Contents1Unit 1Marketing1Passage 1The Marketing Mix: The Four Ps5Passage 2International MarketingUnit 2E-commerce1414Passage 1Amazon'sWholesaleSlaughter16What Is E-business?Passage 219Unit3Corporate Culture19Passage 1A Strong and Living Corporate Culture20Passage 2Not to be Taken for GrantedUnit 4Advertising2323Passage 1 Advertising Media25Passage 2 Advertising28Unit 5Globalization28Passage1Making Brands Work around the WorldPassage 2The Challenger from China Why Huawei is Making the Telecoms World29Take NoticeUnit 6Investment3434 Passage 1 Aspects of Investment36Passage 2InvestmentUnit 7Management39Passage 1The Man Who Invented Management: Why Peter Drucker's Ideas Still39Matter41Passage 2Doing the Business44UnitsInsuranceandInflation44Passage 1HowtoGetPeopletoSaveMore47Passage 2Value of Money51Unit9Currency and Banking51Three Legendary Financial DisastersPassage1
Contents Unit 1 Marketing 1 Passage 1 The Marketing Mix: The Four Ps 1 Passage 2 International Marketing 5 Unit 2 E-commerce 14 Passage 1 Amazon’s Wholesale Slaughter 14 Passage 2 What Is E-business? 16 Unit 3 Corporate Culture 19 Passage 1 A Strong and Living Corporate Culture 19 Passage 2 Not to be Taken for Granted 20 Unit 4 Advertising 23 Passage 1 Advertising Media 23 Passage 2 Advertising 25 Unit 5 Globalization 28 Passage 1 Making Brands Work around the World 28 Passage 2 The Challenger from China Why Huawei is Making the Telecoms World Take Notice 29 Unit 6 Investment 34 Passage 1 Aspects of Investment 34 Passage 2 Investment 36 Unit 7 Management 39 Passage 1 The Man Who Invented Management: Why Peter Drucker’s Ideas Still Matter 39 Passage 2 Doing the Business 41 Unit 8 Insurance and Inflation 44 Passage 1 How to Get People to Save More 44 Passage 2 Value of Money 47 Unit 9 Currency and Banking 51 Passage 1 Three Legendary Financial Disasters 51
53Passage 2Barclays ad Deutsche Bank: Surviving, Not ThrivingUnit 1057Securities57Passage 1 Companies59Passage 2BondsUnit llBusiness Laws6363Passage 1Contracts67Passage 2SmartphonesAretheLatest Patent Battleground72Unit 12Multinational Companies72 Passage1 The Benefits of Multinational Companies75Steps in Entering Business in ChinaPassage 281Unit 13Logistics81Passage1Physical Distribution85Passage2TheImportanceof TransportationKey89
Passage 2 Barclays ad Deutsche Bank: Surviving, Not Thriving 53 Unit 10 Securities 57 Passage 1 Companies 57 Passage 2 Bonds 59 Unit 11 Business Laws 63 Passage 1 Contracts 63 Passage 2 Smartphones Are the Latest Patent Battleground 67 Unit 12 Multinational Companies 72 Passage 1 The Benefits of Multinational Companies 72 Passage 2 Steps in Entering Business in China 75 Unit 13 Logistics 81 Passage 1 Physical Distribution 81 Passage 2 The Importance of Transportation 85 Key 89
UnitlMarketingSupplementary ReadingPassage1TheMarketingMix:TheFourPsThe variety of smaller market segments within the consumer and business market is enormous, and thefirm that isgood at targetmarketing will haveavaluableedge over its competitors.But identifyingthe marketis only part ofthe task.The other basic element in any total marketing program is the marketing mixThe marketing mix can be defined as the blend of product, price, promotion, and placement (ordistribution)that satisfies the demands ofthe chosen market segment. The four Ps have to fit closely together.And, as we shall see, the key to effective marketing is the ability to adjust each of thefour factors in responsetothedemands ofthetargetmarket.ProductA businessperson's first marketing decision concerns the products or services that will attractcustomers in thetargetmarket.Thekeyis todetermine consumers'needs and wants and translatethem intodesirableproducts and services.Rising crime rates,forexample, have created atarget market among smallbusinesses for a growing number of security services. Similarly,the rapid increase in the number of workingwomen has inspired clothing manufacturers to include more high-priced ladies'suits in their overall productmix, many women have discovered they need to “dress for success" just the way men do.Changingconditionsrequirethecontinuousreevaluationof product lines.AtProcter&Gamble,alertexecutives saw rising detergent costs as a threat to continued high-volume usage oftheir products in the homeand added to theirlistof products a numberofcloth-substitute paper products, including Pampers disposablebaby diapers. Pampers now outsell P &G Tide detergent. In addition, P&G has responded to the rising costsofrawmaterials,suchas coconutoil,byreformulatingbarsoapsand otherproductswithmuchlessexpensiveoils. In the steel industry, increased imports have convinced U.S. Steel, Armco, and National Steel, amongothers, to begin entirely new business in chemicals, insurance, and banking.Afterpickingtheproductstobedevelopedbusinesspeoplemakeothermarketingdecisionsabouteachone. These include selecting a brand name, designing a package and establishing a product guarantee.PriceHavingmadethebasic decisions about theproduct line,themarketingmanagermust decidehowthecompany should price its products. Perhaps a policy based on low prices will increase profits to the greatestpossible amount. Supermarkets have used this tactic successfully on two levels. Most offer unbranded,so-called generic products at the lowest price and offer their own brand, usually at a slight higher price, in
