Tag: Case Study

  • L’Oréal International Marketing Strategy explains their Case Study

    L’Oréal International Marketing Strategy explains their Case Study

    L’Oréal International Marketing Strategy; L’Oréal is the world’s biggest cosmetics and beauty products company. Basically, it’s a French-based company and is headquartered in Paris. Poster presentation on L’oreal Luxury Cosmetic; It focuses on engaged in the field of Production and Marketing of concentrating on hair colors, skincare, perfumes, and fragrances, makeup, and styling products. L’Oréal products are also based on dermatological and pharmaceutical fields. Their products are made for Individual and professional customers. So, what discusses is: L’Oréal International Marketing Strategy explains their Case Study.

    The Concept of L’Oréal explains their Case Study by International Marketing Strategy.

    This company operates in over 130 countries like Asia, America, East, and West Europe through 25 international brands. The success of L’Oréal lies in the fact that the company succeeded in reaching out to the customers of different countries of the world; across different income ranges and cultural patterns; giving them the appropriate product they are worthy of. The area of expertise of L’Oréal being that it succeeded almost in every country that it entered. The strategies of L’Oréal was varied enough to help it and stop itself from restricting itself to a single country.

    L’Oréal sold its product based on customer demand and country want rather than keeping the product identical across the globe. It built an ample number of brands or mammoth brands entrenched to the restricted culture and which appealed to a variety of segment of the universal market instead of generalizing the brand and edible in innumerable culture. L’Oréal went on to be a local product in every international market. The brand extension of L’Oréal also came in the same sector or the same segment of the market.

    L’Oréal believed in growing its expertise in the segment it is conscious of rather than going into a completely new sector of the market.

    The international marketing strategy is more in-depth and broadened in one sense of the term. It is simply a principle of marketing however on a global scale. The setup of the global marketing strategy has a lot to do with understanding the nature of the global market itself; and, most importantly the environment. The business environment across the globe has different economic, social, and political influences. Thus, it is believing that selecting a global market target for examples when strategizing is a good idea. The international marketing strategy of L’Oréal is concentrating on a cross-cultural arena spanning four market destinations.

    They are namely:

    • 1) the Asian Market.
    • 2) European Market.
    • 3) North America Market, and.
    • 4) The African, Orient, and Pacific Region.

    L’Oréal in Asia Market:

    At present L’Oréal is one of the best companies in the whole world in the field of cosmetic products. The cosmetic products of L’Oréal are widely used; and, especially the hair color which was introduced by L’Oréal a few years ago. L’Oréal is very famous in Asia and its products in Asia are very cheaper; than the other companies and are used by the majority of people in China, Thailand, Japan, etc. It is famous and very successful because of its global marketing strategies; which are very helpful and also distinct from the strategies used by other companies in this field.

    L’Oréal in Asia,

    Uses the sustainable strategy that is of growing the company as the demands of cosmetic products in countries like China, Thailand, etc are in great amount. This company uses the strategy of suspicious brand management; and, they also brought the strategy of more suspicious acquisitions. The main problem that a company like L’Oréal faces in Asia is the competition given by the other companies dealing with cosmetic products. To overcome this problem in Asia these companies use the strategy of selling good quality products at cheaper rates than the other companies.

    One of the best strategies of L’Oréal in Asia is the diversification of the brand; and, the main reason behind this strategy by L’Oréal is to make them palatable in the local cultures. L’Oréal in Asia aims at the management of the global brands with local variations; and, this means that their main aim is of becoming a local and not a foreign company in Asia.

    For example, L’Oréal in Thailand has given local names to their stores; and, most of the employees present in this company, are local people of Thailand. It is because of all these strategies, L’Oréal is very successful in the whole of Asia.

    L’Oréal in European Market:

    L’Oréal’s the only company that uses the strategies which also supports the people in many ways; and, not only in providing good quality products at cheaper rates. L’Oréal used different strategies of marketing in the European market like they used the strategy of nurturing the self-esteem of the people with beauty.

    In France,

    L’Oréal created programs like “Beauty from the heart” for helping the people made helpless by illness or any kind of negative life experiences. In countries like the UK and Germany, many of the women and also the young people regain their confidence; and, their self-image gradually by using the cosmetics provided by L’Oréal.

    In European countries,

    L’Oréal also used marketing strategies like taking the calculated amount of risk etc.; but, most of the strategies are related to the growth of the people mentally and not only for beauty or fashion purposes. L’Oréal launches various innovative treatment programs for the young people of European countries; and, this company also launches free skincare and make-up workshops for women who have cancer.

    For example,

    In France, a program named “La Vie, de Plus Belle” offers free skincare and makeup for cancer suffering women all over France. This helps them to cope with the treatment’s side effects; and, it also helps them to retain their self-esteem which is very important for a patient.

    In the European countries, L’Oréal generally uses the strategy of the management of brand by which L’Oréal had made a large number of brands that rooted in the local culture; and, which all appeals to the various segments of the global market. By using these social types of strategies for the people of Europe has helped L’Oréal in expanding their business in the whole of Europe.

    L’Oréal in North American Market:

    North American markets are considering as a perfect place for companies like L’Oréal, Olay, ponds, etc. The best business of L’Oréal comes from the market of the US. The reason for this much success is that L’Oréal uses very good global marketing strategies in North America and other countries like Canada etc. One of the successful strategies of L’Oréal in the US market is brand extensions; which include the extensions of the brands after doing complete research.

    For example 01,

    When L’Oréal launched a shampoo for kids they first made complete research; and, also debated about the new launch or for an extension. In the US and Canada L’Oréal uses the strategy of frequent advertisements and promotions. As we know in the present scenario, proper advertisements and promotions are very important for any company because people follow the promotions; and, due to which the demands of the products like hair color increases at a very rapid rate. We can clearly understand the advertisement and the promotions of L’Oréal through their media budget. L’Oréal has the twelfth largest media budget in the world which is much more than the other companies in this field.

    For example 02,

    In the late 1990s, the expenditure of L’Oréal advertising and promotion was jumped from 37% to around 47% of the total amount of sales. The global ad spending of L’Oréal was increased to $1.25 billion which was on par with the company named coca-cola. The best thing about this company is that they have a separate and very distinct policy of promotion in the market of the US. Matrix is the number one brand of L’Oréal in the US and the main reason behind the success of the matrix is frequent; and, distinct advertisement and promotion of cosmetic and hair products.

    The people of countries like Canada like to use new products that mean they like changes in their product after some interval of time. So by keeping this thing in mind, L’Oréal uses the strategies of modifications which means they modify their existing products according to the latest tastes and fashion of the local people. According to the latest surveys of the people of L’Oréal company; the majority of the profits of this company is because of the US and these perfect strategies used by this company in the US is the reason behind this type of success especially in the North American market (Helping vulnerable people).

    L’Oréal in Africa, Orient and Pacific Region:

    Like other countries in the world, L’Oréal is also very successful and equally famous in Africa and the Pacific region. L’Oréal entered into the market of India in the year 1997 and at that; there was not much awareness about the sniff of structure in the industry of hairdressing.

    In countries like the UAE and Australia, proper and organized education was totally absent; and, perfect and well-trained hairdressers were also not present at that time. Despite all these problems, L’Oréal in India made some of the strategies; and, one of the best strategies of L’Oréal that they launch various technical training centers; and, they even opened a club of only the hairdressers.

    In the UAE,

    L’Oréal products which were professional began selling through Parisienne salons; while the other companies have begun retailing their range of hair color to power growth. L’Oréal uses a global marketing strategy for launching its successful brands all around the world.

    For example in February of this year only, L’Oréal announced the arrival of the matrix which is the number one brand of L’Oréal in the US to India, UAE, etc with a reason for adding the range of hair products to their existing products at affordable prices. The main thing about this company is that they make strategies according to the local culture of different countries and not uses the same strategies in every country. Because of all these strategies, L’Oréal gains a huge profit from Europe every year.

    The success of L’Oréal:

    The success story can continue further because even today products of L’Oréal touch the cultural values instilled in the potential customer’s mind. L’Oréal just doesn’t sell the product it makes the customer buy the idea of dreaming big but remaining rooted to the core cultural values. it has carefully devised its global marketing strategy and customized it to the local needs; and, that’s the reason people from Africa to Europe and America to Australia are using the L’Oréal products.

    The same reward schemes, motivational methods, desired working environments, etc; also cannot be the same for different employees working for the company in different nations; and, thus it also needs the understanding of different aspects of the impacts of the cultural differences. Proper analysis of the Macro and the Micro Environmental factors should do to study how much technological and economical; and, politically that country is sound to carry out a trade with them.

    Whether it’s an Asian Market, European market, North American Market, or the Pacific Region, everywhere the culture differs in terms of varied factors. So it becomes the responsibility of the Company to do proper scanning of these factors to have their long stay in the region so that they can attain a Topmost Competitive position by adapting to various region’s cultural factors in their Global Marketing Strategies.

    Therefore the major things that should keep in mind for L’Oréal while doing International business are to form an effective global strategy team for defining the trading policies to work in any country. The strategy of Globalization should encompass major factors like cultural differences, economic policies of the country, etc. moreover the varying lifestyles of the peoples and the rapidly changing economies even should also be kept in mind.

    L'Oréal International Marketing Strategy explains their Case Study
    L’Oréal International Marketing Strategy explains their Case Study!
  • L’Oréal Global Branding Strategy explains What? their Case Study

    L’Oréal Global Branding Strategy explains What? their Case Study

    L’Oréal Global Branding Strategy; The L’Oréal group has been the market leader of cosmetics and the beauty industry. The products it mainly sells are in the fields of cosmetics including, hair color, makeup products, skincare products, perfumes, etc. Poster presentation on L’oreal Luxury Cosmetic; The company has also launched several products in the field of dermatology and pharmacy. The sales and profits maintain through its wide range of professional consumer luxury; and, active products showing a strong through it. So, what discusses is: L’Oréal Global Branding Strategy explains What? their Case Study.

    The Concept of the study explains the Case Study of L’Oréal Global Branding Strategy.

    It was founded in 1909 by Eugene Schueller and soon it grew into the world’s largest company in the industry. The turnover of the company has grown over 19 billion euros with over 11 percent of growth; which considerably indicates the success of marketing strategies of the L’Oréal group. The company market over 70 international brands along with several local brands made specifically for the country it is marketing with the same international standards; and, flexibility according to the local needs and requirements that are to sell to both men and women in over 150 countries.

    The company has shown enough growth in the continents of North America and Western Europe with its outstanding performance of twice the market trend growth of the markets of Asia Pacific, Eastern Europe, Latin America, Africa, and the Middle East. The global marketing efforts of the company with its smart selling efforts brought a tremendous amount of success for it. The differences between the different cultures and the needs of the native people of those different cultures have been quite successfully understood by the company’s marketing personals.

    Explain 01:

    To understand and to answer the cosmetic requirement of the different types of people in the world the company has set up its five worldwide research; and, development center which establishes in different continents like 2 in France, 1 in the US, and 1 in Japan and 1 in China, to make the manufacturing of the product; managed according to the needs of a different culture. L’Oréal group has successfully projected itself as a nice example of a good multinational corporation that manages its profit with considerable success through the competitions in the market’s surrounded by the various geographical, social, economic, and cultural risks.

    The company reached out to a variety of customers with different economic status and cultural background in overall different perception through its fine global branding strategies. Through its selling of different products, the company sold different genres of products like Italian elegance, New York street smarts, French beauty, etc through different global branding methods.

    L’Oréal’s global branding strategy that’s doing wonders has been actively spearheaded by Owen Jones himself. Lindsey Owen Jones has been the CEO of L’Oréal for nearly two decades and an “Honorary President” now, and under his leadership; L’Oréal has really fine-tuned its global branding strategy. Interestingly some press reports tell us that he has been seen roaming around streets in foreign markets to understand the new and existing trends.

    Explain 02:

    And without any doubt, his interesting work style seems to work wonders. The branding strategy of L’Oréal has such an impact that L’Oréal seems to be the only global leader in every segment of the cosmetics industry; the right positioning of its products seems to be the key. Whatever it is trying to sell the French elegance or street smartness of America; is getting good response throughout the world and L’Oréal has been able to reach its consumers across the national and cultural boundaries.  Owen Jones says: “We have this great strategy back in the head office of how we are going to do it worldwide.

