultural differences among countries. Step 5: Preparing and analyzing data After conducting and processing research, Mayo Clinic researchers should analyzed gathered data. Analysis of the quantitative data should deliver insight into obtain specific responses regarding aspects of the respondents’ behavior, intentions, attitudes, motives and demographic characteristics. Quantitative research provides the marketer with responses that can be presented with precise estimations. Qualitative research with open-ended or

in-depth, and unstructured responses reflects people’s thoughts and feelings on the subject. The purpose of the research is to formulate and define problem or situation more clearly and to determine relevant questions to be examined in subsequent research. It is also used to stimulate ad message ideas and where interest centers on gaining an understanding of a market. Step 6: Preparing and presenting the report Based on the results of analyzed data, the final report documenting the market research should be prepared. The report should include description of the research methodology, data gathering process overview as well as the results and conclusions. Once all the research is collected, processed, and conclusions are drawn; the Mayo Clinic marketing department can decide on the best strategy to build awareness and, potentially, increase its international sales revenues.

3.2 Swiffer, higher, stronger, dearer. 

Case Background − Covers the development of paid broadcasting rights for televised sports from 1948 until today. − The implication that sports immediacy and popularity has on the advertising world. − The interaction of professional athletics institutions/associations and global communications companies. − The complexity of the relationship between broadcasters, content providers and rs including BBC, NBC, ESPN, Fox and others. − The positive and negative effects of that the money involved in the industry has on sports, broadcasting rights and ments. − Recent change and initiatives that may impact on the future of televised sport and advertising − various countries are mentioned throughout the case, with a specific focus on America, United Kingdom and Australia.

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Key Statistics − The top eight television programs in America are all sporting events

− Some 3 billion people watched part of the 2000 Olympiad. − The money that television has brought into professional sport has put some of the top players among the world’s highest- paid entertainers − In America, estimates of total spending on sports rights by television companies is about $20 billion a year Key Statistics − Fox purchased the rights to a year of National Football League games for about $4 billion. − Kirch, a German group spent $2.2 billion for the world’s biggest soccerbroadcasting rights: to show the finals of the World Cup in 2002 and 2006 outside America. − For a 30-second slot during the Super Bowl, by most estimates networks are now asking and getting around $3 million

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Issues / Challenges - The quality of immediacy- Sport also has a special quality that makes it unlike almost any other sort of television program: immediacy. - Television changing sport and vice versa-The combination of popularity and immediacy has created a symbiotic relationship between sport and television in which each is changing the other. - Sport channels taking over screen time- The combination of popularity and immediacy has created a symbiotic relationship between sport and television in which each is changing the other. - Inability for broadcasters to attain value for money-The problem is that the value of sport to viewers (“consumer surplus,” as economists would put it) is much larger than the value of most other sorts of programming. - Charging viewers to watch sport-In the next few years, the main new outlet for sports programs will be digital television. - Losing track of what’s important-The biggest beneficiaries of televised sport have not been the clubs and bodies that run sports but the players

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Recommendations - Benefits of ‘free-to-air’ televised sport

- Adapting television to suit sport - Avoiding a potential ‘marketing myopia’ - Deterring illegal streaming and/or piracy - Restricting the influence of government/politics - Maximizing the value of sport - Stopping televised sport becoming completely subscription based

3.3 Marketing on the bottom of the pyramid

1. In evaluating the potential of a BOP market segment there are certain factors that need to be analyzed in order to develop a marketing strategy. The following will be used as a guideline to establish possibility and viability of marketing to the BOP. Market opportunity Being the “poor sector” of the pyramid is there a marketing opportunity? Will people who struggle to survive buy convince goods? In analyzing the market opportunity of the BOP, as the case suggest with major markets being more competitive and profits margins per supplier reducing, organizations are now uncovering the potential of tapping the BOP. The BOP is a group that consists of over 4 billion people, that s for ¾ of world’s population. Given the size of the market, profitability is obtained by volume of sale rather than an individual sale. Consumer behavior Having an understanding of the consumers in BOP can help organization enter this market. With earning less than $2 a day the average person’s perception is a “earn today, spend today” attitude. Marketing to the BOP is not easy; it’s not making low quality but affordable products, but catering to their specific needs which may require having advance technology to facilitate the product affordability. Marketing Mix Would there be a difference in the marketing mix when targeting BOP? What needs to be considered? * Product In deg the product, one needs to understand that more emphasis is to be paid on the functionality rather than the form of the product. As sighted in the case study in marking mobile phones to the BOP, functionalities such as long battery life, affordability and extra volume for noisy environment is valued more than the fancy way it looks. Attracting the BOP markets require the products to be in smaller units which will facilitate affordability. For example even in Sri Lanka products such as Sunsilk shampoo, Nescafe mix, Rinso washing power, Kist tomato sauce is sold in sachets which makes it affordable.

