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International Marketing

International Marketing International Marketing Proctor & Gamble originated in 1837, when William Proctor and James Gamble formed a partnership in Cincinnati, Ohio. The partnership flourished making the company a gaining name as principled manufacturer of high quality consumer goods sold at competitive prices. By 1992 Proctor & Gamble was a multinational company with annual sales of almost $30 billion profits exceeding $1.8 billion, and a reputation for quality products, high integrity, strong marketing, and conservative management. When P&G grew they became more and more interested in foreign markets. In 1992 they had sold their products in more than 140 countries around the world.

In 1991 P&G after being satisfied with their success with Charmin Bounty and Puffs they decided they wanted to expand their business to foreign lands. They decided that Canada was the best and most logical choice to make that first step because of its location and free trade between Canada and the U.S. In 1991 P&G found that Canadian Pacific Product Company, a large paper company was prepared to see Facelle Paper Products, it’s tissue division. Facelle was a medium sized manufacturer and marketer of tissue, towel and sanitary products. So for 185 million P bought the Facelle Co.

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Proctor & Gamble had to consider many things when entering the market in Canada. Tissue products were inexpensive, widely used and were frequently purchased (on average once every two weeks.) Brand switching was high and the risks with product failure were low. The only thing that manufacturers had to worry about was to differentiate their products on performance to build loyalty. Retailers felt that the paper was a low profit, low loyalty category. They used it primarily to draw consumers into their stores. Royale had been the only 3ply tissue on the market, and was viewed as the traditional strong, premium quality facial tissue.

Florelle was a 2ply tissue that had received little promotional attention. It lost most of its market share in 1991 and was down 5.8% at the beginning of 92. Other competing brands of tissue were Kimberly Clark with their Kleenex brand, which had a very good year in 1991. Scott tissue who at first fell a few shares due to loss of trade support, but relaunched their brand in September 1991, positioning it as a product with high content of recycle material, and supporting it with heavy advertising. Irving and all others had average an average year. Brand Image for Royale based upon it’s premium positioning, historically unique 3ply product design and its softness claim, and had built the leading brand image in the product category.

Brand users gave Royale an overall score of 85 on a scale of 100, marginally superior to Kleenex. Even though Royal enjoyed a very favorable overall brand image, they were lacking on thing that would make their product do even better. Knowledge about the brand was not as high as they would have liked. Many people who used it didn’t even know that it was a 3ply tissue rather than a 2ply. This brand image did not translate to market share.

Royale was used as a part-time brand that was bought on feature or specifically for cold care, but seldom for regular usage around the household. Also Royale’s price exceeded Kleenex’s by more than $.20 when Kleenex dropped to $0.79 after the introduction of Kleenex’s 150’s. Florelle a standard 2ply tissue brand offered specialty sizes (pocket packs, man-size, and cube format). P felt the need to upgrade the softness of Facelle tissue by adding eucalyptus fibre and sacrificing some tissue strength since Facelle was one of the strongest tissues on the market. The one problem with the upgrade was deciding whether to keep the product name of Facelle and just say it is better, or change it to Royal some how distinguishing the 3ply from the 2ply. They decided to introduce the product under the name Puffs.

Puffs, which had been successfully launched in the U.S twenty years ago, not yet introduced in Canada, would still do well due to Advertising spills from the U.S. Proctor and Gambles results to the research regarding consumer perception of Royale and Facelle were not good. Even though Royale was one of the leading brands in quality it was not the preferred tissue. It was only bought when people were sick or if the product was on sale. The brand had few loyal customers who would by the product to be used around the house. Facelle was one of the strongest tissues for just being a 2ply.

The only problem P found was that it was not as soft as they would like. They decided to change some ingredients and take away some of the strength to make the tissue softer. They felt the need to rename it after a product that had been in the United States for many years, Puffs. The Royale tissue is a good quality tissue. The only problem is getting people to buy it on a regular basis. P may need to rename the product into the Puffs family or find a better way of getting people to purchase the product more often. Facelle was almost a no-name brand before they named it into the Puffs family. It was a high quality tissue but just didn’t have the exposure. I think it was as smart move on P&G’s part to rename Facelle Puffs.

I think that is what they may need to do for the Royale product if they can’t get more consumers to buy the product on a regular basis. Business Reports.

International Marketing

.. for the Patras operation was US$15 million. The equipment manufacturer, F.L. Smidth of Copenhagen would finance 40 percent of capital expenditures, and another 20 percent would be financed through the National Investment Bank for Industrial Development, SA. The remaining 60 percent of Patras shares would be equity, of which 75 percent of shares would be owned by Yankee, and 25 percent of Patras shares would be owned by Titan. The international division manager of Yankee, Bob Walbecker, dealt with the Manourpoulos family, who were the owners of Titan.

After establishing the connection with Titan, Mr. Walbecker continued to establish good rapport between his division and Titan. Ten days after preliminary negotiations between the two parties Mr. Walbecker was assembling a feasibility team in Denver, which was Yankees’ domestic headquarters. The team consisted of a market analyst, an accountant, a geologist, a civil engineer, and Mr. Walbecker, who managed the study. For each American there was a Greek counterpart that translated and disclosed all information known to Titan. After four years from the start of the study Yankee expected that personnel within the subsidiary would be able to handle any further developments.

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Preparing for the in country phase of the study is perhaps more important than the actual time spent in the country conducting research. Before departing for Athens with his team, Mr. Walbecker prepared an outline for each day’s activities for the entire study period. He also had the individuals make a contact list, which contained a bank, an accounting firm, a lawyer, an equipment supplier, the embassy, the ministry, as well as industry source phone and cable numbers. Another important point that was covered was that Mr.

