Global marketing 4e hollensen

7.3 Video case study: Communicating in the global world 241 Case studies8.1 Philips Lighting: Screening markets in the Middle East 2678.2 Mac Baren Tobacco Company: Internationalizing th

Global MarketinG Svend Hollensen 4th Edition

from all over the world the fourth edition brings in new and updated information

about markets and explains conceptual developments it is a rich, easy-to-read

book So what are you waiting for: read it!”

Prof Evert Gummesson, Stockholm University, Sweden

“Global Marketing is an excellent international marketing book that i have been

using in my teaching for years it is very well written, informative and appeals

to students with different cultural backgrounds Highly recommended!”

Prof Samuel Rabino, Northeastern University, Boston, USA

About the author

Svend Hollensen is an associate Professor at the University of Southern

Denmark His other Financial times Prentice Hall books include Marketing

Management and Marketing Research: An International Approach

(co-authored with Marcus Schmidt).

Drawing on an incomparable breadth of international examples, Svend Hollensen not only demonstrates

how global marketing works, but also how it relates to real decisions around the world

extensive coverage of hot topics such as: blue ocean strategy; celebrity branding; brand piracy; and viral marketing

brand new case studies focusing on globally recognised brands and companies operating in a number of

coun-tries, including ikea, Philips, nokia, Guinness and Cereal Partners Worldwide

all new video cases (featuring such fi rms as nike, Starbucks, bMW, Ford and McDonalds) accompany every

chapter, and are available at www.pearsoned.co.uk/hollensen

also available to students on the web are multiple choice questions, web links, and an online glossary of global

“Managers and students need more than conventional international business and international Marketing

concepts now this convention remains the purview of most international business and marketing texts

i’ve chosen the Hollensen text and two past editions because it offers contemporary thinking in fi rm/

manager strategy development, making and validating the right strategic decisions, accepting trade-offs

and building fi rm competitiveness in a rapidly changing global environment.”

Greg Walton, School of Marketing and International Business, Victoria University of Wellington,

New Zealand

“this book is an invaluable source of knowledge for those who are working on their qualifi cations

in the fi eld of international marketing it contains a variety of new, up-to-date examples

and cases concerning not only european-based but also other international companies;

these and other materials let one discuss and analyse thoroughly the concepts

one is studying.”

Dr Izabela Kowalik, Institute of International Management and

Marketing, Warsaw School of Economics, Poland

“Hollensen offers not only an excellent text, but the pioneering electronic

resources that support the book provide optional and additional value that

can stimulate and motivate further student learning.”

Prof Bradley Barnes, Kent Business School, University of Kent, UK

www.pearson-books.com Cover image: © Getty Images

GLOBAL MARKETING

Visit the Hollensen: Global Marketing, Fourth Edition Companion Website at

www.pearsoned.co.uk/hollensento find valuable student learning materialincluding:

l Full versions of the video case studies at the end of each chapter

l Self-assessment multiple choice questions for each chapter

l Annotated links to relevant, specific sites on the web

l Searchable online glossary

l Flashcards to test your knowledge of key terms and definitions

l Classic extra case studies that help take your learning further

l An entire web-based chapter on global e-marketing, that helps keep youup-to-date in this fast-moving area

l Further reading for chapters 1–19Find more at www.downloadslide.com

We work with leading authors to develop the strongesteducational materials in marketing, bringing cutting-edgethinking and best learning practice to a global market.

Under a range of well-known imprints, includingFinancial Times Prentice Hall, we craft high quality printand electronic publications which help readers tounderstand and apply their content, whether studying

Pearson Education Limited

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and Associated Companies throughout the world

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First published 1998 by Prentice Hall

Second edition published 2001 by Pearson Education Limited

Third edition published 2004

Fourth edition published 2007

© Prentice Hall Europe 1998

© Pearson Education Limited 2001, 2004, 2007

The right of Svend Hollensen to be identified as author of this work has been asserted

by the author in accordance with the Copyright, Designs and Patents Act 1988.

All rights reserved No part of this publication may be reproduced, stored in a

retrieval system, or transmitted in any form or by any means, electronic, mechanical,

photocopying, recording or otherwise, without either the prior written permission of the

publisher or a licence permitting restricted copying in the United Kingdom issued by the

Copyright Licensing Agency Ltd, Saffron House, 6–10 Kirby Street, London EC1N 8TS

All trademarks used herein are the property of their respective owners The use of any

trademark in this text does not vest in the author or publisher any trademark ownership

rights in such trademarks, nor does the use of such trademarks imply any affiliation

with or endorsement of this book by such owners.

ISBN 978-0-273-70678-6

British Library Cataloguing-in-Publication Data

A catalogue record for this book is available from the British Library

Library of Congress Cataloging-in-Publication Data

A catalog record for this book is available from the Library of Congress

10 9 8 7 6 5 4 3 2 1

10 09 08 07

Typeset in 10.5/12.5 pt Minion by 35

Printed and bound by Mateu Cromo, Artes Graficas, Spain

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Brief contents

Preface to the fourth edition xvi

Publisher’s acknowledgements xxxii

4 Development of the firm’s international competitiveness 96

13 International sourcing decisions and the role of the subsupplier 372

15 Pricing decisions and the terms of doing business 474

19 Organization and control of the global marketing programme 642

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SUPPORTING RESOURCES

Visit www.pearsoned.co.uk/hollensento find valuable online resources:

Companion website for students

l Full versions of the video case studies at the end of each chapter

l Self-assessment multiple choice questions for each chapter

l Annotated links to relevant, specific sites on the web

l Searchable online glossary

l Flashcards to test your knowledge of key terms and definitions

l Classic extra case studies that help take your learning further

l An entire web-based chapter on global e-marketing, that helps keep you up-to-date in thisfast-moving area

l Further reading for chapters 1–19

l Answers to the questions in the book that accompany the video case studies

integrated with the book

l A testbank (delivered in TestGen) of over 600 multiple choice questions

Also: The Companion Website provides the following features:

l Search tool to help locate specific items of content

l E-mail results and profile tools to send results of quizzes to instructors

l Online help and support to assist with website usage and troubleshooting

For more information please contact your local Pearson Education sales representative

or visit www.pearsoned.co.uk/hollensen

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Contents

1

2

Preface to the fourth edition xvi

1.2 Development of the ‘global marketing’ concept 71.3 Comparison of the global marketing and management style of

1.4 Forces for ‘global integration’ and ‘market responsiveness’ 171.5 The value chain as a framework for identifying international competitive

Case studies2.1 Blooming Clothing: A bumpy path to exports 552.2 Elvis Presley Enterprises Inc (EPE): Internationalization of a ‘cult icon’ 57

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4.5 Blue ocean strategy and value innovation 115

Case studies4.1 Microsoft Xbox: The battle for gaming leadership against Nintendo’s Wii and Sony PlayStation 3 1194.2 Senseo: Creating competitiveness through an international alliance 121

Part I Case studies

I.1 Manchester United: Still trying to establish a global brand 125I.2 Bridgestone Tyres: European marketing strategy 128I.3 OneCafé: A ‘born global’ penetrates the coffee industry 134I.4 Cereal Partners Worldwide (CPW): The No 2 world player is challenging

Part II

Case studies5.1 Teepack Spezialmaschinen GmbH: Organizing a global survey of

5.2 Tchibo: Expanding the coffee shops’ business system in the United Kingdom and the rest of Europe 181

Case studies6.1 The World Bank and the IMF: What on earth is globalization about?