    But when you go out and look at what is happening, is there a big gap between your projections and the reality of what you see and hear? It is so important to have a world vision because otherwise decentralized consumer goods companies with many brands can fracture into as many little parts if somebody isn’t pulling it back the other way the whole time with a central vision.” This really explains why he prefers roaming in the streets for his strategy-making rather than sitting in the boardroom. Having said all that it’s quite evident that the global branding strategy of L’Oréal has paid huge dividends to the company overall.

    Explain 03:

    To understand this splendid growth story, we need to see how exactly L’Oréal applied their strategy to the countries that were entirely distinct as far as the lifestyle, spending pattern, and culture concern. L’Oréal was started in France, has a good brand value in the united states of America, is reaping good dividends from India, and has a remarkable presence in Japan. These are different complex societies with different needs; so how exactly L’Oréal managed to be equally successful in all these places? This question needs some fact-finding to be done based on country-specific products; and, strategies adopted by the cosmetics conglomerate.

    That’s what exactly we will try doing in the next section of this case study. In India, 4 billion 7.5 ml sachets sell every year and that’s a staggering 66% of total shampoo consumption in India. Most of the urban Indian women (96%) use shampoo, however only 46% use foundation. For hair care, a huge 74% population of Indian women still rely on home remedies, 42% use henna, and 94% use hair oil, as far as L’Oréal’s sale per person in India concern is just 10 cents compared to 28 Euros per person in France. In India skin lightening creams (fairness creams) constitute more than 50% of the skincare market people seem to be crazy about getting fairer.

    Explain 04:

    These facts are self-explanatory about the nature of the Indian market; and, it’s clearly stating that the strategy used in the USA or any other European countries is not going to work in India. the USA is a mature market as far as cosmetics consumption concerns India is an emerging economy with most of the population below 35 years of age and a huge aspiring middle class. The cosmetics market is growing approximately at an annual rate of 16% in India, still a long way to go. The youth in urban centers very concern about the image but the larger section is still off the fashion map.

    Interestingly even after the success story of corporate India, apparently it’s still a country that is very much community-oriented. The great Indian middle class is aspiring but still has the community-driven cultural values intact. L’Oréal has taken this fact very much into consideration while preparing the marketing strategy for India. A very good example would be the launch of Garnier Fructis shampoo in India. The concept was to rely on the idea rather than relying on advertising a brand. The idea of getting five times stronger hair was the central point that created the hype, through “word of mouth” or network marketing.

    Initially, it was positioned as a product for young and teenagers; once the product was established in the market it tried to change or rather increase the target base by shifting gears. In a recent advertisement for Garnier hair color, a daughter is shown advising her mother to try the Garnier product and explaining the benefits. Again it relies on the concept of the idea getting spread by “word of mouth” to another customer segment. This is the best example of marketing in a closed &community driven society.

    Explain 05:

    There is one more remarkable thing about this entire campaign the catchline “take care”. It shifts the focus from the product to the core value of Indian society “caring about others”; and, the entire advertisement becomes more of good advice rather than publicity. China is the world’s most populated country in the world and that makes it very clear that it has the potential of being the biggest consumer market. These days Chinese women are spending an average of 10 to 15% of their income on cosmetics products, and urban Chinese ladies would use 2.2 cosmetics products on average every morning.

    Evidently, most of them want to be fashionable and the L’Oréal punch line – ‘if you want to be fashionable, just choose Maybelline’, really seems to work. Masses are made to believe that this is something that represents America and it ought to be trendy. Maybelline is the product line for the masses and L’Oréal really uses the tendency of masses to look towards the USA that’s why the Maybelline products display against the backdrop of the shiny skyline of New York City Chinese women prefer skincare and beauty products.

    Explain 06:

    According to research by L’Oréal in China, women concern about the radiance of their skin; and, prefer skin nourishing lotions that protect their skin from skin-drying winters. Unlike us customers most Chinese women like skin whiteners rather than tanning products. It’s a sign of beauty for Chinese women. Also, the texture of Chinese hair is thicker and more course than typical US Caucasian hair. This requires different products, and really different skill set to effectively sell and get these products moving in China.

    L’Oréal has dedicated research facilities for these and other issues and followed up with more innovations to suit the needs and preferences of Chinese consumers. There is one more very interesting fact about the Chinese cosmetics industry; Chinese women are very concerned about the ingesting of lipsticks. This is the most interesting food attitude about Chinese women.

    Now following its global strategy L’Oréal even considered this and developed lipsticks containing vitamins; as soon as this was told to the women they were more comfortable in using the product. European countries are mostly developed, here L’Oréal has the liberty of publicizing the brand value rather than focusing on pricing, the benefit to L’Oréal in these markets is that it already well establish and the brand well knows so it can concentrate on grabbing the attention of individualistic feminist women.

    Explain 07:

    Pricing is not a concern in these markets so L’Oréal can afford to have punchlines like-“I am worth it” because these punchlines justify the high pricing of the products and fulfill the feeling of exclusivity of high-end clientele. Now let’s take another example from the European and our markets, L’Oréal brands in these markets are quite well established. L’Oréal products have been used there for few generations now; once young consumer of the L’Oréal brand has started aging and the same street-smart products could not position to them, they have started becoming the mature citizens; now their priorities have changed.

    A recent market report suggests that the new target segment in the cosmetics industry is 40 plus women who once used teenage cosmetics products. The thrust is on anti-aging products because it not only adds the new customer base but retains the once teenage customer also. The customer from the baby boom generation reaches the retirement age and tries to maintain a healthy and youthful look and finds out that their favorite cosmetics brand is still making products for them. L’Oréal capitalized on their desire to look youthful and started marketing its anti-aging products, it has signed sixty-year-old Diane Keaton to represent the Age Perfect Pro-Calcium skincare line.

    Explain 08:

    Also, L’Oréal has signed Scarlett Johansson, Penelope Cruz, Eva Longoria, and Beyoncé Knowles to promote specific cosmetics lines according to the age groups. Now this tells us how L’Oréal used the desire of customers to position its products. The French conglomerate believes that only two different cultures as far as fashion concerns are dominant, represent by two flagship brands L’Oréal Paris and Maybelline New York. L’Oréal has been projected as a French origin with elegance, high-end presentation, and obviously high pricing.

    Whereas the Maybelline product line represents the street-smart American babe who is looking for the value of the money. America seems to be the growth engine of the world, in the cosmetics industry as well. L’Oréal has understood this and they made a strategy based on the trends in the USA and that’s how Maybelline came into existence. Maybelline currently is the second-largest brand in the share of unit sales of cosmetics products and number one in makeup brands. It claims to be totally consistent with today’s confident woman. Maybelline products targets three customer segments; youngster (16 to 25), office lady (26-35), and career women (35 plus).

    Explain 09:

    The marketing mix for the Maybelline line of products consists of two main strategies; foreign consumer cultural positioning; and, symbolic New York City imagery that women can relate to everywhere. Maybelline promotion includes the different way of grabbing attention including promotional coupons; online advertising; sponsorship of fashion shows; signing fashion icons as spokesperson of the product; free makeup consultancy and providing scholarships, etc.; we can see as American cosmetic market is a mature market so L’Oréal tries to rely on mature marketing tactics. In the early 20th century, even American society was not very much open to makeup and skincare products.

    People thought that only sinful women should wear makeup; but, eventually with the economic independence that the American women gained; makeup and cosmetics started coming into the mainstream. Cosmetics apparently became the symbol of new self-belief that the American women were beaming with; and remember even Maybelline claims to be totally consistent with today’s women; there are several other punchlines like ‘maybe she’s born with it’, ‘maybe it’s Maybelline’; all the punchlines keep the self-confidence of women in the center as if its not the makeup but its the attitude that has to be worn.

    Explain 10:

    That’s why women of every nationality and culture started identifying themselves with the product; and, this became the symbol of the 21st-century woman. The mindset and the lifestyle of the customer heavily impacted by the culture. Culture defines by different norms, values, interactions, language, and other personal components shared by groups of people across the world. It is a social phenomenon that defines people’s interests, thoughts, and other behaviors they may exhibit in social life.

    From one country to another, humans have evolved and developed different types of expressions, beliefs, and behavior; which can be difficult to understand for someone who does not belong to the same culture. Culture is the way how the members of a particular group interact with each other on the sharing of the available means; now that determines what is going to be the need for a particular product in that society; that also decides whether a particular advertising strategy will work or not; and, how exactly that will interpret by the target customers.

    Explain 11:

    In different markets, consumer requirements and consumer behavior may vary. Cultural aspects deeply impact consumer behavior; the impact may be direct or indirect. The cultural distinction creates the consumer behavior difference, as it can notice between the Asian and European continents where the culture and the behaviors are very different. Being a global organization L’Oréal certainly needs to understand the cultural differences and position its products; accordingly, otherwise, the results may be far more different than they are at this moment. The thrust has to be on hitting the right customer with the right product.

    This can be possible only if one has a deep knowledge of local culture and beliefs. A very interesting example would be lipstick use in China; according to research, only 3% of women use lipstick for makeup. The reason that was supposed to be behind this low percentage of lipstick use is even weirder; women in China have concerns about ingesting lipstick. L’Oréal surveyed to see whether this is just an age-old saying or it holds some truth; based on the findings it came up with a lipstick that had vitamins in it, and in turn, the demand for L’Oréal vitamin lipsticks increased. Another example could be really handy; in India long hair consider necessary for a woman to consider beautiful.

    Explain 12:

    L’Oréal considered this fact while launching its shampoo product in India; and, it focused on publicizing the fact that using the Garnier Fructis shampoo helps in getting long and strong hair. This strategy made the product very popular in India. In China or India, people like to have a fair complexion. In Asia, women take special care of their skin. People want radiant skins and lotions that can nourish their skin against the sun; whereas in the United States people would rather buy tanning cream.

    On basis of this knowledge, L’Oréal can position their whitening creams in India; and, the interesting part is the way the advertisements could interpret; the way the advertisements for the fairness creams make in Asian countries can interpret as racial advertisements in the USA; but, in Asian countries that seem to be quite usual. Now that’s where the knowledge of the culture and beliefs comes in handy and helps to avoid unnecessary problems. From a business point of view; companies have to adapt themselves to the culture of each country in which they want to have a business. Because of the differences in culture between countries; companies need to adjust their products and services according to local demands.

    This will help them to create and develop a brand image across the globe bases on a large number of globally-recognized products. L’Oréal was able to be successful in these markets; because it adapted to the ground realities of the particular market yet it followed a standardized strategy. If we consider the marketing mix of Maybelline, it has a two-pronged strategy; one for the foreign markets is the global street-smart image of the American chic.

    Explain 13:

    The global street-smart image of New York chick can admire in almost all the urban centers, be it India, China, or Brazil. However, there has to be the right mix of local flavor as well. The most important part of L’Oréal’s strategic plan is to opportunity hunting or the marketing of its products worldwide. From the initial days, it already started catering to the demands of women worldwide. To do that efficiently, they were expected to be well aware of the diversities of women across the globe.

    Once they knew the diversities their job was to come up with a different line of products suitable to women from all parts of the world. Innovation has been the keyword for L’Oréal and this was made possible through constant research and development over the years. The group has already covered most parts of the world and still striving to cover more. To do so, the L’Oréal group has to keep respecting other people’s identity, ideas, and culture. L’Oréal has to keep valuing different cultures and nationalities to get their brand value up; and, it seems that they have been doing it really well.

    The success story can continue further because even today products of L’Oréal touch the cultural values instilled in the potential customer’s mind. L’Oréal just doesn’t sell the product it makes the customer buy the idea of dreaming big; but, remaining rooted in the core cultural values. It has carefully devised its global marketing strategy and customized it to the local needs; and, that’s the reason people from Africa to Europe and America to Australia are using the L’Oréal products.

    L'Oréal Global Branding Strategy explains What their Case Study
    L’Oréal Global Branding Strategy explains What? their Case Study. Image credit from L’Oréal.
  • Failed Americanism? A Case Study for Eurodisney Failure

    Failed Americanism? A Case Study for Eurodisney Failure

    The article uses some aspects of the Hofstede’s cultural dimensions and Trompenaars’ research on organizational culture to compare the cultural difference between America and France, then find out three mistakes that the company made in managing its Euro Disney operation through the case study. Many of Businesses in America make detailed assumptions about the potential to expand their business to other countries and structural models of organizing which can be easily failed to consider the cultural differences. So, what are you going to discuss? – Failed Americanism? A Case Study for Eurodisney Failure.