Approaching the market in this way brings the product into the consideration set of the poor for the first time - even if they only buy the sachet once a month, collectively these purchases can result in a substantial volume of product sale. The infrastructure at the bottom of the pyramid is often poor and products may need to be adapted to withstand shortcomings such as fluctuating voltage, impure and intermittent water and movement over unsealed roads or tracks.

* Pricing The technique in price at the BOP segment is to have low margins and high volumes. Special consideration needs to be made to the purchasing power of the segment. There are various ways of overcoming the pricing issue in a BOP market as the case suggest, Installment payments – Singar had adopted this method, where instead of selling a sewing machine at the price of $100 it was sold at an installment plan for $5 p.m. Another example is at Hoy payments to purchase r/m to expand homes were sold at $11.50 p.w. at the end of the year given the volume of participants they made a profit of $1.5 million. Another example is where Hindustan Lever, among the first MNC's to realize the potential of India's rural market, has launched a variant of its largest selling soap brand, Lifebuoy at Rs.2 for 50 gm. Coca-Cola has addressed the affordability issue by introducing the returnable 200-ml glass bottle priced at Rs.5. The initiative has led to 80% of new drinkers for coke coming from the rural markets. Earn and purchase as you work – engaging the customers to work and having the products sold at a discount. * Distribution Given the poor state of roads, it is an even greater challenge to regularly reach products to the village. Reaching the BOP is not always easy a company needs to find low distribution methods to get the products across to this segment. For example India's largest MNC, Hindustan Lever, has built a strong distribution system which helps its brands reach the interiors of the rural market. To service remote village bullock-carts and even boats are used. Coca-Cola, which considers rural India as a future growth driver, has evolved a hub and spoke distribution model to reach the villages. LG Electronics defines all cities and towns other than the seven metro cities as rural and semi-urban market. As the case suggest employing women from the BOP can be employed to act as a distributor which is more effective low cost means of getting the products to those who need.

* Promotion Since large parts of BOP markets are not accessible to conventional advertising media, building awareness is another challenge. For example Hindustan Lever relies heavily on its own company-organized media. Godrej Consumer Products, which is trying to push its soap brands into the interior areas, uses Radio to reach the local people in their language. Coca-Cola uses a combination of TV, Cinema and Radio to reach rural households. LG Electronics uses vans and road shows to reach rural customers. Philips India uses wall writing and Radio advertising to drive its growth in rural areas. (Flercher, 2005)

Implications for international marketers The BOP segment will require a deep understanding of the local environment and involve a ‘bottom-up’ approach resulting from identifying and shoring up the existing social infrastructure. Strategies need to be culturally sensitive and relationship based. Such as: * Creation of a unique approach tailored to the local market that is both culturally sensitive and economically feasible. * Identify the real needs of the consumer and product adaptation to meet these needs in a way that creates opportunity for local participation; * Development of ways to overcome the infrastructure problems faced by BOP consumers. * Detailed research into the BOP market as to their specific needs and characteristics. * Try to utilize BOP segment in the distribution and promotion.

2. In the past the role of a marketer was to anticipate and identify customer needs. However given the complexities and the increase global competition in today’s context, marketers now also find themselves creating a need in the market. Marketing to the BOP is an example for the latter.

The BOP consists of the poorest population with low levels of disposable income. One would expect it to be spent on necessities. However companies now are creating a need amongst the bottom of the pyramid for convenience and shopping goods. For instance due to the high price of a lap top or even a bottle of shampoo, the lower end will not even consider this product as a need. By making it affordable through installment payments the products are now attractive and even considered due to the affordability factor. Companies also use smaller units to overcome affordability factor. These tactics creates a demand within BOP segment for those products not even considered before. Is it exploitation for company to make profits from the population at the bottom of the line? As a business entity profits is one of the main concerns however marketing to the bottom of the pyramid also has a social responsibility attached to it. Although they have little disposable income considering their purchasing power, alterations are done to make the product affordable as explained above. Profitability therefore is not made by selling to an individual in the BOP segment; the company can actually make losses considering a single transaction. However profit is earned from the volume of the purchase and the size of the BOP collectively. Rather than exploiting the poor it’s merely raising their standard of living through and through the volume the company in turn earns a profit creating a win win situation. Through marketing to the BOP * Making products such as toiletries improve hygiene and wellbeing. * By selling computers. Sewing machines, it gives a chance to improve their skills and ability which will they can benefit * By having loans and employment catered to the BOP can stimulate economic growth Just because there are called bottom of the pyramid they should not be expected to stagnate as the same level, in a global attempt to irradiate poverty marketing to the BOP is the start.

