Explain one reason why a human resources manager would find a sales forecast useful.

Chinese online retailing giant Alibaba recorded over $\$ 240$ billion in sales in $2013$ $-$ more than Amazon and eBay combined. On its busiest day of the year, Alibaba sold $\$ 5.75$ billion of goods, three times more than what all of America spent on all US shopping sites combined in the same $24$ hours. Alibaba is planning to become a public limited company by selling shares on the New York Stock Exchange. This will value the company at $\$ 150$ billion or more. With the capital it raises, Alibaba has plans not only to dominate China, but to launch its own US marketplace.

At first Alibaba's business was a B$2$B marketplace connecting American merchants with Chinese suppliers. It quickly expanded into retail B$2$C operations with Taoboa, where eight million small businesses now list their items. It later up-scaled with Tmall, a shopping site where premium brands such as Apple, Nike and Disney host virtual shops for Chinese consumers. During the last nine months of $2013$ Alibaba made over $\$ 6.5$ billion dollars in revenue from selling fees, nearly half of which was profit. Alibaba's greatest challenge in entering the US market will be to gain customers trust. In the past it's been criticised for allowing dishonest businesses to sell illegal counterfeit goods on its sites. Customers searching for products have to go directly to Alibaba's sites as, unlike most e-commerce companies, it doesn't permit search engines to index its products. Merchants are able list for free on sites like Taobao, but it charges them a premium if they want their goods promoted in its search engine.

One New York customer has used Alibaba on several occasions in recent years. He said that although he wasn't sure whether to trust the site at first, in the end the prices for goods were too competitive to ignore. He was able to buy the products direct from the manufacturers at $10 \%$ of the price he would have paid on a US website.

The arrival of Alibaba will be a worrying prospect for Amazon, which uses its ability to undercut its competition to continue to build its business.

Evaluate the likely impact on American consumers of Alibaba setting up operations in the USA.

Explain why marketing objectives should be considered when devising a marketing mix.

Evaluate Dixons’ decision to close its high-street shops and to go ‘fully online’ as the only method of selling its products.

The world's best-known fast-food restaurant has always prided itself on high standards for hygiene and levels of service in its outlets, no matter which country it is operating in. It also aims to achieve uniform product standards throughout the world. The principle of a common world approach is also extended to the marketing mix used by the business $-$ same products, same decor, same promotions, same pricing levels. When the company first expanded internationally in the $1970$s, it was selling the 'American dream' but that is no longer acceptable in many countries of the world. The emphasis has now changed to 'global brand but local marketing'.

The need to be aware of cultural and religious factors when designing a global marketing strategy was made clear to the business when it was confronted with a lawsuit from Indian Hindus. McDonald's had to apologise to all religious and secular vegetarians for failing to make clear that beef flavouring is added to its chips in the USA. It is claimed that there are at least $16$ million vegetarians in the USA, who may have eaten these chips, and that they could be suffering from emotional distress as a result. In India, restaurant windows were smashed and dirt was smeared on statues of Ronald McDonald. Hindu leaders called for the food chain to be expelled from the country.

There are benefits to standardisation, however $-$ the McDonald's double-arch logo is now the best-recognised in the world, for example, and internationally standardised advertisements as used by Coca-Cola offer economies of scale as well as reinforcing the global nature of the brand.

However, McDonald's is not alone in increasingly adopting the 'think globally, act locally' concept. Products that are too heavily focused on American culture, tastes and consumer needs are much less well received in some countries than they used to be. Adapting well-known brands to meet the cultural and social demands of countries that are becoming more independent in their approach to business and marketing is now a priority for companies like McDonald's. In India, McDonald's had to move away from reliance on beef and now has an Indian menu with local flavours, such as McCurry Pan and Chicken Maharaja Mac. In France, the changes have been even more substantial. Red and yellow colours are replaced with more 'adult' colour schemes. External restaurant signs are discreet and blend in with the neighbourhood. There are real leather seats, gas fireplaces and hardwood floors. Organic ingredients are used and healthy-eating messages are displayed on every wall. French desserts are offered instead of the standard options and a big seller is le P'tit Moutarde $-$ a small hamburger with a French mustard sauce. McDonald's sales in France rose by $8 \%$ in one year after some years of much slower growth - perhaps meeting local needs and responding to national consumer tastes is the way forward.

