Marketing. Textbook

interested, of course, in the quality and price of spare parts, but they are less interested in the manufacturer and its brand. In this regard, manufacturers of spare parts are targeting marketing at consumers of components and parts.

The main characteristics of these consumers:

1.Agents of car manufacturers — garages and workshops servicing cars of one or more manufacturers on a franchise basis.

2.Repair specialists — garages and workshops that provide a limited or full range of services.

3.Car fleet owners are local commercial agents who can themselves provide repair services, etc.

4.Quick selection — garages and workshops that provide a limited range of simple parts at low prices.

5.List price service — independent workshops that carry out repairs and provide service at fixed prices.

6.Independent garages are small garages that are not affiliated with a specific vehicle manufacturer and specialize in vehicles “over three years old.”

7.Retail companies sell spare parts for cars.

8.Emergency stations are organizations that provide assistance in extreme (crisis) situations [8, p. 294].

Questions:

1.Identify specific sections of the Automarket company’s marketing program and describe their structure.

2.Analyze the company’s marketing mix and formulate your proposals for its improvement.

2.The strategy of the automobile giant

In July 1991, the Financial Times reported: “A new multi-country Ford truck will hit the market this year. Its cab is made in Europe, its chassis is made in North America, and its diesel engine was created by a

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corporation that produces agricultural machinery. Final assembly will take place in Brazil. The first batch of these medium-duty trucks is targeting the Brazilian and North American markets, where they will be available this fall.”

A Ford vice president said, “The truck, assembled in Brazil, represents the very best of what Ford has achieved.” According to him, the company has the capacity to produce 40 thousand cars per year.

The cab will be re-equipped based on the Ford model used in Europe. Cabin components will be sent from the UK to Brazil for assembly of the new vehicles. However, due to high transport costs in Europe and a customs tariff of 14 % for the supply of such goods to the EU, it is unlikely that assembled trucks will make it back to Europe. The possibility of supplying them to other markets is now being considered and it is very likely that the trucks will be exported to Asia.

Ford has already invested about $ 100 million to build a diesel engine plant in Brazil, which will soon go into operation and produce engines for the domestic market of this country. It will be a powerful six-cylinder engine with direct fuel injection and a cylinder capacity of 7.8 liters. It is possible that this plant will produce a 6.6-liter engine model adapted to South American conditions. It is expected to produce 55 thousand engines per year. In the future, the company intends to begin producing mediumduty trucks in North America. As for the more powerful truck model, Ford intends to purchase engines for them from other companies.

Ford’s project in Brazil is the company’s response to growing demand for trucks. A company can significantly reduce costs by effectively distributing the production of individual car parts to factories in different countries. Ford expects that components will be produced in a number of countries, but must meet common international standards. They will then be sent for final assembly.

Ford began its program in 1982 and will take another 8 years to complete it.

Over the course of five years from 1983, the company would spend about $ 1 billion on construction and production, representing 25 % of its

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total budget. The UK will receive approximately 80 % of all capital investment in truck production. This is because although Ford has factories in Australia and Brazil, its operations are primarily concentrated in the US and UK.

When starting a truck project, the company faced a number of organizational and technical problems that needed time to resolve. Ford’s share of the Western European market for cars weighing over 3.5 tons has fallen to almost 6 %, although in 1980 it was 7 %. However, the company managed to overcome the initial difficulties, and the planned launch of the new truck in March 1991 confirms that the company intends to significantly expand its share of medium and heavy-duty trucks in Europe. Ford is aiming to expand sales, particularly in the UK, to recoup its investment [8, p. 296].

Questions:

1.What strategy does Ford use in this situation?

2.What product strategies can you name for Ford?

3.What method does the company use to expand market share?

4.What components of the marketing mix did you find in the example describing the company’s activities? Justify your answer.

7.2.EXERCISES

1.Develop marketing strategies using the example of an enterprise.

2.Develop marketing programs.

3.Conduct a SWOT analysis.

4.Prepare a marketing plan for a specific company/organization.

5.The old truth of sailors and philosophers says: there is no favorable wind for someone who does not know where he is sailing, not to mention the one who has smashed his own helm into pieces. How do you think this truth relates to marketing? Compare a ship sailing at sea with the activities of a business enterprise. What are the similarities and differences between running a ship and managing marketing?

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6. In December 1996, the Republic of Belarus became the 100th country in the world in which McDonald’s restaurants operate. Constantly expanding its activities, the foreign enterprise McDonald’s restaurants increased its share in the republic’s restaurant business to 10 %. What is the mission of McDonald’s restaurants? What goals has the company achieved? What basic development strategies for an enterprise can you recommend [1]?

