INTERNATIONAL MARKETING MANAGEMENTAN ANALYSIS OF GLOBALIZED AND CUSTOMIZED APPROACHES TO MARKETING MANAGEMENT GROUP 4 | SECTION A |BATCH 2012-14 | IIFT DELHI TEAM MEMBERS 1. Amanpreet Kalra (6A) 2. Nishant Philip (27A) 3. Ritankar Roy (35A) 4. Snigdha Bal (42A) 5. Srinidhi Rajshekhar (43A) Organizations Analysed || NISSAN MOTOR CO., LTD & IKEA
Country Price Remarks Product Remarks DistributionRemarks Advertising necessary styling THE CAAAAARIndia other benefits small is necessary & small is sufficient PRICE|SEATING|MPG INITIAL ADVERTISINGUSA THROUGH DRAG RACES 22 VARIANTS VIDEO GAME WINNER SOCCER MOM COMPETITION COLLEGE GRADUATE RACE TRACK SCHOOLS FAMILY OF 5 INTERSTATE WORK TRAVELLER PLATFORM ADVERTISING SELLS THERussia COMMONIZATION AMBIENCE, AND ….COMFORT…..SHIFTING MUTUAL USAGE OF EXPECTATION FACILITIES WITH AVTOVAZ ST PETERSBERG DFL MIDTERM KNOWLEDGE IS POWERChina STRESSES ON PLAN TECHNOLOGICAL INNOVATION CROSSOVER TOUGHNESS…UK VEHICLES URBAN PROOF AVERAGE INVESTMENT JACK OF ALL TRADES MASS LOCALIZATION FOCUSES ON HIGHBrazil OF 82% ADRENALINE INNOVATE AND SHIFT …FASHION
AGENDA Product: Globalization vs. Adaptation. Price: Globalization vs. Customization Distribution Channels: Globalization vs. Customization Communication including Advertising (include both print and video advertisements) Overall Marketing Strategy Its the most Everyman store in retail. It Synergies at the back- crosses income, age, end & exclusivity at the gender, nationality. It is front end that’s what truly a wonder ensures success.
NISSAN INDIA || THE DESI MARKETING MIX
Nissan Product Strategy for India :Nissan has 22 models in India based on the following analysis:Major Indian consumer needs –1. The necessary styling must ensure the vehicle stands out; this is pivotal as the basic styling which is a sunk cost and leaves very little room for exclusive modelling , therefore the models launched must ensure exclusive styling without burdening the cost factor.2. “ other benefits “ is a huge attraction factor in India therefore Nissan tied up with Hover automotive to provide value-added services to customers throughout the vehicle ownership lifecycle3. “Small is necessary & small is sufficient “ The Indian automobile density per km makes it a deciding factor for sale to the salary bracket of 6-8 lacs per annum"India is a strategic market for the future of Nissan. Not only is there tremendous potential, butNissan is well positioned to play a key role by delivering attractive, affordable vehicles to Indianconsumers," - Carlos Tavares, executive vice president, NML
kitna deti hai….. Nissan Micra An indirect pricing strategy Nissan Micra XE ( 18.06 ) but the major selling point of Nissan Micra XE Plus (18.06 ) the Micra range has been its Nissan Micra XL ( 18.06 ) mileage. Nissan Micra XV (18.06 ) Nissan Micra Diesel XV (23.08 ) Nissan Micra Diesel XV Premium (23.08 ) The after sale usage cost has Nissan Sunny been the main selling point Nissan Sunny XE (16.95 ) Nissan Sunny XL (16.95 ) of the Nissan. Nissan Sunny XV (16.95 ) Nissan Sunny Diesel XL (21.64 ) Nissan Sunny Diesel XV ( 21.64 ) Nissan Evalia Nissan Evalia XE (19.33 ) Nissan Evalia XE Plus ( 19.33 ) Nissan Evalia XL ( 19.33 ) Nissan Evalia XV (19.33 ) Nissan Teana Nissan Teana XL (11.07 ) Nissan Teana XV ( 11.07 ) Nissan X-Trail Nissan X Trail LE (14.42 ) Nissan X Trail SLX MT (14.42) Nissan X Trail SLX AT (13.29 )
Nissan India Price strategy • Features generally found in high end sedans and offered the car at an affordable cost. It is the first sedan to be launched below Rs 6,00,000 bracket in the segment, and consequently opened up new markets in Indian families searching for a car in the mid-size segment. •The Sunny is tagged between Rs 5.88 lakh and Rs 8.78 lakh (ex-showroom, Delhi). The base version of the sedan is cheaper by a whopping Rs 87,000 compared to the entry-level petrol variant of new entrant Skoda Rapid which starts upwards of Rs 6.75 lakh.In a country that has a history of being partial to the small car, it is Nissan’s mid-sizedsedan, the Sunny, and not its hatchback, Micra that is being driven out of showroomsin droves, and in turn establishing Japan’s second largest carmaker as a force to bereckoned with in India’s cutthroat passenger vehicle market. - Ghosn
