“Waiting in New Delhi
“Richard was a 30 year-old American manager sent by his Chicago-based company to set up a representative office in India. This new office’s main mission was to source consumer products such as cotton piece goods, garments, accessories and shoes as well as certain industrial goods, e.g. tent fabrics and cast iron components.
“India’s Ministry of Foreign Trade had invited his company to pen this office because they knew it would promote exports, brig in badly-needed foreign exchange and provide manufacturing knowhow to Indian factories. This was in fact the first international sourcing office to be located anywhere in South Asia, and the MFT very much wanted it to succeed so that other Western and Japanese companies could be persuaded to establish similar procurement offices.
“Richard decided to set up the office in New Delhi because he knew that he would have to meet very frequently with senior government officials. Since the Indian government closely regulates all trade and industry, Richard often found it necessary to help his suppliers obtain import licenses for the semi-manufactures and components they required to produce finished goods for his company.
“Richard found the government meetings very frustrating. Although he always phoned to make appointments, the bureaucrats almost always kept him waiting for half an hour or more. Not only that, his meetings would be continuously interrupted by phone calls, unannounced visitors and assistants bringing in stacks of letters and documents to be signed. Because of he waiting and the constant interruptions, it regularly took half a day or more to accomplish something that could have been done back home in 20 minutes or less.
“Three months into this assignment, Richard began to think about requesting a transfer to a more congenial part of the world—‘somewhere where things work.’ He just could not understand why the officials here were being so rude. Why did they keep him waiting? Why didn’t they hold incoming calls and sign papers after the meeting so as to avoid the constant interruptions?
“After all, the government of India had actually invited his company to open this office. So didn’t he have the right to expect reasonably courteous treatment from the bureaucrats in the various ministries and agencies he had to deal with (Richard R. Gesteland)?”
What Richard does not realize, Mr. Gesteland explained, is that the Indian way of doing business is vastly different from the American way of doing business. What is acceptable in some cultures, may not be considered acceptable or the standard in others. In India, being a half hour or more late is not unusual and is not considered rude. India has what Mr. Gesteland calls fluid time, in which no times are firmly set. Additionally, it is acceptable to take telephone calls during meetings. It is also considered acceptable to sign papers and have unexpected visitors. Although this may seem to an American to be backwards, a waste of time, and impolite, it is considered the standard and a perfectly acceptable manner of doing business in India.
1. Why did Richard not able to jell with local conditions?
2. If you were Richard ,What would you do
CASE: II The Sudkurier
The Sudkurier is a regional daily newspaper in south-western Germany. On average 310,000 people in the area read the newspaper regularly. The great majority of those readers subscribe to its home delivery service, which puts the paper on their doorsteps early in the morning. On the market for the last 35 years, the Sudkurier contains editorial sections on politics, the economy, sports, local news, entertainment and features, as well as advertising. The newspaper is financially independent and its staff is free of any political affiliation. Management at the Sudkurier would like to bring the paper into line with the current needs of its readers. For this purpose, the management team is considering the use of market research.
Management would like to have information about the following.
- What newspaper or other media are the Sudkurier’s main competitors?
- Do most readers read the Sudkurier for the local news, sports and classified ads, and should these sections therefore be expanded at the expense of the sections on politics and the economy?
- Should the Sudkurier’s layout be modernized?
- Do mostly lower levels of society read the Sudkurier?
- Into what political category do readers and non-readers the Sudkurier?
- Which suppliers of products and services consider the Sudkurier especially appropriate for their advertising?
Source: Regional Press Study, Gfk-Medienforschung Contest-Census
1. Explain how you will methodically go about compiling the requested information covered in the seven questions for management. Include in your explanation an estimate of the expense involved in obtaining the information.
2. Develop a 10-question questionnaire for the purpose of making a survey.
CASE: III Unilever in Brazil: marketing strategies for low-income customers
After three successful years in the Personal Care division of Unilever in Pakistan, Laercio Cardoso was contemplating attractive leadership positioning China when he received a phone call from Robert Davidson, head of Unilever’s Home Care division in Brazil, his home country. Robert was looking for someone to explore growth opportunities in the marketing of detergents to low-income consumers living in the north-east of Brazil and felt that Laercio had the seniority and skills necessary for the project. Though he had not been involved in the traditional Unilever approach to marketing detergents, his experience in Pakistan had made him acutely aware of the threat posed by local detergent brands targeted at low-income consumers.