Massive protests during a meeting in Prague 2126.2 Sauer-Danfoss: Which political/economic factor would affect a

manufacturer of hydraulic components? 2136.3 Video case study: Debate on globalization 214

Case studies7.1 Lifan: A Chinese subsupplier and brand manufacturer of motorcycles

is aiming at the global market 2377.2 IKEA catalogue: Are there any cultural differences? 239

7.3 Video case study: Communicating in the global world 241

Case studies8.1 Philips Lighting: Screening markets in the Middle East 2678.2 Mac Baren Tobacco Company: Internationalizing the water pipe

8.3 Video case study: Hasbro 272

Part II Case studies

II.1 CarLovers Carwash: Serendipity as a factor in foreign market selection: the case of CarLovers from Australia 274II.2 The Female Health Company (FHC): The female condom is seeking a

foothold in the world market for contraceptive products 277II.3 Tipperary Mineral Water Company: Market selection inside/outside

II.4 Skagen Designs: Becoming an international player in designed

Part III

in the European condom market? 3069.3 Video case study: Understanding entry modes into the Chinese market 309

10.4 Cooperative export modes/export marketing groups 323

Case studies10.1 Lysholm Linie Aquavit: International marketing of a Norwegian

10.2 Parle Products: An Indian biscuit is seeking agents and cooperation partners in new export markets 32610.3 Video case study: Honest Tea 327

Levitra challenge Viagra’s market leader position? 35211.3 Video case study: Mariott 354

Case studies12.1 Durex condoms: SSL will sell Durex condoms in the Japanese market through its own organization 369

12.2 The Fred Hollows Foundation: A non-profit organization establishes lens production factories in Nepal and Eritrea 36912.3 Video case study: Starbucks 370

Case studies13.1 LM Glasfiber A/S: Following its customers’ international expansion

in the wind turbine industry 38813.2 Lear Corporation: A leading supplier of automotive interior systems 39013.3 Video case study: Eaton Corporation 392

Part III Case studies

III.1 IKEA: Expanding through franchising to the South American market? 394III.2 Autoliv Air Bags: Transforming Autoliv into a global company 400III.3 IMAX Corporation: Globalization of the film business 405III.4 Heineken/Al Ahram Beverages Co.: Marketing of alcoholic and

non-alcoholic drinks to Egypt and to other Muslim markets – does an

14.5 New products for the international market 431

the lighter gone too far? 46914.3 Video case study: Swiss Army 470

Case studies15.1 Harley-Davidson: Does the image justify the price level? 50215.2 Gillette Co.: Is price standardization possible for razor blades? 50315.3 Video case study: Ford Motor Company 504

16.6 Implications of the Internet for distribution decisions 52616.7 Special issue 1: International retailing 52716.8 Special issue 2: Grey marketing (parallel importing) 532

Case studies16.1 De Beers: Forward integration into the diamond industry value chain 53416.2 Nokia: What is wrong in the US market for mobile phones – can Nokia

recapture the no 1 position from Motorola? 536

17.3 Video case study: BMW Motorcycles 583

Part IV Case studies

IV.1 Absolut Vodka: Defending and attacking for a better position in

IV.2 Guinness: How can the iconic Irish beer brand compensate for declining sales in the home market? 593IV.3 Dyson Vacuum Cleaner: Shifting from domestic to international

marketing with the famous bagless vacuum cleaner 600IV.4 Triumph Motorcycles Ltd: Rising from the ashes in the international

Case studies18.1 Mecca Cola: Marketing of a ‘Muslim’ cola to the European market 636

18.2 TOTO: The Japanese toilet manufacturer seeks export opportunities for its high-tech brands in the United States 63818.3 Video case study: Dunkin’ Donuts 639

Case studies19.1 Mars Inc.: Merger of the European food, petcare and confectionary

19.2 AGRAMKOW Fluid Systems: Reconsidering its global organization

19.3 Video case study: McDonald’s 676

Part V Case studies

V.1 Femilet: A SME is seeking a foothold in the European lingerie market 679V.2 Sony BMG: New worldwide organizational structure and

the marketing, planning and budgeting of Dido’s new album 685V.3 Philips Shavers: Maintaining shaving leadership in the world market 689V.4 Vipp AS: A SME uses global branding to break into the international

Globalization is the growing interdependence of national economies – involving marily customers, producers, suppliers and governments in different markets Globalmarketing therefore reflects the trend of firms selling and distributing products andservices in many countries around the world It is associated with governments reduc-ing trade and investment barriers, firms manufacturing in multiple countries and for-eign firms increasingly competing in domestic markets

pri-For many years the globalization of markets, caused by the convergence of tastesacross borders, was thought to result in very large multinational enterprises, whichcould use their advantages in scale economies to introduce world-standardized pro-ducts successfully

In his famous 1994 book, The Global Paradox, John Naisbitt has contradicted especially

the last part of this myth:1

The mindset that in a huge global economy the multinationals dominate world businesscouldn’t have been more wrong The bigger and more open the world economy becomes,the more small and middle sized companies will dominate In one of the major turnarounds

in my lifetime, we have moved from ‘economies of scale’ to ‘diseconomies of scale’; frombigger is better to bigger is inefficient, costly and wastefully bureaucratic, inflexible and, now,disastrous And the paradox that has occurred is, as we move to the global context: Thesmaller and speedier players will prevail on a much expanded field

When the largest corporations (e.g IBM, ABB) downsize, they are seeking to late the entrepreneurial behaviour of successful SMEs (small and medium-sized enter-prises) where the implementation phase plays a more important role than in largecompanies Since the behaviours of smaller and (divisions of) larger firms (according

emu-to the above quotation) are convergent, the differences in the global marketing iour between SMEs and LSEs (large-scale enterprises) are slowly disappearing What ishappening is that the LSEs are downsizing and decentralizing their decision-makingprocess The result will be a more decision- and action-oriented approach to globalmarketing This approach will also characterize this book

behav-In light of their smaller size, most SMEs lack the capabilities, market power andother resources of traditional multinational LSEs Compared with the resource-richLSEs, the complexities of operating under globalization are considerably more difficultfor the SME The success of SMEs under globalization depends in large part on thedecision and implementation of the right international marketing strategy

The primary role of marketing management, in any organization, is to design andexecute effective marketing programmes that will pay off Companies can do this intheir home market or they can do it in one or more international markets Going inter-national is an enormously expensive exercise, in terms of both money and, especially,top management time and commitment Due to the high cost, going internationalmust generate added value for the company beyond extra sales In other words, thecompany needs to gain a competitive advantage by going international So, unless thecompany gains by going international, it should probably stay at home

1Naisbitt, J (1994) The Global Paradox, Nicholas Brearly Publishing, London, p 17.