Nissan India || Distribution ChannelLocalisation has a major role to play in Nissan’s ability to price the vehicle competitively.As with its other mass segment offering Micra , localisation content of the Sunny standsat around 85 per cent.The company has developed a vendor base of 96 suppliers in India, more than half ofwhich operate close to the manufacturing unit in Oragadam, Chennai.Nissan also sells premium SUV X-Trail, luxury sedan Teana and sports car 370Z which areimported as completely built units from Japan.The company has rolled out 185,359 in less than two years of commissioning itsmanufacturing facility in Chennai and exports over 80 per cent of its annual production tomore than 100 countries in Europe, West Asia and Africa.The company is the third largest exporter of passenger vehicles in India and has shipped89,615 units till February this financial year.Abdul Majeed, partner and leader (automotive practice), Pricewaterhousecoopers : “Nissan came in late but they quickly set upcapacity and commenced sales in both in domestic and overseas markets simultaneously. This helped them to ramp up quickly whencompared with other manufacturers.”
NISSAN USAAfter much tinkering, several near misses, confused conversations withAmerican police officers, a drag race up a hill with a VW bug, and a caraccident that took out Shin Makis front teeth, the team returned to Japan.Through broken teeth, Shin Maki reported to Nissans board that, with somemodifications, Nissan cars and trucks could be sold in the states .
Nissan product strategy in USA Nissan has a varied strategy for USA, More than 22 different utility based models across 6 segments Major product classification would be based on price, mileage, commercial usage , seating capacity Price : range of $ 11000 - $100,000 Seating capacity : 2-8 Miles per gallon – has a range scale which goes upto 92 on the electric car segment and as low as 12 miles per gallonBoth internal indicators and external measurements show marked increases in Nissan’s brandstrength over the past year. With its market leadership in the EV segment and its new Infinitiglobal headquarters in Hong Kong, Nissan is delivering a powerful, unified message ofinnovation and excitement to consumers around the globe. - Andy Palmer Executive VicePresident
NISSAN USA product Strategy NISSAN USA Pricing StrategyThe product variation results from the Nissans pricing strategy is contrary tovaried nature of the buyer: the normal belief, at the heart of its sales-The soccer mom in the USA-The college graduate Nissan manages a price range from as-The family of 5 low as 11000 USD to 100,000 USD as the-The interstate work traveller base cost for vehicles The price diversity exists because of-Each segment requires a versatile the sheer enormous market sizemodifications of the tech specs & The price ranging has locational trendsvariation in terms of seating and body with higher end cars being sold in the USA states like Los Angeles and the the-Higher purchasing power lowest priced cars sold in Utah-Lesser servicing costs due to localised The pricing strategy is essentialavailability of technicians and spares because it caters to segments:therefore the investment requirement City dwellersis routed to product innovation Suburban Housholds corporates Commercial requirements The mileage cost is a factor as many of the potential buyers require interstate transport and prefer map driving to flights
Nissan USA Distribution channel:To help Nissan strengthen and consolidate its network, Nissan Logistics Corporation (NLC)was established to handle logistics procurement for North American-made parts. NLC actsas a distribution network, arranging for the consolidation and transportation of parts fromsuppliers to Nissans assembly plants in Mexico and Japan.Nissan Mexicana, S.A. de C.V., (NMEX), was established in 1961 as an importer anddistributor of Datsun vehicles. In 1966, NMEX began producing vehicles, including theSentra for North America, and became the first Japanese-owned automobile productionfacility in North America.In 1990, Nissan North America Inc. (NNA), was created to coordinate all of Nissans variousactivities in North America to enhance the design, development, manufacturing, andmarketing of Nissan vehicles. In 1998, the two organizations merged operations under theNissan North America, Inc., name. NNAs mission is to provide all Nissan and Infinitiemployees and dealers with the tools they need for constant improvement and consumersatisfaction. Headquartered in Franklin, Tennessee, NNA coordinates all operations in theUnited States, Canada, and Mexico including automotive styling, consumer, and corporatefinancing and engineering.