    Does the content explain how Failed Americanism? and analyze the Euro Disney failure case study.

    One of the examples of the outcome to intercultural business is Disney Corporation’s European venture. Due to the lack of cultural information of France as well as Europe, further, on their inability to forecast problems, Disney acquired a huge debt. False assumptions led to a great loss of time, money and even reputation for the corporation itself.

    Instead of analyzing and learning from its potential visitors, Disney chose to make assumptions about the preference of Europeans, which turned out that most of those assumptions were wrong. Also, study the Case Study on the Merger Between US Airways and American Airlines. Disney Company is one of the most successful operators of theme parks in the world, and their theme park in America and Japan achieved great success but the situation in Europe is not so good.

    In the following sectors, the three lessons the company should have learned about how to deal with diversity based on its experience will be described. More rapid development in the trend of multinational companies, cross-cultural management has become a major part of the business. The purpose of this paper is to obtain some favorable factors for the future development of Euro Disney by the above analysis.

    Three Mistakes by Euro Disney:

    The following mistakes are below:

    First Mistake:

    In determining the target market did not take into account cultural differences Euro Disney’s choice of location focus on the aspects of financial and population, then the Eurodisney theme park located in populous central Europe. Disney executives did not see that Mickey Mouse and intellectuals in the region of the left bank of the Seine in Paris cannot live in harmony and France is serious about their intelligence.

    In retrospect, Paris is not the best place to establish such a theme park, so the establishment of the Disney parks is a declaration of war to intellectuals of French. Disney’s manager stated publicly some of the criticism is “the nonsense of small number of Business” would not help them a favor. This may be well operated according to American culture, while the French pay more attention to their own cultural elite and regard this refute as an attack of national quality.

    Second Mistake:

    Having not adequately taken into account the habits of the French when arranging the service kinds Disney does not provide breakfast because they think that the Europeans do not eat breakfast. In addition, the Disney company does not provide alcoholic beverages within the park, but the French habits are different, they are used to drinking a cup while taking lunch, which aroused the anger of the French.

    Disney executives did not estimate that the European are not interested in vacation in theme park so much, in the attitude of Disney Company the European will be happy about spending a few days in a theme park like the American and Japanese, but middle-class in Europe just want to “get away from everything around” and go to the coast or the mountains, and Euro Disney is the lack of such appeal.

    Last Mistake:

    No combination of French culture to the local staff management Disney has taken the global standard model as same as the Japanese business, they transplanted the American culture to France directly than doing this result with a serious clash of cultures.

    The Disney Company use many measures that departed with the local culture, for example, in the Euro Disney, the France worker is requested to comply with the strict appearance code as the other theme parks in the United States and Japan do, the workers are asked to break their ancient cultural aversions to smiling and being consistently polite to the park guest even must mirror the multi-country makeup of its guest.

    In addition, the Disney Company brought their U.S. Pop culture to France and fought hard for a greater “local cultural context”. The French people think that this is an attack on their native culture, so they adopted an unfriendly attitude toward to the arrival of the Disney, including the protest come from the intellectual and the local residents and farmers.

    Three Lessons by Eurodisney:

    The following lessons are below:

    First Lessons:

    Multinational companies should target market accurately even in the same country or regional market, the traditional culture makes different control power to different people. Multinational companies should be fully based on detailed market research to find the weak links in the market and make a breakthrough, use the “point to an area” model to expand.

    For example, McDonald’s opened in the Chinese market, its target is no longer work for the busy working-class, but the children. The golden arches mark, the joyful atmosphere of the shop, the furnished toys, full of playful ads, as well as various promotional activities specifically carry out for children, these have a tremendous appeal to the target customers.

    McDonald thinks that adult eating habits difficult to change, only those children whose taste not yet formed are the potential customers of Western fast-food culture, the McDonald received Broad market recognition and have huge market potential.

    Second Lessons:

    Multinational enterprises should pay full attention to the importance of the influence of cultural differences on marketing face to the new multiple culture environment, the multinational enterprise should take an objective to acknowledge about the cultural differences of the consumer demand and behavior and respect it, abandoning the prejudice and discrimination of culture completely.

    Moreover, multinational enterprises should be good at finding out and using the base point of communication and collaboration of different cultures and regard this base point as the important consideration factor when the plan to enter the target country market.

    After all, the fundamental criterion for a successful business enterprise is whether it can integrate into the local social and cultural environment. The multinational enterprises should improve the sensitivity and adaptability to the different cultural environment.

    Last Lessons:

    Multinational enterprises should make full use of the competitive advantages of cultural differences and promote international marketing. The objective of international cultural differences can also be the basic demand points of different competitive strategy.

    In the international market, launching culture marketing activities and highlighting the exotic culture and cultural differences in the target market can open the market quickly. Companies should strive to build cross-cultural “two-way” communication channels, it is necessary to adapt to the host’s cultural environment and values and carry out the business strategy of localization to make it can be widely accepted by the host country local government, local partners, consumers, and other relevant stakeholders.

    Effective cross-cultural communication, on the one hand, contributes to cultural integration but also can create a harmonious internal and external human environment for corporate management.

    Euro Disney Calamity:

    The following Calamity is below:

    Until 1992,

    The Walt Disney Company had experienced nothing but success in the theme park business. Its first park, Disneyland, opened in Anaheim, California, in 1955. Its theme song, “It’s a Small World After All,” promoted an idealized vision of America spiced with reassuring glimpses of exotic cultures all calculated to promote heartwarming feelings about living together as one happy family.

    There were dark tunnels and bumpy rides to scare the children a little but none of the terrors of the real world . . . The Disney characters that everyone knew from the cartoons and comic books were on hand to shepherd the guests and to direct them to the Mickey Mouse watches and Little Mermaid records. The Anaheim park was an instant success.

    In the 1970s,

    The triumph was repeated in Florida, and in 1983, Disney proved the Japanese also have an affinity for Mickey Mouse with the successful opening of Tokyo Disneyland. Having wooed the Japanese, Disney executives in 1986 turned their attention to France and, more specifically, to Paris, the self-proclaimed capital of European high culture and style. “Why did they pick France?” many asked.

    When word first got out that Disney wanted to build another international theme park, officials from more than 200 locations all over the world descended on Disney with pleas and cash inducements to work the Disney magic in their hometowns. But Paris was chosen because of demographics and subsidies. About 17 million Europeans live less than a two-hour drive from Paris. Another 310 million can fly there at the same time or less.

    Also, the French government was so eager to attract Disney that it offered the company more than $1 billion in various incentives, all in the expectation that the project would create 30,000 French jobs. From the beginning, cultural gaffes by Disney set the tone for the project. By late 1986, Disney was deep in negotiations with the French government.

    Disney team:

    To the exasperation of the Disney team, headed by Joe Shapiro, the talks were taking far longer than expected. Jean-Rene Bernard, the chief French negotiator, said he was astonished when Mr. Shapiro, his patience depleted, ran to the door of the room and, in a very un-Gallic gesture, began kicking it repeatedly, shouting, “Get me something to break!”

    There was also snipping from Parisian intellectuals who attacked the transplantation of Disney’s dream world as an assault on French culture; “a cultural Chernobyl,” one prominent intellectual called it. The minister of culture announced he would boycott the opening, proclaiming it to be an unwelcome symbol of American clichés and a consumer society.

    Unperturbed,

    Disney pushed ahead with the planned summer 1992 opening of the $5 billion parks. Shortly after Euro-Disneyland opened, French farmers drove their tractors to the entrance and blocked it. This globally televised act of protest was aimed not at Disney but at the US government, which had been demanding that French agricultural subsidies be cut. Still, it focused world attention on the loveless marriage of Disney and Paris.

    Then there were the operational errors. Disney’s policy of serving no alcohol in the park, since reversed caused astonishment in a country where a glass of wine for lunch is a given. Disney thought that Monday would be a light day for visitors and Friday a heavy one and allocated staff accordingly, but the reality was the reverse.

    Another unpleasant surprise was the hotel breakfast debacle. “We were told that Europeans ‘don’t take breakfast,’ so we downsized the restaurants,” recalled one Disney executive. “And guess what? Everybody showed up for breakfast. We were trying to serve 2,500 breakfasts in a 350-seat restaurant at some of the hotels. The lines were horrendous.

    Moreover,

    They didn’t want the typical French breakfast of croissants and coffee, which was our assumption. They wanted bacon and eggs.” Lunch turned out to be another problem. “Everybody wanted lunch at 12:30. The crowds were huge. Our smiling cast members had to calm down surly patrons and engage in some ‘behavior modification’ to teach them that they could eat lunch at 11:00 AM or 2:00 PM.”

    There were major staffing problems too. Disney tried to use the same teamwork model with its staff that had worked so well in America and Japan, but it ran into trouble in France. In the first nine weeks of Euro-Disneyland’s operation, roughly 1,000 employees, 10 percent of the total, left.

    One former employee was a 22-year old medical student from a nearby town who signed up for a weekend job. After two days of “brainwashing,” as he called Disney’s training, he left following a dispute with his supervisor over the timing of his lunch hour. Another former employee noted, “I don’t think that they realize what Europeans are like . . . that we ask questions and don’t think all the same way.”

    One of the biggest problems,

    However, was that Europeans didn’t stay at the park as long as Disney expected. While Disney succeeded in getting close to 9 million visitors a year through the park gates, in line with its plans, most stayed only a day or two. Few stayed the four to five days that Disney had hoped for. It seems that most Europeans regard theme parks as places for day excursions.

    A theme park is just not seen as a destination for an extended vacation. This was a big shock for Disney. Also, study the Case Study of the Starbucks Mobile Payment Application. The company had invested billions in building luxury hotels next to the park-hotels that the day-trippers didn’t need and that stood half empty most of the time.

    To make matters worse, the French didn’t show up in the expected numbers. In 1994, only 40 percent of the park’s visitors were French. One puzzled executive noted that many visitors were Americans living in Europe or, stranger still, Japanese on a European vacation! As a result, by the end of 1994 Euro-Disneyland had cumulative losses of $2 billion.

    At this Point,

    Euro-Disney changed its strategy. First, the company changed the name to Disneyland Paris in an attempt to strengthen the park’s identity. Second, food and fashion offerings changed. To quote one manager, “We opened with restaurants providing French-style food service, but we found that customers wanted self-service like in the US parks. Similarly, products in the boutiques were initially toned down for the French market, but since then the range has changed to give it a more definite Disney image.” Third, the prices for day tickets and hotel rooms were cut by one-third. The result was an attendance of 11.7 million in 1996, up from a low of 8.8 million in 1994.

    Failed Americanism A Case Study for Eurodisney Failure
    Failed Americanism? A Case Study for Eurodisney Failure. Image credit from #Pixabay.
  • The Case Study of Ad Campaign for Apple iMac

    The Case Study of Ad Campaign for Apple iMac

    The iMac ad campaign consists of a series of seven television commercials. These commercials advance Apple Computers newest generation of personal computers: the iMac. The iMac is a personal computer that is an AIO unit (All In One) and is housed in a translucent white and green case. Apple has attempted to make a simple, cheap, powerful, and easily connectable computer for people of all ages. The idea began about two years ago when Apple acquired Next Computers and restored Steve Jobs to Interim CEO of the Apple. Do you study to learn: If Yes? Then read the lot. Let’s Study: The Case Study of Ad Campaign for Apple iMac. The case Reference: Encyclopedia of Major Marketing Campaigns, Thomas Riggs.

    How to achieve the growth business by the Apple iMac Ad Campaign? So read the case, The Case Study of Ad Campaign for Apple iMac.

    Jobs, who founded Apple and created the modern computer, was the visionary who conceived the idea of a computer that was as attractive and simple as it was powerful. In the late 1990s technology analysts speculated that Apple Computer, Inc.’s fate hinged on its new personal computer the iMac. Ever greater numbers of consumers were buying personal computers (PCs) that ran on Microsoft’s Windows operating system rather than Apple’s version.

    Although Apple had pioneered user-friendly computers, the company had not introduced a consumer-targeted computer since 1992. Hoping that its stylish new iMac would propel Apple back into this vast segment of the market, Apple released its iMac ad campaign. Apple’s share of the worldwide desktop-computer market had plummeted since 1995, the last year the company had been profitable. He set a team of designers to work on putting Apple’s existing computer chip, the Motorola Power PC Generation 3, into an awe-inspiring case. During the spring of 1998, rumors began to fill silicon valley that Jobs was about to reinvent the modern PC.