Preface to the fourth edition

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Preface to the fourth edition

The task of global marketing management is complex enough when the companyoperates in one foreign national market It is much more complex when the companystarts operations in several countries Marketing programmes must, in these situ-ations, adapt to the needs and preferences of customers that have different levels of pur-chasing power as well as different climates, languages and cultures Moreover, patterns

of competition and methods of doing business differ between nations and sometimesalso within regions of the same nation In spite of the many differences, however, it isimportant to hold on to similarities across borders Some coordination of inter-national activities will be required, but at the same time the company will gain somesynergy across borders, in the way that experience and learning acquired in one coun-try can be transferred to another

ObjectivesThis book’s value chain offers the reader an analytic decision-oriented framework for the development and implementation of global marketing programmes.Consequently, the reader should be able to analyse, select and evaluate the appropriateconceptual frameworks for approaching the five main management decisions con-nected with the global marketing process: (1) whether to internationalize, (2) decidingwhich markets to enter, (3) deciding how to enter the foreign market, (4) designing the global marketing programme and (5) implementing and coordinating the globalmarketing programme

Having studied this book, the reader should be better equipped to understand howthe firm can achieve global competitiveness through the design and implementation ofmarket-responsive programmes

Target audienceThis book is written for people who want to develop effective and decision-orientedglobal marketing programmes It can be used as a textbook for undergraduate or gradu-ate courses in global/international marketing A second audience is the large group ofpeople joining ‘global marketing’ or ‘export’ courses on non-university programmes.Finally, this book is of special interest to the manager who wishes to keep abreast of themost recent developments in the global marketing field

Preface to the fourth edition

xviii

l coverage of global buyer–seller relationships;

l extensive coverage of born globals and global account management (GAM), as anextension of the traditional key account management (KAM);

l presents new interesting theories in marketing, for example, service value chain,value innovation, blue ocean strategy, social marketing, global account manage-ment, viral branding, and sensory and celebrity branding;

l aims to be a ‘true’ Global Marketing book, with cases and exhibits from all parts ofthe world, including Europe, the Middle East, Africa, the Far East, North and SouthAmerica;

l provides a complete and concentrated overview of the total international marketingplanning process;

l many new up-to-date exhibits and cases illustrate the theory by showing practicalapplications

Outline

As the book has a clear decision-oriented approach, it is structured according to thefive main decisions that marketing people in companies face in connection with theglobal marketing process The 20 chapters are divided into five parts The schematicoutline of the book in Figure 1 shows how the different parts fit together Compared

to the second edition, ‘global marketing research’ is now considered to be an integralpart of the decision-making process, therefore it has been moved to Chapter 5, so as touse it as an important input to the decision about which markets to enter (the begin-ning of Part II) Examples of the practice of global marketing by actual companies areused throughout the book, in the form of exhibits Furthermore, each chapter and partend with cases, which include questions for students

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Preface to the fourth edition

xix

What’s new in the fourth edition?

l Nineteen new video case studies (one per chapter)

l Chapter 1 – The new concepts value shop and the service value chain are duced Here the traditional value chain is confronted with the service value chain(value network)

intro-l Chapter 4 – Contains a new comprehensive section on blue ocean strategy and valueinnovation

l Chapter 6 – New updated information on the EU and the new EU member statesfrom 1 January 2007 Furthermore the management of the international terroristthreat is discussed

l Chapter 7 – A new section on social marketing is included

l Chapter 8 – A new exhibit explains the principles of market screening at KonicaMinolta Printing Solutions Europe

l Chapter 9 – A new exhibit explains the principles of choosing the ‘right’ entry modefor Konica Minolta Printing Solutions

l Chapter 10 – Introducing the international partner matrix for evaluating the formance of international distribution partners Also a section about the import-ance of getting a ‘mindshare’ at the distributor partners is included

per-l Chapter 12 – Now includes a section on location and relocation of the HQ

l Chapter 14 – Now contains new sections on sensory branding, celebrity brandingand brand piracy and anti-counterfeiting strategies

l Chapter 15 – Introduces an international pricing taxonomy: the local price followerfirm, the global price follower firm, the multilocal price setter firm and the globalprice leader firm

l Chapter 16 – Categorizes the most important criteria for selecting foreign tors into five categories: financial and company strengths, product factors, market-ing skills, commitment and facilitating factors

distribu-l Chapter 17 – A new comprehensive section (including several exhibits) on viralmarketing is included

l Chapter 18 – Now includes a section about a seven-stage cross-cultural negotiationprocess, including a discussion about the so-called BATNA (best alternative to anegotiated agreement)

l Chapter 19 – Now contains an even more extensive coverage of global account agement (GAM), including three models for handling the organizational set-up ofGAM Furthermore this chapter now also contains an overview model of the totalinternational marketing planning process

l End-of-chapter summaries recap the main concepts

l Each chapter contains two case studies, which help the student relate the modelspresented in the chapter to a specific business situation

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Preface to the fourth edition

xx

l Questions for discussion allow students to probe further into important topics

l Part cases studies – for each part there are five comprehensive case studies coveringthe themes met in the part To reinforce learning, all case studies are accompanied

by questions Case studies are based on real-life companies Further informationabout these companies can be found on the Internet Company cases are derivedfrom many different countries representing all parts of the world Tables 1 and 2present the chapter and part case studies

l Multiple choice questions

l Video library, including questions

Table 1 Chapter case studies: overview

(The video case studies can be downloaded at www.pearsoned.co.uk/hollensen)

Chapter Case study title, subtitle and related websites Country/area

of company headquarters

Geographical target area

Chapter 1

Global marketing

in the firm

Case study 1.1

Vermont Teddy Bear

Should Vermont Teddy Bear go abroad?

A bumpy path to exports

(no website available)

Ireland Europe 3 3

Case study 2.2

Elvis Presley Enterprises Inc (EPE)

Internationalization of a ‘cult’ icon

Preface to the fourth edition

xxi

Table 1 continued

Chapter Case study title, subtitle and related websites Country/area

of company headquarters

Geographical target area

Expanding the coffee shops’ business system

in the United Kingdom and the rest of Europe

A Chinese subsupplier and brand manufacturer

is aiming at the global market

The World Bank and the IMF

What on earth is globalization about? Massive protests during a meeting in Hong Kong

www.worldbank.org www.wto.org www.imf.org

Video case study 7.3

Communicating in the global world

No website available

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Preface to the fourth edition

xxii

Table 1 continued

Chapter Case study title, subtitle and related websites Country/area

of company headquarters

Geographical target area

Lysholm Linie Aquavit

International marketing of the Norwegian Aquavit brand

www.linie-aquavit.com

Norway Germany,

the rest of the World

Bayer and GlaxoSmithKline

Can the X-coalition and the product Levitra challenge Viagra’s market leader position?

Mac Baren Tobacco Company

Internationalizing the water pipe business

www.macbaren.com www.habibi.com.lb/mainpage.html

Video case study 9.3

Understanding entry modes into the Chinese market (16.33)

Preface to the fourth edition

xxiii

Table 1 continued

Chapter Case study title, subtitle and related websites Country/area

of company headquarters

Geographical target area

Target market

B2B B2C Chapter 12

The Fred Hollows Foundation

A non-profit organization establishes lens production facilities in Nepal and Eritrea

www.hollows.org

Australia Less

Developed Countries (LDCs)

Launch of a cream cheese in Saudi Arabia

www.arla.com (regarding the Puck brand)

Denmark Saudi Arabia 3 3

Case study 14.2

Zippo Manufacturing Company

Has product diversification beyond the lighter gone too far?