Unit 1 Marketing Supplementary Reading Passage 1 The Marketing Mix: The Four Ps The variety of smaller market segments within the consumer and business market is enormous, and the firm that is good at target marketing will have a valuable edge over its competitors. But identifying the market is only part of the task. The other basic element in any total marketing program is the marketing mix. The marketing mix can be defined as the blend of product, price, promotion, and placement (or distribution) that satisfies the demands of the chosen market segment. The four Ps have to fit closely together. And, as we shall see, the key to effective marketing is the ability to adjust each of the four factors in response to the demands of the target market. Product A businessperson’s first marketing decision concerns the products or services that will attract customers in the target market. The key is to determine consumers’ needs and wants and translate them into desirable products and services. Rising crime rates, for example, have created a target market among small businesses for a growing number of security services. Similarly, the rapid increase in the number of working women has inspired clothing manufacturers to include more high-priced ladies’ suits in their overall product mix; many women have discovered they need to “dress for success” just the way men do. Changing conditions require the continuous reevaluation of product lines. At Procter& Gamble, alert executives saw rising detergent costs as a threat to continued high-volume usage of their products in the home and added to their list of products a number of cloth-substitute paper products, including Pampers disposable baby diapers. Pampers now outsell P &G Tide detergent. In addition, P&G has responded to the rising costs of raw materials, such as coconut oil, by reformulating bar soaps and other products with much less expensive oils. In the steel industry, increased imports have convinced U.S. Steel, Armco, and National Steel, among others, to begin entirely new business in chemicals, insurance, and banking. After picking the products to be developed businesspeople make other marketing decisions about each one. These include selecting a brand name, designing a package and establishing a product guarantee. Price Having made the basic decisions about the product line, the marketing manager must decide how the company should price its products. Perhaps a policy based on low prices will increase profits to the greatest possible amount. Supermarkets have used this tactic successfully on two levels. Most offer unbranded, socalled generic products at the lowest price and offer their own brand, usually at a slight higher price, in
addition to the highest-price commercial brands. On the other hand, the desirability of some products dependson a high-quality image, which a highprice helps to confer.Curtis Mathes brand televisions are advertisedas“themost expensivetelevision setI America and worth it",and comewithafour-year limited warrantyPromotionVeryoften themost importantdecision amarketingmanager makes ishowthemanufacturer shouldinform prospective customers about its products. This involves promotion, which includes the sales approach.Some marketing strategists, like those at Avon Products, may decide to emphasizedirect selling and spendmostof theirpromotiondollarstotrainandpay salespeople.Others,likeproducersof soap and headacheremedies, promote their products through advertising, primarily on television. Department stores also spendheavily on advertising,but theychoose newspapers asthemost effectivemedium.Thealternatives aremanyandthechoicemaydeterminethesuccessofamarketingeffort.PlacementThe fourth element is the marketing mix is placement (or distribution): how the manufacturer gets itsproducts to the customers. Transportation is the major factor here, but placement also entails decisions aboutdistributionoutlets.Tupperware,forexample,distributes directlytotheconsumerthrough its partyapproachMostapparel companies,ontheotherhand,sell toretailers,whoresell to consumers.Somemanufacturersemploy multiple placement systems. Thus the Whirlpool Corp. Sells the Whirlpool brand of appliance todealers fordistributionto sales outlets and it alsomakes theKenmorebrand, which it ships directlyto Sears,Roebuck& Co. Sears itself sells through its stores and by catalog.Hart Schaffner Marx makes suits andsportswear for independent retailers butalso makes them availableto consumers throughits own retail stores,including Wallach's and Baskin. In short, there are many ways of distributing goods.The Right CombinationFindingthebestmixofproduct,price,promotion,andplacementhasbecomeanincreasinglycomplextask for most businesses. Marketing directors have found that even the most subtle changes— in the shapeor colorof packaging,for instance,or the way theproduct is displayed in a storecan have a decisive impacton a product's success, quite apart from its actual quality. In effect, you may have built a better mousetrap,but unless you package it well, set up good distribution, target your advertising appropriately, and offer agood Warranty, theworld won't necessarily takenotice.Indeed, it hasbecomemorecommontoreverse theprocess andgotothe market for new ideas ratherthan going into production with an untested idea and then attempting to find a market for it. ConsolidatedFoods Sara Lee Subsidiary took careful note of the fact that one-and two-member households had come tomake up52percentofall American homes by1979.Knowing this marketexisted spurred SaraLeeto developa line of individual Danish pastry products, which quickly became the sales runner-up to Sara Lee's best-selling all-butter pound cake.EacercisesI.Discussion
addition to the highest-price commercial brands. On the other hand, the desirability of some products depends on a high-quality image, which a high price helps to confer. Curtis Mathes brand televisions are advertised as “the most expensive television set I America and worth it”, and come with a four-year limited warranty. Promotion Very often the most important decision a marketing manager makes is how the manufacturer should inform prospective customers about its products. This involves promotion, which includes the sales approach. Some marketing strategists, like those at Avon Products, may decide to emphasize direct selling and spend most of their promotion dollars to train and pay salespeople. Others, like producers of soap and headache remedies, promote their products through advertising, primarily on television. Department stores also spend heavily on advertising, but they choose newspapers as the most effective medium. The alternatives are many and the choice may determine the success of a marketing effort. Placement The fourth element is the marketing mix is placement (or distribution): how the manufacturer gets its products to the customers. Transportation is the major factor here, but placement also entails decisions about distribution outlets. Tupperware, for example, distributes directly to the consumer through its party