McDonald's percentage sales revenue growth:

$$\begin{array}{|l|c|c|} \hline & \textbf{ 4th quarter 2013 \% } & \textbf {2 0 1 2 \% } \\ \hline \text{ USA } & -1.4 & 5 \\ \hline \text{ Europe } & +1.0 & 8 \\ \hline \text{ Asia, Middle East, Africa } & -2.4 & 11 \\ \hline \end{array}$$

Evaluate McDonald’s’ decision to change from a pan-global international marketing strategy to a global localisation approach.

Explain why the additional three Ps are so important to service-based businesses.

Explain one use of the Boston Consulting Group matrix to a multi-product firm of your choice.

Evaluate the usefulness of cost-plus pricing as a pricing strategy in the Chinese car market.

Samsung has added four new Galaxy smartphones to its existing line, designed to deliver an 'exceptional experience at an affordable price'. The new products are targeted at the low-price market segment of the smartphone market where Samsung really wants to grow its market share.

The Galaxy Core II, Galaxy Star $2$, Galaxy Ace $4$ and Galaxy Young $2$ all run Google's Android $4.4$ KitKat system and feature smaller displays and less-powerful processors than the flagship model, the Galaxy S$5$, but they still do a remarkable job and offer the consumer an exceptional experience for the price.

Last week Samsung also announced the specifically fitness-focused Galaxy S$5$ Sport, which will be both dust- and water-resistant. The product is an innovative response to the way smartphone owners use their phones when they are at the gym, out for a run and even cycling. The phones come with new fitness apps which allow you to do things like measure your performance on a running machine or map your ride when you are cycling.

Evaluate Samsung’s decision to target the ‘low-price’ market segment of the smartphone market.

Tesco Lotus $-$ the brand name used by the European supermarket in Thailand - had $15 \%$ of the supermarket grocery (food) market in $2013$. Total sales in this sector amounted to ${\pounds25}$ billion. Two French-owned companies operating in Thailand were second and third on the list of firms' market shares $-$ Big $\mathbf{C}$ had $7 \%$ and Carrefour $4 \%$. If non-food items are included then Tesco Lotus has $43 \%$ market share. Being market leader gives Tesco Lotus a huge advantage $-$ and it is not standing still. It has plans to both open new stores and enter new markets. Recently, Tesco Lotus entered the fast-growing school-uniform market, worth $\$140$ million a year, with prices $20-30\%$ lower than traditional shops.

This expansion is not without its critics and the new Thai government has taken action to protect locally owned shops and to ensure good consumer choice is maintained. A new law is proposed that would severely restrict the opening of all new foreign-owned stores. Consumer groups are split on the new law - they want to keep the variety offered by local stores, but they enjoy the big stores and low prices too.

Explain two advantages Tesco Lotus might gain from being 'market leader' in Thailand.

Outline three benefits of e-commerce for consumers of foreign holidays.

Determine two changes that will turn the company into a market-oriented business.

Carlos Sanchez is a chef specialising in Spanish cuisine. He has always wanted to work for himself and has decided to open his own small restaurant. Property prices are too high in the capital, so he has moved to a small coastal resort about $100$ kilometres from the capital. He has many important decisions to make. He is not sure whether Spanish cooking will be popular with the locals and the tourists. He is able to prepare many other types of dishes too. He could open just a restaurant or a takeaway too. If Carlos offers takeaway meals, he could either serve these in plastic containers for microwave heating, which are expensive, or in paper trays, which are cheaper. Carlos has noticed that there are few other restaurants in the area and no takeaways, although one well-known fast-food chain has recently closed down. There are no other Spanish-based restaurants. After finding a suitable shop site, Carlos then has to decide whether to decorate it for younger people's tastes and have loud pop music or in a more sober style with traditional Spanish music.

Evaluate the usefulness of market research to Carlos as he plans his new restaurant.

This company recently commissioned a primary market research report. The details are highlighted below:

Aim: To measure PepsiCo's brand's consumer perception as a 'healthy' product.

Sample size: $1000$ people in the USA from different age and income groups and from different regions.

Sampling method: Random - from grocery store loyalty card lists Survey method: Online questionnaire coupled with focus groups to gain first-hand knowledge of consumers' opinions.

Potential research problems: There may be a potential bias from the surveyed population. Surveyed people may have issues that prevent them from answering accurately - the questionnaire has been designed to ask questions in the easiest and least embarrassing way possible. The possibility of not being able to contact a respondent has been addressed by setting the computer to select an alternative customer to add to the sample.

Initial secondary research: Last year Coca-Cola's brands had $41 \%$ market share to PepsiCo's $29.9 \%$. Coca-Cola's sales fell by $20 \%$ in USA last year compared to PepsiCo's $8 \%$.

Discuss the possible problems PepsiCo might have faced when conducting its market research.