Video case study 15.3

Ford Motor Company

www.ford.com Four episodes from: www.fordboldmoves.com (episodes 9, 13, 21, 24) (total 14.34)

Preface to the fourth edition

xxiv

Table 1 continued

Chapter Case study title, subtitle and related websites Country/area

of company headquarters

Geographical target area

AGRAMKOW Fluid Systems

Reconsidering its global organization structure

Europe, World

Preface to the fourth edition

xxv

Table 2 Part case studies: overview

Part Case study title, subtitle and related websites Country/area

of company headquarters

Geographical target area

Case study I.4

Cereal Partners Worldwide (CPW)

The No 2 world player is challenging the No 1 – Kellogg Company

www.cerealpartners.co.uk

Switzerland, USA

(no website available)

Australia World 3

Case study II.3

Tipperary Mineral Water Company

Market selection inside/outside Europe

South America (Brazil)

3

Case study III.2

Autoliv Air Bags

Transforming Autoliv into a global company

Case study II.2

Female Health Company

The female condom, Femidom, is seeking a foothold in the world market for contraceptive products

www.femalehealth.com

USA World

(governmental organizations)

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Preface to the fourth edition

xxvi

Table 2 continued

Part Case study title, subtitle and related websites Country/area

of company headquarters

Geographical target area

3

Case study IV.3

Dyson Vacuum Cleaner

Shifting from domestic to international marketing with the famous bagless vacuum cleaner

www.dyson.co.uk

UK USA,

the rest of the World

www.sonybmg.com

Germany, USA

World, UK

Case study III.4

Heineken/AI Ahram Beverages Co.

Marketing of alcoholic and non-alcoholic drinks

to Egypt and other Muslim markets – does an acquisition help?

www.heineken.com www.alahrambeverages.com

Holland, Egypt

www.diageo.com

UK, Ireland

World 3 3 Find more at www.downloadslide.com

Preface to the fourth edition

xxvii

Table 3 Case studies on Internet: overview

Chapter Case study title, subtitle and related websites Country/area

of company headquarters

Geographical target area

Village Roadshow/AOL Time Warner

Globalization of the theme park business

www.villageroadshow.com.au

Australia, USA

Steinway & Sons

Internationalizing the piano business

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Marginal definitions highlight the key terms in each chapter A full Glossary can be found at the end of the book and on the Global Marketing website at www.pearsoned.co.uk/hollensen.

A wealth of longer Case Studies, drawn from a

wide range of countries, products and industries,

enhance the end of each part of the book.

New and engaging Exhibits analyse and discuss

specific companies to show how the theories in

the chapter are used by well-known brands in

the business world.

Contents

1 Global marketing in the firm

2 Initiation of internationalization

3 Internationalization theories

4 Development of the firm’s international competitiveness

Part I Case studies

I.1 Manchester United: Still trying to establish a global brand

I.2 Bridgestone Tyres: European marketing strategy

I.3 OneCafé: A ‘born global’ penetrates the coffee industry

I.4 Cereal Partners Worldwide (CPW): The No 2 world player is

challenging the No.1 – Kellogg

Part II Deciding which markets to enter

Chs 5– 8

Part III Market entry strategies

Designing the global marketing programme

Chs 14 –17

Part V Implementing and coordinating the global marketing programme

Chapter 1 Global marketing in the firm

animated preschool series

One of the most successful TV-programmes for preschool kids,

by Granada Ventures It is now a global brand and has been sold

bright blocks of colour against a stark white background, Pocoyo

has been designed to hold the attention of young children.

Pocoyo

Pocoyo is a young boy with an array of qualities ready to capture

interact He is a curious enthusiastic little boy in blue As he

occasion hindrance from his friends Loula, Pato, Elly and Sleepy

Bird.

Pocoyo has at its core a fascinating concept – one of learning

through laughter Clinical studies have shown that laughter not

programme, but also is proven to increase learning by 15 per cent By working closely with behavioural

psy-discover magic and humour in the simplest of things And far from painting an idealized version of childhood,

Pocoyo is sometimes moody, noisy and miserable – just like a real pre-schooler.

The value chain of Pocoyo

As illustrated in Pocoyo’s value chain (see Figure 1.12) Zinkia Entertainment is taking care of the development and

production of the Pocoyo series (upstream functions) whereas Granada Ventures takes care of global licensing and

publishing rights (downstream functions).

Zinkia Entertainment is a company founded in 2001 Located in Madrid, Spain, its main focus is to create

ani-mated series for TV and games for mobile devices and for game platforms The company has more than 100

audiovisual content, focusing on animation and cinematic documentaries as well as interactive content for online

include, among others, Pocoyo (52 × 7 minutes), a 3D animated pre-school series In June 2006, Pocoyo was

awarded the Cristal award for the ‘Best TV Series in the world’ at the 30th International Festival of Annecy

Zinkia Entertainment’s partner in the Pocoyo value chain is Granada Ventures, the merchandise, licensing and

publishing division of the UK-based television channel ITV plc Established in October 2003, following the merger

ing brands beyond broadcast by selling them worldwide on a licensing basis, mainly to other TV channels The

in television, film and sports This includes brands such as Pocoyo and Hell’s Kitchen as well as established

brands such as ‘I’m A Celebrity Get Me Out Of Here!’

Source: Pocoyo TM & © 2005 Zinkia Entertainment S.L.

Licensed by Granada Ventures.

Figure 1.12 The Pocoyo value chain

Ë

5

In the face of globalization and an increasingly interconnected world many firms attempt to expand their sales into foreign markets International expansion provides and facilitates access to new product ideas, manufacturing innovations and the latest technology However, internationalization is unlikely to be successful unless the firm prepares in advance Advance planning has often been regarded as important to the success of new international ventures (Knight, 2000).

Solberg (1997) discusses the conditions under which the company should ‘stay at home’ or further ‘strengthen the global position’ as two extremes (see Figure 1.1) The framework in Figure 1.1 is based on the following two dimensions:

Introduction

1.1

Contents

1.1 Introduction 1.2 Development of the ‘global marketing’ concept 1.3 Comparison of the global marketing and management style of SMEs and LSEs 1.4 Forces for ‘global integration’ and ‘market responsiveness’

1.5 The value chain as a framework for identifying international competitive advantage

1.6 Value shop and ‘service value chain’

1.7 Information business and the virtual value chain 1.8 Summary

Case studies 1.1 Vermont Teddy Bear 1.2 Arcor 1.3 Video case study: Nivea

Learning objectives

After studying this chapter you should be able to do the following:

l Characterize and compare the management style in SMEs (small and medium-sized enterprises) and LSEs (large-scale enterprises).

l Identify drivers for ‘global integration’ and ‘market responsiveness’.

l Explain the role of global marketing in the firm from a holistic perspective.

l Describe and understand the concept of the value chain.

l Identify and discuss different ways of internationalizing the value chain.

Global marketing in the firm

1

Globalization

Reflects the trend of firms buying, selling and distributing products and services in most countries and regions of the world

Internationalization

Doing business in many countries of the world, but often limited to a certain region (e.g.

Europe).

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In 2000 the Arcor Group launched www.

arcorsales.com, the first food industry website in Latin America devoted to business-to-business

to leverage those currently in use.

Questions

1 What would be the major obstacles to Arcor’s attempt to penetrate markets outside Latin America?

2 How could Arcor use the concept of the ‘virtual value chain’ to increase internationalization?

3 Where are Arcor’s competitive advantages in the value chain?

Questions for discussion

1 What is the reason for the ‘convergence of orientation’ in LSEs and SMEs?

2 How can an SME compensate for its lack of resources and expertise in global marketing when trying to enter export markets?

