MRKT330 Chp 8 Discussion

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Marketing

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Feb 20, 2024

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1. BASED ON YOUR UNDERSTANDING OF THE CHAPTER READINGS AND VIDEO LECTURE MODULES, THINK OF ANY ONE PRODUCT OR SERVICE MARKETED BY ANY FIRM IN USA. THAT FIRM WANTS TO INCREASE ITS SALES AND PROFITS BY MARKETING IT IN ANOTHER COUNTRY MARKET. DISCUSS WHAT ADAPTATIONS, AND MODIFICATIONS TO ITS (A) PRODUCT , (B) PRICING , (C) PROMOTION AND (D) DISTRIBUTION STRATEGIES YOU SUGGEST TO BE SUCCESSFUL IN THAT FOREIGN MARKET. [IDENTIFY, AND EXPLAIN (A) PRODUCT , (B) PRICING , (C) PROMOTION AND (D) DISTRIBUTION STRATEGIES SEPARATELY.] Global marketing can be a complex and challenging task for firms, but looking at the four distinct strategies, you can expand your product to better succeed around the world. Increasing the global brand image and increasing growth potential is some of the main reasons for global marketing, and it seems like Sony Entertainment is a company that would benefit from this. One of their main products is the PlayStation 5, which is an expensive, luxury product that can be difficult for a lot of people to get in lower-income countries. I believe that Sony can reach not only the high-income markets but as well as the low-income countries by adapting their product line, slightly changing their services, and promoting certain products based on the country the sale is coming from . This would greatly increase Sony’s revenue and make PlayStation not only a household name in the US, but around the world. A) Product/Services- One of the biggest problems that I believe Sony has with the PlayStation is the diversity of their product line . As of right now the two options for the PS5 is the digital edition at $400 and the standard edition for $500. This is a high price point for any gaming console, and I understand the fact that a more high quality product will come with a high price. That is why I believe a secondary product that can run in tandem with Sony’s line of PlayStation might benefit them greatly. Look at another competitive company in the gaming market, Nintendo. Currently they have two versions of their popular Nintendo Switch, the Lite version, and the OLED version (more premium version). The Switch lite costs around $200 retail and often times goes on sale for cheaper, while the OLED version costs around $350. These different price points allows the company to expand their products into low income countries that might not be able to afford the most premium version of their products . Even though the Lite version is $150 cheaper, it still uses the same interface and games as the OLED version, allowing people to feel like they aren’t missing out on anything. I believe that if Sony implemented this type of strategy, they would be able to expand to even more markets. B) Pricing- One service that I believe could have a change in pricing for the PlayStation is the online service, PlayStation Plus. PS Plus is a service that allows you to play online multiplayer games, as well as giving you a library of free games. There are 3 different tiers of the service, with the bottom tier costing $60 a year for online play and 2 free games a month, and the most expensive tier

offering a full library of games that range from classics to newcomers. One thing that bothers me about the pricing is that other companies in the industry offer some of these services for free. For example, Microsoft and Xbox now offers a similar library of games for similar price points but doesn’t charge its users for online play. This means that the Xbox live services aren’t required for games, unlike the PS plus. By keeping the same services but making PS plus just about having a library of games and not online play, it can reach a wider range of users . Many users in lower income countries stick to single player games and don’t get the full experience because they don’t want to pay for the extra online services. C) Promotion- As we learned in the chapter this week, having successful transactions across borders has to include being able to understand different cultural and business norms as well as consumer preferences . If you look at the top selling games for the US vs. Europe, there are the similarities between some of gaming giants such as Call of Duty and Grand Theft Auto, but you can see a big difference in sports games. In the US, 3 sports games are included in the top 10 with NBA2K, Madden , and FIFA, while in Europe, the only sports game in their top 10 is FIFA. This shows the significant cultural differences across the world. While both the US and Europe play and enjoy soccer, American football is primarily in the US. In order for Sony to further cater to their markets, one thing they can do is promote only certain games in the region you are located. For example, a game like Madden might be the first thing that you see when you open the digital store, but if you are in Europe, you might not be advertised to Madden at all. Adapting to consumer preferences is a major part in being successful in a global market. D) Distribution Strategies- In order for the PlayStation to be successful, the distribution has to be on point , which has actually been one of the firm’s biggest problems in the early days of the PS5. For the past 2 years, a PS5 was hard to come by because of the limited supply, and this is due to the availability of materials and how production was solely in China. In order for the PlayStation to reach a global market, you must first have a large supply, which is why Sony should look into investing in more local facilities so that distribution can occur at a faster and more available rate . Response (Colton Jones): When developing an international marketing strategy, a firm/marketer has two options: a global marketing strategy, or a multidomestic marketing strategy. A global marketing strategy involves standardizing a marketing mix ( product, pricing, promotion, distribution ) with very little modifications for all national and domestic markets a firm enters. A multidomestic marketing strategy is much the opposite, recognizing that not all nations share the same culture, values and purchasing power, this strategy involves customizing marketing strategies (marketing mix) for each country or region a firm enters into. It is also important to remember that certain nations may require slight customization while others may

