CASE STUDY 1.2: HUNTER BOOT LTD. - the iconic British brand is moving into
exclusive fashion
1. What are the main reasons for the recent international marketing success of
the hunter boots?
Hunter Boots' current success is due to the effectiveness of their worldwide marketing
approach.
The strategy focuses on well-known people that endorse Hunter Boots. The
corporation created a trend in attractive footwear by delivering its product picture to
consumers' minds through worldwide sporting events.
In addition, the debut of the special edition in conjunction with well-known designers
added value to the firm by providing quality items to new target segments, attracting
an increasing number of consumers.
Hunter's rival enterprises were also able to increase their sales not just locally but also
worldwide by gaining brand awareness through trade associations and
specialists in order to expand by building consumer values and networking partners
-
The recent success of Hunter boots was caused by the achievement from its
international marketing strategy. The strategy is focused on famous individuals
that promote Hunter boots’. The company delivered its product image to the
consumers' minds through global sports events, and this creates a trend in
fashionable footwear. Also, the launching of the special edition with
collaboration with famous designers created new value for the company by
offering premium products for new target markers, which attracted more and
more customers.
-
Furthermore, by creating consumer values and networking partners, Hunter
established its competing firms to boost their sale not only locally but also
globally by brand recognition through trade associations and experts in order to
grow
-
Their ability of moving ‘wellies’ into the fashion world
-
Collaboration with top designers, such as Jimmy Choo
-
Their effective marketing campaign, using celebrity endorsement to make their
boots appear to be the must have item
-
Ability to identify celebrities wearing Hunter Boots at festivals, rock concerts
and more events
2. Recently hunter has added outerwear (leather footwear and hand-bags) to
their international product range. What are the pros and cons of extending
the product range in this way? Should hunter boots ltd include further
products like eyewear and watches?
(Lý thuyết: line extension, economies of scope)
Economies of scope: Reusing a resource from one business/country in additional
businesses/countries.
A single global supplier (marketer) can provide value for the global customer through
greater consistency in the quality and features of products and services across
countries, faster and smoother coordination across countries and lower transaction
costs.
The challenge in capturing the economies of scope at a global level lies in being
responsive to the tension between two conflicting needs: the need for central
coordination of most marketing mix elements, and the need for local autonomy in the
actual delivery of products and services
-
Pros
+ Hunter has a strong brand name, and product diversification can help in
leveraging the new products
+ It could reduce the financial risk that is associated with the new product
development by leveraging the parent brand name (Hunter) to enhance
consumers perception as a result of its core brand equity
+ It can help Hunter spread their customer base
+ Helps in enhancing the product portfolio of Hunter by introducing
products in the market
+ It might expand the Hunter shelf space present at retailers
+ Focus on tradition of the brand
+ Effective marketing campaign
+ Moving towards the fashion world
-
Cons
+ If the new line extension fails, consumers attitudes towards the core
brand name (Hunter) and the core products might be damaged
+ Large competitors
+ To maintain quality you have to put high cost
+ If they add more products like eyewear and watches it might be a success
for them since as they already are big in the market their brand loyalty is
good enough so customers are attracted toward them. But they need to
avoid intra-firm competition. They need to be able to clearly differentiate
between products. The products should be similar but different enough
that they will not compete with one another as much as they will with
the brands of rival companies. Therefore yes they should.
(Brand extension is a marketing strategy in which a well known brand uses the same
brand name to enter into a totally unrelated product category. It is done to leverage on
the existing brand equity. Some marketers argue that since building a brand is a costly
affair, once you have built a brand you should leverage its value by using the same
brand name for other new categories.
Line extensions is a marketing strategy in which the scope of the product a brand
represents is increased (when you are adding varieties or variations of the same
branded product, you are basically doing a line extension). Like brand extension, line
extension is also done to leverage on the brand equity by targeting a bigger chink of
the user base. Coke introduced Diet Coke to target the diet conscious people.)