Walbecker made maps available to the team of the location, and showed documentary films discussing the political and economical situation of the country as well. Shots and medical supplies were also made available and taken with the team. Language was also a concern to the accuracy of the study. Based on this fact personnel were required to attend classes on the language even if they had some prior knowledge. After sufficiently preparing the personnel for the trip, Mr. Walbecker departed with the team for Athens.

For the first four days the team was allowed to orient themselves to their surroundings. There are several reasons why the team was given this time to relax. First, they had to recover from the long flight. Physical and mental stamina were at a low-point when the team left the plane. Secondly, the change in surroundings has an effect on the emotions of a person.

Third, it allows for the creation of a team from a group of individuals. A sense of camaraderie can be established during this free time. By the beginning of the week the team was eager and ready to start work on the study. Using the contact list and each individuals daily schedule the team was sent about to gather information. From each contact on the prepared list each member was expected to gain at least two additional contacts.

While meeting with contacts the team was asked to differentiate between opinion and fact. This is because misinformation gathered by inexperienced people is very abundant. Fortunately for Walbecker the team he had assembled was able to distinguish between relevant and irrelevant material. During the study the team was also required to take notes every day. They were also encouraged to go outside of the metropolitan area in order to gain a better feeling of the country and it’s people. Upon return of the team from Athens, Walbecker concluded the following: the rate of return would be 16 percent, the partners had good integrity and intentions, the political situation was not extremely stable, the ownership option was good for other projects if the Patras investment was slow, and there were no technical or market developments evident to slow down progress in construction.

From these findings Walbecker had to persuade the Board to agree to the venture. He concentrated on the soundness of the venture, the reliability of the partners, and the advantages of Greece. Using market analyses and forecasts, an audit of Titan’s financial affairs, the geological report, plant layout and consolidated capital estimates, and a business-environment report, which covered the political situation, the economy, partner evaluation, and an outlook on the country’s currency-the Drachma-Mr. Walbecker was prepared to start finalizing the report. Concluding the report were the financial details on the US$4.5 million equity needed by Yankee. Before giving a formalized presentation to the Board and other important associates, Mr. Walbecker had informal discussions over breakfast with the three top executives at Yankee about the project. The reason for this was not only to give the executives a briefing about the information that was gathered, but also to get an idea as to result of the vote on the project.

After the formal presentation, the Board was given one month to decide on accepting or rejecting the project. At the conclusion of one month’s time from the formal presentation the Board’s vote revealed the acceptance of the project. This example should have revealed the importance of the site selection, gathering, and transmission processes used in conducting a feasibility study. The main point of conducting a feasibility study is to find the intricate details which are necessary to make the right choice for expansion. The example presented above is just one particular situation. In trying to maintain brevity, the paper could not possibly include all of the suggested actions that management should take in every situation. Management must be able to adjust and plan a course of action to find the details of their particular situation that are essentials to making a viable decision. As an overall idea in dealing with foreign counterparts one should be objective in judgment and abundant in knowledge of the person’s/people’s backgrounds.

Knowledge is a valuable resource when expanding operations. Conducting venture analysis is one way in which a company can perceive how the investment will contribute to future operations. Table 1: List of statistics that portray the market situation. Essential Market Statistics: 1. Population by language, religion, ethnic groups 2. Population by age, income, major occupations 3. Population by regions and centers-with growth rates 4.

Number of households and rate of creation 5. Percentage of households with car, radio, refrigerator, TV set, washing machine, running water, electricity. 6. Per capita disposable income (per capita national income less taxes and savings) broken down by region 7. Personal and household consumption pattern; changes over ten years. 8.

Government purchases of goods and services, broken down by product groupings and buying agency. 9. Type, number, and purchasing of state enterprises 10. Imports, and exports, by product and by origin or destination 11. Statistics on market for your product (internal production plus imports less exports) * Source: Penetrating the International Market, p.27-8. Table 2: Diagram showing the timing of project events over a 12 month period. Months Actions 0 Project received by outside party 1 2 3 Preliminary evaluation by company completed 4 5 Initial screening in country completed 6 Decisions to conduct study, employ intelligence service 7 Departure of study team for country 8 9 Completion of field work 10 11 Completion of Report 12 decision by Board on acceptable terms * Source: Multinational Management, Venture Analysis.

p.58. 1 McGrath, John J. Sell Your CEO! Vital Speeches of the Day. vol. 61-14.

May 1, 1995: 444-7. 2 Stuart, Robert Douglas. Penetrating the International Market. American Management Association. New York 1965: 25-39.

3 Haner, F.T. Multinational Management. Merrill. Columbus, Ohio 1973: 43-58. 4 Ewing, John S. and Meissner, Frank. International Business Management; Readings and Cases.

Wadsworth. Belmont, California. 1964: 146-70. 5 Robinson, Richard D. International Management.

Holt, Reinhart and Winston. New York. 1967: 71-85. 6 Morden, Tony. International Culture and Management. Management Decision.

vol. 33-2. 1995:16-21. 7 Harris, Philip R. and Moran, Robert T. Managing Cultural Differences.

Gulf. Houston, Texas. 1979: 12-24. 8 Fayerweather, John. International Business Management; A Conceptual Framework. McGraw-Hill.

New York. 1969: 51-64. 9 Haner, F.T. Multinational Management. Merill. Columbus, Ohio.

1973: 60-64. [mg1] 1 M. Broich Business Reports.


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