3.4: Continued Growth for Zara and Inditex 1. What are the ways that Inditex ensures that “fast fashion” is truly fast? Inditex ensures that its fashion is fast through its supply chain efforts. They have created new methods to enable store managers to order and display merchandise faster and added cargo routes for shipping goods. The company ships clothing straight from the factory to stores and makes two-thirds of its goods in Spain and nearby countries, compared to most competitors who manufacture most of their clothing in Asia. Inditex has their sales managers monitoring computers, which are

reporting sales at every store around the world. When a garment does well or fails, they are able to quickly tell designers if they need to come up with new ideas. They also have generated in house store fronts where they develop new marketing promotions every two weeks. 2. What are the important attributes of a “fast fashion” retailer to customers? To store managers? Retailer to costumer:  Give new product fast to shops;  Stocked stores with new designs twice a week;  Ship clothes straight from the factory to stores to improve product availability; The important “fast fashion” attributes to the customer is that the retailer is providing the latest fashion to them as soon as it comes out. They want to make sure that they are getting the latest trends first and that they are not buying out dated clothing. It is also important to the customer that the retailer has what they are looking for when they come. They do not want the retailer to be out of stock every time they come in. If they are out of stock, the attribute of having their suppliers close to the retailers means that they would be able to re-stock their merchandise fairly quick. Retailer to store managers:  Have information about rate of sale of new collection as fast as possible;  New collection has labels in time of arrival (to make fast identification and hang on store) ;  Store managers use hand-held computers that show how garments rank by sale, so clerks can re-order bestsellers in less than an hour. 3. Why would a retailer introduce their online store country-by country? Why Inditex slow to embrace online sales when it was is so tech-savvy in other ways? There is a number of reasons why a company might chose to stay away from a certain type of marketing. Some of the primary reason could include the company’s business model, its core competencies, or even the exclusivity factor. The company might have attempted to stay away from internet sales as its main selling population was within larger cities, and majority of its marketing structure was based on in store sales. As prominent as information technology is today, not all merchandise is best d online. It seems that in this particular case, the company’s core marketing was based around its in-store merchandise that was always updated. The company’s late entry into the online market could have been for the simple reason of it focusing on its core competencies. Launching its online store on country-by-country basis could be a wise idea from the stand point of market analysis. A number of questions come to mind when operating an online retail. Some of this include: where will the merchandise be shipped from, what will be the primary online strategy in of fashion, what would be the cheapest way to produce merchandise sold online, and may other

logistical problems. Launching its online business country-by-country would allow the company to get some bearing on the new business venture that is outside of the company’s core business model. I don’t necessarily believe that the company’s decision to wait on its online business was necessarily related to their inability to deal with the technology associated with online stores. The company’s business is based on some degree of exclusivity, and having online stores could possibly damage that image. 4. Describe five opportunities for continued growth during the next five years for Zara’s parent, Inditex, SA.     

Launch stores in the Americas along with establishing new distribution centers. The same as with China and Russia. Focus on online expansion. Expand aggressively into international markets. Continue to find creative ways to keep the stores’ looks fresh. The fifth and final opportunity would be to continue exploring alternative markets

5. Pick one of the five opportunities and outline the advantages and disadvantages of pursuing it? The opportunity I would like to discuss is continuing growth in the American market. The primary advantages to investing in the American market segment are the financial and overall structural wealth of the country. The United States is a huge market for many fashion firms, and with today’s technological advance, the American market is expanding very quickly. Although the company already has a number of stores in major cities, the company should pursue opening up stores in smaller communities. By no means anything rural, but cities such as Cleveland, although not the fashion such as New York, could still facilitate good business. The primary negatives to entering American market are naturally the competition and logistics. The American market is well developed and rather saturated with already established retail chains such as GAP. Market entry and promotion could be expensive. Another factor to take into consideration when entering American market is logistics. The primary manufacturing hub for the company is located in Western Europe, thus shipping could take a big toll on the profit margin. Although the company does currently offset this costs by raising the prices on its products, this ultimately will hinder the firm’s ability to compete with local retailer who are not burdened by the logistical expenses.