CASE STUDY 2.2: ELVIS PRESLEY ENTERPRISES INC. (EPE) - internationalization
of a cult icon
1. What are the main motives for the internationalization of EPE?
2. What can EPE do to maintain a steady income stream from abroad?
3. What are the most obvious assets for further internationalization of EPE?
1. Internationalization motives: The fundamental reasons – proactive and reactive –
for internationalization.
Proactive motives:
- Long-term profit: the potential for great revenue from visitors
- Foreign market opportunities: global popularity of Elvis
- Maintaining Graceland
2.
Problems: EPE faces the challenge of maintaining its revenue streams from abroad, as
the majority of visitors to Graceland still come from the United States. Additionally,
EPE does not earn much from Elvis's actual songs due to the deal made by Colonel
Tom Parker in 1973.
Solution: EPE can maintain a steady income stream from abroad by continuing to
develop and market Elvis-related products and experiences that appeal to
international audiences. This could involve creating new music, film, and TV content
that is tailored to specific markets, partnering with local businesses and organizations
to promote Elvis-related tourism and events, and leveraging social media and other
digital platforms to reach a wider audience
3. The most obvious assets for further internationalization of EPE are likely to be the
Elvis brand (top 100 entertainment icons of the twentieth century), Graceland, and
Elvis-related intellectual properties such as his music, film, and TV content. These
assets have already proven to be popular with audiences around the world and could
be further leveraged through partnerships with local businesses, expansion of
Elvis-related tourism offerings, and development of new products and experiences that
appeal to international markets.
AT:
Theories:
-
Internationalization motives: The fundamental reasons – proactive and reactive – for
internationalization.
-
Proactive motives: Proactive motives represent stimuli to attempt strategy change,
based on the firm’s interest in exploiting unique competences (e.g. a special
technological knowledge) or market possibilities.
-
Profit and growth goals: The stronger the firm’s motivation to grow, the greater will be the
activities it generates, including search activity for new possibilities, in order to find
means of fulfilling growth and profit ambitions. The desire to grow may also be of
particular importance in a firm’s decision to start exporting.
-
Managerial urge: Managers’ commitment and motivation that reflect the desire and
enthusiasm to drive internationalization forward.
-
Unique product: A firm may produce goods or services that are not widely available from
international competitors
⇒ 1. what are the main motives for the internationalization of EPE?
Motives for the internationalization of EPE are mainly proactive, particularly:
+
Profit and growth goals: To create long-term profit for EPE, Priscilla Presley has decided
to open Elvis’s mansion, Graceland, which receives $15 million on those tickets alone,
plus what it receives from photographs, hotel guests, meals and souvenirs. Moreover,
EPE has diversified revenue streams include a themed restaurant called Elvis Presley’s
Memphis; a hotel, down at the end of Lonely Street, called heartbreak hotel; licensing of
Elvis-related products; the develop- ment of Elvis-related music, film, video, TV and
stage productions, and more.
+
Managerial urge: The masterstroke decision of Priscilla Presley to open Elvis’s mansion,
Graceland come from her desire to attract visitors from all parts of the world.
+
Unique product: Brand name “Elvis” and Elvis related products are among the key
products that receive a high degree of attention from customers.
2. What can EPE do to maintain a steady income stream from abroad?
+
Invest in digital channels: EPE can utilize digital technology to create virtual experiences,
online content or merchandise sales platforms catering to a worldwide audience.
3. What are the most obvious assets for further internationalization of EPE?
+
Elvis Presley’s Legacy: The global appeal of Elvis as a cultural icon remains immense,
and EPE can capitalize on this by promoting his demographic, music, and lifestyle
stories across the globe.
+
Graceland: As the second most visited private residence in the US, Graceland can be a
key asset in attracting international tourists and promoting related experiences or
hospitality services.