approach. Most apparel companies, on the other hand, sell to retailers, who resell to consumers. Some manufacturers employ multiple placement systems. Thus the Whirlpool Corp. Sells the Whirlpool brand of appliance to dealers for distribution to sales outlets and it also makes the Kenmore brand, which it ships directly to Sears, Roebuck& Co. Sears itself sells through its stores and by catalog. Hart Schaffner Marx makes suits and sportswear for independent retailers but also makes them available to consumers through its own retail stores, including Wallach’s and Baskin. In short, there are many ways of distributing goods. The Right Combination Finding the best mix of product, price, promotion, and placement has become an increasingly complex task for most businesses. Marketing directors have found that even the most subtle changes— in the shape or color of packaging, for instance, or the way the product is displayed in a store can have a decisive impact on a product’s success, quite apart from its actual quality. In effect, you may have built a better mousetrap, but unless you package it well, set up good distribution, target your advertising appropriately, and offer a good Warranty, the world won’t necessarily take notice. Indeed, it has become more common to reverse the process and go to the market for new ideas rather than going into production with an untested idea and then attempting to find a market for it. Consolidated Foods’ Sara Lee Subsidiary took careful note of the fact that one-and two-member households had come to make up 52 percent of all American homes by 1979. Knowing this market existed spurred Sara Lee to develop a line of individual Danish pastry products, which quickly became the sales runner-up to Sara Lee’s bestselling all-butter pound cake. Exercises I. Discussion
1.Trytodefineeach componentofthemarketingmix in just one sentence.For example,product"meanstoget the right product to the market.2.Describebrieflyall youknowabout ways of distributinggoods.3.Should the component elements of themarketingmixbe alwaysgiven equal importance?And why?4.What isthekey to effectivemarketing?5. Why should a business person concern consumers'needs and wants first?6. How does a company promote its products in the common ways?7. How should a company price its product?8. How does the manufacturer get its products to the customers?9.How can we design the market mix?II. Choose the right answer.1.Atotal marketing programA is another term for marketing mixB.consistsoftwobasicelements-identifyingthemarketandmarketingmixC. refers to identifying the marketD. is to satisfy the demands of the target market2. What is the marketing mix? It'sA.a combination ofproduct andpriceB.ablendofpromotionandplacementC.a combination ofproduct,price,promotionanddistributionD. a blend of product, price and promotion3.Inmaking thefirst marketingdecision, the most important thingbusinesspeople should do isA. to find out consumersneeds and wantsB. to find out the costs of raw materials of a new productC.toreducethepriceoftheirproductsD.to create a target marketamong small businesses4.In Para.4, the author uses facts to support the idea thatA.alert executives are essential to a businessB. disposable products sell wellC.American steel industry isbeing replaced bynewbusinesses in chemicals, insurance andbankingD.changing conditions require the continuous reevaluation of product lines5.According to Para.6,which of the following is not true?A.ThemarketingmanagerofacompanyisresponsibleforpricingitsproductsB. Only high-price policy is profitable.C.Unbranded products are usually much cheaper than products of commercial brands.D. Products of very high prices may also succeed in market.6.In order tomake a new product well known to the public,A. a company should try the most effective waydirect selling
1. Try to define each component of the marketing mix in just one sentence. For example, “product” means to get the right product to the market. 2. Describe briefly all you know about ways of distributing goods. 3. Should the component elements of the marketing mix be always given equal importance? And why? 4. What is the key to effective marketing? 5. Why should a business person concern consumers’ needs and wants first? 6. How does a company promote its products in the common ways? 7. How should a company price its product? 8. How does the manufacturer get its products to the customers? 9. How can we design the market mix? II. Choose the right answer. 1. A total marketing program _. A. is another term for marketing mix B. consists of two basic elements—identifying the market and marketing mix C. refers to identifying the market D. is to satisfy the demands of the target market 2. What is the marketing mix? It’s _. A. a combination of product and price B. a blend of promotion and placement C. a combination of product, price, promotion and distribution D. a blend of product, price and promotion 3. In making the first marketing decision, the most important thing businesspeople should do is _. A. to find out consumers’ needs and wants B. to find out the costs of raw materials of a new product C. to reduce the price of their products D. to create a target market among small businesses 4. In Para.4, the author uses facts to support the idea that _. A. alert executives are essential to a business B. disposable products sell well C. American steel industry is being replaced by new businesses in chemicals, insurance and banking D. changing conditions require the continuous reevaluation of product lines 5. According to Para.6, which of the following is not true? A. The marketing manager of a company is responsible for pricing its products. B. Only high-price policy is profitable. C. Unbranded products are usually much cheaper than products of commercial brands. D. Products of very high prices may also succeed in market. 6. In order to make a new product well known to the public, _. A. a company should try the most effective way—direct selling