7. Open Joint Stock Company “Alesya” is one of the large knitting enterprises producing knitwear for women, men and children. The company sells its products both on the domestic market in the Republic of Belarus, and in the Russian Federation, Kazakhstan, the Baltic countries, Italy, Germany and other countries. About 50 % of manufactured products are sold in the Republic of Belarus and about 20 % in Russia. The remaining products are sold in more than 20 other countries. What management structure is most appropriate for the open joint stock company “Alesya”? What departments in the marketing management service would be appropriate to create? What main functions should be implemented by each of the created departments [1]?

7.3.CONTROL QUESTIONS

1.Assess the role of marketing in strategic management.

2.What is the most important thing in developing any marketing strategy?

3.Describe the main strategies included in I. Ansoff’s “ProductMarket” model and the “BCG” matrix.

4.What are the main elements of a marketing plan? Is there a need for annual adjustments to the five-year marketing plan? Justify your answer.

5.What types of marketing programs do firms develop?

6.What marketing strategies do firms use?

7.What is the structure of a typical product marketing program?

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TOPIC 8. SERVICES MARKETING

8.1.SITUATIONAL TASKS

1.Hotel “Gold” has 20 rooms for 40 guests. The hotel employs

25 people.

Despite the fact that the hotel has quite high prices, there are always a lot of guests there. On average, the hotel is 75 % occupied all year round — this is a good indicator for the hotel business.

In her work, the hotel owner is guided by several principles: - provide services in accordance with the fee;

- ensure that employees are interested in the work they do; - take care of visitors.

To understand customer needs and tastes and further improve their experience, guests are asked to complete a questionnaire. It contains a request to express your impressions of the hotel as a whole, as well as the organization and quality of food and service [9].

Questions:

Imagine yourself as a consultant and perform the following operations:

1)try to formulate survey questions in each of these areas;

2)propose a system to encourage hotel visitors to fill out the questionnaire;

3)offer activities to increase the interest of hotel employees in improving the quality of service.

2. Travel company “Zhelanie” is a classic tour operator. Among the destinations offered by the company are Egypt, Israel, Italy (vacations, sightseeing tours, any individual programs).

“Most favored nation treatment for agencies” is the principle that the company strictly adheres to in its work. All travel agents, after concluding

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a cooperation agreement, become recipients of fax bulletins, which, in addition to price lists, contain operational information about resorts (down to air and water temperature), information on the availability of seats for upcoming stays, changes in consular requirements, etc.

What regional partners are delighted with is the “call back” principle, which the “Zhelanie” company began to use in international telephone conversations. A travel agent just needs to call the company, introduce himself, give his phone number and say: “Call back, please.” And the company’s managers themselves will call the agent back, so that further communication via the international line will be at the expense of the tour operator [13].

Questions:

1.Describe the distribution channel used by the “Zhelanie” company. What are its advantages and disadvantages?

2.What other sales channels for tourism products do you know?

3.What criteria would you use when choosing a travel agent?

4.What are the features of the “Zhelanie” company’s work with travel agents?

5.What other techniques do you know for establishing relationships with travel agents?

8.2.EXERCISES

1. One of the most dynamically developing Russian markets is the tourism services market and, first of all, such a segment as sea cruises. The supply of cruises significantly exceeds the demand for them. In these conditions, travel companies are forced to look for non-standard ways to attract customers. Two main directions have been identified:

-providing discounts for children, newlyweds, pensioners;

-expansion of the geographical theme of cruises and their cultural program.

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Offer your own options for increasing the competitiveness of a travel company organizing sea cruises.

2.Many managers see the purpose of business as making a profit, while others see that purpose as creating and retaining a clientele. Explain how these opposing views may affect the tourism business’s relationship with its customers. If a manager considers his goal to attract and retain a client, does this mean that he is not interested in profit?

3.Select a major travel company and explain how its marketing offerings meet the needs of its target market. For analysis, use advertising materials, publications in periodicals, personal experience, as well as information obtained from other sources.

4.The manager of an economy class hotel develops a behavior model of a potential client to clarify the necessary elements of the marketing policy. What aspects of the client’s behavior should he take into account when making a decision?

8.3.CONTROL QUESTIONS

1.Define service. Name the main properties of the service.

2.What main categories of services do you know?

3.Name the stages of the service life cycle.

4.What is the scope of tourism marketing research?

5.Describe the segmentation of tourism marketing.

6.Name the factors influencing the emergence of new types of

services.

7.Where can you find ideas for new services?