+
EPE’s Intellectual property: EPE's ownership of Elvis Presley's physical and intellectual
properties gives them the ability to create various entertainment products, like music,
film, or stage productions, which can be promoted and monetized in international
markets.
+
Merchandising and Licensing Rights: EPE can explore the potential of licensing and
merchandising partnerships to develop region-specific or globally appealing products,
further driving international expansion and revenue growth.
+
Partner network: The media and entertainment company CKX Inc acquired an 85%
interest in EPE, including physical and intellectual property and EPE can have an
opportunity to get a share of customer base from CKX.
CASE STUDY 6.1: SAUER-DANFOSS: which political/economic factors would affect
a manufacturer of hydraulic components?
1. Which political and economic factors in the global environment would have
the biggest effect on the future global sales of Sauer-Danfoss hydraulic
components/systems to:
(a) manufacturers of construction and mining equipment (e.g. Caterpillar)?
For construction manufacturers some of the most relevant economic factors will
be: the general macroeconomic indicators and the general construction activity.
The financial situation, infrastructure and interest rates also take a big part in
the future global sales of the company.
In regard to the political factors, policies like tariffs and different regulations,
along with a country’s risks of operations and whether they have non-tariff
trade barriers or not, influence the company’s future.
(b) manufacturers of agricultural machinery (e.g. John Deere)?
For agricultural manufacturers some of the most relevant economic factors will
be: the general macroeconomic indicators and the general agricultural activity.
The financial situation of the farmers and the number of farmer workers also
take a big part in the future global sales of the company.
In regard to the political factors, once again, policies like tariffs and different
regulations, along with a country’s risks of operations and whether they have
non-tariff trade barriers or not, influence the company’s future. In the case of
manufacturers of agricultural machinery, government subsidies for farmers are
also of great importance.
Lý thuyết:
(1) The economic environment
Economic development results from one of three types of economic activity:
-
Primary: These activities are concerned with agriculture and extractive
processes (e.g. coal, iron ore, gold, fishing).
-
Secondary. These are manufacturing activities. There are several evolutions.
Typically countries will start manufacturing through processing the output of
primary products.
-
Tertiary. These activities are based upon services, e.g. tourism, insurance and
health care. As the average family income in a country rises, the percentage of
income spent on food declines, the percentage spent on housing and household
activities remains constant, and the percentage spent on service activities (e.g.
education, transport and leisure) will increase.
2. What are the biggest problems in forecasting future demand for a sub
supplier such as SauerDanfoss?
The sales are always dependent on the sales made by their main customers, like
John Deere. We will use the bottom-up approach, still we will encounter some
problems: keeping in close contact with the company’s main potential clients,
the clients’ sales forecasts for their final products, and the fact that the final
sales forecast should be revised according to the potential customers’ stock
level.
CASE STUDY 7.1: CIRQUE DU SOLEIL INC - the show that revolutionized the circus
arts is expanding its global scope
1. Which socio-cultural factors influence the sales of tickets for ‘Cirque du
Soleil’ shows around the world?
Theory:
-
Manner and customs:
Effort to narrow cultural differences between peoples by the appreciation for art,
creativity, and entertainment in different cultures. Additionally, the cultural values,
beliefs, and preferences of the target audience impact the type of shows, themes, and
narratives that resonate with them.
-
Aesthetic:
Passive involvement but higher intensity => customers immersing themselves in the
experience
As the Cirque du Soleil’ shows have performed: “They draw the audience into the
performance through continuous live music, with performers rather than stagehands
changing the props.” Another show held in Las Vegas employs cutting edge
technology such as holograms, 3D and motion simulation.
Result: strengthen the feeling of viewers toward non-traditional format and live
interaction.
-
Value and attitudes
Diversify the form of show to adapt with consumer’s different desire
-
Cirque du Soleil has turned the circus on its ear, blending street entertainment,
eccentric costumes and cabaret.
