International Marketing

End Term

Q1. Product Differentiation is the process of marketing of generally similar products with minor
variations that are used by consumers when making a choice. This technique is used by the companies in
order to give a unique experience to the consumers in terms of the product or services being offered
which differentiates them from the competition in the market.

For example, in case of a Global Brand of Fast Food, product differentiation can be a unique product or
recipe like Taco Bell which provide Tacos unlike the common burger or pizza that are provided by other
competitors. It can also be a unique experience such as Starbucks which provides product differentiation
in terms of the ambience it provides inside the coffee shop. A car rental co. can provide product
differentiation in terms of the music system that they install inside the cars. Generally the cars are pre
installed with basic music system in order to keep the cost of the car low but to differentiate from
competition, it can provide a good music system to customers such that they feel like they are riding
their own cars.

Positioning refers to the place that a brand occupies in the minds of the customers and how it is
distinguished from the products of the competitors. In order to position products or brands, companies
may emphasize the distinguishing features of their brand or they may try to create a suitable image
(inexpensive or premium, utilitarian or luxurious, entry-level or high-end, etc.) through the marketing
mix. For example,

Global brand of fast food - Subway position itself as a brand which provides both tasty and healthy food.
They mention in all their stores that “we bake our own bread”. They also give customized choices to
their customers with respect to what sausages and vegetables they want in their subs.

Car Rental co. - ZoomCar position itself as the brand which provides car at the minimum rentals. They
position themselves as most cost efficient company with respect to their competitors.

Market segmentation is the process of dividing a market of potential customers into groups, or
segments, based on different characteristics. The segments created are composed of consumers who
will respond similarly to marketing strategies and who share traits such as similar interests, needs, or
locations. For example,

Global brand of fast food - Starbucks segments consumers on the basis of demographics that is age and
income. They target the youth as well as the corporates who look for a good ambience (psychographic)
for meetings over coffee.

Car Rental co. - ZoomCar segments its customers on the basis of geography that is place where there is
very high demand of private vehicles but less affordability. It also targets tourist places where customers
want cars only for tourism purpose for limited days.
Q2. P&L

Sales Quantity (Number of 200gm USD 30,000,000

package * USD3
COGS INR 100 per Kg (USD 100/70) * USD 285,714
Quantity sold in KG
Gross Margin Sales-COGS USD 29,714,285
Operating Expenses
Staff Cost USD 1,000,000
Expenses incurred to run USD 2,000,000
stores
Administration cost USD 500,000
Processing cost USD 3,000,000
Cost of Selling
Cost of freight Cost of home deliveries, hiring a USD 500,000
full time vehicle or ad hoc vehicle
Cost of Packaging Cost of carry bag wrappers USD 750,000
Marketing Cost of advertisements, etc USD 5,000,000
Sales and distribution Cost of distribution channel USD 3,000,000
Operating Profit (EBITDA) Gross Margin – operating USD 14,964,285
expense – Cost of selling

Net realizable value (NRV) is the value of an asset that can be realized upon the sale of the asset, less a
reasonable estimate of the costs associated with either the eventual sale or the disposal of the asset in
question. To calculate NRV, Subtract the costs required to prepare the item for sale from the expected
selling price. The result is the net realizable value of the item in inventory. Add up the NRV for all items,
and the result is the total net realizable value for the company's inventory

NRV = (14964285/30000000)* 100 = 49.88%

Q3. SWOT analysis of Patanjali:

1. Strengths :

• Well established brand in India with high brand awareness and high purchase intention among
Indian consumers.

• High popularity and following of Swami Ramdev who is the brand ambassador or rather the face
of Patanjali even at the international level.
 • A large number of product mix which makes them a competitor in all the product segments and
hence they can leverage their image to enter any product segment internationally.

• Brand is perceived as the one providing high quality at low prices

2. Weakness:

• No recognition or experience to work in the international market.

• Not so established distribution channel in Indian market, hence too early to try to enter
international markets

• No proper organization structure with limited hierarchy which will pose a challenge while
entering into international markets

• Presence of well established players such as P&G, HUL etc.

3. Opportunities:

• Presence of Indian population globally which will welcome the Patanjali products with open
arms

• Increasing awareness of Yoga and Ayurvedic related products globally comes as huge
opporutnity.

• Government policies to foster export will also help Patanjali to reach global markets.

4. Threats:

• Patanjali is only 12 years old which makes it a comparatively new brand in the market and
hence, its awareness in intenrational marketing is low.