NISSAN UKGraham Smith, automotive sector leader at KPMGManagement Consulting, agrees that Nissan has the rightproduct range for the economic climate. He says: People arenot as brand "snobby" as they once were. Nissans rangeappeals to the British car buyer.
UK Nissan Product & Price strategy||Nissan triumphantly revealed record UK sales,achieving its highest-ever market share of5.34% and becoming a top-five manufacturerfor the first time - overtaking BMW, Peugeot,Citroen and Toyota.the brand has succeeded by taking advantageof wider market trends with its crossovervehicles Qashqai and Juke, which do not Major product and price inspirations:conform to traditional car-industry segments. -to move the brands pivot point awaySmaller SUV concepts are popular at the from Micra and instead focus on cross-moment. The cars are not necessarily great car leadership, with Qashqai and Juke.at any one thing, but by being a jack-of-all- That has been supported by other halotrades - Andrew Jackson, head of automotive products such as the GTR and Leafanalysis at Datamonitor electric vehicle -in 2013 and 2014 there will be six major product launches, and the ambition is to grow to a 6% share in the market in the longer term, expanding our share among younger, more-suburban consumers.
TOTAL COST CONTROL || NISSAN UK SUPPLE AND DISTRIBUTION STRATEGY
SIMULTANEOUS DEVELOPMENT OF VEHICLE TARGET PROFIT AND OVERALL BPLAN is thekey to nissan motors channeling in UKThe UK has been a cornerstone of Nissan manufacturing since 1986, with theSunderland plant (in northeast England) setting important benchmarks for quality andefficiency in Europe and around the world.The British branch of Nissan was the first Japanese transplant company set up inEurope.From the moment of its arrival, the company recognised the traditional relationshipbetween customer and supplier was insufficient to guarantee top quality.Nissan UK therefore developed its own partnership system called Pre-ProductionQuality Assurance.
NISSAN THE WAY AHEAD AND THE GLOBAL DIVERSITY STRATEGY
NISSAN GLOBAL SALES ASSUMPTIONS
Nissan sale by region resulting from adaptive strategies
Nissan GROUND BASICS PRIOR MARKET ADAPTATION AND LOCALIZATION EXTENT
V STRATEGY – VERSATILITY BASED ON LOCALIZATION
v STRATEGY AND RESULTS IN TERMS OF SALES DUE TO 80 % LOCALIZATION
Nissan strategy fro Russia, India, China and Brazil
BACKGROUNDIKEA is a privately held, international home products company that designs andsells ready-to-assemble furniture such as beds, chairs, desks, appliances andhome accessories. It is the worlds largest furniture retailer.It is known for its modern architectural designs on various types of applianceand furniture, often associated with a simplified eco-friendly interior design.The IKEA website contains about 12,000 products and is the closestrepresentation of the entire IKEA range and is the worlds third-largest consumerof wood, behind The Home Depot and Lowes. IKEA stores around the world
PRODUCTIKEA products are identified by single word names. Most of the names areScandinavian in origin. Although there are some notable exceptions, mostproduct names are based on a special naming system developed by IKEA. Thefollowing gives IKEA’s naming convention: Upholstered furniture, coffee tables, rattanfurniture, bookshelves, media storage,doorknobs: Swedish placenames (forexample: Klippan) Beds, wardrobes, hall furniture: Norwegianplace names Dining tables and chairs: Finnish place names Bookcase ranges: Occupations IKEA Kitchen and Bookcase ranges Bathroom articles: Scandinavian lakes, riversand bays Kitchens: grammatical terms, sometimes alsoother names Chairs, desks: mens names Fabrics, curtains: womens names Garden furniture: Swedish islands
PRODUCT Carpets: Danish place names Lighting: terms from music, chemistry, meteorology, measures, weights,seasons, months, days, boats, nautical terms Bedlinen, bed covers, pillows/cushions: flowers, plants, precious stones Childrens items: mammals, birds, adjectives Curtain accessories: mathematical and geometrical terms Kitchen utensils: foreign words, spices, herbs, fish, mushrooms, fruits orberries, functional descriptions Boxes, wall decoration, pictures and frames, clocks: colloquial expressions,also Swedish place namesExamples: DUKTIG (meaning: good, well-behaved) is a line of childrenstoys, OSLO is a name of a bed, BILLY (a Swedish masculine name) is a popularbookcase, DINERA (meaning: (to) dine) for tableware, KASSETT (meaning:cassette) for media storage. One range of office furniture isnamed EFFEKTIV (meaning: efficient, effective), SKÄRPT (meaning: sharp orclever) is a line of kitchen knives.A notable exception is the IVAR shelving system, which dates back to the early1970s. This item is named after the items designer.