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TOPIC 9. INTERNATIONAL MARKETING

9.1.SITUATIONAL TASKS

1.Looking for opportunities abroad: McDonald’s in Moscow

As McDonald’s faces threats to its U.S. operations, it is actively seeking opportunities abroad. A successful example is the opening of the McDonald’s chain in Moscow. George Cohen dreamed of opening the company’s first restaurant in the former Soviet Union for 14 years. The president of McDonald’s Restaurants of Canada, knowing that Russian citizens lived primarily on meat, bread and potatoes, thought, “Russia is going to be a huge market for us,” without even realizing how right he was.

With sales falling in the U.S. market due to changing American eating habits, by 1991 McDonald’s only source of growing net income came from its 2,600 foreign branches. When the company finally opened its first restaurant in Moscow in 1990, it was more than the fulfillment of Cohen’s dream — it was a necessary step for the stagnant company. There was just one problem: Russia was different from any country where McDonald’s had branches. Therefore, Cohen had to formulate the rules of marketing as if anew.

First, he decided that since he had no competitors, resorting to advertising in the media or on outdoor billboards would be a waste of money. Instead of defining or segmenting the market, he decided to present McDonald’s as a reflection of a broader concept, instilling in Russians the idea of a fast food company. This proposed the “McDonaldization” of Moscow, whose city council owned 51 % of the company’s shares. Given that Russians eat with cutlery rather than with their hands, management spent half the advertising budget on brochures and napkins explaining how to eat a Big Mac, rather than why it should be eaten. Second, it also refrained from using the traditional Ronald

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McDonald mascot, believing that this would only confuse potential customers. Young Muscovite employees were given instructions on how to appear impeccably cheerful and neat, something that Soviet customers were not accustomed to. In the same way, buyers were taught to stand in line according to the American model.

McDonald’s customers were more than receptive to the new. In addition, throughout the year, Soviet television broadcast reverent reports about the Big Mac’s work ethic, quality control system, and costeffectiveness.

“I don’t think it’s possible to come from a raid and say: “Okay, we’ve opened, you can come in.” You need to do your homework. You have to be clear about what you want if you come here,” Cohen said of his strategy.

This logic led him to abandon some of McDonald’s more original items and stick to hamburgers. To obtain proper results, he agreed with Russian specialists to raise livestock similar to American breeds and to plant the first Russet Burbank potatoes in Russia. However, the Russians were unable to fulfill all the points of the agreement, so the seeds were imported from the company’s farms in the Netherlands, tomato paste from Portugal, and apples from Bulgaria.

Although Cohen is now sticking to a simple menu, this does not mean that he is not thinking about the subsequent expansion of the market [11, p. 818–819].

Questions:

1.Why did McDonald’s decide to open restaurants in Russia?

2.What problems did she encounter specific to the Russian market?

2. Goodyear Tire segments international markets regardless of region

A key issue in segmenting international markets is whether to define segments by region or independently of regions. Regional segmentation

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makes sense if certain needs, tastes and purchasing behavior depend on regional characteristics and customs. For example, it makes sense to segment the range of outerwear by region due to differences in climate.

Goodyear Tire takes a more global approach to segmentation because the tires it produces are a universal product, but they also require some regional fine-tuning. The company decided to identify segments in international markets based on what consumers look for when buying tires: brand, price or type of retailer. The company has identified four segments, independent of region. Goodyear calls those who pay attention to the brand

“quality buyers.” These tend to be wealthier people who are brand loyal and buy well-known brands. Because consumers in Belgium and Italy are more brand loyal, they are more likely to belong to this segment.

The second segment — “trusting customers” — is very loyal to one store. This group is not so wealthy and considers the brand of tires to be unimportant, relying on store recommendations. These store-oriented buyers are more common in less developed countries and are not yet characterized by a preference for a particular type of tire. They tend to consider store owners to be specialists. As countries develop economically and consumers become more familiar with tires, buyers are likely to place greater importance on product quality.

There are two groups of price-oriented consumers. Image and quality oriented buyers are interested in the brand first and then the price. This group tends to buy mainstream brands, have little store loyalty, and compare brands carefully. A significant proportion of consumers in France and Greece fall into this category. The second group of price-oriented buyers — bargain seekers — rely solely on price. These are most likely to be young people who are least loyal to the brand. They consider buying tires an unpleasant task and put it off for as long as possible. The bulk of these buyers are located in the United States.

Goodyear varies its marketing strategy in each country based on its dominant segment. For those who value quality, the company advertises the brand image in television and radio broadcasts, highlighting the latest advances in technology. Sales are carried out in specialized tire stores and

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