3 What are the main differences between global marketing and marketing in the domestic context?

4 Explain the main advantages of centralizing upstream activities and decentralizing downstream activities.

5 How is the ‘virtual value chain’ different from the ‘conventional value chain’?

References

Asugman, G., Johnson, J.L and McCullough, J (1997) ‘The role of after-sales service in international

marketing’, Journal of International Marketing, 5(4), pp 11–28.

Auguste, B.G., Harmon, E.P., Pandit, V (2006) ‘The right service strategies for product companies’,

McKinsey Quarterly, 1 March, pp 10 –15.

download from www.pearsoned.co.uk/

hollensen

VIDEO CASE STUDY

1.3 Nivea

Nivea (www.nivea.com) is Beiersdorf ’s (www.beiersdorf.com) largest brand in terms

of sales, product and geographical reach The brand is a market leader in a number of product areas, including skin care and sun care, especially in Europe.

3 Which marketing problems does Nivea anticipate, when penetrating the US market?

For further exercises and cases, see this book’s website at www.pearsoned.co.uk/hollensen

Guided tour

xxix

Two insightful Case Studies conclude each chapter, providing a range of material

for seminars and private study by illustrating the real life applications and

implications of the topics covered in the chapter.

The References list sources – books, journal articles and websites – that will help develop your understanding and inspire independent learning.

After reading the chapter, take your learning

further by watching a Video Case Study from

a leading international company on the

Global Marketing Companion Website at

www.pearsoned.co.uk/hollensen, and

answer the questions

Test yourself at the end of each chapter with a set of Questions for Discussion Then try answering the self assessment Multiple Choice Questions that accompany each chapter on the Global Marketing Companion Website at www.pearsoned.co.uk/hollensen.

Part I The decision whether to internationalize

In the 1970s and 1980s Arcor transformed itself into a vast industrial companies in the country The com- Argentina and in different countries

in the region In 1976 Arcor started Uruguay, in 1981 in Brazil and in 1989

in Chile.

In 1999 in Brazil Arcor opened the most advanced chocolate plant in the region, whose facilities also that country This was a start-up that put the com- tion on the continent It also permitted Arcor to American market.

In order to continue with its expansion process Arcor established itself in Barcelona in beyond the borders of its own country, and the create closer bonds with customers from the and Africa.

Today the Arcor Group has 35 plants in the region (27 in Argentina, four in Brazil, three in Chile, and one in Peru).

ARCOR prepares more than 1,500 products in the four areas that make up its business focus: foods,

In all these segments the company has developed a become a true specialist in everything it produces.

At present Arcor is well established in Latin America, but outside this area it is relatively weak

Of the total sales in 2005 of US$1,500 million less than 5 per cent derived from outside Latin America.

In the coming years, Arcor faces three big lenges within its ‘international expansion’ frame- confectionary and chocolate company; continuing potential markets outside Latin America, such as the penetration in the most demanding markets in the Union.

chal-The group is an active participant in various strategic alliances (production and/or marketing Nestlé and Brach’s The most recent example is the cuits and cereal bar business in Argentina, Brazil, their biscuit manufacturing activities into a single

in the biggest biscuit company in South America.

Danone SA (France) and 51 per cent by Arcor This local markets like Formis, Maná, Saladix, Hogareñas,

Arcor: A Latin American confectionary player is globalizing its business

CASE STUDY

1.2

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Writing any book is a long-term commitment and involves time-consuming effort Thesuccessful completion of a book depends on the support and generosity of many peopleand the realization of this book is certainly no exception

I wish to thank the many scholars whose articles, books and other materials I have cited

or quoted However, it is not possible to acknowledge everyone by name In particular I

am deeply indebted to the following individuals and organizations I thank you all for yourhelp and contribution:

University of Southern Denmark

l Management at University of Southern Denmark provided the best possible ment for writing and completing this project

environ-l Colleagues provided encouragement and support during the writing process

l Charlotte Hansen took care of word processing of my drafts in a highly efficient ner Furthermore she created many of the new figures in an imaginative way

man-l The Library at University of Southern Denmark provided articles and books from ferent worldwide sources

dif-Reviewers

l Reviewers provided suggestions which were useful in improving many parts of the text

l In the development of this text a number of reviewers have been involved, whom Iwould like to thank for their important and valuable contribution: Henrik Agndal,Jönköping International Business School; Grahame Fallon, University CollegeNorthampton; Ronald Salters, Fontys Eindhoven

l Professor Alkis Magdalinos, contributed with many necessary corrections and tions for improvement in different sections of the book

sugges-Case contributors

l Edel Foley and Eibhlin Curley, Ireland for Case 2.1: Blooming Clothing

l Bill Merrilees and Dale Miller, Marketing Group, Department of Management,University of Newcastle, Australia for Case II.1: CarLovers Carwash

l Wim Wils, Fontys Eindhoven, for Case 8.1: Philips Lighting

l Sjoerd Drost, Product manager, Philips Shavers, for Case V.3: Philips Shavers

l Eric Wepiere, Manager CRM and Internet, Chevrolet Europe, for Case 14.2: Chevrolet

I also wish to acknowledge the help from the following firms whose managers have vided valuable material that has enabled me to write the following cases I have been indirect personal contact with most of the following companies and thank the managersinvolved for their very useful comments

pro-Chapter cases:

l Cryos, Aarhus, Denmark for Case 3.1 on Cryos

l Entertainment Rights, London, UK for Case 3.2 on Postman Pat

l Teepack Spezialmaschinen GmbH, Düsseldorf, Germany for Case 5.1 on TeepackSpezialmaschinen

l IKEA, Sweden for Case 7.2 on the IKEA Catalogue

l Arcus AS, Oslo, Norway for Case 10.1 on Lysholm Linie Aquavit

l Ka-Boo-Ki, Ikast, Denmark for Case 11.1 on Ka-Boo-Ki

Acknowledgements

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l Chevrolet Europe, Switzerland, for Case 17.2 on Chevrolet

l AGramkow, Sønderborg, Denmark for Case 19.2 on AGRAMKOW Fluid Systems

Part cases:

l Bridgestone/Firestone, Bruxelles, Belgium/Tokyo, Japan for Case I.2: Bridgestone Tyres

l OneCafé International AB, Sweden for Case I.3: OneCafé

l Skagen Designs, Reno, USA and Copenhagen, Denmark for Case II.4: Skagen Designs

l Autoliv AB, Stockholm, Sweden for Case III.3: Autoliv Air Bags

l IMAX Corporation, Toronto, Canada for Case III.4: Imax Corporation

l The Absolut Company, a division of Vin & Sprit AB, Stockholm, Sweden for Case IV.1:Absolut Vodka

l Femilet, Ikast, Denmark for Case V.1: Femilet

l Sony BMG, New York, USA for Case V.2: Sony BMG

l Philips Shavers, Eindhoven, Holland for Case V.3: Philips Shavers

l Vipp A/S, Copenhagen, Denmark for Case V.4: Vipp

I would also like to thank Madame Tussaud Group, especially Global Marketing DirectorNicky Marsh from London and Cathy Wong, External Affairs Consultant from Shanghaifor their contribution to Exhibit 14.2

I am also grateful to the following international advertising agencies, which have provided

me with examples of standardized and/or localized advertising campaigns:

l Tribal DDB who contributed with viral marketing picture material for Exhibit 18.8:

‘Quintippio’ viral ad campaign

l J Walter Thompson (JWT Europe), London who contributed with a European ad forLUX soap

l Hindustan Thompson (HTA), Bombay, India who contributed with an ad for Kellogg’sBasmati Flakes in India and an ad for LUX soap in India

l Ammirati Puris Lintas, Hamburg, Germany who contributed with an ad from the ‘Meand my Magnum’ campaign

I would also like to thank LEGO and Langnese (special thanks to Silke for her efforts to getthe Magnum ad) for their contributions to different examples in the book

I am grateful to my publisher, Pearson Education I would like to thank Acquisitions EditorDavid Cox (and former Acquisitions Editor Thomas Sigel), Editorial Assistant AndrewHarrison and Desk Editor Georgina Clark-Mazo for their help with this edition

I also extend my greatest gratitude to my colleagues at the University of SouthernDenmark for their constant help and inspiration

Finally, I thank my family for their support through the revision process I am pleased

to dedicate this version to Jonna, Nanna and Julie

Svend Hollensen University of Southern Denmark, Sønderborg, Denmark

January 2007

svend@sam.sdu.dk

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We are grateful to the following for permission to

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Figure 1.1 from A framework for analysis of strategy

development in globalizing markets, Journal of

International Marketing, Vol 5 (1), reprinted by

per-mission of American Marketing Association (Solberg,

C.A 1997); Figure 1.4 from The strategy concept I:

five Ps for strategy, California Management Review,

Vol 30, No 1, reprinted by permission of The Regents

of the University of California (Mintzberg, H 1987);

Figure 1.5 from Rethinking incrementalism, Strategic

Management Journal, Vol 9, reprinted by permission of

John Wiley & Sons Ltd (Johnson, G 1988); Figure 1.8

from In Search of Excellence: Lessons from America’s

Best Run Companies, reprinted by permission of

HarperCollins Publishers Inc (Peters, T.J and

Waterman, Jr, R.H 1982); Figure 1.9 adapted from

Competitive Advantage: Creating and Sustaining

Superior Performance, reprinted by permission of

The Free Press, a Division of Simon & Schuster Adult

Publishing Group (Porter, M.E 1985); Table 2.1

adapted from International Marketing and Export

Management, 2nd Edition, Addison-Wesley, reprinted

by permission of Pearson Education Ltd (Albaum, G

et al 1994); Figure 3.1 adapted from International

føretagsekonomi, Norstedts, reprinted by permission of

Mats Forsgren (Forsgren, M and Johanson, J 1975);

Figures 3.2 and 3.3 from Internationalization: evolution

of a concept, Journal of General Management, Vol 14,

No 2, reprinted by permission of The Braybrooke Press

Ltd (Welch, L.S and Loustarinen, R 1988); Figure 3.6

from Internationalization in industrial systems in

Strategies in Global Competition edited by N Hood

and J.E Vahlne, Croom Helm, reprinted by

permis-sion of Thomson Publishing Services (Johanson, J

and Mattson, L.G 1988); Figure 3.7 adapted from

Internationalization Handbook for the Software Business,

reprinted by permission of Centre of Expertise for

Software Product Business (Âijö, T et al 2005);

Table 4.2 from Composite strategy: the combination

of collaboration and competition, Journal of General

Management, Vol 21, No.1, reprinted by permission of

The Braybrooke Press Ltd (Burton, J 1995); Figure 4.4

adapted from Competitive advantage: merging

market-ing and competence-based perspective, Journal of

Business and Industrial Marketing, Vol 9, No 4,

reprinted by permission of Hans P Wehrli (Jüttner, U

and Wehrli, H.P 1994); Figure 4.5 from Exploiting the

core competences of your organization, Long Range

Planning, Vol 27, No 4, reprinted by permission of

Elsevier (Tampoe, M 1994); Figure 5.5 from

Contemporary Marketing Research, 2nd Edition,

Copyright © 1993, reprinted with permission of JohnWiley & Sons, Inc (McDaniel, Jr., C and Gates, R

1993); Figure 5.8 from Marketing Research: An

International Approach, reprinted by permission of

Pearson Education Ltd (Schmidt, M.I and Hollensen,

S 2006); Table 6.1 from The Economist 25 March 2006,

© The Economist Newspaper Ltd, London (25.3.06),reprinted by permission of The Economist Newspaper

Ltd; Figure 6.3 from Global Marketing, 1st Edition,

reprinted with permission of South-Western, a sion of Thomson Learning (Czinkota, M.R and

divi-Ronkainen, I.A 1996); Table 7.2 adapted from

Inter-national Marketing Strategy: Analysis, Development and Implementation, Thomson Learning, reprinted

by permission of Thomson Publishing Services

(Phillips, C et al 1994); Figure 7.3 from International

Marketing: A Cultural Approach, reprinted by

permis-sion of Pearson Education Ltd (Usunier, J.-C 2000);

Table 7.4 from Going International, Random House,

reprinted by permission The Sagalyn Agency(Copeland, L and Griggs, L 1985); Figures 8.6 and 8.7 reprinted by permission of Konica Minolta Printing

Solutions Europe; Figure 8.8 from European Business:

An Issue-Based Approach, 3rd Edition, Pitman,

reprinted by permission of Pearson Education Ltd(Welford, R and Prescott, K 1996); Figure 8.11 from

Global Marketing Management, Prentice Hall, reprinted

by permission of Pearson Education, Inc (Keegan, W.J

1995); Figure 8.12 from International Marketing

Strategy, 2nd Edition, Prentice Hall, reprinted by

per-mission of Pearson Education Ltd (Bradley, F 1995);Figure 8.13 from Market expansion strategies in

multinational marketing, Journal of Marketing, Vol 43,

Spring, reprinted by permission of AmericanMarketing Association (Ayal, I And Zif, J 1979);

Table 10.1 from Entry Strategies for International

Markets: Revised and Expanded Edition, reprinted by

permission of John Wiley & Sons, Inc (Root, F.R

1994); Figure 11.4 adapted from Strategiske allianser

i globale strategier, Norges Eksportråd, reprinted by

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and 11.6 from Strategies for Joint Ventures, reprinted

by permission of K.R Harrigan (Harrigan, K.R 1985);

Figure 12.2 from Oviatt, B.M and McDougall, P.P.,

Toward a theory of international new ventures, Journal

of International Business Studies, Vol 25, No 1, 1994,

reproduced with permission of Palgrave Macmillan

(Oviatt, B.M and McDougall, P.P 1994); Figure 12.3

from Organisational dimensions of global marketing,

European Journal of Marketing, Vol 23, No 5, reprinted

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and Kreutzer, R 1989); Figure 12.4 from Regional

headquarters: the spearhead for Asian Pacific markets,

Long Range Planning, Vol 29, No 1, reprinted by

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Why are subsidiaries divested? A conceptual framework,

Working Paper No.3-93, reprinted by permission of

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13.1 adapted from Alihankintajarjestelma 1990-luvulla

[Subcontracting System in the 1990s], Publications of

SITRA, No 114, reprinted by permission of Sitra

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Relationship marketing from a value system perspective,

International Journal of Service Industry Management,

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Ltd (Jüttner, U and Wehrli, H.P 1994); Figure 13.3

from A total cost/value model for supply chain

compet-itiveness, Journal of Business Logistics, Vol 13, No 2,

reprinted by permission of Council of Logistics

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double-edged portfolio approach to SME, Subcontractors