B. salespeople must be well paidC.advertising iton television is themost effective wayD.producershavevariouswaystochoosefrom7.Whichofthefollowingbestexpressesthemain ideaof Para.8?A.Transportation is themajorfactor indistributionB. Tupperware distributes directly to the consumer through its party approachC.Apparel companies sell to retailers, who resell toconsumers.D.Placement can be done in many different ways.8. From the passage we may conclude that the most important thing to effective marketing isA.toproducehigh-qualityproductstomeet the needs of consumersB.to be able toadjust the Four Ps in response to the demands of the target marketC.tospendheavilyonpromotiontofacilitate saleD.to havefirst-class products and to be able to distributethem widelyIll. Choose the right meaning of the underlined part according to the context.1... and thefirm that isgood at target marketing will have a valuableedgeover its competitors.A. opinionB. advantageC. profitD. division2.Abusinessperson's firstmarketingdecision concerns the products or services that will attract customers inthetargetmarket.A. disturbsB. has to do withC. has an effect onD.applies to3.At Procter & Gamble, alert executives saw rising detergent costs as a threat to continued high-volumeusage of their products in the home...B. watchfulC.anxiousD.activeA. experienced4. Supermarkets have used this tactic successfully on two levels.A. methodB. testD.tactC.decision5. On the other hand, the desirability of some products depends on a high-quality image, which a high pricehelps to conferB. makeC. explainD.giveA. comfort6.Department stores also spend heavily on advertising,but they choose newspapers as the most effectivemedium.A. hardlyB. littleC.muchD.some7. Transportation is one major factor here, but placement also entails decisions about distribution outlets.B. involvesA. focuses onC.encouragesD.inspires8. Marketing directors havefound that the most subtle changes—in the shape or color of packaging can havea decisive impact on a product's success.A.mysteriousB. slightC.noticeableD. clever9. Knowing this market existed spurred Sara Lee to develop a line of individual Danish pastry products.B. persuadedD. warnedA. urgedC. helpedIV. Match up the words or expressions on the left with the definitions on the right
B. salespeople must be well paid C. advertising it on television is the most effective way D. producers have various ways to choose from 7. Which of the following best expresses the main idea of Para. 8? A. Transportation is the major factor in distribution. B. Tupperware distributes directly to the consumer through its party approach. C. Apparel companies sell to retailers, who resell to consumers. D. Placement can be done in many different ways. 8. From the passage we may conclude that the most important thing to effective marketing is _. A. to produce high-quality products to meet the needs of consumers B. to be able to adjust the Four Ps in response to the demands of the target market C. to spend heavily on promotion to facilitate sale D. to have first-class products and to be able to distribute them widely III. Choose the right meaning of the underlined part according to the context. 1. .and the firm that is good at target marketing will have a valuable edge over its competitors. A. opinion B. advantage C. profit D. division 2. A businessperson’s first marketing decision concerns the products or services that will attract customers in the target market. A. disturbs B. has to do with C. has an effect on D. applies to 3. At Procter & Gamble, alert executives saw rising detergent costs as a threat to continued high-volume usage of their products in the home. A. experienced B. watchful C. anxious D. active 4. Supermarkets have used this tactic successfully on two levels. A. method B. test C. decision D. tact 5. On the other hand, the desirability of some products depends on a high-quality image, which a high price helps to confer. A. comfort B. make C. explain D. give 6. Department stores also spend heavily on advertising, but they choose newspapers as the most effective medium. A. hardly B. little C. much D. some 7. Transportation is one major factor here, but placement also entails decisions about distribution outlets. A. focuses on B. involves C. encourages D. inspires 8. Marketing directors have found that the most subtle changes—in the shape or color of packaging can have a decisive impact on a product’s success. A. mysterious B. slight C. noticeable D. clever 9. Knowing this market existed spurred Sara Lee to develop a line of individual Danish pastry products. A. urged B. persuaded C. helped D. warned IV. Match up the words or expressions on the left with the definitions on the right
1. distribution channelA.all the companies or individuals involved in moving a particular good orservicefrom the producer tothe consumer2. to launch a productB. an idea for a new product, which is tested with target consumers beforethe actual product is developed3.market opportunitiesC.attributes orcharacteristics ofa product:quality,price,reliability,etc.4. market researchD. dividing a market into distinct groups of buyers who have differentrequirements orbuyinghabits5.market segmentationE.places wheregoods are sold to thepublicshops, stores, kiosks, marketstalls, etc.6. packagingF.possibilities offilling unsatisfied needs in sectors in which a company canprofitably produce goods or services7. points of saleG. someone who contacts existing and potential customers, and tries topersuade them to buy goods or services8. product conceptH. collecting, analyzing and reporting data relevant to a specific marketingsituation (such as a proposed new product)9.productfeaturesI.tointroduceanewproductontothemarket10.salesrepresentativeJ. wrappers and containers in which products are soldV.Translate the following sentences into Chinese.1.Figuringhowmuch revenue or brand value companies are generatingfromtheir investments indigitalmedia seemstobegettingmoreandmorecomplex2. The $120 billion that companies are expected to shell out this year for digital advertising and marketingefforts, including website development, will edge past the $1ll.5 billion to be invested in print-basedmarketing.3. Both campaigns also succeeded by integrating multiple channels, blurring the lines between digital andtraditional medialeveraging online buzz to drive mass media exposure that in turn compels people intoaction.4. Digital marketing is similar to modern architecture in many ways. Form follows function. An object cantake several different shapes and be adorned with a variety of different elements, but it'sup to the marketingarchitecttounderstand whatwillbe acceptableto themasses and meet social expectations.Passage 2International MarketingIncreasing numbers of US organizations are crossing national boundaries in search of markets andprofits. For many ofthese firms, the international marketplace generates a sizable portion of total revenuesand profits.Exxon receives73percentofits total revenuefrom itsoverseas operations,IBM59percent,DowChemical 54percent, and ITT43percent.Mobile,Texaco,Merck,EastmanKodak,and Digital Equipment