    The first official word on the iMac came near the beginning of summer. Jobs announced that he was preparing to introduce a new line of computers unlike any that he had produced. At this press conference, he displayed some concept drawings to wet the media’s appetite. In August, the iMac was introduced to consumers. The day it was released, there was already over a month’s backorders for the new machine (Macworld Web). Later that month, Apple began running commercials on the major television networks.

    The $100 million campaign, created by the ad agency TBWA\Chiat\Day, debuted on August 16, 1998. Its advertisements featured brightly hued computers against a plain white background, thereby further emphasizing the iMac’s one-of-a-kind colorful shell, and contained snappy copy that underscored either the iMac’s aesthetics or its user-friendliness. The campaign, which consisted of network and national cable television commercials (as well as spot television marketing in Apple’s top 10 markets), magazine, billboard, and bus ads, and radio spots, was the largest marketing effort in Apple’s history.

    But despite the high stakes involved for the company, the iMac ad campaign delivered its message in a ‘‘fun and factual’’ way, an Apple spokesperson stated in the August 14, 1998, San Francisco Chronicle. The ads highlighted the iMac’s easy Internet access, its simplicity (especially when compared to rival PCs), and its speed. Central to each ad was the iMac’s unique design. ‘‘Chic, not geek,’’ proclaimed one, while another simply said, ‘‘iCandy.’’

    The iMac’s debut was triumphant, and 1998 proved to be Apple’s first profitable year since 1995. Many industry analysts credited the iMac as the primary force behind this turnaround. ‘‘A year and a half ago, Apple had no future; now it does,’’ proclaimed Fortune. Consumer surveys revealed that a substantial percentage of iMac purchasers were first-time Apple buyers, which indicated that the iMac ad campaign had succeeded in its goal of winning over new computer buyers and PC converts.

    Historical Context of Ad Campaign for iMac:

    Founded in 1977, Apple had fallen on hard times by the mid-1990s. The company had made history in 1984 when it introduced the Macintosh, a machine that revolutionized the computer world with its graphical screen displays, pull-down menus, and other user-friendly features. While International Business Machines Corp. (IBM) licensed its operating system and other technologies, thereby launching an armada of inexpensive PC clones, Apple instead honed its image as the purveyor of ‘‘machine’s for free-thinking, discriminating nonconformists and rebels,’’ according to Macworld.

    Apple consistently touted the fact that its computers, unlike those of its rivals, were simple to use. The introduction of Microsoft’s Windows operating system in the early 1990s undermined the force of these claims, however, as Windows provided similar graphical features and screen windows. A proliferation of similar products confused customers at the same time that Apple’s image making efforts devolved into chaos. By 1996, 25 separate Apple campaigns were running simultaneously. As the company’s market share plummeted precipitously—from a high of around 14 percent in 1993 to a paltry 3 percent in 1997—software writers threatened to stop creating programs for the Apple operating system, claiming there was no profit to be made.

    Consumers began to doubt that Apple would survive and was reluctant to spend thousands of dollars on a machine that might quickly become a dinosaur. ‘‘This company was in a death spiral,’’ an Apple executive told Newsweek. Steve Jobs, one of Apple’s founders, returned to the company as interim CEO in 1997 and quickly strove to right the troubled company. After trimming the product line to two broad categories—home and business—Jobs vowed to focus the ‘‘home’’ line on Apple’s key markets of consumers and school users.

    At the same time, Jobs oversaw the creation of 1997’s ‘‘Think Different’’ advertising campaign, a high-profile effort designed to reassert that Apple, though plagued by bad press and sinking profits, was a vibrant company producing innovative products for innovative people. Jobs’ strategy halted the company’s free fall, and in April 1998 Apple reported its second straight profitable quarter. The company still needed to prove that it could compete for the consumer market with rival PC makers such as Hewlett-Packard, Compaq, and Dell. While Apple retained ‘‘Think Different’’ as an overarching branding campaign, it needed advertisements to herald the arrival of its newest machine, the iMac.

    The Ad Campaign Target of the sell for iMac:

    Apple wanted to market the iMac predominantly into three groups: loyal Apple users, first-time computer buyers, and PC owners. As the company had not introduced a new consumer product since 1992, it hoped that many Apple users would choose to upgrade to the iMac. The company had long cultivated a rebellious image, with advertisements ranging from the famous ‘‘1984’’ commercial to the stark ‘‘Think Different’’ photos of maverick geniuses who had flouted conventional wisdom to make stunning contributions. As a result, Apple buyers tended to be those who perceived themselves to be somewhat outside the mainstream and who valued creativity.

    Advertisements for the iMac were crafted to reach this group as well. The print ads used arty photos of the iMac that made the computer look less like a machine and more like a museum piece. The taglines in some of the print pieces also followed the Apple advertising formula. For instance, ‘‘I think therefore iMac,’’ punned on Descartes’ famous maxim, and understanding the reference required a degree of intellectual literacy. Moreover, the quirky, insider-type wit was likely to appeal to the alternative audience comprising the bulk of Apple loyalists. Reaching first-time computer buyers presented an entirely different set of challenges.

    An industry analyst estimated that 5 million to 10 million consumers were ready to buy their first computer. According to an Apple news release, this analyst concluded that ‘‘access to the Internet is a leading reason for consumers to buy a personal computer.’’ The technological world was often overwhelming to the uninitiated, though, with its talk of RAM, gigabytes, and modem speed. The ‘‘iMac’’ campaign sought to allay these consumers’ fears. One print ad suggested that the most complicated aspect of buying an iMac was deciding which color to purchase. ‘‘The thrill of surfing. The agony of choosing,’’ the piece quipped. ‘‘Buying a computer used to be a decision based on processor power, functions, and software packages,’’ said the Austin American-Statesman. ‘‘iMac has changed things because it is now about choosing between strawberry and grape.’’

    Other print ads—‘‘Yum’’ and ‘‘iCandy’’—likened the machine to a sweet treat, further demystifying it. The television commercials, such as ‘‘Simplicity Shootout,’’ also emphasized the iMac’s user-friendliness by juxtaposing Apple’s easy setup and Internet access with the hassle of trying to use a Windows-based PC for the first time. Commercials featuring the actor Jeff Goldblum validated the insecurities of the Internet ‘‘newbie.’’ ‘‘It seems a big party is going on these days,’’ Goldblum said to the camera, referring to the Internet. ‘‘But, I don’t have an e-mail.’’ He then proceeded to explain how easy it was to get on the Internet with the iMac.

    The third group Apple strove to target with the iMac ad campaign was consumers using other PCs. Many analysts doubted that Apple could entice an appreciable number of Windows aficionados to purchase the iMac as their next computer, according to Tulsa World. Apple believed it could. To do so, the company hammered home the message that the iMac was faster, simpler, and equally as affordable as comparable PCs. The ‘‘iMac’’ campaign conveyed that ‘‘We have a better product,’’ an Apple executive told Advertising Age. Apple also used the iMac’s style as an important selling point. One particular print ad (that humorously declared, ‘‘Sorry, no beige’’ above a turquoise iMac) embodied an underlying premise of the ‘‘iMac’’ campaign: ‘‘people would be able to further express themselves through their computers,’’ as an Apple spokesperson told the Austin American-Statesman.

    Marketing Strategy for Selling:

    To reach the diverse audience comprising its three target markets, Apple unleashed the iMac ad campaign with a media blitz. ‘‘It is easily our most far-reaching, coordinated use of the media,’’ a company spokesperson told the San Francisco Chronicle. Television commercials played a central role in communicating the campaign’s message to a vast number of consumers. While many rival computer companies focused heavily on trade publications, Apple aggressively pursued consumers where they lived. ‘‘Determining the media mix was complicated,’’ an Apple executive told Editor & Publisher. ‘‘iMac is targeting toward a variety of different markets, and buyers don’t necessarily need to be technologically savvy.’’ After the campaign’s launch on The Wonderful World of Disney, iMac spots aired on popular network shows that garnered a mainstream audience, such as Home Improvement, Spin City, Just Shoot Me, Friends, and 20/20.

    Apple also used national cable channels, such as Comedy Central, FX, and MSNBC. To ensure that its base of Apple users knew of the iMac and its updated features, the company also bought local airtime in its top 10 markets: Boston, Los Angeles, New York, San Francisco, Chicago, Philadelphia, Washington, D.C., Seattle, Minneapolis, and Denver. The television commercials relied on humor to convey the iMac’s qualities. A spot called ‘‘Simplicity Shootout’’ featured ‘‘Adam Taggert, 26, Brown University graduate, Class of 1994’’ competing against a 7-year-old boy and his dog in a duel to set up their respective new computers. Taggert, who had selected a PC, fumbled with cables and manuals for quite a while, while the youngster had his iMac up and running in five minutes.

    Later television spots portrayed actor Jeff Goldblum (who had provided the voice-over on earlier iMac commercials) talking frankly and calmly about the iMac. Still, others concentrated on the visual vividness of the machine. In January 1999, after Apple launched five additional iMac colors (tangerine, lime, strawberry, blueberry, and grape), TBWA\Chiat\Day created a commercial that pictured the five bright iMacs spinning artfully to the Rolling Stones’ song ‘‘She’s a Rainbow.’’ Apple used other media as well. The colorful print ‘‘iMac’’ pieces were published in a number of consumer magazines, including ESPN, Time, Entertainment Weekly, Wired, Vanity Fair, Elle, and Metropolitan Home.

    Moreover, the company engaged in a major saturation effort in its top 10 markets. Billboard versions of the ads (showing the iMac and containing a single tagline, such as ‘‘Mental Floss’’), bus ads, and radio spots all played an important role. Apple also broadcast ‘‘countdown to iMac’’ radio pieces in these markets during the days prior to the iMac’s introduction. In addition, it sponsored radio promotions in which an iMac was given away every day. The company even went so far as to install 20-foot inflatable iMacs atop some computer stores. ‘‘Apple is acting more like a package-good marketer than a technology company,’’ exclaimed Advertising Age.

    An analyst for the magazine concurred: ‘‘They’re creating an environment in which an awful lot of potential consumers are paying attention to them.’’ Maintaining such a high profile was essential not only for Apple to sell more iMacs, but also ‘‘to reestablish the company’s credibility,’’ according to the San Francisco Chronicle. The ‘‘iMac’’ campaign was truly a global marketing effort. Half of the $100 million ad budget was used in the United States, but the remaining sum brought the message of the iMac’s simplicity to Europe, Japan, and other international markets. The campaign was released in these regions on August 29, 1998.

    Competition for Sell:

    The magnitude of Apple’s goal of convincing first-time computer buyers and PC owners to consider the iMac was mammoth. According to Investor’s Business Daily, 85 percent of the desktop-computer market consisted of Windows-based PCs. The leading computer manufacturer was Compaq, which in 1994 overtook IBM to become the market leader. Compaq was no stranger to consumer-oriented advertising campaigns. In 1995 Compaq debuted ‘‘Has It Changed Your Life Yet?,’’ which was created by the ad agency Ammirati Puris Lintas. The commercials were intended to show how Compaq PCs ‘‘change[d] . . . lives in small but important ways for the better,’’ an Ammirati spokesperson told Marketing Computers. One spot showed a delighted child receiving a Compaq for Christmas.

    In 1998 Compaq doubled its ad spending for its Presario computer, which was its primary consumer-oriented machine. In February 1999 Compaq inaugurated a worldwide branding campaign. As of October 1998, Compaq maintained a 13.7 percent share of the worldwide computer market. IBM devoted a massive advertising budget to reaching home-computer users. In the early 1990s, IBM came under attack for being an unwieldy behemoth in the increasingly nimble computer industry. In an effort to revamp its image IBM began its ‘‘Solutions for a Small Planet’’ campaign in 1995. Although many of these Ogilvy & Mather spots directly addressed businesses, the overall goal of the campaign was to bolster the IBM brand. In February 1998 IBM specifically sought to reach consumers when it spent $50million on an Olympics ad campaign.

    The print ads and television spots celebrated little-known athletes whose personal accomplishments embodied the spirit of the Olympic Games. As Advertising Age explained, IBM planned to ‘‘make viewers feel better about IBM and better about IBM technology.’’ In addition to airing the campaign during Olympics broadcasts on CBS and TNT, print pieces appeared in Sports Illustrated, Time, the Wall Street Journal, and USA Today. IBM had an 8.6 percent share of the market in October 1998. Another rival, Hewlett-Packard, teamed up with agency Goodby, Silverstein & Partners in 1997 to produce ‘‘Expanding Possibilities,’’ a $40 million consumer campaign. Other competitors, such as Microsoft, Intel, and Dell, also engaged in brand-building campaigns during the period.