• Regulations on import in different countries also possess a challenge for Patanjali

5 Strategic options for the company are :

a. Product segmentation : Patanjali should enter only as niche player in the international
marketing in the beginning in order to analyze purchase intention of the customers globally. It
should focus only on Ayurvedic products before increasing product ctegories.
 b. Customer targeting : Since there iss a large number of Indian origins around the globe, it is easy
to target those customers initially using the brand image of Swami Ramdev to attract and
increase brand awareness.

c. Yoga camps : Patanjali used Swami Ramdev's yoga camps in order to sell free samples and later
sell their products to all the followers. With increasing awareness of Yoga and Ayurvedic
products, Yoga and health camps will be a good way to increase the awareness and enter the
international market.

d. Acquisition of a local brand : In order to cope up the distribution channel and logistics
challenges, Patanjali can acquire a local brand in order to reduce its struggle in the internaional
market and modify the brand according to Patanjali's standard.

e.

Q4. STandardization and Adaptation are the two key concepts in international context. When a company
plans to go in the internation market, it has to come up with a strategy that whther it should go with
the standard products or services which it is following locally or whether it should adapt according to
the needs of the new markets.

Standardization in context of international marketing, is the process of keeping the same product or
service for all the customers throughout the globe. For example, Starbucks offer the same standard
services and ambience that it offers globally. It follows same standards of safety and quality in all its
stores.

Where as adaptation is the process where companies make certain changes or modification in its
products or services in order to adapt to the need of the customers in different countries. For example,
Starbucks started new variety of coffee in indian market according to the taste of the indian customers.
They also added other variety of foods suiting the indian customers.

Adaptation is followed when the company is following the tsrategy which is commonly knows as
Glocalization that is, it is going global with localized flavor or modifcations. Standardization is followed
where the products or services is universally acceptable and there is no or little scope of any changes.
For example, Facebook during its initital expansion in the late 2000s followed standardized approach
while expanding ro Europe or Asian countries. It provides the same service to all its users till date which
is the best example of standardization. Whereas Dominoz has followed the process of adaptation when
it entered in the indian market. It does not provide the same variety of pizza as it provides in Europe of
US. All the taste are according to the taste and need of indian customers which is an apt example of
Adaptation.
Q5. AIDA refers to the process which involves:

a. Awareness: It is the process of creating a recall in the mind of people that a particular brand
exists in the market. It is the process of associating a brand with cretain qualities or perception
which make the customers aware of it.

b. Intention: It is the process of creating purcahse intention in the mind of the customers. It
focuses on shifting the brand from awareness set to cinsideration set of consumers.

c. Desire: It is the process of communication in which a need or want is created in the mind of
customers for a particular brand.

d. Action: It is the final stage of communication where the product or service is actually shifted
from consideration set to action set where the customers plans to buy the product or service.

For example, Patanjali Dantkanti advertisement shocase Swami Ramdev which creates awareness in the
mind of people about the product. He is showcased telling about the harmful chemicals that are present
in other products in the market and how Dantkanti has natural ingredients and ayurvedic medicines
which creates an intention about Dantkanti in mind of people. He mentions different Ayurvedic
ingredients along with their benefits like Llong pudina etc which creates desire in customers and finally
he talks about swadeshi and how patanjali's profit is going in charity etc. . All this combines finally
reaches action state where customers shifts to Dantkanti.

Q6. 'Ease of doing business' in B2C markets of a Pharma Branded Generic in the emerging markets will
involve the following 5 key elements:

1. Dealing with license and permissions : The ease of doing business in pharma resolves mainly
around the license and permission that are required in order to setup a manuacturing pharma
branded generic. If the license is received, then it is easy to carry out all the processes and
establishing the manfucturing unit.

2. Registering property : In order to establish a drug manufacturing factory, there is alot of process
and paper work which needs to be followed even after getting the license for it. There are a lot
of safety and standards that need to be followed such as location, architecture, safety etc.

3. Getting credit : Due to a lot of emerging competition in the market in pharma branded generic,
it becomes difficult to pool in investors to get credit or bank loans due to high risk. There are
well established players in the market already and big hospitals have their own associated brand
which their doctors recommend.

4. Paying taxes : There a lot of taxes that are involved in B2C markeitng of branded generic due to
intervention of government in pharma industry and hence it pose a major challenge in ease of
doing business.
5. Resolving insolvency: Another challenge to ease of doing business in Pharma Branded generic is
the insolvency issue. There is a huge investment that is made in this business and it take years
in order to break even. Hence, resolving insolvency makes it diffcult to enter this business.

Q7.

MPC (man power to cost)/BTO ratio is a tool to optimize the cost. It is one of the key HR strategy to
optimist the cost of manpower

The 3 strategies to optimize MPC/BTO ratio in international market are:

1 – Eliminate the weak link in the team or make that person a part of project that is different from
the ongoing project

2 – Motivate the sales rep to bring more sales

3 – Use Goal Prepare Review reset (GPRS) technique to set goals and achieve the target set.