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.

Evaluate the importance of the people element of the extended marketing mix to the success of UGG’s retail outlets.

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.

Discuss the usefulness of the moving average method of sales forecasting to the marketing manager of ADS.

$$\begin{array}{|c|c|c|c|c|} \hline \textbf { Year } & \textbf { Quarter } & {\begin{array}{l} \textbf { Sales } \\ \mathbf{\$ m} \end{array}} & \begin{array}{l} \textbf { Trend (centred quarterly } \\ \textbf { moving average) } \mathbf{\$ m} \end{array} & \begin{array}{l} \textbf { Seasonal } \\ \textbf { variation } \mathbf{\$ m} \end{array} \\ \hline 2012 & 1 & 23 & & \\ \hline & 2 & 27 \\ \hline & 3 & 35 & 27.5 & 7.5 \\ \hline & 4 & 24 & 28 & -4 \\ \hline 2013 & 1 & 24 & 28.625 & -3.625 \\ \hline & 2 & 29 & w & -0.375 \\ \hline & 3 & 38 & 30.125 & 7.875 \\ \hline 2014 & 1 & 28 & 31.875 & -3.875 \\ \hline & 2 & 33 & 32.5 & x \\ \hline & 3 & 41 & 32.75 & 8.25 \\ \hline & 4 & 29 & 32.625 & y \\ \hline 2015 & 1 & 28 & & \\ \hline & 2 & 32 & & \\ \hline \end{array}$$

$$\begin{array}{|l|c|c|c|c|} \hline & \textbf { Quarter 1 } & \textbf { Quarter 2 } & \textbf { Quarter 3 } & \textbf { Quarter } 4 \\ \hline \begin{array}{l} \textbf { Average seasonal } \\ \textbf { variation \$m} \end{array} & -3.75 & 0.0625 & z & -3.875 \\ \hline \end{array}$$

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 the benefits and limitations for a large hotel business of forming a joint venture with a hotel business in country $\mathbf{X}$ with the aim of establishing a new chain of hotels there.

Many top market global brands have been struggling to increase sales or market share in recent years. The news of Burberry's continuing success leaves some wondering how the company is delivering such a strong performance, with a revenue increase of $35 \%, 105$ new stores added and a productivity boost of $11 \%$ in the last $12$ months. 'While the luxury industry faces global challenges in the year ahead, we remain confident in our team's ability to outperform, underpinned by the consistent execution of our key strategies,' said Burberry's chief executive. The sales figures show that the company's plan to survive the financial crisis by targeting flagship markets has so far been successful. Burberny's USP of being an 'iconic British luxury brand' has been enhanced in the last few years to attract a new, younger market segment while keeping current customers satisfied. Now the company is targeting young, digitally aware consumers in the world's wealthiest markets. As rising internet penetration and increasing familiarity with online shopping is a burgeoning trend, the company's focus is mainly on digital integration. The company's targets are $25$ of the world's wealthier cities (including London, New York and Beijing); according to Burberry these account for more than half of the global luxury fashion trade. These target markets also benefit from high levels of tourism and very wealthy residents. The company is investing in underpenetrated markets such as Asia Pacific, Latin America and the Middle East, as these are forecast to see continued growth in consumption of luxury goods as tourism, salaries and store openings increase. Non-apparel, including handbags, small leather goods, scarves, shoes, belts and jewellery, remain a key driver of the company's growth, contributing $40 \%$ of retail sales in the last $12$ months. Low prices have never been a consideration for Burberry as its management perceives that its consumers demand exclusivity and style $–$ and these do not integrate well with low prices.

Evaluate the ways Burberry differentiates its products from its competitors in the market for female clothing.

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

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

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.

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

Compare and contrast company/corporate branding and own-label branding.

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