    An outcome of Ad Campaign for the iMac:

    Despite a blockbuster launch of the iMac, many commentators predicted that the quirky machine would not convert PC users or lure first-time buyers. They were wrong. In its first weekend, the iMac generated $25 million in sales. ‘‘It was the best-selling computer we ever had in a single day,’’ a representative from CompUSA proclaimed to the New York Daily News. Nor was this a flash in the pan. At the close of 1998, Apple announced $309 million in profits, of which ‘‘sales of the iMac accounted for a good portion,’’ said the San Jose Mercury News. The company’s stock prices shot up, as did its market share, which reached 5 percent in October 1998. The following month the iMac was the best-selling desktop computer in the United States.

    And, as the San Jose Mercury News noted, the iMac ‘‘wooed not only Mac faithful but also first-time buyers and veteran users of other systems who were new to Mac.’’ A consumer survey reported in Newsbytes News Network revealed that an estimated 40 percent of iMac buyers were new Apple buyers. Apple remained committed to growth in the consumer sector. ‘‘Apple’s future is in the consumer market,’’ an ebullient Jobs told Fortune. In July 1999 the company debuted the iBook, a portable computer designed for consumer use. This laptop, like the iMac, featured bright colors and a unique design. Even though the campaign’s exposure waned after 2000, the iMac ad campaign did not officially end until Apple released its 2002 ‘‘Switchers’’ campaign, which featured real-life people whose lives were improving after they switched to Apple computers.

    The Case Study of Ad Campaign for Apple iMac

  • Case Study of the Starbucks Mobile Payment Application App

    Case Study of the Starbucks Mobile Payment Application App

    Starbucks Mobile Payment Application App Case Study; Starbuck’s innovative value proposition includes a wide variety of mostly coffee-based menus along with other types of drinks that catered to a wide range of audiences; who are willing to pay top buck for the luxurious and relaxed interiors that are the perfect environment for socializing with friends and relax. Starbucks successfully created an aspirational brand that created highly loyal; and, delighted customers who repeatedly come to Starbucks for the unique experience it is offering. Do you study to learn: If Yes? Then read the lot. Let’s Study: The Case Study of the Starbucks Mobile Payment Application App.

    How to achieve the SUCCESS of the Starbucks Mobile Payment Application App? So read the case, The Case Study of the Starbucks Mobile Payment Application.

    Starbucks redefined the highly competitive coffee shop business and successfully created an uncontested market by turning the simple coffee drinking experience into a way of life experienced by drastically redefining the coffee shop environment by adding music, Wi-Fi, relaxed seating, and luxurious interiors. Till Starbucks disrupted the traditional coffee shop market most of the focus was on the price, location, and quality of coffee shops. Another important aspect that Starbucks focused on was the quality of customer service with an exclusive aim of maximum customer delight and they meticulously recruited; and, trained the best talent in the industry that has added huge value to their brand reputation.

    Starbucks customers loaded more than $1.2 billion on its Starbucks app – that’s more money than some banks! The Starbucks app has strategically outcompeted mobile payment offerings from tech giants such as Apple and Google so far. The reason behind the app’s success is simple: Starbucks combined their gift card; and, loyalty programs into an app optimized for mobile payment. Instead of trying to keep payment exclusive to a particular phone or operating system or brand. The Starbucks mobile app is widely available on both iOS and Android, a Case Study. Automatically this opens up the potential market share and user base to everyone with a smartphone.

    History:

    The Starbucks coffee shop for the year has been successfully maintaining its dominant position in the market; although the market is becoming highly competitive with many players offering to offer similar products and services similar to Starbucks. Strong competition has also increased with fast-food chains such as McDonald’s and Dunkin Donuts; which now offer premium coffee, threatening the market share of established players. To capture its competitive advantage and to create a new value proposition for its customers; Starbucks has started focusing on information technology, mobility, and the use of social media in particular. What is the Growth Strategy for Case Study Starbucks?

    App services:

    Such an innovative price proposal by Starbucks is a mobile payment application. Starbucks launched its mobile card app in 16 stores at the beginning of 2009; and, after the adoption of the customer, Starbucks expanded it across the nation in the United States. The main feature of the app allows customers to scan 2D barcodes on their mobile device; and, use them as a store payment. The app is expanding Starbucks’s existing, tangible, prepaid reward cards for loyal customers.

    The app market bases on its benefits in saving time and facilitating shopping for customers. Starbucks refers to the app as “the fastest way to pay”. With this app, customers can check their balance; reload the card with any major credit card or PayPal; see the transaction, and easily track your stars in the MSR (My Starbucks awards) Can, program. The advantages are speed for consumers and there is a low card in their pocket. Customers using the app can also find a mobile payment Starbucks near their location.

    Payment Services:

    The Starbucks mobile payment system is extremely successful base on the fact that in the US; the US $ 1.5 billion average weekly transactions that are responsible for a full 15% of the transaction make in US Starbucks-powered stores; many digital wallets Service providers are struggling according to BI Intelligence. The innovative mobile app has digital tipping options; the dashboard is showing current reward or loyalty points level; available points with current transactions, weeks of coffee selection, recent transactions, and messages.

    Social Media:

    The Starbucks mobile payment application can also integrate with social media sites like Facebook, Twitter, where customers can proudly show their reward level milestones with their friends and family. Important Case Study in Corporate Social Responsibility of Coffee Starbucks. This will further enhance their brand reputation and brand loyalty. By shaking the phone, customers can select the barcode of coffee; which they want to buy and want to pay accordingly. The app model on the social media site interface where customers can see the regular purchase of Starbucks coffee and reward-style history and award points in the timeline.

    By developing mobile marketing programs it seems to present a further opportunity for Starbucks to fortify the targeted long-term relationships with its customers. Customers allow Starbucks to gain access to their mobile phones in exchange for improved experience and convenience. Thus, perceived benefits have to exceed perceived risks such as the safety of personal data; as well as, the security of financial transactions via mobile phones.

    Markets:

    Starbucks’ disruptive mobile strategy integrated its highly successful loyalty program called My Starbucks Rewards with payments by customers. Starbucks further incentivizes the customers who habitually buy and pay through the mobile app and more reward points are the award that is redeeming for free drinks and food. The app’s success is not due to the ease of payment with a phone compare to cash or debit or credit card but the fact the customer can see the incentives and rewards he is going to get that will further increase his loyalty with Starbucks. In a way, Starbucks is locking the customer for the near future. Starbucks loyalty program was diligently crafted over the years and it has been the best in the coffee shop industry or any other industry. Also, learn about – Market Research Coffee of “Starbucks” Entry into China.

    With more than 12 million active users in the United States and Canada, Starbucks has added one more new feature where customers can preorder their coffee using the mobile app and pick up the coffee later. “A prime example of this is our forthcoming mobile order and pay initiative that will allow customers to use their phones and MSR (My Starbucks Rewards) accounts to order ahead of arriving at a store where we plan to pilot in a major U.S. market later this year,” said Howard Schultz, Starbucks CEO.

    Customer Need:

    Customers wanted this functionality of preorder through mobile for the past few years, particularly since the mobile-based cab hailing service Uber huge success. The Coffee company is able to offer this service right now as the company feels its technology and in-store operations are well equipping to handle such requests. Also, expanding the number of drive-through express service outlets that are the best suite for the preorder system. Starbucks is also, talking to partners and other businesses like retail outlets that will also allow the customers to use their mobile application payment system, rewards system, and loyalty programs in non-Starbucks outlets.

    Through its mobile payment system Starbucks eliminated the need to carry cash, coin change issues, tipping problems, reduced the time spent on ordering and making coffee, understanding the menu and coffee types, offers and rewards available, raised the customer delight, loyalty and rewards, number of visits, new customers and created a new revenue source for the company, helped in acquiring new customers and also created a uncontested space in the digital wallet market.

    The Case Study of the Starbucks Mobile Payment Application
    Case Study of the Starbucks Mobile Payment Application App.
  • Bullwhip Effect in Supply Chain Management

    Bullwhip Effect in Supply Chain Management

    What is the Bullwhip Effect? Understanding the meaning, definition, concept, Eliminating, and Causes in Supply Chain Management!

    Meaning: The bullwhip effect is a distribution channel phenomenon in which forecasts yield supply chain inefficiencies. It refers to increasing swings in inventory in response to shifts in customer demand as one moves further up the supply chain. The meaning, definition, concept, Eliminating, and Causes, Explains Bullwhip Effect in Supply Chain Management. The concept first appeared in Jay Forrester’s Industrial Dynamics (1961) and thus it is also known as the Forrester effect. The bullwhip effect can be explained as an occurrence detected by the supply chain where orders sent to the manufacturer and supplier create larger variance than the sales to the end customer.

    The bullwhip effect was named for the way the amplitude of a whip increases down its length. The further from the originating signal, the greater the distortion of the wave pattern. In a similar manner, forecast accuracy decreases as one moves upstream along the supply chain. These irregular orders in the lower part of the supply chain develop to be more distinct higher up in the supply chain. This variance can interrupt the smoothness of the supply chain process as each link in the supply chain will over or underestimate the product demand resulting in exaggerated fluctuations. Who are the Users of Accounting Information inside the Organization?

    The Concept of Bullwhip Effect in Supply Chain Management

    The problem of the Bullwhip effect in supply chain management has always been a concern for many years. Due to its non-industry specific nature, it has grabbed the attention of many professionals from diverse industries and business schools. Bullwhip effect as its name suggests is an oscillation in the chain or pipeline. In the supply chain, this effect occurs when there is a constant fluctuation in the demand. In-congruence in the information leads to its distortion thereby creating a bullwhip. The expression “Bullwhip Effect” was termed by executives of P&G, the company that manufactures Pamper brand of diapers.

    These executives observed that while the consumer demand for Pamper’s Diapers was fairly constant over time, the orders for diapers placed by retailers to their wholesalers or distributors were quite variable i.e., exhibited significant fluctuations over time. In addition, even larger variations in order quantities were observed in the orders that P&G received from its wholesalers. Also, read it The Motivated Personality born in India They inspire Always.

    This increase in the variability of the orders seen by each stage in a supply chain was called the bullwhip effect. This situation of misalignment in the supply chain can be termed as ‘Asymmetric Information’ where different parties having different states of private information about demand conditions, products, and the chain operations. The problem of this asymmetry arises because participating firms generally lack the knowledge required about each other’s plans and intentions to adequately harmonize their services and activities.

    Supply chain members often do not wish to share their private information completely and faithfully with all others due to the profitability of that actual or perceived information. Thereby the whole supply chain suffers from sub-optimal and opportunistic behavior. These decisions occur when the members don’t have sufficient visibility to resolve various trade-offs in decision making because lack of information causes decisions to be made in a narrow scope that cannot ensure that products flow properly to end customers. Moreover, with limited information sharing, members don’t have consistent perceptions of market needs and visibility over performance at the other levels of the supply chain.

    As a consequence, decisions are made based on either the best estimation of the available data or an educated guess. Such decisions can be biased and prevent the individual member from attaining the optimal solution of the supply chain. For example, the manufacturer often uses incoming orders with larger variance and not sales data from the retailer as a signal about the future product demand. Asymmetric information also produces problems of the vulnerability of opportunistic behavior. Specifically, adverse selection and moral hazard manifest themselves in the relationship between the supply chain members.

    The negative selection of adverse selection, for example, is that the member firms cannot optimize supply chain performance because they don’t possess the required capability to meet the predetermined customer service level. To explain this effect a very simple example of the two-tier supply chain, a retailer and a manufacturer, can be taken into account. The retailer observes customer demand and places orders to the manufacturer. For determination of the order quantity to place with the manufacturer, the retailer will use the observed demand data of customer and a demand forecasting technique. In the 2nd stage, the manufacturer plays his role of forecasting by observing the retailers demand to place the order with his suppliers.

    In many supply chains, the manufacturer doesn’t have access to customer’s demand data thereby making him rely on the retailer’s data to forecast. As the bullwhip effect implies (the orders placed by the retailer are significantly more variable than the customer demand observed by the retailer), the manufacturer’s forecasting and inventory control problem will be much more difficult than the retailer’s forecasting and inventory control problem. In addition, the increased variability will force the manufacturer to carry more safety stock or to maintain higher capacity than the retailer in order to meet the same service level as the retailer.