At the start of the project—dubbed ‘Everyman’—Laercio assembled an interdisciplinary team and began by conducting extensive field studies to understand the lifestyle, aspirations and shopping habits of low-income consumers. Increasing detergent use by these consumers was crucial for Unilever given that the company already had 81 per cent of the detergent powder market. But some ….esalers had national coverage and economies of scale but did not directly serve the small stores where low-income consumers shopped, necessitating another layer of smaller wholesalers, which increased their cost to US$0.10 per kg. Alternatively, Unilever could contract with dozens of specialize distributors who would get exclusive rights to sell the new Unilever detergent. These specialized distributors would have a better ability to implement point of purchase marketing and would cost less ($0.05 per kg).
1. Describe the consumer behaviour differences among laundry products’ customers in Brazil. What market segments exists?
2. Should Unilever bring out a new brand or use one of its existing brands to target the north-eastern Brazilian market?
3. How should the brand be positioned in the marketplace and within the Unilever family of brands?
Case 4 Ryanair: the low fares airlines
The year 2004 did not begin well for Ryanair. On 28 January, the airline issued its first profits warning and ended a run of 26 quarters of rising profits. On that day, when the markets opened, the company was worth €5 billion. By close of business, its value had shrunk to worth €3.6 billion, as its share price plunged from worth €6.75 to €4.86. Investors were dismayed by the airline’s admission …..
- In April 2005, Ryanair abandoned an experiment in paid-for in flight entertainment, after passengers were reluctant to rent the consoles at the £5 required to receive the service. Apparently, market research discovered passengers are unwilling to invest on such short flights, with the ideal being six-hour flights to longer-haul holiday destinations. When the experiment was launched in November 2004, Michael O’Leary hailed the move as ‘the next revolution of the low-fares industry…we expect to make enormous sums of money’.
1. How does Ryanair’s pricing strategy account for its successful performance to date? Would you suggest any changes to Ryanair’ pricing approach? Why/why not?
2. Is the ‘no-fares’ strategy a useful approach for Ryanair in the short term? In the long term?
3. Do the issues facing Ryanair threaten its low-fares model?
Case V LEGO: the toy industry changes
How times have changed for LEGO. The iconic Danish toy maker, best known for its LEGO brick, was once the must-have toy for every child. However, LEGO has been facing a number of difficulties since the late 1990: falling sales, falling market share, job losses and management reshuffles. Once vote ‘Toy of the Century’ and with a history of uninterrupted sales growth, it appears LEGO has fallen victim to changing market trends. Today’s young clued-up consume is far more likely to be seen surfing the web, texting on their mobile phone, listening to their MP3 player or playing on their Game Boy than enjoying a LEGO set. With intensifying competition in the toy market, the challenge for LEGO is to create aspirational, sophisticated, innovative toys that are relevant to today’s tweens.
In 1932 Ole Kirk Christiansen, a Danish carpenter, established a business making wooden toys. He named the company ‘LEGO’ in 1934, which comes from Danish words ‘leg godt’, meaning ‘play well’. Later, coincidentally, it was discovered that in Latin it means, ……
still remaining true to its wholesome ‘play well’ brand values? Will LEGO succeed in its attempts to target young girls and its desire to target a more adult audience? Will it succeed in its attempts to reduce costs and improve efficiencies? Will CEO Jorgen Vig Knudstorp succeed where his predecessors have failed? Only in the fullness of time will these questions be answered but one thing is for sure: no brand, no matter how powerful, can afford to become complacent in an increasingly competitive business environment.
1. Why did LEGO encounter serious economic difficulties in the late 1990s?
2. Conduct a SWOT analysis of LEGO and identify the company’s main sources of advantage.
3.Critically evaluate the LEGO turnaround strategy.