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MKT Exam 1 - Essays
Cases 1, 2, 3
Terms in this set (45)
What kind of decision is being made in the Jolsen Automotive case?
- Opportunities and threats associated with market strategies
- Strengths and weaknesses (competencies and constraints) of the company
- 4 modes of global market entry
What are the key objectives in the Jolsen Automotive case?
- Large market share (45.5% of scissor hoists)
- 24% growth in sales
What is Jolsen Automotive's current market position?
Maintaining growth rate in a flat (saturated) marketplace
What problem is Jolsen Automotive trying to solve?
- CA company salesforce (direct)
- CA distributors
- US wholesaler
What are Jolsen's current channels of distribution?
- US wholesaler is not performing well
- CA sales are relationship-based while US wholesaler sells on a transaction-base
Why are Jolsen's sales per million vehicles greater in CA than in the US despite the US's larger population?
Relationship selling is based on _____.
Transactional (traditional) selling is based on _____.
- Quality design
- Top safety features
- Design patents
- Value-added services
What are Jolsen's strengths (core competencies)?
- Small sales team
- Majority of sales dependent on external salesforce
- Limited line of products
What are Jolsen's weaknesses (constraints)?
- Specialty lifts sold on a differentiated non-price basis
- Expand share of US market
- Enter European market
What are Jolsen's opportunities?
- 2 large US competitors have cheaper products
- Jolsen lift is not a priority for US wholesaler
What are Jolsen's threats?
3. Joint Venture
4. Direct Investment
What are the 4 forms of global market entry?
Selling domestically produced products to buyers in other countries.
Selling the right to use some process, trademark, patent, or other right for a fee or royalty.
When a foreign company and a local firm invest together to create a local business.
When a domestic firm actually invests in and owns a foreign subsidiary or division.
- Minimal capital investment
- Control of manufacturing
- Speed of entry
- Opportunity to learn market before investing
What are the pros of Jolsen exporting to the EU?
- High shipping costs
- No control of distribution
- Exchange rates
- Minimal returns
What are the cons of Jolsen exporting to the EU?
- No capital investment
- Minimal expenses
What are the pros of Jolsen licensing its product in the EU?
- No control over product quality/distribution
- Don't learn the foreign market
- No control over company image
- Small returns from royalties
What are the cons of Jolsen licensing its product in the EU?
- Share of capital investment
- Gain market knowledge
- 50% of profits
What are the pros of a joint venture for Jolsen?
- Lose 50% of control
- Slow to setup
- Pierre moves to EU
- Conflict may arise between two companies
What are the cons of a joint venture for Jolsen?
- 100% control
- Protect patents/technology
- 100% of profits
What are the pros of direct investment for Jolsen?
- Greatest financial risk and investment
- Slow to setup
- Important salespeople move to EU
- Crash course in local culture
What are the cons of direct investment for Jolsen?
- Close proximity means share of best practices
- Least risky (status quo)
- Low break-even point
- High profit-making potential if wholesaler agrees to negotiate
What are the benefits of market penetration in the US for Jolsen?
- Must compensate US wholesaler to release the NE territory
- Could damage reputation if wholesaler won't negotiate
What are the cons of market penetration in the US for Jolsen?
What kind of decision is being made in the Goodyear Tire case?
- Recession led to some buyers becoming more price-conscious and less brand loyal
- Growth in discount tire dealers and warehouse clubs
What factors lead to declining sales for Goodyear Tires?
- Should Goodyear broaden distribution by selling through mass merchandisers like Sears?
- If so, what brands should Goodyear distribute through Sears?
What two problems was Goodyear trying to solve?
Type of distribution that establishes one or a few dealers within a given area; consumption is based on brand - consumers not willing to substitute.
Type of distribution achieved by screening dealers to eliminate all but a few in any single area; consumers will substitute brands based on other factors such as price or convenience.
OEM and replacement
The tire market can be broken down into what 2 categories?
- Broad product line
- Largest number of POS
- Brand leader in OEM and replacement market
What are Goodyear's strengths?
- Decline in replacement tire market share
What is Goodyear's weakness?
- 2 million Goodyear tires are being replaced at Sears
What is Goodyear's opportunity?
- Industry sales are flat
- Changing consumer behaviors
What are Goodyear's threats?
- Sears sells more volume per POS (efficiency)
- Gain back portion of lost market share
- Reach more price-conscious consumers
- Access to tire buyers who are loyal to Sears
What are the pros of dual distribution through Sears?
- Cannibalization of Goodyear dealers' sales
- Channel conflict
- If dealers stop carrying Goodyear tires, further decline of market share
What are the cons of dual distribution through Sears?
2. Buyer requirements
What are the 3 channel selection criteria?
An arrangement whereby a firm reaches different buyers by employing two or more different types of channels for the same basic product.
A clash of goals and methods among the members of a distribution channel; when one member is engaged in behavior that is preventing another from achieving its goals.
- Channel not giving products adequate attention
- Competitors allowed to carry only select items
- Goal incompatibility
- Role incongruence
- Communication breakdowns
- Ideological differences
What are some sources of channel conflict?
- Facilitating functions (credit)
- Pleasant store environment
- Credible salespeople
What buyer requirements could Sears meet?
Segment the market and provide brand exclusivity to Sears and tire dealers for certain brands, and let both carry remaining brands.
What is the best decision for Goodyear Tire?
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