Session 13-14

IB Marketing & Branding

PGP-25 IB-E 2022-23 S13-14:

August 8, 2022 1
International Marketing & Branding
 IB Strategies & Key Marketing Aspects

International strategy Product, Positioning, Place

Multi-domestic strategy Differential positioning*

Global strategy Product, Positioning, Price

Transnational strategy Product, Positioning, Price, Differentiation

* Across markets as per market requirements

©2019-2022 P Rameshan
PGP-25 IB-E 2022-23 S13-14: International
August 8, 2022 2
Marketing & Branding
 International Marketing Experiences
P&G marketing of diapers in Japan failed (late 1970s & early 1980s)
because the product was bulky when the Japanese preferred trim-fits.
Later, the modified product was highly successful

P&G marketing of detergents in Japan failed (early 1980s) because the

product did not have the advertised action since the Japanese washed
clothes in cold water, adding fabric softeners. Later, the modified
advertisement, matched with a modified product, brought good success

P&G marketing of dish wash soap was a huge success in Japan (late
1990s) because the product was well-designed, based on good research,
to address the needs of Japanese customers, & the product was backed
up with excellent marketing campaigns

Kellogg’s early marketing of breakfast cereals in India (since 1990s)

failed to help it meet its strategic goals because of the inability to
address cultural factors, price sensitivities & customer preferences

PGP-25 IB-E 2022-23 S13-14:

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International Marketing & Branding
 International Marketing Strategy
Oreo: Local Adaptation of Products
& Promotions

https://youtu.be/75NpeAN-z4k;
(778) Kraft Marketing Oreos Globally - YouTube

PGP-25 IB-E 2022-23 S13-14:

August 8, 2022 4
International Marketing & Branding
 Market Gap Analysis

Unmet Market
Potential Usage Gap Total Market
Potential
Lost due to
Competition Competitive Gap
Sales Lost to
Lost due to Poor
Product Line Gap
Competitors
Product Line

Lost due to Poor

Distribution Distribution Gap Market Actually
Supplied
Demand met by Company’s
Company Current Sales

PGP-25 IB-E 2022-23 S13-14:

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International Marketing & Branding
 Market Gap Analysis*

Market Gap Company’s International Markets

Market 1 Market 2 Market 3 Market 4 Market 5
Current Share 30% 10% 40% 5% 17%
Distribution Gap 7% 22% 4% 14% 11%
Product Line Gap 21% 42% 19% 35% 28%
Competitive Gap 22% 11% 12% 11% 14%
Usage Gap 20% 15% 25% 35% 30%
Total Potential 100% 100% 100% 100% 100%
* Illustrative

©2019-2022 P Rameshan
PGP-25 IB-E 2022-23 S13-14:
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International Marketing & Branding
 Determinants of Market Potential
Purchasing power

Leapfrogging trends

Prices & price elasticity

Income elasticity

Substitution effects

Income inequality

Tastes & preferences

PGP-25 IB-E 2022-23 S13-14:

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International Marketing & Branding
 International Marketing Tasks
Target market selection

Market concentration vs. diversification

Standardization vs. localization

Product policy

Pricing policy

Distribution policy

Promotion policy

PGP-25 IB-E 2022-23 S13-14:

August 8, 2022 8
International Marketing & Branding
 IB Branding Issues

Locally relevant Economic, environmental

products & political sensitivities
Wal-Mart selling Profligacy, neglect,
US items in Mexico corruption, lobbying

Locally relevant Socio-cultural

product design sensitivities
US cars’ left hand- Taboo products,
drive based switches taboo names
Locally sensitive Locally sensitive
product name brand icons
Locally sensitive
‘Nova’ may be translated Salman Khan when he had
as ‘Won’t Go’ in Spanish messages multiple criminal cases
Pictorial messages at
high illiteracy places

PGP-25 IB-E 2022-23 S13-14:

August 8, 2022 9
International Marketing & Branding
 Case 6

Lenovo

PGP-25 IB-E 2022-23 S13-14:

August 8, 2022 10
International Marketing & Branding
 Provoking Question

Will Lenovo’s acquisition of IBM PC division work in the long

run?

If yes, how?

If no, why?

PGP-25 IB-E 2022-23 S13-14:

August 8, 2022 11
International Marketing & Branding
Strategic Issues & Silver-lines

ThinkPad was associated with IBM: Will customer accept it with Lenovo?

IBM was continuously innovating on ThinkPad: Will it continue?

Loyal customers were anxious about future: Will Lenovo succeed?