PRODUCT IKEA publishes an annual catalogue, considered to bethe main marketing tool of the retail giant, consuming70% of the companys annual marketing budget. The catalogue is distributed both in stores and bymail and prints approximately 175 million copiesworldwide annually, more than 3 times as much asthe Bible. In common with some other retailers, IKEA haslaunched a loyalty card in some of its locations called"IKEA family". The card is free of charge and can beused to obtain discounts on a special range of productsfound in each IKEA store.In conjunction with the card, IKEA also publishes andsells a printed quarterly magazine titled IKEA FamilyLive which supplements the card and catalogue.
PRICEThe cheapest IKEA prices in the world can be found in Poland. Its prices rankedby far the lowest when comparing prices both including and excluding VAT.Here are the cheapest (left) and most expensive (right) countries for IKEA:The following shows the price comparisons in different regions:
PRICEThe following shows the price comparisons among European countries: Prices in the Big 4 (above), Eastern Europe (bottom left) and Scandinavia (bottom right)
PRICEThe following shows the GDP per capita at PPP vs. IKEA Prices (USD): Interpretation of the Map on the left: The darker the country in the “GDP” heat map and the lighter the country in the “IKEA Price” heat map, the more affordable, in theory, the IKEA products for that country should be. Thus, USA is amongst the cheapest and China is amongst the most expensive (above).
PRICEThe table below showshow all 33 countriesranked for the following: Avg. Prices on IKEAproducts (USD) –cheapest to mostexpensive GDP per capita (PPP) inUSD – most wealthy toleast wealthy Most Affordable –highest IKEA PPP Rate tolowest rate
DISTRIBUTION Distribution Services functions as the wholesaler for IKEA, securing local storagecapacity for stores and purchasing products from suppliers all over the world. Products are shipped from suppliers to distribution centers, where they are unloaded,stored in racking, and then re-loaded onto road transport vehicles when ordered by stores.The fundamental goal is to handle goods as efficiently as possible. In some cases, goods are shipped directly from suppliers to stores, or held on the dockof a distribution center for just a short time before being shipped out again. IKEA Distribution Services is reacting to the growing number of online orders with anew order tracking system to help it manage deliveries. It installed the data capturesystem Nucleus IS from Zetes to increase visibility of orders after they leave its distributioncentre. It also integrated an electronic Proof of Delivery (ePOD) system to providecustomers with a printed receipt of delivered items.
DISTRIBUTIONThe key components of IKEA’s distribution channel in all countries are as follows: Store distribution manager: The store distribution manager analyses thesupply chain, ensuring distribution centres can accommodate the volume ofgoods required by stores. Customer distribution manager: The customer distribution manager isresponsible for operating and developing the order distribution business, fromwarehouse to customer. Transport operational coordinator: The transport operational coordinator isthe lynchpin between IKEA and its carriers, ensuring an efficient flow of goods. Warehouse operations manager: The warehouse operations manager ensuresefficiency within the distribution centre and responds to the needs of the supplychain. Quality manager: The quality manager is responsible for quality control in thewarehouse and efficiency of delivery to the customer. Transport business developer: The transport business developer builds andmaintains relationships between IKEA and its carriers whilst negotiating mutuallybeneficial transport scenarios. Goods flow coordinator: The goods flow coordinator secures the highestproduct availability to the customer with the lowest possible supply chain costs.