1. distribution channel A. all the companies or individuals involved in moving a particular good or service from the producer to the consumer 2. to launch a product B. an idea for a new product, which is tested with target consumers before the actual product is developed 3. market opportunities C. attributes or characteristics of a product: quality, price, reliability, etc. 4. market research D. dividing a market into distinct groups of buyers who have different requirements or buying habits 5. market segmentation E. places where goods are sold to the public—shops, stores, kiosks, market stalls, etc. 6. packaging F. possibilities of filling unsatisfied needs in sectors in which a company can profitably produce goods or services 7. points of sale G. someone who contacts existing and potential customers, and tries to persuade them to buy goods or services 8. product concept H. collecting, analyzing and reporting data relevant to a specific marketing situation (such as a proposed new product) 9. product features I. to introduce a new product onto the market 10. sales representative J. wrappers and containers in which products are sold V. Translate the following sentences into Chinese. 1. Figuring how much revenue or brand value companies are generating from their investments in digital media seems to be getting more and more complex. 2. The $120 billion that companies are expected to shell out this year for digital advertising and marketing efforts, including website development, will edge past the $111.5 billion to be invested in print-based marketing. 3. Both campaigns also succeeded by integrating multiple channels, blurring the lines between digital and traditional media—leveraging online buzz to drive mass media exposure that in turn compels people into action. 4. Digital marketing is similar to modern architecture in many ways. Form follows function. An object can take several different shapes and be adorned with a variety of different elements, but it’s up to the marketing architect to understand what will be acceptable to the masses and meet social expectations. Passage 2 International Marketing Increasing numbers of US organizations are crossing national boundaries in search of markets and profits. For many of these firms, the international marketplace generates a sizable portion of total revenues and profits. Exxon receives 73 percent of its total revenue from its overseas operations, IBM 59 percent, Dow Chemical 54 percent, and ITT 43 percent. Mobile, Texaco, Merck, Eastman Kodak, and Digital Equipment
derive more than 40 percent of their annual earnings from international business. The Coca-Cola Company,the prime example ofa global marketer, generates 77 percent of its nearly $9 billion in annual revenues fromforeign sources, and its product is sold in 160 foreign countries.Overseas salesarealso importantrevenuesourcesformanyUS servicefirms.Citicorpearnsabout52percent of its revenues from foreign operations. Other service marketers that derive a substantial portion oftotal revenues from foreign operations include American Family Insurance, 73 percent; Pan Am, 71 percent,Woolworth,43percent;andMcDonalds36percent.Justas somefirmsdepend onforeign sales,others relyonpurchasingrawmaterials abroadforuse intheir domestic manufacturing operations. Afurniture company's purchase of South American mahogany isanexample.International marketing is valuableto the individual firmfor otherreasons.In some instances,thecompany discovers significant product innovations being offered by competitors in foreign markets.Theseimproved offerings may be adapted for the firm's product line currently being offered in its home country,thereby providing a way to generate profitable new-product ideas. Another reason is that the global marketermaybe abletomeetforeigncompetition abroadbeforethelatterinfringes inhomemarkets.After Japan'sMakita Electric Works succeeded incapturinga20percent market shareforprofessional tools inEuropeovera three-year period by offering a highly standardized, low-priced product line, Black & Decker respondedwith a crash program designed to cut costs and tighten quality control to match the Japanese firm's retailprices. These corrective measures prevented Makita from expanding its European successes to the UnitedStates.In developing an international marketing mix, marketers may choose from two alternative approaches:a global marketing strategy or a multinational marketing strategy. A global marketing strategy uses astandardized marketing mix,with minimal modifications, in all foreignmarkets.The advantage of thisapproach is that it enables marketers to realize economies of scalefrom their production and marketingactivities. The Benetton advertisement illustrates this strategy. Benetton's cosmetics, as well as its well-known line ofItalian knitwear, targets the same type of consumer worldwideyoung,affluent shoppers withtrendy tastes. Benetton's international advertising has a common theme “United Colors of Benetton" anduses global visual images that appeal to its target audience whether in New York, Paris, or Tokyo. The onlymodification is translation ofthe copy into different languages. Other companies follow the same strategy.AfterGillette combined its North American and European operations, it used thesamead campaign to marketits newSensorrazor in17countries.SimilarlyCoca-Colauses the sameTVads,adapted with local languagesand other slight variations, in its 160-country world market. The idea ofCoke's global approach is to have“"one sight, one sound, one sell around the world."A global marketing perspective is appropriate for some goods and services and for certain marketsegmentscommontomany nations.Theapproach worksforproducts thathaveuniversal appeal,such asCoca-Cola and Levi's jeans, and for those that appeal to upscale consumers, such as Jaguar.The global approach is particularly appealing to food marketers who hope to help define consumerpreferences. They believe that if their foods are introduced to children, who do not yet have well-defined
