Henry Stewart Talk Series: Competing In Foreign Markets ✓ Solved

Henry Stewart Talk Seriescompeting In Foreign Marketsa Global

1. After reviewing the information, how important do you feel the Country of Origin effect is on a firm’s international marketing decisions? Please provide justification for your answer.

2. Using the 4 cell box diagram, using Country of Origin Effect on Y axis and Costs on the X axis, provide at least 2 examples of Countries which tend to have firms/products which are predominately in each of the quadrants. Why do you feel that they are in the quadrant based on Dr. McDermott Talk? Need to listen to the audio thoroughly.

3. What are the basic problems/challenges for firms that are considered to be World class marketing companies? Are they mostly in quadrant three or four? Explain.

4. Review the slide titled International Marketing Challenges: the Macro-micro Relationship. China is considered to be in the Emerging Economy (Phase 1). What is needed for China to move into Emerging Economy (phase 2).

Paper For Above Instructions

Importance of Country of Origin Effect

The Country of Origin (CoO) effect plays a critical role in a firm’s international marketing decisions. It refers to the impact that the country of a product's manufacture has on consumer perceptions and behavior. Research has shown that consumers often associate certain qualities and characteristics with products based on the country they come from. For instance, products from Germany are frequently associated with high quality and engineering excellence, whereas products from developing countries might be seen as cheaper and of lower quality. This bias leads companies to consider the CoO effect seriously when positioning their products internationally. A strong CoO can enhance brand image and facilitate premium pricing due to the perceived value (Erdem & Swait, 2004).

Examples of Countries in the 4 Cell Box Diagram

Using the 4-cell box diagram with Country of Origin Effect on the Y-axis and Costs on the X-axis, we can identify various countries and their corresponding positioning:

• Quadrant 1 (High CoO Positive, Low-Cost): Countries like India, which is renowned for its IT service sector, often offers high-quality service at lower costs compared to Western counterparts.
• Quadrant 2 (High CoO Negative, Low-Cost): Bangladesh is an example where low-cost textile production coexists with negative perceptions regarding quality and labor conditions.
• Quadrant 3 (High CoO Positive, High-Cost): Japan is a prime example, being associated with high-quality electronics and automobiles, commanding higher prices due to its innovation and craftsmanship.
• Quadrant 4 (High CoO Negative, High-Cost): Countries like Nigeria could fall into this category for petroleum products that are often viewed less favorably despite potentially high costs.

These examples reflect the categorization based on Dr. McDermott's talk, emphasizing the interplay between perception and market cost.

Challenges for World-Class Marketing Companies

World-class marketing companies, which predominantly fall in Quadrant 3, face numerous challenges. Firstly, maintaining their perceived value is essential as competition increases. Innovations in product features and customer service must be consistent to retain a premium pricing strategy. Additionally, they must navigate the complexities of global markets such as cultural differences and regulatory issues, which can impact brand image and operational strategies. Companies like Apple and Toyota exemplify this segment and face these ongoing challenges, making it crucial to adapt to rapidly evolving market conditions (Czinkota & Ronkainen, 2013).

China’s Economic Progression

To transition from an Emerging Economy (Phase 1) to a more advanced stage (Phase 2), China must address structural issues including enhancing innovation, improving regulatory frameworks, and elevating labor standards. Recognizing the shift in its economic model from manufacturing to a knowledge-based economy is essential. Investments in research and development and fostering a stronger domestic market presence can facilitate this progression. Economist Nicholas Lardy highlights that without these changes, China risks stagnation despite its significant growth trajectory (Lardy, 2019).

In conclusion, the CoO effect plays a pivotal role in shaping international marketing strategies, affecting consumer perceptions significantly. The classifications of countries within the 4-cell diagram provide insight into their market positions based on costs and origin perceptions. World-class marketers must contend with unique challenges as they maintain their competitive edge and strive for continual innovation, especially as countries like China aim for economic transitions that demand strategic adaptations.

References

• Czinkota, M. R., & Ronkainen, I. A. (2013). Global Marketing. Cengage Learning.
• Erdem, T., & Swait, J. (2004). Brand Credibility, Brand Consideration, and Choice. Journal of Consumer Research, 30(1), 26-32.
• Lardy, N. R. (2019). The State Strikes Back: The End of Economic Reform in China? Peterson Institute for International Economics.
• Steenkamp, J.-B. E. M., & Geyskens, I. (2006). How Country Characteristics Affect the International Marketing Strategies of Manufacturers. Journal of International Marketing, 14(3), 67-87.
• Bilkey, W. J., & Nes, E. (1982). Country-of-Origin Effects on Product Evaluation. Journal of International Business Studies, 13(1), 89-99.
• Obermiller, C. (2008). Country of Origin Effects and the Market for Foreign Consumer Products. Journal of Business Research, 61(2), 175-181.
• Papadopoulos, N., & Heslop, L. A. (2002). Country Equity and Country Branding: Problems and Prospects. Journal of Brand Management, 9(4), 266-280.
• Shankarmahadevan, J., & Bhat, C. (2010). Analyzing the Effects of Country of Origin on Consumers: The Role of Product Context and Manufacturer Image. Journal of Brand Strategy, 1(3), 233-249.
• Roth, M. S., & Diamantopoulos, A. (2009). Advancing the Country Image Construct. Journal of Business Research, 62(7), 797-802.
• Bakator, M., & Bakator, K. (2019). Country of Origin Effect: Past, Present and Future. Journal of International Business Research, 18(2), 1-24.