DISTRIBUTIONIKEA is owned and operated by acomplicated array of not-for-profitand for-profit corporations. Thecorporate structure is divided into twomain parts: operations andfranchising. Most of IKEAs operations,including the management of themajority of its stores, the design andmanufacture of its furniture, andpurchasing and supply functions areoverseen by INGKA Holding, a private,for-profit Dutch company. Of the IKEAstores in 36 countries, 235 are run bythe INGKA Holding. The remaining 30stores are run by franchisees outsideof the INGKA Holding.In Australia, IKEA is operated by two companies. Stores located on the East Coastincluding Queensland, New South Wales and Victoria are owned by INGKA Holding.Stores elsewhere in the country including South Australia and Western Australia areowned by Cebas Pty Ltd. Like elsewhere, all stores are operated under a franchiseagreement with Inter IKEA Systems.
PROMOTION IKEA’s 70% of IKEA’s marketing budget isspent on publishing catalogs. All promotional strategies have a commontheme of making home better, be it the UK-wide "Home is the Most Important Place in theWorld" advertising campaign in 2007 with “NotFor Sale” signboards or Thai advertisement withslogan "A better everyday life at home“ in 2011. In 2010, IKEA launched an advertisement forUK & Ireland called "Happy Inside" which had100 cats lying on IKEA furniture in the flagshipIKEA store in Wembley, London. It also focuses on Outdoor promotion. In 2009, just before the new store openedin Southampton, the MV Red Osprey of Red Funnel was re-painted in an entirely yellowand blue livery to celebrate the opening of the new IKEA store in Southampton.In March 2010, IKEA developed an event in four important Metro stations in Paris, inwhich furniture collections are displayed in high-traffic spots, giving potential customers achance to check out the brands products.
PROMOTION In 2008, IKEA paired up with the makers ofpopular video game The Sims 2 to make a stuffpack called The Sims 2 IKEA Home Stuff,featuring many IKEA products. In April 2011, an advertising campaign forwhich aims to discover whether men orwomen are messier in the home launched. Thestrategy behind the campaign is that domesticclutter leads to arguments, leading to anunhappy home, which IKEA wants to prove canbe avoided with better storage. Viewers will be directed to a new Facebookpage for the brand, where they are able tovote as to who they believe is the messiest,and submit proof using videos and photosthrough an app created especially for thecampaign
Overall Marketing StrategyOur IKEA vision is something that weve found is universally understood, from Moscowto the United States and especially in Atlanta. This vision includes IKEAs catchphrase ofYou do a little. We do a little. And together we save a lot’-Linda Mee, Store Manager of IKEA Atlanta, US Message Ecosystem Targeting 4Ps Positioning
Products Beautifully Crafted and Appealing
Keeping Costs Low Through Self Assembly Packs
Targeted Middle Class Across the World For the Ikea brand is the same everywhere from Warrington to Warsaw The basic stripped-down, well-designed and, most importantly, low- cost items are identical. The company has ignored traditional conventions of furniture retailing, whereby products are geared to local tastes, and instead it offers the same "typically Swedish product range” - Market Week Journal
Huge Stores Located Outside Urban Areas IKEA stores were usually located outside urban areas, isolated from other shops. This was done intentionally so that IKEA could create a complete shopping experience for customers
Circular Store Design The stores were constructed in the form of a circle, to allow shoppers to view all sections of the store.
Easy Shopping at the Store Play area Catalogue and signageNo parking hassles
Uniform Product Range: Bestsellers Ivar Storage System Billy Bookcase Lack side table
With 131 stores in 27 countries its huge volumes, cheap out-of-townsites, and dedication to keeping costs low through self-assembly packsmeans that unlike some other furniture retailers Ikea has coped withthe recession in major markets including the UK and Sweden. Thecompany is likely to continue with its winning formula whether it istargeting consumers in Birmingham or Beijing - Helen Jones, Marketing Week Journal