Part 3 CUSTOMER BEHAVIOR AND E-MARKETING.

6: Consumer Buying Behavior 7: Business Markets and Buying Behavior 8: Reaching Global Markets 9: Digital Marketing and Social Networking

Chapter 8 Reaching Global Markets Professor Jason C. H. Chen, Ph.D. School of Business Administration Gonzaga University Spokane, WA 99258 chen@jepson.gonzaga.edu

Marketing Applications

5. Use the information on windshield-wiping fluid heaters and the Russian market included in the text. Based on approximately 275 motor vehicles per 1,000 people in the Russian population, a. What percentage of the market do you think that companies selling this product can capture (industry sales)? b. Which mode of entry seems best for one of these manufacturers (trading company, licensing, offshoring or others)? They are usually mid-sized companies with limited capital, international experience, and knowledge. c. How much customization would a product like this require for Russia?

a. What percentage of the market do you think that companies selling this product can capture (industry sales)? Answer: Responses to this question (percentage of the market) will vary for each student, but the estimates for industry sales should be realistic. b. Which mode of entry seems best for one of these manufacturers (trading company, licensing, offshoring or others)? They are usually mid-sized companies with limited capital, international experience, and knowledge. Answer: Suggestions for mode of entry will also vary, but students should justify the level of risk (i.e., trading companies are low-risk while offshoring is high risk).

c. How much customization would a product like this require for Russia? Answer: Most students may answer that a windshield-wiper fluid heater would need little customization because weather conditions remain the same across borders. However, it is possible that the heater would need to be customized to meet international manufacturing needs or the income level of Russian consumers. Link (Do Windshield Washer Heaters Really Work? ) https://www.youtube.com/watch?v=IN8EZ7NhMSU

1. Click on “International” near the bottom of the web page 1. Click on “International” near the bottom of the web page. Select a country to which you would like to send flowers. Summarize the delivery and pricing information that would apply to that country.   International delivery information is located at the bottom of the home page and is divided by region. Students’ answers will vary based on the choice of country. 2. Determine the cost of sending fresh-cut seasonal flowers to Germany. Depending on the arrangement, prices vary from $79.99 to $240.99 (as of press time).

3. What are the benefits of this global distribution system for sending flowers worldwide? What other consumer products could be distributed globally through the Internet?   Students will be able to list several benefits of global distribution, including the ability to send gifts to friends and family who are spread out across the world. Today, almost any consumer products can be distributed globally through the Internet, so you may want to ask students what types of products cannot be distributed online.

Internet Exercise FTD   Founded in 1910 as Florists’ Telegraph Delivery, FTD was the first company to offer a “flowers-by-wire” service. FTD does not deliver flowers itself, but it depends on local florists to do it. In 1994, FTD expanded its toll-free telephone-ordering service by establishing a website. Visit the site at www.ftd.com, and answer the following:

1. Click on “International” near the bottom of the web page 1. Click on “International” near the bottom of the web page. Select a country to which you would like to send flowers. Summarize the delivery and pricing information that would apply to that country.   International delivery information is located at the bottom of the home page and is divided by region. Students’ answers will vary based on the choice of country. 2. Determine the cost of sending fresh-cut seasonal flowers to Germany. Depending on the arrangement, prices vary from $79.99 to $240.99 (as of press time).

3. What are the benefits of this global distribution system for sending flowers worldwide? What other consumer products could be distributed globally through the Internet?   Students will be able to list several benefits of global distribution, including the ability to send gifts to friends and family who are spread out across the world. Today, almost any consumer products can be distributed globally through the Internet, so you may want to ask students what types of products cannot be distributed online.

Video Case 8.1 Evo: the Challenge of Going Global

Summary   Evo is an active sports retailer that has unexpectedly become a global distributor. Founded as an online store in 2001, the company opened its Seattle-based retail store four years later; this combination of e-commerce and physical stores allows evo to carry a greater selection and extend its global reach while providing customers with a way to interact with its products. Approximately 5 percent of evo’s business comes from outside the United States, but the company has been constrained by its relationships with international vendors. Evo hopes to work with its vendors to make global selling more feasible. In the meantime, the company continues to ship directly to consumers and engage with its fans through the Internet.

1. What are both the positive and negative outcomes from using exclusive dealer agreements that restrict global distribution?   Vendors create exclusive dealer arrangements with evo to avoid saturating markets overseas and to maintain control over their products. By limiting distribution, manufacturers are able to exert some control over other elements of the marketing mix, such as ____. Because retailers often do not own many of the brands they sell, manufacturers can maintain the right to determine where their products are sold and how much to distribute to the company. If consumers from foreign countries try to order these brands, they will receive notification that their order has been canceled. price

2. What are the unique product features that could make evo a global brand?   Evo creates global brand exposure through the ________. The company launched evoTrip as a service for adventurous sports enthusiasts who want to travel. EvoTrip arranges the trips with the goal to connect people to local cultures, communities, and sports. In addition to increasing its customer base, evoTrip allows the organization to form relationships with consumers overseas. Evo’s fans also find ways to ship the company’s products internationally. Internet

3. What should evo's marketing strategy be to go global?   Evo should continue to build strong relationships with global consumers and with its vendors to make global selling more feasible. The company might also choose to continue to open more physical stores and create its own brand of products that it could distribute internationally.