    What Contributes to the Bullwhip Effect?

    There are many factors said to cause or contribute to the bullwhip effect in supply chains; the following list names a few:

    • Free return policies: Customers may intentionally overstate demands due to shortages and then cancel when the supply becomes adequate again, without return forfeit retailers will continue to exaggerate their needs and cancel orders; resulting in excess material.
    • Demand information: Relying on past demand information to estimate current demand information of a product does not take into account any fluctuations that may occur in demand over a period of time.
    • Price variations: Special discounts and other cost changes can upset regular buying patterns; buyers want to take advantage of discounts offered during a short time period, this can cause uneven production and distorted demand information.
    • Order batching: Companies may not immediately place an order with their supplier; often accumulating the demand first. Companies may order weekly or even monthly. This creates variability in the demand as there may, for instance, be a surge in demand at some stage followed by no demand after.
    • Lack of communication between each link: in the supply chain makes it difficult for processes to run smoothly. Managers can perceive a product demand quite differently within different links of the supply chain and therefore order different quantities.
    • Disorganization between each supply chain link: with ordering larger or smaller amounts of a product that is needed due to an over or under reaction to the supply chain beforehand.

    Eliminating Bullwhip Effect in Supply Chain Management

    Following are a set of efficient countermeasures that were designed to minimize the negative effects of the Bullwhip effect;

    1. Avoid multiple demand forecast updates.
    2. Eliminate gaming in shortage.
    3. Stabilize prices, and.
    4. Break order batches.

    However, we have to admit that the above-mentioned measures of reduction of the Bullwhip effect are not exhaustive and cannot fully eliminate the existence of this effect.

    Countermeasures of Bullwhip Effect in Supply Chain Management

    Actual demand for a product is influenced by several factors such as competition, prices, weather conditions, technological developments, and consumers’ general confidence. These would be considered external and unmanageable factors. There are other uncertainties involved as well that can have an effect on the supply chain such as problems in delivery time due to production machine failures. Techniques to lessen or curtail the bullwhip effect would be to understand and recognize who or what is suggesting the variations in demand. Is it the retailer, manufacturer, the customer, or the distributor? The key element to eliminating this setback is being aware of where the demand changes are beginning. Techniques that can be used or put into place to reduce the bullwhip effect is sharing information along the supply chain, Vendor Managed Inventory (VMI), and managing e-business.

    The most obvious way to reduce the bullwhip effect is to improve communication and forecasting along the supply chain. Master Data Management (MDM) is can be looked at to integrate all data in an organization at the highest level, both internally and externally. One of the most notable examples of information sharing is between large manufacturers and retailers. Inventory if properly managed, it can increase profits and efficiency. The implementation of a Vendor-Managed Inventory (VMI) initiative would be a key factor in improving and controlling the bullwhip effect. VMI indicates that the vendor, usually a distributor, maintains the inventories for manufacturer or buyer and in turn will reduce warehouse costs for suppliers. VMI alleviates uncertainty of demand and replenishment decisions can be made according to operating needs, and also has heightened awareness of trends in demand. E-commerce brings about new opportunities to improve the performance of the supply chain. The primary advantages of internet utilization are speed, decreased costs, the potential to shorten the supply chain, and flexibility.

    Electronic marketplaces provide for more efficient resource allocation, better information flow, and dissemination on products and services in the supply chain. Electronic data interchange (EDI) can be implemented to help supply chain managers in reducing misleading signals sent from sales and marketing (distribution). Enterprise resource planning (ERP) is one of the most successful tools for managing supply chains. ERP is software that integrates the planning, management, and use of all sources in the entire enterprise. The major objective is to integrate all departments and functional information flow across a company onto a single computer system that can serve all of the enterprise’s needs.

    A plan created from an SCM system that allows companies to quickly assess the impact of their actions on the entire supply chain, including customer demand, can only be done with the integration of ERP software. ERP and SCM can help alleviate the bullwhip effect across the supply chain by having a shared understanding of what needs to get done, managing the variations in the organization, communication among all that are involved especially top management, and having single control of replenishment or VMI can overcome inflated demand forecasts. Long lead times should also be reduced where it is reasonably beneficial.

    Causes of Bullwhip Effect in Supply Chain Management

    There are four main causes behind building up of bullwhip effect in the supply chain.

    These causes are:

    1. Demand Forecasting.
    2. Order Batching.
    3. Rationing and Shortage Gaming, and.
    4. Price Fluctuation.

    From the above information, it is clear enough that all the factors or elements resulting in bullwhip effect originate from a common ground i.e. information sharing. Case Study of International Marketing Strategy in PepsiCo. It is evident enough that the lack of information and interaction between different stages evolve bullwhip in the system thereby plaguing the whole Supply Chain.

    Bullwhip Effect in Supply Chain Management
    Image Credit from ilearnlot.com.

  • Case Study of International Marketing Strategy in PepsiCo

    Case Study of International Marketing Strategy in PepsiCo

    PepsiCo Case Study; Pepsi was created by the chemist named Caleb Brad-ham. Keep Reading Case Study of International Marketing Strategy in PepsiCo. He was inspiring to experiment with various products and ingredients to create a suitable summer drink that became highly sought after way back in the summer of 1898. It was this summer inspiration that later evolved into what we now know as Pepsi Cola. You’ll like to L’Oréal International Marketing Strategy explains their Case Study.

    The Product inspired to experiment with various products and ingredients to create a suitable summer drink. Case Study of International Marketing Strategy in PepsiCo.

    The company was launched officially in the year 1902. The beginning of Pepsi Cola was in the back room of his pharmacy, but recognizing its potential, Caleb soon started bottling the product so that people all over can enjoy it. As the years passed, Caleb started franchising the bottling of the drink to different people in different locations. Soon Pepsi Cola was being sold in 24 states across the United States.

    When World War I broke out, the company went bankrupt and Caleb had to sell the trademark to a stockbroker from North Carolina. But he too could not revive the business. It was the candy manufacturer, Charles G. Guth, who bought it from the previous owner and revive it into the global brand it is today. Its marketing plan started even when the company was in the hands of Caleb and grew with the company. It was during World War II that the company adopt the red white and blue emblem to depict patriotic America.

    The color code still exists today through the emblem has evolved many times. It was after 65 years after the sale of its first cola that PepsiCo started its diversification into other foods and beverages. Now the company not only sells Pepsi, its main brand, but also other items like Quaker Oats, Aquafina, Tropicana, Mountain Dew and Lays. It also had an alliance with companies like Starbuck’s and Lipton to come out with special coffee and tea.

    PepsiCo Marketing, and Promotional Strategy in the Market.

    The current marketing strategy adopts by PepsiCo Inc. is definitely one that caters to its global standing. Since Pepsi came out at a time when Coke or Coca-Cola already have a head start in the market, it’s market strategy and the business plan began with differentiation – an attempt to establish its product as one that is unique in taste and quality. This approach was successful to a great extent and Pepsi was able to establish itself in the US markets.

    Later the plan shifted to comparative marketing and later to diversification. Pepsi’s promotional campaigns had a lot to do with its success. Pepsi’s market environment always presented it with a challenge in the form of Coke which had already created a niche for itself. In the 1940s to create a niche among the African American, Pepsi created a scholarship program that awarded 17 African American high school seniors full-time scholarships. During the same time, the ad campaigns of Pepsi featured top people from the African American community and they called it “Leader in their field” campaign. This campaign was quite a breakthrough and really made an impact.

    It opened up a whole new market segment for the company. In the 1960s, Pepsi’s campaign was aimed at teenagers and young adults – beach bursting of youngsters having fun and drinking Pepsi was quite a common theme and popular too. It showed that Pepsi was the drink for partying and hanging out with friends, something the American youth could easily identify with. The “Pepsi Generation” theme became highly popular and the drink started creating a niche for itself among the young of the country.

    At first, it calls “think young” campaign. This later evolved into “come alive” in the year 1965. This is when the term “Pepsi generation” was first introduced to the people. In the 1970s Pepsi came out something called the “Pepsi Challenge”. This campaign was aimed at proving Pepsi as a better-tasting drink than its rival Coke and involve blind tasting of the two products to choose the better one.

    Even though this helped improve the market share of PepsiCo, Coke still led the market. Pop icons like Michael Jackson and Lionel Ritchie and youth sensation like Michael J Fox became part of the Pepsi campaigns in the 1980s whereby Pepsi began to beat Coke and come out the winner. They had a huge fan following and when they saw endorsing the brand, the impact was instantaneous. Pepsi also exploited famous movies of the time like Star Wars to improve their brand image and create interest among the people.

    However, Pepsi chose to replace the “Pepsi Generation” campaign with “Gotta Have It” at the beginning of the 1990s. This turned out to be an erroneous move and Coke again started to gain market share.

    Pepsi Marketing Blunders.

    One of the major blunders that Pepsi did in its marketing runs is the literal translations of some of its slogans into other languages. For example, PepsiCo’s slogan “Come Alive with the Pepsi Generation” when translated into Taiwanese meant “Pepsi will bring your ancestors back from the dead” and caused great damage to its image. It was a perfect example of the wrong market message.

    Similarly, the goodwill of the company suffered a heavy blow when its bottle cap campaign (number inside the cap and a few winning numbers win fabulous prizes) in Chile ended in the wreckage of the company. This was caused by wrong fax being sent and the wrong number announce on TV. Almost a similar incident repeat in the Philippines as well a few months later when, due to a computer glitch, instead of one winner several winners were announcing for the bottle cap sweepstakes. Instead of learning from a blunder in one country, it was repeating in another, causing further harm to its brand image. A more recent marketing blunder happened in the United States of America itself.

    In 2010, Pepsi decided not to spend big bucks for sponsoring the Super Bowl. The Super Bowl is a sporting event in the States that is watching by almost all Americans and hence its wide reach is indisputable. Instead, it decided to do social marketing through its Internet-based “Refresh” campaign. Though the effort was commendable it was a major blunder. Instead of using the Super Bowl to further give the limelight to the Refresh campaign, it completely missed the opportunity paving way for others to make use of the spot.

    When Pepsi and the Cola Wars.

    The cola wars began somewhere in the mid-1950s. The main players in the war were Pepsi and Coca-Cola. The two companies had been in rivalry ever since Pepsi came out with its first cola. But the rivalry reached its zenith in the 1980s and 1990s. The main point was neither company had a cost advantage. Hence promotion was the main way of competing. In the 80s Pepsi started coming out with campaigns that undermined Coke.

    For example, a Pepsi and came out which showed a group of retirement home people dancing to rock ‘n roll when they get the wrong delivery of a Pepsi crate instead of Coca-Cola. It also used celebrity advertising vigorously. This gave Pepsi a lead in the market, though short-lived.

    In the 1990s Coca-Cola was beating Pepsi by huge margins again. The war was quite cutthroat with Coca-Cola doing everything possible to outrun Pepsi. This included stealing Pepsi’s bottlers, hoarding of Pepsi bottles and creating ads that hinted at ridiculing the Pepsi brand. In many countries, Coca-Cola was forcing retailers and bottlers to boycott the Pepsi brand. Upon learning about this Pepsi filed several anti-competitive cases out if which they won around 70. Yet, at one stage of the war, Pepsi’s market value fell to less than half of Coca Cola’s market value.

    Coca-Cola was and is still leading in when it comes to the market share of its cola brand. The only way Pepsi could fight back was through diversification. It started spreading its wings to include sports beverages. Varied versions of the Pepsi drink and non-carbonated beverages in its portfolio. It started considering itself as a “complete” beverage company. The diversification further happened to include snacks and food items like potato chips and oats. Diversification really helped Pepsi to improve. PepsiCo is falling stands in the market not only in the local markets of America and Europe but also in its international markets where Coke is leading the show.

    When Pepsi Goes International and Its Global Marketing Plans.

    In the 1940’s itself, PepsiCo started branching out into the international arena. At first, it was into Latin America, the Middle East, and the Philippines. Here too Coke had the early bird advantage. Yet the product soon gained popularity. With the Arab countries boycotting Coke, Pepsi enjoyed a monopoly for many years in the Middle East.

    In the 1950s Pepsi went to Europe and this included Russia, with whom there existed a Cold War by the USA. Though there were initial difficulties, getting into Russia was a major breakthrough which the company exploits. The company posted pictures of the then leaders of the United States and Russia sipping the drink.