Positioning Paper presented at the 8th Nordic

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permission of Per Blenker (Blenker, P and Christensen,

P.R 1994); Figure 13.5 from Strategies for International

Industrial Marketing, Croom Helm, reprinted by

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P.W and Valla, J.P 1986); Part IV, Figure 3, p 419,

from Standardisation: an integrated approach to global

marketing, European Journal of Marketing, Vol 22,

No 10, reprinted by permission of Emerald Group

Publishing Ltd (Kreutzer, R 1988); Table 14.2 adapted

from The international dimension of branding: strategic

considerations and decisions, International Marketing

Review, Vol 6, No 3, reprinted by permission of

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1989); Table 14.3 from The future of consumer

brand-ing as seen from the picture today, Journal of Consumer

Marketing, Vol 12, No 4, reprinted by permission

of Emerald Group Publishing Ltd (Boze, B.V and

Patton, C.R 1995); Figure 14.5 partly reprinted from

Competitive analysis using matrix displays, Long Range

Planning, Vol 17, No 3, reprinted by permission of

Elsevier (McNamee, P 1984); Figure 14.6 from

International Marketing: Analysis and Strategy, 2nd

Edition, Macmillan, reprinted by permission of SakOnkvisit (Onkvisit, S and Shaw, J.J 1993); Figures 14.8and 14.9 from New products: cutting the time to

market, Long Range Planning, Vol 28, No 2, reprinted

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14.12 adapted from International Marketing: Analysis

and Strategy, 2nd Edition, Macmillan, reprinted by

permission of Sak Onkvisit (Onkvisit, S and Shaw, J.J.1993); Figure 14.17 adapted from Environmentally

responsible logistics systems, International Journal of

Physical Distribution and Logistics Management, Vol 25,

No 2, reprinted by permission of Emerald GroupPublishing Ltd (Wu, H.J and Dunn, S.C 1995); Figure 15.5 from Pricing conditions in the European

Common Market, European Management Journal,

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Marketing and Research Today, February, reprinted by

permission of ESOMAR (Simon, H and Kucher, E

1993); Figure 15.9 and Table 17.3 from International

Marketing Strategy: Analysis, Development and Implementation, Thomson Learning, reprinted by per-

mission of Thomson Publishing Services (Phillips, C

et al 1994); Table 16.1 from Are you tough enough to

manage your channels?, The McKinsey Quarterly, No 1,

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International Marketing, 8th Edition, Irwin, reprinted

by permission of The McGraw-Hill Companies, Inc.(Cateora, P.R 1993); Figure 16.3 from US-Japan distri-bution channel cost structures: is there a significant dif-

ference?, International Journal of Physical Distribution

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S.F and Lancioni, R 1997); Figure 16.4 from Marketing

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marketing venues: a case study, paper presented at

the 12th IMP Conference, University of Karlsruhe,

reprinted by permission of P.J Rosson (Rosson, P.J

and Seringhaus, F.H.R 1996); Table 17.5 from

Guidelines for managing an international sales force,

Industrial Marketing Management, Vol 24, reprinted

by permission of Elsevier (Honeycutt, E.D and Ford,

J.B 1995); Exhibit 17.8, p 568, Figure from The

Cutting Edge in The Economist, 16 March 2006, ©

The Economist Newspaper Limited, London (16.3.06),

reprinted by permission of The Economist; Exhibit 19.1,

p 656, Figure Sauer-Danfoss Production Locations

reprinted by permission of Sauer-Danfoss Inc.;

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Marketing, 3rd Edition, pub McGraw-Hill,

repro-duced with the kind permission of the McGraw-Hill

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Marketing Management: Analysis, Planning,

Implemen-tation and Control, 9th Edition, Prentice Hall, reprinted

by permission of Pearson Education, Inc (Kotler, P 1997);

Figure 19.11 from Samli, A.C et al., International

Marketing: Planning and Practice, 1993, Macmillan,

reproduced with permission of Palgrave Macmillan

(Samli, A.C et al 1993).

We are grateful to the following for permission to

reproduce Case Study material:

Case Study 2.2 screen shot from www.elvis.com, Elvis

image used by permission, Elvis Presley Enterprises,

Inc.; Case Study 3.1 screen shot from www.cryos.dk

reprinted by permission of Cryos International

Sperm Bank Ltd; Case Study 3.2 screen shot and

image reprinted by permission of Entertainment

Rights, London, UK; Case Study I.1 screen shot from

www.ManUtd.com reprinted by permission of

Manchester United Limited; Case Study 5.1 screen

shot from www.teepack.com reprinted by permission

of Teepack Spezialmaschinen GmbH & Co KG; Case

Study 5.2 reprinted by permission of Tchibo

Frisch-Röst-Kaffee GmbH; Case Study 6.1 screen shot from

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The World Bank, from World Bank Online, 2003;

permission conveyed through Copyright Clearance

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www.sauer-danfoss.com reprinted by permission of

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Norseland, Incorporated; Case Study 12.2 screen shot

from www.hollows.org courtesy of The Fred Hollows

Foundation/www.hollows.org; Case Study III.1

screen shot from www.ikea.com reprinted by

permis-sion of IKEA Ltd; Case Study III.2 screen shot from

www.autoliv.com reprinted by permission of Autoliv

Inc.; Case Study III.3 screen shot and image reprinted

by permission of IMAX Corporation; Case Study III.4screen shot from www.alahrambeverages.comreprinted by permission of Al Ahram BeveragesCompany; Case Study 14.2 screen shot fromwww.zippo.com reprinted by permission of ZippoManufacturing Company; Case Study IV.1 screenshot from www.absolut.com reprinted by permission

of V&S Vin & Sprit AB (publ); Case Study 18.1 screenshot from www.mecca-cola.com reprinted by permis-sion of Mecca Cola World

We are grateful to the following for permission toreproduce pictures:

Exhibit 1.3 images reprinted by permission ofMcDonald’s Corporation; Exhibit 1.4 image Pocoyo

TM & © 2005 Zinkia Entertainment S.L Licensed

by Granada Ventures; Exhibit 2.2 image © MichaelReynolds/epa/Corbis; Exhibit 4.1 image Tony Souter,Copyright © Dorling Kindersley; Case Study 4.1 imagereprinted by permission of Microsoft Corporation.Microsoft, Xbox and Xbox 360 are either registeredtrademarks or trademarks of Microsoft Corporation inthe United States and/or other countries; Case Study4.2 image Sjoerd Drost, Senior Consumer MarketingManager, Philips; Case Study I.3 images reprinted bypermission of OneCafé International AB; Case StudyI.4 the ‘Cheerios’, ‘Nesquik’, ‘Shreddies’ or ‘ShreddedWheat’ name and image is reproduced with the kindpermission of Société des Produits Nestlé S.A.; Exhibit 7.3 image reprinted by permission of PolaroidCorporation; Exhibit 7.4 screen shot from Pocari Sweat website reprinted by permission of OtsukaPharmaceutical Co., Ltd; Case Study 7.2 imagesreprinted by permission of Inter IKEA Holding ServicesS.A.; Exhibit 8.2 image reprinted by permission of Sara Lee; Case Study 8.1 image reprinted by permission

of Wim Wilms; Case Study 8.2 image reprinted by permission of Mac Baren Tobacco Company; CaseStudy II.2 image reprinted by permission of The Female Health Company and Mayer Laboratories, Inc.(www.mayerlabs.com), US distributor of the FemaleCondom; Case Study II.3 images reprinted by permis-sion of Tipperary Mineral Water Company; Case StudyII.4 images reprinted by permission of Skagen Designs;Case Study 9.2 image reprinted by permission of AnsellHealthcare Europe; Case Study 10.1 Linie Aquavitadvertisement reprinted by permission of Arcus; CaseStudy 10.2 Parle-G advertisement reprinted by permis-sion of Parle Products Pvt Ltd; Case Study 11.1 LEGOKids Wear advertisement reprinted by permission ofKA-BOO-KI A/S; Exhibit 14.2 image (left) reprinted bypermission of Madame Tussauds London; Exhibit 14.2image (right) reprinted by permission of MadameTussauds Shanghai; Chapter 14, p 449, image reprintedFind more at www.downloadslide.com