derive more than 40 percent of their annual earnings from international business. The Coca-Cola Company, the prime example of a global marketer, generates 77 percent of its nearly $9 billion in annual revenues from foreign sources, and its product is sold in 160 foreign countries. Overseas sales are also important revenue sources for many US service firms. Citicorp earns about 52 percent of its revenues from foreign operations. Other service marketers that derive a substantial portion of total revenues from foreign operations include American Family Insurance, 73 percent; Pan Am, 71 percent; Woolworth, 43 percent; and McDonald’s 36 percent. Just as some firms depend on foreign sales, others rely on purchasing raw materials abroad for use in their domestic manufacturing operations. A furniture company’s purchase of South American mahogany is an example. International marketing is valuable to the individual firm for other reasons. In some instances, the company discovers significant product innovations being offered by competitors in foreign markets. These improved offerings may be adapted for the firm’s product line currently being offered in its home country, thereby providing a way to generate profitable new-product ideas. Another reason is that the global marketer may be able to meet foreign competition abroad before the latter infringes in home markets. After Japan’s Makita Electric Works succeeded in capturing a 20 percent market share for professional tools in Europe over a three-year period by offering a highly standardized, low-priced product line, Black & Decker responded with a crash program designed to cut costs and tighten quality control to match the Japanese firm’s retail prices. These corrective measures prevented Makita from expanding its European successes to the United States. In developing an international marketing mix, marketers may choose from two alternative approaches: a global marketing strategy or a multinational marketing strategy. A global marketing strategy uses a standardized marketing mix, with minimal modifications, in all foreign markets. The advantage of this approach is that it enables marketers to realize economies of scale from their production and marketing activities. The Benetton advertisement illustrates this strategy. Benetton’s cosmetics, as well as its wellknown line of Italian knitwear, targets the same type of consumer worldwide—young, affluent shoppers with trendy tastes. Benetton’s international advertising has a common theme “United Colors of Benetton” and uses global visual images that appeal to its target audience whether in New York, Paris, or Tokyo. The only modification is translation of the copy into different languages. Other companies follow the same strategy. After Gillette combined its North American and European operations, it used the same ad campaign to market its new Sensor razor in 17 countries. Similarly Coca-Cola uses the same TV ads, adapted with local languages and other slight variations, in its 160-country world market. The idea of Coke’s global approach is to have “one sight, one sound, one sell around the world.” A global marketing perspective is appropriate for some goods and services and for certain market segments common to many nations. The approach works for products that have universal appeal, such as Coca-Cola and Levi’s jeans, and for those that appeal to upscale consumers, such as Jaguar. The global approach is particularly appealing to food marketers who hope to help define consumer preferences. They believe that if their foods are introduced to children, who do not yet have well-defined
tastes, they are likely to be accepted. In addition, travelespecially in Europehas created a willingnessamong adults to try different ethnic flavors. Certainly,some new product concepts, likefast-food restaurantsand microwavemeals, have been readily accepted in the absence of similarlocal offerings.Most firmsfind it necessary to continue practicing market segmentation outsidetheirhomemarketsbytailoringtheirmarketingmixesfromcountrytocountry.Thisapproach,calledamultinationalmarketingstrategy, assumes that different market characteristics and competitive situations among nations require thedevelopment of a customized marketing mix appropriate for each marketplace. For example, in a recentadvertising campaign for Lux soap, ads that appeared in the United Kingdom showed a celebrity applyingthe soap in herbath.In Germany,the same ad showed thewoman about to step into the shower.These twoversions were necessary because while the British are more likely to bathe in a tub, the Germans prefer theshower.Kraftfollowed a similar multinational approach initscheeseadvertisements.InBelgium,anadshows a wedge of white cheese being spread on toast as part of the breakfast.In Spain, the same brand ofcheese is in slice form and is being rolled around an asparagus stalk as an hors d'oeurve.Some marketers use a combined global and multinational approach.For example, when Scott Paperentered the European market, its marketing research convinced thecompanyto create a consistently warm,cuddly advertising image.To implement thisglobal concept, Scott created a series of ads that focused on aLabrador puppy,an imagethatwouldtell consumers that Scott was“softand strongHowever,becauseScott believed that its ads should reflect local markets, a series ofads were shot in different settings.In GreatBritain, the puppy was shown in a traditional English country garden. In Spain, the setting was a living roomwith Spanish-stylefurniture.InItaly,an Italian livingroom was chosen.In addition,the background musicvaried by location.ParkerPen'sGlobalizationStrategyWhen Parker Pen Company