-
The company’s latest collaboration is with the estate of Michael Jackson, and
consists of a series of projects based on the ‘king of pop’.
-
The company additionally creates original content for television and on DVD
through Cirque du Soleil Images
2. What makes the business model of ‘Cirque du Soleil’ globally so successful?
Theory:
-‘Global village’: Take advantage of the commonly recognized culture symbol
among the world population, in this can such symbols are the enthusiasm
toward pop,...
- Perceived value advantage, blue ocean strategy: 'Cirque du Soleil' presents a
fusion of circus and theater that is very different from traditional circuses. It has
redefined its creative approach to provide a unique and unforgettable experience
to the audience.
- Deliberate strategy formation:
Their managers are goal-oriented people where they aim to fix and pursue their
consecutive plan. They also transform their plans into action as they implement
their attractiveness into broad-based concepts and go internationally.
Management laid out a diversified blueprint for growth, the implementation of
which would greatly increase the company’s financial stature.
- Relationship Management: Among its 5,000 employees are more than 1,300
artists, including dancers, actors and acrobats, from some 50 countries =>
accelerate the globalization vision.
- They also enhance their circus performances by providing special events for
private parties, company gatherings as well as public events.
3. What should be the criteria for selection of a theme for Cirque du Soleil’s
next world tour?
- Cultural Relevance: The theme should be relevant to the culture and traditions
of the countries where the show is being performed. The local audience should
be able to relate to the theme and feel a sense of pride and ownership. =>
cultural difference + enhance intensity
- Celebrities Endorsement: Looking after the achievement they get with Michael
Jackson theme, it’s recommended that ‘Cirque du Soleil’ stay with the same
theme for the time being by selecting inspirational stories of someone like
influential people where they tell stories about how they achieve their success
because it will inspire people as well to attract their fans globally.
- Creativity and Originality: The theme should be innovative and unique,
reflecting the 'Cirque du Soleil' brand's values, creativity, and excellence. It
should be able to attract a diverse audience and create a sense of awe and
wonder.
CASE STUDY 9.1: JARLSBERG - the king of norwegian cheeses is deciding on entry
modes into new markets
1. Which kind of market entry mode would you generally suggest for Jarlsberg:
(a) in Scandinavia?
(b) in Asia?
Theories:
-
Entry mode: An institutional arrangement for the entry of a company’s products
and services into a new foreign market.
3 main types are export, intermediate and hierarchical modes.
-
Scandinavia:
2.7
->
Intermediate mode: shared control
and risk, split ownership
Given that Scandinavia is a culturally similar region with relatively low entry
barriers, it might be beneficial for Jarlsberg to use an intermediate mode of
entry, such as a joint venture or a strategic alliance. This would allow Jarlsberg
to leverage the existing knowledge and network of a local partner, while still
maintaining a significant degree of control over the operations.
-
Asia: 2.3 -> Export mode: low control, low risk, high flexibility
(sociocultural distance between home country and host country; country risk/
demand uncertainty; direct and indirect trade barriers; tacit nature of know-how)
Asia is a diverse region with varying cultural, legal, and economic conditions.
Given the large population and growing demand for high-quality food products
in many Asian countries, export mode may be a viable option for Jarlsberg.
Recommendation:
-
Scandinavia:
+ Joint venture in Sweden
+ New product line that attracts younger customers.
-
Asia
+ Local marketing expert group
+ India & China
2. What are the general motives for choosing a hierarchical mode (own
subsidiary) in the US?
-
Tariffs and quotas on import
-
Higher degree of control
-
Lower lead times
-
Production is aligned with the corporate strategy.
The general motives for choosing a hierarchical mode of entry, such as franchising,
licensing, or wholly owned subsidiaries, include maintaining greater control over the
operations, ensuring that quality standards are met, and protecting intellectual
property rights. Hierarchical modes of entry also offer greater potential for profits, as
the company can retain a larger share of the profits generated by the operations