Publisher’s acknowledgements

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by permission of Orgasmic Chocolates; Exhibit 14.8

images reprinted by permission of Ducati; Case Study

14.1 Danish Klassic advertising material and Puck

Cream Cheese advertisement reprinted by permission

of Arla Foods amba; Case Study 14.1 image Hassan

Ammar/AFP/Getty Images; Case Study 15.1 image

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permission of Diageo; Exhibit 17.8 images reprinted by

permission of Tribal DDB; Chapter 17, p 571, Gammel

Dansk advertisement reprinted by permission of

Danisco Distillers Berlin GmbH; Chapter 17, p 572,

LEGO® FreeStyle in the Far East, © 1997 and LEGO®

FreeStyle in Europe, © 1997 advertisements reprinted

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adver-tisements and images reprinted by permission of V&S

Vin and Sprit AB (publ); Case Study IV.2 images

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image Matthew Fearn/PA/EMPICS; Case Study IV.4

Triumph motorcycle reprinted by permission of

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Copyright © Disney, reprinted by permission of

Euro Disney Associés S.C.A.; Case Study 18.2 imagesreprinted by permission of TOTO Ltd; Case Study 19.1image Martin Keene/PA/EMPICS; Case Study V.1images reprinted by permission of Femilet; Case Study V.2 image reprinted by permission of Sony BMGMusic Entertainment (UK) Ltd; Case Study V.3 imagesreprinted by permission of Philips Shavers; Case StudyV.4 Vipp advertisements and images reprinted by permission of Vipp AS

We are grateful to the following for permission toreproduce texts:

Exhibit 13.1 from Network sourcing: A hybrid

approach, International Journal of Purchasing and

Materials Management, Vol 31, No 2, Spring,

reprinted by permission of The National Association ofPurchasing Management (Hines, P 1995); Chapter 14,

p 425, extract from Developing global strategies for

service businesses, California Management Review,

Vol 38, No 2, reprinted by permission of The Regents

of the University of California (Lovelock, C and Yip, G.S 1996)

In some instances we have been unable to trace theowners of copyright material, and we would appreciateany information that would enable us to do so

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ACs advanced countriesAPEC Asia Pacific Economic CooperationASEAN Association of South East Asian NationsB2B business to business

B2C business to consumerBDA before–during–afterBER business environment riskBERI best alternative to a negotiated agreementC2B consumer to business

C2C consumer to consumerC&F customs and freightCATI computer-assisted telephone interviewsCEO chief executive officer

CFR cost and freightCIF cost, insurance and freightCIP carriage and insurance paid toCPT carriage paid to

CRM customer relationship managementDAF delivered at frontier

DDP delivered duty paidDDU delivered duty unpaidDEQ delivered ex-quayDES delivered ex-shipDSS decision support systemECB European Central BankECO ecology

ECSC European Coal and Steel CommunityEDI electronic data interchange

EDLP everyday low pricesEEA European Economic AreaEEC European Economic CommunityEFTA European Free Trade AreaEMC Export Management CompanyEMEA Europe, Middle East and AfricaEMU European Economic and Monetary Union

EU European Union: title for the former EEC used since the ratification of the

Maastricht Treaty in 1992EXW ex-works

FAS free alongside shipFCA free carrierFDI foreign direct investment: a market entry strategy in which a company invests in

a subsidiary or partnership in a foreign market (joint venture)FMCG fast-moving consumer goods

FOB free on board: the seller quotes a price covering all expenses up to the point of

shipmentFSC foreign sales corporationGAM global account managementGATT General Agreement on Tarrifs and TradeGDP gross domestic product

GNI gross national incomeGNP gross national product: the total ‘gross value’ of all goods and services produced

in the economy in one year

Abbreviations

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GPC global pricing contractGRP gross rating point

HQ headquartersIDR intermediation–disintermediation–reintermediationIMF International Monetary Fund

IMS international market selectionIPLC international product life cycleISO International Standards OrganizationISP internet service provider

IT information technologyKAM key account managementL/C letter of credit

LDCs less developed countriesLSEs large-scale enterprisesLTO long-term orientationM&A merger and acquisitionMIS marketing information systemMNCs multinational corporationsMNE multi-national enterpriseNAFTA North American Free Trade Agreement: a free trade agreement to establish an

open market between the United States, Canada and MexicoNICs newly industrialised countries

OE operational effectivenessOECD Organization for Economic Cooperation and Development: a multinational

forum that allows the major industrialised nations to discuss economic policies and events

OEM original equipment manufacturer (outsourcer)OLI ownership-location-internalization

OPEC Organization for Petroleum Exporting CountriesOTS opportunity to see

PDA personal digital assistantPEST political/legal, economic, social/cultural, technologicalPLC product life cycle: a theory that characterises the sales history of products as

passing through four stages: introduction, growth, maturity, declinePOS point of sale

PPP purchasing-power parity

PR public relationsQDF quality deployment functionR&D research and development

RM relationship managementRMC regional management centreROA return on assets

ROI return on investmentSBU strategic business unit: a single business or a collection of related businesses that

can be planned separately from the rest of the companySMEs small and medium-sized enterprises

SMS short message serviceSRC self-reference criterion

TC transaction costTCA transactional cost analysis

TF trade fairTQM total quality managementURL universal

USP unique selling propositionVAT value added tax

VER voluntary export restraintWAP wireless application protocol WTO World Trade Organization (successor to GATT)

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Svend Hollensen is an Associate Professor of International

Marketing at University of Southern Denmark He holds an MSc

(Business Administration) from Aarhus Business School He

has practical experience from a job as International Marketing

Coordinator in a large Danish multinational enterprise as well as

from being International Marketing Manager in a company

pro-ducing agricultural machinery

After working in industry Svend received his PhD in 1992

from Copenhagen Business School

He has published articles in journals and is the author of two

case books that focus on general marketing and international

marketing (published by Copenhagen Business School Press)

With Pearson Education he has published Marketing

Management – A Relationship Approach (a second edition is

planned for 2008) as well as Marketing Research – An

Inter-national Approach (May 2006), together with Marcus Schmidt.

Svend has also worked as a business consultant for several

multinational companies, as well as global organizations such as

the World Bank

The author may be contacted via:

University of Southern Denmark

Alsion 2

DK-6400 Sønderborg

Denmark

e-mail: svend@sam.sdu.dk

About the author

Find more at www.downloadslide.com

Find more at www.downloadslide.com