decided to launch a global marketing strategy30 years ago,someobserverswere puzzled.Although Parker's name was well-known,the Wisconsin-based company brought limitedresourcestothetask.Annual sales of Parker writing instrumentshad never exceeded$225million,and thecompany had never budgeted more than s20 million a year for advertising. Still, Parker's high-qualityproducts were sold in 154 countries, and its marketing executives were eager to design and implement aglobal strategy for Parker Pen. In their view, cultural and competitive similarities would be more importantthan differences,meaning that the sameproductcould be sold the same way in many differentmarkets,andwith much lower marketing costs. They believed, in short, that Parker Pen would provide a classic test ofglobal marketingtheory.Parker's then president, James Peterson,also believed thatglobal marketing would be crucial to thesurvival ofthefalteringcompany.The company's weaknesses had been obscured for years by strong overseassales and a weak US dollar.At home, not only were competitors introducing mass-marketed, disposal pens,but even as Parker attemptedto guard its reputationforquality,the company was losing its share of thedomestic expensive-pen market to A.T. Cross Company and Sheaffer Eaton, Furthermore, Parker'smanufacturing process was inefficient. New-product development had been neglected, and advertisingworldwide,whichhad been left to local marketers,was handled by more thanfortydifferent agencies.Profits
tastes, they are likely to be accepted. In addition, travel—especially in Europe—has created a willingness among adults to try different ethnic flavors. Certainly, some new product concepts, like fast-food restaurants and microwave meals, have been readily accepted in the absence of similar local offerings. Most firms find it necessary to continue practicing market segmentation outside their home markets by tailoring their marketing mixes from country to country. This approach, called a multinational marketing strategy, assumes that different market characteristics and competitive situations among nations require the development of a customized marketing mix appropriate for each marketplace. For example, in a recent advertising campaign for Lux soap, ads that appeared in the United Kingdom showed a celebrity applying the soap in her bath. In Germany, the same ad showed the woman about to step into the shower. These two versions were necessary because while the British are more likely to bathe in a tub, the Germans prefer the shower. Kraft followed a similar multinational approach in its cheese advertisements. In Belgium, an ad shows a wedge of white cheese being spread on toast as part of the breakfast. In Spain, the same brand of cheese is in slice form and is being rolled around an asparagus stalk as an hors d’oeurve. Some marketers use a combined global and multinational approach. For example, when Scott Paper entered the European market, its marketing research convinced the company to create a consistently warm, cuddly advertising image. To implement this global concept, Scott created a series of ads that focused on a Labrador puppy, an image that would tell consumers that Scott was “soft and strong”. However, because Scott believed that its ads should reflect local markets, a series of ads were shot in different settings. In Great Britain, the puppy was shown in a traditional English country garden. In Spain, the setting was a living room with Spanish-style furniture. In Italy, an Italian living room was chosen. In addition, the background music varied by location. Parker Pen’s Globalization Strategy When Parker Pen Company decided to launch a globalmarketing strategy 30 years ago, some observers were puzzled. Although Parker’s name was well-known, the Wisconsin-based company brought limited resources to the task. Annual sales of Parker writing instruments had never exceeded $225 million, and the company had never budgeted more than $20 million a year for advertising. Still, Parker’s high-quality products were sold in 154 countries, and its marketing executives were eager to design and implement a global strategy for Parker Pen. In their view, cultural and competitive similarities would be more important than differences, meaning that the same product could be sold the same way in many different markets, and with much lower marketing costs. They believed, in short, that Parker Pen would provide a classic test of global marketing theory. Parker’s then president, James Peterson, also believed that global marketing would be crucial to the survival of the faltering company. The company’s weaknesses had been obscured for years by strong overseas sales and a weak US dollar. At home, not only were competitors introducing mass-marketed, disposal pens, but even as Parker attempted to guard its reputation for quality, the company was losing its share of the domestic expensive-pen market to A.T. Cross Company and Sheaffer Eaton. Furthermore, Parker’s manufacturing process was inefficient. New-product development had been neglected, and advertising worldwide, which had been left to local marketers, was handled by more than forty different agencies. Profits
wereplunging,andmostof theprofits weregenerated byManpowerTemporary Services,a subsidiaryofParkerPen.Peterson's first move was to streamline Parker's operations by cutting the payroll by half, reducing theproduct line from 500 different writing instruments to 100, and spending $20 million to upgrade Parker'smanufacturing facilities.Then Peterson and his marketing team embarked on a two-pronged program withfar-reaching consequences. They began production of cheap pens that could compete in the under-$3 market,and they standardized everything associated with Parker products under a“global umbrella".From then on,all packaging and point-of-sale display materials would use the same striking block motif. The advertisingbudget would be centralized, and one advertising agency would handle accounts worldwide.A singletheme-"Make your mark with a Parker"-would be used for all products and in all markets, andadvertisements would feature the same graphics, photography,and typefaces, Only the languages of thecopy would