    Its arch-rival, Coca-Cola, was able to enter the Russian markets only after more than 25 years after Pepsi’s entry. In many of the countries that Pepsi venture into comparative advertising was prohibiting and in many countries, it was not an accepted concept. For example, Pepsi tried its “Pepsi challenge” promotional gimmick in Japan. However, the country and its people were not aware of comparative advertising and as such the campaign did more harm than good.

    Hence in Japan, they have to break their tradition of running with the global campaign and come up with a campaign that the Japanese would identify with and was more Japanese. The “Pepsiman” was a superhero-like a figure. That was devised by a Japanese person for the Japanese market. The commercial was an instant hit and help improve Pepsi’s share in the Japanese market by as much as 14%. From Japan Pepsi learned a valuable lesson – the same ads will not have the same effect everywhere.

    When it comes to cross-national advertising, there is always the inherent risk of alienating the people. With the Indian markets, Pepsi had the first-mover advantage over Coke. PepsiCo had coined its own special slogan for the Indian market too that became quite popular with the crowd. Yet Coke re-entry into India was a great threat to the company. Coke signing on youth icon and Indian star Hrithik Roshan to do their campaign was an even bigger threat.

    However, Pepsi reverted to the old ploy of slowing down the competition. They featured the king of Indian movies, Shah Rukh Khan and a Hrithik look alike. This comparative ads were effective and brought Pepsi back into the spotlight. In the USA and European markets, Pepsi still uses promotional campaigns that aim to break the color barriers with stars like Britney Spears, Beyonce and Haley Berry appearing in its ads.

    The brand and PepsiCo products are highly popular in these areas. In the international arena, Pepsi has been able to create a niche through its vigorous advertisement and event sponsorship. In fact, more than 45% of the total revenue of the company comes from its market outside the USA. However, the company has experienced many setbacks due to its many blunders have cost it valuable market share.

    Case Study of International Marketing Strategy in PepsiCo - ilearnlot
    Case Study of International Marketing Strategy in PepsiCo, Image Credit from ilearnlot.com.

  • Top 5 case studies of FedEx company that we realize is why they are the Best

    Top 5 case studies of FedEx company that we realize is why they are the Best

    Here is top 5 case study about FedEx, FedEx Corporation is an American multinational courier delivery services company headquartered in Memphis, Tennessee. FedEx Company will be doing courier services of delivering Goods and Package. Also learn, Continue to learn Top 5 case studies of FedEx company that we realize is why they are the Best.

    Understanding and Learn What? Top 5 case studies of FedEx company that we realize is why they are the Best.

    The case study is the study of knowledge, When will the FedEx Company need to create a courier company, or the FedEx company has done the job of courier for the first time? This case study tells us that when the FedEx company has started the work of the courier, and how will it be started?

    What problems did they get after starting the courier company, and how would they have solved the problem? Case studies of all companies tell us how the company started, how the company touched the new height and went ahead? Occasionally the company’s case study also shows how much money the company has earned and spent?

    Some company’s case studies also tell us how, when, and how, or what do the customers join the company, and what does not make the company away and go towards new companies. So, here are the top 5 case studies of the FedEx Courier Company. How do they make the company? How are they all right? How are they growing and achieving success? How have they started courier services in many places? Now, learn and understand how the FedEx company started, and day by day, the company touched the new height of the sky.

    FedEx Corporation is an American multinational courier delivery services company headquartered in Memphis, Tennessee. The name “FedEx” is a syllabic abbreviation of the name of the company’s original air division, Federal Express (now FedEx Express), which was used from 1973 until 2000.

    The company is known for its overnight shipping service and pioneering a system that could track packages and provide real-time updates on package location (to help in finding lost packages), a feature that has now been implemented by most other carrier services. This information was collected from Wikipedia.

    FedEx, an international company that provides shipping by air and ground and a range of logistics and trade consulting services, must provide speed and dependability globally not only for its core businesses with customers but also in its communications with constituencies about key business objectives. Employees at FedEx work in 200 countries 7 days a week, 24 hours a day. The corporate communication function must operate in as broad a landscape with speed, high impact, and precision.

    1. Case Study of Leveraging Information Technology to Grow Business in FedEx.

    Case Study of Leveraging Information Technology to Grow Business in FedEx - ilearnlot
    Image Credit to #trbimg

    The Federal Express Corporation had a visionary leader to become the first motivator in the express transport and logistics industry, leaving FedEx with a remote source: their ability to help them control the entire supply chain management.

    The ability of the company to use technology and its supply of resources has made competitors difficult to match standards of company standards. FedEx is mainly successful because of their technical progress. Technology has given them better customer service and quality which is not unique by any company. No company was able to offer overnight delivery of packages with speed and precision of the Federal Express. Learn More to Visit the Article.

    2. Case Study of A Powerful Partnership of Strategy and Corporate Communication in FedEx.

    Case Study of A Powerful Partnership of Strategy and Corporate Communication in FedEx - ilearnlot
    Image Credit to #revistamagazzine.

    Given the core businesses of the company, communication challenges can arise in many challenges – anything from crisis management, such as an accident after the accident or computer outage, for the management of e-commerce initiatives, the implementation of a new business model quickly for.

    According to Corporate Vice President Bill Margaritas, corporate communications need to add significant value to the business and the company should have a complete alliance with high impact strategic decision makers. But how did they complete it in FedEx? First of all, Margaritis organizes an annual audit with the authorities so that it can know what they are trying to achieve and establish a scorecard for success.

    These are the company’s new “customer-facing market-market” strategies to improve development and profitability. This structure allows the team to pay full attention to active opportunities, rather than being less vulnerable to operational issues, which are important for management but are distinctly different. Learn More to Visit the Article.

    3. Case Study of the Success Story of FedEx Company.

    Case Study of the Success Story of FedEx Company - ilearnlot
    Image Credit from ilearnlot.com.

    FedEx’s strengths in logistics, operations, and technological innovation allow them to pursue a differentiation business level strategy. FedEx works to stand apart from its competitors by creating a level of service that is difficult for competitors to match. FedEx has clearly been identified as an innovator, but what they need to get across to their customers is that they provide a high level of quality service.

    FedEx charges higher prices for its services than many of its competitors in the industry. This is considered a premium that a customer pays for the quality of service FedEx provides. By differentiating their standard of quality from their competitors, FedEx lets their customers know that if they are willing to pay more, it will be worth it.

    FedEx is able to meet the needs of all these segments. They have spent an extraordinary amount of capital developing their infrastructure just so they can make the best promises to their customers. FedEx transports more than 3 million items to over 200 countries each day. Within each business unit are specific functional units that perform particular functions. The main functional units are logistics and operations for its transportation system. Learn More to Visit the Article.

    4. Case Study of Pioneer of Internet Business in the Global Transportation and Logistics Industry for FedEx.

    Case Study of Pioneer of Internet Business in the Global Transportation and Logistics Industry for FedEx - ilearnlot
    Image Credit from #laprensalatina.

    It provided a successful technology for the FedEx Corporation as a pioneer in the whole industry for e-business. This strategy became an advantage that they used to undermine their competitors’ strengths and localized customer service. With a globally connected IT network, FedEx was able to leverage their IT advantage to service their corporate accounts on a global basis, rather than on a country by country basis.

    Pioneer of Internet Business in the Global Transportation and Logistics Industry:

    FedEx Corporation created its own website form in 1994, it is the first step and basis for the company to develop its e-commerce. FedEx.com is the first transportation website which could accept the one line order for package tracking and allow the customers to transact the business by the Internet.

    Both shippers and recipients could access shipping information and print documentation via the Internet. As the pioneer in the industry, FedEx should continually improve their system and service due to its competitor also created the Internet service and Internet software. Learn More to Visit the Article.

    5. Case Study of Using Marketing Channels to Create Value for FedEx Customers.

    Case Study of Using Marketing Channels to Create Value for FedEx Customers - ilearnlot
    Image Credit from ilearnlot.com.

    FedEx’s service covered all around the globe, making services available for customers from many countries and almost every place. FedEx has many drops off location around the globe. A customer can choose either one drop- off location that is nearest to them. This Case Study analysis with How companies create value for customers? How is Value Created and What Does It Do?

    FedEx has great air network, having more than 320 daily international flight and 654 aircraft ready to ship the packages. FedEx has many hubs around the world working as a midpoint for delivering the packages. There are four hubs in the Asia Pacific. That is Shanghai, Osaka, Seoul and Guang Zhou. Besides, FedEx has hubs in London, Cologne, Frankfurt, and Paris which will later ship the parcel around the European area. Moreover, hubs that link Latin America, the Caribbean and Canada were in Memphis and Miami.

    One thing that makes FedEx so special out of so many transportation or shipping company is the collection of airplane uses by FedEx in order to ship the parcel. FedEx is the first company who use the plane called the Boeing 777. The uniqueness of the plane is the plane is a fuel saver. It shorter the transit time with larger space to put the parcel. This had made the overnight courier service possible. Learn More to Visit the Article.

    Top 5 case studies of FedEx company that we realize is why they are the Best - ilearnlot
    Top 5 case studies of FedEx company that we realize is why they are the Best! Image Credit from ilearnlot.com.

  • Case Study of Using Marketing Channels to Create Value for FedEx Customers

    Case Study of Using Marketing Channels to Create Value for FedEx Customers

    FedEx as a service company that mainly focuses on transportation or shipment services, channel played an important role leading to success. FedEx need a good channel to get and reach more customers. FedEx has a strong network structure linking all the market together. FedEx serves more than 220 countries and territories currently. Further, these networks are linked up by land, air and ocean transportation. Also learn, Case Study of Using Marketing Channels to Create Value for FedEx Customers, with How companies create value for customers? How is Value Created and What Does It Do?

    Understanding and learn what? Case Study of Using Marketing Channels to Create Value for FedEx Customers.

    FedEx’s service covered all around the globe, making services available for customers from many countries and almost every place. FedEx has many drops off location around the globe. A customer can choose either one drop- off location that is nearest to them.

    FedEx has great air network, having more than 320 daily international flight and 654 aircraft ready to ship the packages. FedEx has many hubs around the world working as a midpoint for delivering the packages. There are four hubs in the Asia Pacific. That is Shanghai, Osaka, Seoul and Guang Zhou. Besides, FedEx has hubs in London, Cologne, Frankfurt, and Paris which will later ship the parcel around the European area. Moreover, hubs that link Latin America, the Caribbean and Canada were in Memphis and Miami.

    One thing that makes FedEx so special out of so many transportation or shipping company is the collection of airplane uses by FedEx in order to ship the parcel. FedEx is the first company who use the plane called the Boeing 777. The uniqueness of the plane is the plane is a fuel saver. It shorter the transit time with larger space to put the parcel. This had made the overnight courier service possible.

    FedEx was famous for its overnight service. Customers can receive their packages at the same time on the next day. The strong backbone of shipping network structure by FedEx makes this service available. An example is given to explain how FedEx manage to ship the parcel between 24 hours and reach 10.30am. A customer decided to ship his parcel from Shang Hai to New York City. FedEx pick up the shipment in time to make the same-day trans-oceanic flight. FedEx picked up the package from the client at the time of 4:50 pm, Tuesday. The package was delivered to Shang Hai’s facility for sorting process.

    Then, the package reaches Shang Hai Pudong International Airport at 9:30 pm. At 11:30 pm, the package leaves China and in the Boeing 777 aircraft on the way direct to Memphis, Tenn. The flight travel east of the Pacific Ocean and passed the International Date Line. At the time 11:30 pm, the package arrived in Memphis. In Memphis, the package was on loaded, cleared, sorted and reloaded on to a flight from Memphis to Newark. In Newark, the shipment ship by truck to New York City. This is how the package from Shang Hai reach the client in New York City and at the time 10:30 am Wednesday.

    From the example, the package was first picked up and sends to the facility for the process, then to the airport. The package then reaches the hub and been process again. Finally, the package was delivered by motorized vehicle. FedEx has more than 43,000 motorized vehicles which make FedEx manage to reach many places in the different country. Example of motorized vehicle commonly used by FedEx was trucks, vans, containers, and also tricycles.

    FedEx delivered by electrically-assisted tricycles in Paris to avoid the traffic jam in order to ship in time. The tricycle was designed to put packages back on the tricycle. It has a removable storage container that places between the back two wheels. It is 100 percent electrical and it has to start manually. It is 100 percent eco-friendly and it enables delivery work more efficient even faster than a car or truck.