require entirely different marketing strategies. At the end of the day, appropriate marketing research must be conducted before a firm enters a foreign market, regional, international or otherwise. When considering international product and promotional strategies , a firm can take the global marketing strategy of keeping both the product and promotional message consistent throughout each market. However, if the situation does not allow, a firm can follow the multidomestic marketing strategy of doing one of the following: keeping the product the same while changing the promotional strategy, keeping the promotional strategy the same while adapting the product, changing both the promotional strategy and adapting the product, or creating a new product entirely. Different nations hold different values and are built upon different cultures. A successful promotional strategy and product must take this into account, or else risk flopping in said foreign country. At the same time, a global marketer cannot forget about distribution . Specifically two steps: first they must discuss a method for entering a foreign market (how, when, where) and second, they must decide how to distribute the product in said foreign market. Distribution channels must be properly set up, to maintain the desired stock of these products, while also preparing for shortfalls in the supply/distribution chain. Foreign markets may lack warehouses, proper infrastructure or easy transportation, all of which must be taken into account. When considering pricing , an international marketer must consider a multitude of constraints to the value a product can be priced at, including competition, as well as political and legal constraints. Different governments will have different levels of involvement in their nation’s economies, and will have varying levels of reception to foreign business. Compliance with these rules and regulations is critical when setting prices. Additionally, different foreign populations will have different levels of disposable income (purchasing power), overcharging for a product will lead to very little sales, while undercharging for a product could be seen as price dumping (an artificial reduction in the prices of goods or services in order to increase sales in a particular market). I wanted to take this time to discuss the American firm Target entering the Canadian market. Target is a retailer known for its affordability and wide selection of products (a similar business model to Walmart). In case you didn’t know (and I wouldn’t expect you too), Target attempted to enter the Canadian market a few years ago. It was a disaster, and they ended up having to leave just two years after they entered. The fact of the matter is that they did not do the proper marketing research before entering Canada, likely due to the similarities between the two countries. Canada holds very similar values and economic status to the United States, and as such, Target went in thinking the same marketing strategies that worked in the U.S. would work in Canada. I’m here to reverse Target’s failure. Through looking at each aspect of the marketing mix, I believe I have a good understanding of what it would take for Target to succeed in Canada.  (Products): Canadians, through their proximity to the United States, had already done a lot of shopping in Targets whenever they visited. As such, they had envisioned receiving the same number and amount of products on Target’s shelves. From groceries to furniture to electronics, when Canadians heard Target was coming they expected to see the same products. Unfortunately, Target’s selection in Canada was largely decreased, and the shelves were usually empty (see distribution). If Target

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wanted to succeed, they would have to ensure much of the same selection available in the States was made available in Canada. This is what I’ll do.  (Pricing): This was one of the biggest reasons for Target’s failure in Canada. Canadians had experienced low prices shopping in American Targets, and expected the same when shopping in Canada. Unfortunately, when they entered Canadian Targets, they found prices for the same products marked up significantly. This led shoppers to look elsewhere for low-cost retailers (a market that is oversaturated in Canada with competitors like Walmart, Loblaws and Hudson’s Bay). Canadians expected the same low prices, and so in my do-over, they’ll get them. The prices will have to be the same as the U.S., by any means necessary.  (Promotion): Canada is a similar market to the United States, with a close proximity as well. Canadians have very similar amounts of disposable income, as well as very similar values and culture. In fact, you’ll seldom find two countries more similar. As such, Target went in with only a year’s worth of promotion and an aggressive approach, assuming Canadians will react the same as Americans. They rushed to open a multitude of stores as quickly as possible, and picked poor locations for their stores (a chain called Zellers had gone out of business and Target bought these unsuitable locations at a bargain price). Additionally, when Target’s reputation began to suffer because of pricing, empty shelves and a lack of products, they did nothing to combat it through promotional means. I imagine a completely different strategy in my scenario. I would take a slower approach, opening one store at a time, with appropriate amounts of advertisement (involving social media, giveaways and any needed to generate hype). This would ensure supply chain issues (see distribution) are not existent, and Canadians are happy with the products and prices offered. I would also listen to consumer opinions and reviews, making necessary changes whenever displeasure arises.  (Distribution): This is another big reason for Target’s failure. Because of the rush Target was in to get Canadian stores up and running, their distribution chains were lacking, to say the least. Shelves were consistently empty from the start, and very little changed. Products from overseas almost never arrived on time. While Target distribution centers would constantly receive goods and products, they never made it to store shelves. The lack of a distribution network also led to increased prices, and a souring reputation. In fact, many of the problems I mentioned above would be fixed through a proper distribution chain. As such, my first priority would be establishing secure supply chains and distribution networks. Along with my slow, one at a time approach to opening stores, this would fix the majority of problems Target faced the last time around. Word Count: 1151 Hey Jonesy! I love looking at you discussion posts, especially about this topic because you have firsthand experience when it comes to global marketing and how certain strategies can lead to an end of a firms

international reach. For me, I have never left the country, and have only encountered products that have been imported into the US. For you, it was interesting reading about what lead to Target’s downfall in Canada because you were specifically part of it. In your section about how the price environment needs to be changed, you looked at how marked up prices in the Canadian Targets compared to the United States Targets. Do you think this mainly had to do with distribution problems that you later talked about, or do you think this was done by design? I think that if this was done by design, Target believed that the hype behind their products and service would make the Canadian people use their store, even if it was more expensive than other countries. I would love to hear more from you about other products and services that failed in the Canada that are popular in the United States. Lastly, what products and services do you think could survive in the US that originated from Canada? I’ve heard you talk about some stores that I have never heard of before and was wondering if you think the US has a successful market for them.

MRKT330 Chp 8 Discussion

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