vary.In addition,advertising would spotlight Parker's new, inexpensive products instead of thequality pens that were thecompany's trademark.These two decisionsto produce cheap pens and to use a uniform marketing strategy for all Parkerproducts-were eventually considered major blunders by many inside Parker Pen. Long-time Parker Penemployees objected that the lower-quality pens ran counter to Parker's carefully nurtured status image.Parker's Europeanmanager argued thatadvertising shouldtake into accountthedifferences amongmarkets.However,Parker's newmanagement insisted that the company's future lay in high-tech, high-volumeproduction of cheap pens for a global market, and implementation of new strategy proceeded. At first, salesofthenewroller-ball pen and otherwritinginstruments increased.Then,just asdemandwaspicking up,theautomated production line began to shut downrepeatedly. Parker employees were forced to return to theassembly lines to take overforthemalfunctioningsystems.Thedefectrate soared,and before theproblemswere resolved,themarketing division set aside strategies and forecasts and sold whatever products wereavailable.Afewmonthslater,theglobal advertising campaign waslaunched.Inaccordance withthe“one product,one market"policy,advertisements for different markets had identical layout, illustrations,and text,only thelanguages in whichthey were written were different.Because thetheme was so general, the advertisementsappealed to no one in particular, especially not to those buyers who viewed writing instruments as statussymbols. Resentment against the global marketing strategy mounted within the company, and when thefailure of the advertising campaign could no longer be ignored, Peterson resigned, followed by his hand-picked marketing executives.The pen business suffered a $500,000 loss and was purchased in 1986 by agroup of Parker's international managers and a British venture capital company.Nowbased inNewhaven,England,ParkerPenLtd.isaprofitablecompany,with2000pre-taxprofitsof s88 million. Although the reorganized firm used the now-functioning Wisconsin plant and owes some ofits cusses to the greater operating efficiency the formermanagement brought about, the new owners haveinstituted several policies of their own. Parker's inexpensive pens receive less emphasis in advertising, andplans to produce disposable pens were dropped.The company is working to restore its reputation for qualityand reliability. It intends to add perceived value, rather than volume, to its products. In addition, except for
were plunging, and most of the profits were generated by Manpower Temporary Services, a subsidiary of Parker Pen. Peterson’s first move was to streamline Parker’s operations by cutting the payroll by half, reducing the product line from 500 different writing instruments to 100, and spending $20 million to upgrade Parker’s manufacturing facilities. Then Peterson and his marketing team embarked on a two-pronged program with far-reaching consequences. They began production of cheap pens that could compete in the under-$3 market, and they standardized everything associated with Parker products under a “global umbrella”. From then on, all packaging and point-of-sale display materials would use the same striking block motif. The advertising budget would be centralized, and one advertising agency would handle accounts worldwide. A single theme—“Make your mark with a Parker”—would be used for all products and in all markets, and advertisements would feature the same graphics, photography , and typefaces; Only the languages of the copy would vary. In addition, advertising would spotlight Parker’s new, inexpensive products instead of the quality pens that were the company’s trademark. These two decisions—to produce cheap pens and to use a uniform marketing strategy for all Parker products—were eventually considered major blunders by many inside Parker Pen. Long-time Parker Pen employees objected that the lower-quality pens ran counter to Parker’s carefully nurtured status image. Parker’s European manager argued that advertising should take into account the differences among markets. However, Parker’s new management insisted that the company’s future lay in high-tech, high-volume production of cheap pens for a global market, and implementation of new strategy proceeded. At first, sales of the new roller-ball pen and other writing instruments increased. Then, just as demand was picking up, the automated production line began to shut down—repeatedly. Parker employees were forced to return to the assembly lines to take over for the malfunctioning systems. The defect rate soared, and before the problems were resolved, the marketing division set aside strategies and forecasts and sold whatever products were available. Afew months later, the global advertising campaign was launched. In accordance with the “one product, one market” policy, advertisements for different markets had identical layout, illustrations, and text; only the languages in which they were written were different. Because the theme was so general, the advertisements appealed to no one in particular, especially not to those buyers who viewed writing instruments as status symbols. Resentment against the global marketing strategy mounted within the company, and when the failure of the advertising campaign could no longer be ignored, Peterson resigned, followed by his handpicked marketing executives. The pen business suffered a $500,000 loss and was purchased in 1986 by a group of Parker’s international managers and a British venture capital company. Now based in Newhaven, England, Parker Pen Ltd. is a profitable company, with 2000 pre-tax profits of $88 million. Although the reorganized firm used the now-functioning Wisconsin plant and owes some of its cusses to the greater operating efficiency the former management brought about, the new owners have instituted several policies of their own. Parker’s inexpensive pens receive less emphasis in advertising, and plans to produce disposable pens were dropped. The company is working to restore its reputation for quality and reliability. It intends to add perceived value, rather than volume, to its products. In addition, except for