International Marketing Issues. Проблемы международного маркетинга, страница 7

By 1977, Delsa management was faced with the grim reality of competition from financially strong and aggressive, professionally managed multinationals. Although Delsa had been pulled along in the market by the initial marketing efforts which were designed to create a primary demand for yogurt, marketing efforts of the competitors were now focused almost entirely on selective brand-name promotion. Delsa management had concentrated its efforts on getting the product in retail outlets and maintaining good relationships with dealers; no effort had been made to create a consumer recognition and franchise through advertising and other promotion. Management was made up of the family members who owned the company; they brought little professional training to the job. New capital investment was needed to enlarge production capacity, and serious consideration needed to be given to investing in a promotional campaign to build and maintain Delsa brand recognition.

1) Is the management of a small domestic firm at an advantage or disadvantage in competing with the professional management of a multinational who enters its market?

2) Would customers for a product like yogurt be likely to prefer a domestic brand or a foreign-related brand?

3) Is the local firm badly handicapped because of limited capital when competing with multinationals?

SUPPLEMENTARY READING

Recent Patterns of World Trade: Diversification

Since 1960, world trade patterns have been changing. The changes have resulted from diversification of products traded by individual countries and diversification of the countries that are major world traders. The United States has had a dominant role in the trading patterns that have evolved in recent times. For that reason, special attention is focused on the United States.

In the previous sections, traditional patterns of trade have been characterized as trade from colonies to mother countries; trade of raw materials from less-developed countries to developed economies; and trade of manufactured goods from developed countries to less-developed ones. The mother countries did very little exchange of products among themselves. Likewise, underdeveloped countries were relatively isolated from each other in regard to trade. In recent times, however, developed countries have begun to trade more and more with each other. The major market for Japanese products is the United States. And U.S. products have their largest foreign markets in Western Europe and Canada. Figure 1-2 shows the destination of exports and source of imports for several developed countries, and it substantiates the importance of trading partners within the developed world. Developed countries continue to trade mostly with each other today because they are the major world markets for the kinds of high-technology products produced and consumed in developed economies. While these countries still export a great deal of manufactured products to developing countries in exchange for their raw materials, this type of trade is less significant in terms of relative volume and value. Today, trade in manufactured goods is the major component of world trade.

While developed countries have begun to trade more and more with each other, there have also been changes in the world trade activities of less-developed countries. They have become exporters of manufactured goods to the developed world. Areas such as Mexico, Taiwan, the Philippines, and Hong Kong have recently produced clothes, televisions, electronic components, and many other products whose market destinations are the U.S., Canada, Western Europe, and other developed and developing countries. The less-developed countries are now supplying each other with manufactured goods, and in many cases they compete effectively against higher-cost goods from developed countries. Firms in developed countries are even competing against their own subsidiaries from developing countries for the home market. The overall result of these changing trade patterns in manufactured goods has been a broader world base of supply and more intense competition among suppliers.