A) Merchandise trade today accounts for less than 2 percent
of all the foreign exchange transactions around the world. Can
one deduce that merchandise plays an insignificant role in
today’s economies? Why or why not?
B) . A major cereal manufacturer produces and markets standardized
breakfast cereals to countries around the world.
Minor modifications in attributes, such as sweetness of the
product, are made to cater to local needs. However, the core
products and brands are standardized. The company entered
the Chinese market a few years back and was extremely
satisfied with the results. The company’s sales continue to
grow at a rate of around 50 percent a year in China.
Encouraged by its marketing success in China and other Asian
countries, and based on the market reforms taking place, the
company started operations in India by manufacturing and
marketing its products. Initial response to the product was
extremely encouraging and within one year the company was
thinking in terms of rapidly expanding its production capacity.
However, after a year, sales tapered off and started to fall.
Detailed consumer research seemed to suggest that while the
upper-middle social class, especially families where both
spouses were working, to whom this product was targeted,
adopted the cereals as an alternative meal (i.e., breakfast) for a
short time, they eventually returned to the traditional Indian
breakfast. The CEOs of some other firms in the food industry
in India are quoted as saying that non-Indian snack products
and the restaurant business are the areas where multinational
companies (MNCs) can hope for success. Trying to replace a
full meal with a non-Indian product has less of a chance of
succeeding. You are a senior executive in the international
division of this food MNC with experience of operating in
various countries in a product management function. The CEO
plans to send you to India on a fact-finding mission to determine
answers to these specific questions. What, in your opinion,
would be the answers:
a. Was entering the market with a standardized product a
b. Was it a problem of the product or the way it was
c. Given the advantages to be gained through leveraging
of brand equity and product knowledge on a global
basis, and the disadvantages of differing local tastes,
what would be your strategy for entering new
C) Globalization involves the organization-wide development
of a global perspective. This global perspective requires globally
thinking managers. Although the benefits of globalization
have received widespread attention, the difficulties in developing
managers who think globally has received scant attention.
Some senior managers consider this to be a significant
stumbling block in the globalization efforts of companies. Do
you agree with the concerns of these managers? Would the lack
of truly globally thinking managers cause problems for implementing
a global strategy? And how does the proliferation of
e-commerce affect the way these managers conduct business?
1.Why would a firm such as Vodafone need to have a global
marketing strategy even though its product development, as
well as the rest of its marketing strategy, needs to be localized
for tech-savvy consumers in Japan?
2. What alternative strategy might Vodafone have used to set
a strong market position in Japan from the very beginning?
3. What implications can you draw from Vodafone’s loss of its
Japan unit with regard to global firms’ tapping into the convergence
among global consumers?