Outline two other methods a business could use to enter an international market.

The origin of UGG in Australia lies in the wide-open beaches of Byron Bay $-$ a surfers' paradise. Surfers looked for ways to keep their feet dry and warm $–$ and handmade sheepskin boots offered natural warmth and comfort. The foundation was laid for a marketing phenomenon as the global brand now has sales of over US $\$1$ billion. The UGG boot is now globally well known; the promotion focuses on celebrity endorsements and prices are high to reflect the image of the brand. UGG offers online, premium outlets and, increasingly, its own stores as places for customers to purchase just UGG products. These products include more than just boots as there are now UGG men's footwear products and even a range of bridal shoes called 'I Do'! The shift towards increasing its retail operation means that UGG has put more emphasis on the extended marketing mix such as physical evidence. In its shops it has tried to match the fun-loving, free-wheeling image of its brand and its customers. Stores are in high-street locations with a welcoming exterior. Inside, the layout is spacious, light and colourful with quality fittings and furniture. There is ample seating to allow customers and their partners to relax as they try UGG products on for size.

In line with its retail expansion, UGG has upgraded its IT platform to improve the ordering and delivery process. The new software will gather sales, stock and orders in a single system, collecting data from the point of sale. From a customer-service perspective this means that orders can be filled more quickly and a closer relationship established.

Explain how UGG has improved its process as part of its retail marketing strategy.

Determine two disadvantages if the company turns into a market-oriented business.

Analyse two factors that contribute to a successful brand.

Explain the impact a reduction in the price of computers might have on the demand for computer software.

Apple has announced plans to open more of its own branded stores in the USA and China as it continues to develop this distribution channel. Just a few years ago, the Silicon Valley company, famous for the first popular personal computer in the $1970$s and more recently the iPad Air, always relied on other retailers and its website to sell its ever-growing range of products. The new retail stores are likely to be well received by consumers if recent reports from London and New York are any guide. They will be supported by a varied promotional mix including extensive use of social media.

Some business analysts believe that Apple runs a real risk of coming into conflict with its existing retail partners $-$ including the US chain CompUSA. 'Why should other retail stores bother to sell and promote Apple products if the company is going to compete directly with them on the high street?' said one investment specialist. There are also fears that Apple could fall into the same trap as Gateway, another PC maker focused on the consumer market. Gateway had to close about $40 \%$ of its North American stores, saying it had over-extended itself at a time of slowing sales of PCs. Apple is investing heavily in property and there is always the risk of stock build-up at a time of slower world economic growth. Apple plans to open its two new stores in high-profile shopping centres near Las Vegas in the USA and in the Chaoyang district of China. Apart from selling the usual Apple products $-$ computers, iPads, Apple TV and the like $-$ the main draw in the shops will be the Genius Bar $-$ a counter where shoppers will find several highly trained Mac Geniuses ready to advise on any technical questions. There will be a hands-on Apple Retail Store Experience giving consumers the chance to test-drive Apple's entire product mix. The stores will also run a series of daily creative workshops to teach customers how to make the most of the programs available.

Analyse two effects on existing retailers of Apple products of the opening of new Apple stores.

Le Sportif is a health and sports club located in Paris. The club has performed well over the last two years but now faces competition from two clubs, Wellness and Glides, which have just opened. Wellness, which targets high-income professional clients, has been particularly successful and has attracted a number of customers from Le Sportif.

The management of Le Sportif conducted some extensive market research to find out more information about their customers. They used a series of focus groups to find out about customers' views on Le Sportif and a questionnaire to provide them with more precise data about the way customers used the club.

Le Sportif has responded positively to its market research by adopting the following strategies:

• introducing a family membership scheme

• introducing a range of family-based classes to encourage health and fitness

• opening a coffee shop.

The management of Le Sportif believe that this new customer-oriented approach, which targets a niche market of health and fitness for the whole family, will give the club a USP and will enable it to stand out from the competition.

Analyse the benefits of market segmentation to a business such as Le Sportif.

Tube Investments of India is planning to enter the ultra-premium cycle market segment - with price ranges from $\$ 300$ to $\$ 4000$. 'Though the market size is small, we cannot afford to be absent from this segment,' TI Cycles' vice president said. Last year TI Cycles sold $2.8$ million units and the marketing objective for the current year is $3.1$ million units. The company started making electric scooters last year and has already launched BSA Workouts exercise equipment. The ultra-premium bicycles will not add greatly to total sales revenue $-$ but they will help to take the brand upmarket as Indian consumers' incomes increase.

Analyse one problem for TI as it tries to enter the ultra-premium cycle market segment.

Explain how the marketing mix of a sports-shoe retailer might have to be adapted if it decides to close most of its shops and sell mainly online.

We are a global food and beverage company operating in highly competitive categories and we rely on continued demand for our products. To generate revenues and profits, we must sell products that appeal to our customers and to consumers. Any significant changes in consumer preferences or any inability on our part to anticipate or react to such changes could result in reduced demand for our products and erosion of our competitive and financial position. Our success depends on: our ability to anticipate and respond to shifts in consumer trends, including increased demand for products that meet the needs of consumers who are concerned with health and wellness; our product quality; our ability to extend our portfolio of convenient foods and beverages in growing markets; our ability to develop or acquire new products that are responsive to certain consumer preferences, including reducing sodium, added sugars and saturated fat; developing a broader portfolio of product choices and increasing non-carbonated beverage offerings; our ability to develop sweetener innovation; our ability to improve the production and packaging of our products; and our ability to respond to competitive product and pricing pressures.

Analyse how PepsiCo might develop a new product to deal with rising health concerns over its soft drinks.

Analyse the importance of social media in promoting small hotels.

Analyse how a car manufacturer can use loss leadership to increase its profits.

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.

Outline one problem businesses might have using Alibaba as a way of buying and selling goods.

The Cadbury Gorilla advertisement was one of the most famous and effective advertisement campaigns of recent years. The aims of the campaign were to:

• improve the public image of Cadbury and the Dairy Milk chocolate brand

• increase sales of Dairy Milk, which seemed to be in the maturity stage of its life cycle.

The TV advertisement featured an actor in a gorilla costume enthusiastically playing a well-known drum solo from the Phil Collins hit record 'In the Air Tonight'. The $90$-second performance faded to a computer-generated shot of a Dairy Milk bar over the slogan 'A glass and a half full of joy' (Cadbury has always claimed that each bar contains a glass and a half of fresh milk). Producing the advertisement and paying for the TV time slots cost US $\$12$ million. One TV advertisement during the Rugby World Cup cost $\$1.4$ million alone. The campaign was very successful. The advertisement was uploaded on to YouTube and was viewed over $500000$ times in the first week. Market research reported that the public's view of Cadbury and Dairy Milk had improved and sales rose by $9 \%$ in one year - higher than the original target.

Evian's 'Roller Babies' video holds the official Guinness World Record for the most viral video advertisement of all time. It has already been viewed over $50$ million times on YouTube. But viral success is not the same as sales success. After Roller Babies was released in $2009$, sales of the water brand, owned by the Danone Group, actually declined, according to Jonah Berger, a professor of marketing at the University of Pennsylvania. Forbes noted:

In the year the Evian 'Roller Babies' video went viral and attracted $50$ million views, the brand lost market share and sales dropped $25 \%$. The Evian brand continued to lose market share in the UK in $2013$, but overall the Danone Group's water business is growing.

Analyse two reasons why the sales of Evian water might have declined despite the apparent success of their online advertising.