    FedEx not only ship with aircraft and motorized vehicles, but also by ocean cargo. It provides another choice for the customer to choose from. The ocean cargo services provided by FedEx linking North America, Latin America, the Asia-Pacific region, Europe and the Middle East together. Besides, FedEx has enough amount of ocean cargo to make their services, choosing the space of cargo available.

    For example, allow the customer to have full-container-load (FCL) for the user that need huge space and less-than-container-load (LCL) for those customers that does not need so much cargo space. Further, FedEx has ocean cargo with the different facility like the refrigerator, onboard cranes, on the cargo ship to provide the service like ship dry or liquid bulk shipments and handle heavy shipments to smaller ports.

    Moreover, customers usually expect their package to ship in time with good condition. FedEx understand that and come out a solution that is provided packing service. It tried to help in avoiding damage in packages. In order to make the service available, one of the FedEx’s subsidiaries company was designed to become one of the channels in helping customers to pack their packages. So, customers can now bring their package to any of the FedEx Office and ask for pack up service.

    Further, FedEx knows that this the era of information technology. Everyone seems to be online often and many things can be done online. FedEx understand that there is a need to open a website as a channel in order to make the service available for more people, especially for those who seldom go out and always do online shopping. The website makes the process of shipping easier. Everyone can use the service. Now, FedEx’s customer can ship online with few steps and avoid many processes of filling up the forms.

    FedEx reach customers in many different ways. Beside of online, by air, by land, and by sea, FedEx reach customers by telephone and fax. This is another channel provided by FedEx to the customer called and picks up service. In order to provide convenience to the customer, understanding some people might think lazy to go out just for dropping a small package, and also for people who definitely very busy and lack of time, called and pick up service is a very good way to reach them. The customer can just dial FedEx’s customer service number and ask for a pickup. FedEx will pick up the package from you and the great thing was the time count once the package was picked up by them. Further, Customer can fax to the company to have the service.

    In another hand, mobile phone or smartphone are using as a channel to reach more customers. Smartphone becomes very popular nowadays. People tend to have one smartphone to do many tasks on the go. FedEx makes the website of FedEx available for the smartphone user, trying to attract more customers to use their service. FedEx customer can do tracking of the parcel, schedule a pickup, and even billing by using the phone. It makes the service become very convenient especially for those who usually travel around and wish to deliver their parcel.

    FedEx understands the importance of customer service. So, a company called FedEx Service is there specialized in information technology. They providing back up and information like tracking information, customer’s detail, and customer’s history of using FedEx’s services, estimate the duties and taxes and handle the claims and complaints. Besides, the company also provides information about the service and company. It is to make the customer service and online tool available at all the time whenever customer needed them. Furthermore, it is a guide for the customer because much information was provided on the website.

    One of the channels in marketing is the employee. As a service provider, the employee is the first who reach the customer and make the service available. It often leads to satisfaction of the customer. In order to make the service delivery to a certain standard, the employee is trained. The employees required to test every six months to ensure their skills meet minimum acceptable requirements. Extra training was required for those who have not met the minimum requirement. Employees need to go through computer-based training, satellite broadcast training, and staff-conducted training in order to perform the service to the customer.

    FedEx’s channels are backed by the computer system called COSMOS. That is Customers, Operations, and Services Master Online System. It is a centralized computer system to manage people, packages, vehicles and weather scenarios in real time. It is to make sure all the channels are working properly.

    How companies create value for customers?

    With these concepts in mind, think about ways you can improve customer value to grow your business. This is article presenting by inc.com. Here are 5 steps you can take:

    Step 1: Understand what drives value for your customers.

    Talk to them, survey them, and watch their actions and reactions. In short, capture data to understand what is important to your customers and what opportunities you have to help them.

    Step 2: Understand your value proposition.

    The value customers receive is equal to the benefits of a product or service minus its costs. What value does your product or service create for them? What does it cost them–in terms of price plus any ancillary costs of ownership or usage (e.g., how much of their time do they have to devote to buying or using your product or service?)

    Step 3: Identify the customers and segments where are you can create more value relative to competitors.

    Different customers will have varying perceptions of your value relative to your competitors, based on geographic proximity, for example, or a product attribute that one segment may find particularly attractive.

    Step 4: Create a win-win price.

    Set a price that makes it clear that customers are receiving value but also maximizes your “take.” Satisfied customers that perceive a lot of value in your offering are usually willing to pay more, while unsatisfied customers will leave, even at a low price. Using “cost-plus” pricing (i.e., pricing at some fixed multiple of product costs) often results in giving away margin unnecessarily to some customers while losing incremental profits from others.

    Step 5: Focus investments on your most valuable customers.

    Disproportionately allocate your sales force, marketing dollars, and R&D investments toward the customers and segments that you can best serve and will provide the greatest value in return. Also, allocate your growth capital toward new products and solutions that serve your best customers or can attract more customers that are similar to your best customers.

    Your customers are the lifeblood of your business. They are the source of current profits and the foundation of future growth. These steps will help you find more ways to grow your business by better serving your best customers.

    How is Value Created and What Does It Do?

    Value is created just as much by a focus on processes and systems as much as it is my mindset and culture. Mindset and culture are much more difficult to change, and also difficult to emulate. It is easier to copy products and systems than to change mindsets and culture. Therefore, for long-term success, mindset and culture are important and lasting. These, along with systems create great experience and value.

    Value changes during the use of a product or during the Customer Journey. Value is perceived during the purchase intent, the shopping, the actual purchase or buying, the installation or start-up, the use, and even the re-sale. We sometimes call this the waterfall of needs. Needs change during the Customer Journey.

    Creating Customer Value increases customer satisfaction and customer experience. (The reverse is also true. A good customer experience will create value for a Customer). Creating Customer Value (better benefits versus price) increases loyalty, market share, price, reduces errors and increases efficiency. Higher market share and better efficiency lead to higher profits.

    Case Study of Using Marketing Channels to Create Value for FedEx Customers - ilearnlot
    Image Credit from ilearnlot.com.

  • Case Study of Pioneer of Internet Business in the Global Transportation and Logistics Industry for FedEx

    Case Study of Pioneer of Internet Business in the Global Transportation and Logistics Industry for FedEx

    Transportation is one of the largest industries in the world, and its sector range is very wide which include taxis, truck, train, ships, barges, airplanes, pipelines, warehouse and logistics service. For the industry, the three main trends were the globalization of business, information technology development and new technology to support process efficient, and the market demand for more value-added. Also learn, Case Study of Pioneer of Internet Business in the Global Transportation and Logistics Industry for FedEx.

    Understand and learn what? Case Study of Pioneer of Internet Business in the Global Transportation and Logistics Industry for FedEx.

    Hence, the companies in the transportation and logistics industry depend on the global network of distribution centers to gain quick payment cycle and cheaper resources. In FedEx Corporation, as a leading firm in the industry, its centralized structures have always required, and facilitated billion dollar investments in IT and established the website from 1994.

    It provided a successful technology for the FedEx Corporation as a pioneer in the whole industry for e-business. This strategy became an advantage that they used to undermine their competitors’ strengths and localized customer service. With a globally connected IT network, FedEx was able to leverage their IT advantage to service their corporate accounts on a global basis, rather than on a country by country basis.

    Pioneer of Internet Business in the Global Transportation and Logistics Industry.

    FedEx Corporation created its own website form in 1994, it is the first step and basis for the company to develop its e-commerce. FedEx.com is the first transportation website which could accept the one line order for package tracking and allow the customers to transact the business by the Internet.

    Both shippers and recipients could access shipping information and print documentation via the Internet. As the pioneer in the industry, FedEx should continually improve their system and service due to its competitor also created the Internet service and Internet software.

    For instance, the DHL launched the website in 1995, UPS spent billions on IT and electronic commerce. The express transportation associated with e-tailing would reach $7 billion in the year 2000, but FedEx only handled with 10 percent of purchase online goods. All of these brought heavy pressure to FedEx. In 1998, the company paid more than $2 billion to acquire the Caliber System, Inc. to increase the abilities and power on Internet service and e-tailing.

    Because of the large potential market and lower cost, the Internet and e-tailing market was continually enlarging in the Global Transportation and Logistics Industry. To evaluate the performance of FedEx in Internet and e-tailing market should be from the view of five performance objectives.

    Firstly, from the view of cost, FedEx as the first one for Internet and e-tailing in the Global Transportation and Logistics Industry, it focused on long-term investment on IT and led the company to have the specific position in the area. For the intense competition, the company paid more than $2 million to purchase Caliber System. It could effectively increase their market share in business-to-consumer delivery service. Hence, the investment partly made up the weakness against with UPS.

    Secondly, flexibility, the Internet service, and e-tailing provide the convenience for the customers, increase an easy and quick channel for the transportation and e-tailing business. For instance, in the year 1999, FedEx Marketplace created a link to the online shopping, the online shopper could click to the top online stores and with FedEx delivery.

    Thirdly, dependability, the establishing of the website enhanced the dependability between the organization and customers. The computer system supported the customers to know their goods conditions during the whole delivery process. For example, the company created software called FedEx Virtual Order in 1999 which provide Internet order and also provide the customers’ catalogs for them on the website. Moreover, the IT system also enhanced the internal management of FedEx Corporation. For the enormous organization, the dependable information system should be the basis for the busy operation process.

    Fourthly, speed, for the transportation and logistics industry, speed is one of the crucial elements for the customers choosing a transportation company. The online order and the unique information system in FedEx deal with the order and storage, goods and shipping process, every process could reduce the time than before. For example, the FedEx Marketplace provided easy access to online merchants to offer fast FedEx shipping.

    Last but not least, quality, all of the strategies and performances about Internet and e-tailing could be linked to improving the quality providing for the customers and partners. For instance, the FedEx created e-business Tool in the year of 1997 which could support an easier connection with FedEx shipping applications. And the EuroOne network established also provide a powerful transportation routing system which linking more than 30 cities. All of this would enhance the service quality of FedEx’s Internet and e-tailing.

    Consequently, the FedEx had an explicit objective in the Internet and e-tailing market, for both financial and non-financial performance of an organization in this area was the focus on achieving their objective. For the customers and partners, FedEx tries to provide more flexible, convenient, fast service by the Internet and e-tailing channel, created dependable and loyal relationships with them and build a perfect reputation in the market. For the own organization, it insisted on long-term investment on the Internet and e-tailing area, it would lead to earning a long-term benefit.

    Besides, the organization continually emphasized the infrastructure building and technology improvement, to create a dependable operating system and transportation team which could support the smooth operation of the Internet and e-tailing market. All of these performances lead the development of FedEx. It could not satisfy only by the pioneer of Internet business in the Global Transportation and Logistics Industry but try to be the long-term leadership in this market.

    Evaluation of FedEx Acquisition of Caliber System.

    To evaluate the success or failure of FedEx Corporation acquired Caliber Systems in 1998 should also form different points of view. From the positive side, the company use $88 million acquired the Caliber System, Inc., it could provide the company with a powerful technical support on Internet commercial at that time. In the period, the e-commercial was on the development stage in the Global Transportation and Logistics Industry, the long-term investment, and acquisition of Caliber System made the FedEx Corporation own the abilities and opportunities to be the pioneer and leader in this area.

    According to the summary of benefits for M&A, The strategy helped FedEx Corporation enter a new market, broaden the business range, develop the new product and also gain new information technology. From the result, after the acquisition, in the following year, the company had an excellent performance, the net income increased 30 percent and posting record earning risen 73 percent.

    However, as the passage of time, the competition in the market became more intense, despite the e-tailing and electric commerce supporting, the report showed that both the volume and the income have a negative trend. From the view of the financial report, the result had an obvious falling. This condition was the cause of several factors.

    • Firstly, the fuel pricing jumping was unexpected, it will increase the cost for the company.
    • Secondly, it also meant the Caliber System did not blend into the organization completely.

    The organization was enormous, the operation was complicated, hence, just acquisition strategy without good association could not make the new party perform perfectly. For solving the problems, the FedEx Corporation announced reorganization on 19, Jan 2000.

    Consequently, it is hard to simply judge whether success or failure for the acquisition of Caliber System. The acquisition brought benefits, opportunities and also new operation method for FedEx Corporation. The negative result in the following years was also caused by multiple factors, i.e. the competition in the industry, the fuel price rapid rising and etc.

    Case Study of Pioneer of Internet Business in the Global Transportation and Logistics Industry for FedEx - ilearnlot
    Image Credit from #laprensalatina.