Two businesses were complementary on customers, channels & regions

IBM focused on enterprise segment, Lenovo on small customers

IBM sold 70% through consulting, Lenovo 70% through partners

IBM was strong in non-China markets, Lenovo in China

Only major overlap in culture, customer focus, innovation & trust factor

PGP-25 IB-E 2022-23 S13-14:

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International Marketing & Branding
Strategic Actions

Company resolve to work together & take decisions on mutual trust

HQ in USA near IBM HQ

Research centres in USA, Japan & China

Restructuring & consolidation

English as communication medium

Coordination of 24 hours through teleconferencing

Free hand to CMO for new brand positioning

Leveraging on ThinkPad, IBM logo & IBM support for 5 years

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International Marketing & Branding
 Pre-merger Concerns of Customers on IBM PCs Going
to Lenovo & Later Changes
Slowdown in Innovation
Poorer Quality
Overseas Outsourcing of
Service & Support

Large Drop in Intent to

Purchase

Deal for IBM Service &

Support for 5 Years

Assurances to Customers
on Raising Quality &
Innovation

Later Rise in Intent to

Purchase
©2020-2022 P Rameshan
PGP-25 IB-E 2022-23 S13-14:
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International Marketing & Branding
 Solution Question (2022)

Can Lenovo sustain the success of IBM Think PCs?

If yes, why/how?

If no, why?

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International Marketing & Branding
 Can Lenovo sustain success of IBM Think PCs?
No Lenovo Fails
Skeptic Customers Customer Apathy

5-Year Restrictions Innovation Failures

Service Anxieties Branding Failure

Innovation Failures Low Cost Image

Branding Failure (e.g. X41) ‘IBM’ Clouding ‘Lenovo’

Competitors’ Campaigns Control Issues

Lenovo’s Asian Focus Competitive Pressures

Brand Integration Issues Market Pressures

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International Marketing & Branding
 Lenovo’s Actions Revealing Its Understanding of IBM Think PCs
Yes: Success Factors Success Actions
‘Think’ Brand Equity Dependent on Leveraging Empowering CMO Focused Branding

‘IBM’ Identity Like a Guarantee HQ in USA Signaling Intent

IBM Servicing Addressing Anxiety Securing IBM Support Reassuring Customers

Product Innovations Sign of Competence Product Analysis & Redesign Innovations

Lenovo Branding Image Correction Customer Analysis Sensitivities

Marketing Strategy Professional Approach Market Analysis Targeting

Cost & Pricing Efficiency & Low Cost Promotion Channels Optimum Returns

PGP-24 IB-E 2021-22 S15-16

August 8, 2022 Organization & Control of International 17
Business
 Post-Acquisition Product Survival

Strong Brand

Acquisition

Perception Gap

Product
Strengthening

Perception
Management

Rebranding

©2018-2022 P Rameshan
PGP-25 IB-E 2022-23 S13-14:
August 8, 2022 18
International Marketing & Branding
 Customer-Acquirer Role in Product Survival

Product

Customer Love New Owner

Competences
Customer Loyalty

Intent Understanding Effort

Desire for Survival Survival &

& Success Success

©2018-2022 P Rameshan
PGP-25 IB-E 2022-23 S13-14:
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International Marketing & Branding
 Will a Product Survive With Another Company?

L-I-U-E Survival Framework for Acquired Products

Customer psychology: If they Love a product, they would like it

to survive & succeed

Will it succeed: What is acquirer’s Intent? Supporting vs. killing*

What is acquirer’s Understanding? Clear vs ambiguous

What is acquirer’s Effort? Sincere vs. half-hearted

* Parle’s Thums Up was an aberration: Coke wanted to kill

it soon after its purchase; but it was so popular that Coke
was forced to support it again & again – leading to its
successful survival

©2018-2022 P Rameshan
PGP-25 IB-E 2022-23 S13-14:
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International Marketing & Branding
 Did Lenovo have a clear strategy to sustain IBM Think PCs?
IBM Think
Balanced
Investment
Lenovo
Required

Slower Outsourced Selected

Innovation Service Option

Poorer ThinkPad &

Quality Lenovo
IBM
Action
Strategy L.I.U.E
Innovation Efficiency Brand
Branding
Campaign
New Pricing
Products
Master House of Parallel Master & Hero
Brand Brands Brands Sub-brands
3000 Titanium
Lost Sub- Costliest Confusing Family ThinkPad
brand & Risky
Small Business
Needs
21
©2018-2022 P Rameshan
 Lenovo 2015

Revenue $46.3 billion

Net Income $837 million

Assets $27.1 billion

Acquisitions Motorola Mobility (2014)

‘Think’ Products ThinkPad, ThinkCentre,

ThinkServer, ThinkStation,
ThinkVision
Market Position Largest in China
Second largest in the world
Chairman & CEO Yang Yuanqing

PGP-25 IB-E 2022-23 S13-14:

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International Marketing & Branding