Here is an international business iconoclast for today. To view an archive of previous iconoclasts, please click on the “Weekly Iconocast” tab on my site. Enjoy! -Michael
For a complete list of all chapters so far, you can visit the Marketing Management Tab on the blog!
Chapter 8: Summary
The good or service as seen by the consumer constitutes much more than just a physical core product; all the intangibles that accompany the product form the package. The product audit is used to explore what this package comprises. The Ansoff Matrix looks at the four main growth strategies and demonstrates the increase in risk as a company moves from penetration of the known market to diversification into a totally unknown market.
The theory of the product life cycle says that the stages of introduction, growth, maturity, decline, and postmortem that a product goes through are to be reflected in the corresponding marketing mix. Even though most attention is focused on new-product launches, most products are in the maturity stage, where they need careful management attention to either prolong their life cycle or to lead to graceful retirement.
A popular theoretical tool for structuring product portfolios is the Boston Consulting Group Matrix. Its four quadrants are based on market share and market growth: problem children (or question marks), stars, cash cows, and dogs. Because of its assumption of a significant product life cycle and economies of scale, the Boston Matrix may have less relevance than its advocates suggest. In any event, the use of the matrix requires a sound understanding of the complex interrelationship between market growth rate and relative share.
The development of a product mix needs to consider both the width and depth of product lines and may require line stretching or line rationalization. In doing so, the firm must carefully consider the implications of such product policies on sales, profits, and relationships with customers and suppliers.
When using a strategy of market expansion, the firm must consider whether and how to standardize or adapt its products. In addition, attention must be devoted to packaging. No longer simply driven by product protection, packaging must reflect market requirements, promotional opportunities, and distribution considerations.
Services, whether related to goods or pure services, have distinctive features. In particular, they are more dependent on people, which necessitates more, and higher, standards of management. The intangibility of services means that the associated physical elements may be used for promotion, and strong branding is important. The lack of storage capacity may require new efforts at smoothing out demand fluctuations through personnel management or pricing strategies.
Overall, even though all elements of the marketing mix are equally important, the product is the most visible component and serves as the focal point for all marketing mix aspects.
Hello! I have very pleased to announce the publication of Marketing Management: 4th Edition with the help of Springer Publishing. I would like to give a special thank-you to Masaaki Kotabe, Demetris Vrontis, and Riad Shams for their collaboration.
Over the coming weeks, I will be releasing promotional summaries of the chapters of Marketing Management right here on this page. You can look for new Marketing Management posts every Wednesday!
If you are interested in purchasing a copy of the book and would like it signed, please contact me. For purchasing, please visit https://www.springer.com/gp/book/9783030669157
Hello! I am pleased to announce the upcoming publication of a new edition of International Business in collaboration with Cambridge University Press. This book is expected soon in the next coming months, and I am very excited for its release. If you are interested in getting your copy of the text signed, please contact me via email.
Here is a brief description from Cambridge University Press:
“Thoroughly updated, the 9th edition of this bestselling textbook incorporates global trends and data, supported by an exemplary case selection based on firms from around the world. The internationally cited author team of Czinkota, Ronkainen, and Gupta balance conceptual understanding of business theory with the day-to-day realities of business practice, preparing students to become successful participants in the global business place. This edition brings greater focus on Asia and emerging markets, as well as Brexit, the impact of COVID-19 on business and the importance of technology and the digital space to international business practice. Through its discussion and analysis, the book guides students to a greater understanding of contemporary business issues and helps them to develop new tools of analysis. Covering all key aspects of international business, the authors emphasize a few key dimensions: international context, role of government in international business, small- and medium-sized firms, and social responsibility.”
Hello everyone! I would like to share this new commentary of mine that was recently published in The Hill and MSN among others. I hope everyone has enjoyed a safe Memorial Day weekend.
Prepare for the Unexpected
Michael R. Czinkota
Music aficionados connect the month of May with Mozart’s minuet written as a five year old” komm lieber Mai und mache…,” but for many Americans this year the link came from a curtailment of gas It was reported that almost 80 percent of fuel depots in Virginia and North Carolina were running on empty. Lines of cars seeking gas quickly brought back eerie memories of the 1970s.
That shortfall is said to stem from private sector adversaries who had successfully shut down the flow of liquid energy. The result was a major decline in distribution capacity, particularly of Colonial Pipeline. Evildoers apparently had employed software manipulations to severely disrupt fuel flow. They informed their targets that this ransomware disruption would prevent the flow of gas until a large payoff had been made. The amount ranged between 5 to 20 million dollars. Colonial could not reverse the impact. Payment was allegedly made, and the energy flow was slowly restored.
A lack of gas sounds bad enough, but it may be only one of simultaneously appearing evils. If the action was meant to distract, what was the issue to be covered up? What nation gets the next turn? If this was just a preparation for future malfeasance, what obligations will arise and how costly will they be? When taking off shoes as a security precaution at an airport, it is not just the action that matters but rather the rationale and background that makes such actions necessary. Research at Georgetown has clearly indicated that the long-term indirect effects of terrorism far outweigh the short-term direct ones. When combining all these cost factors one can conclude that somewhere someone is cooking our goose and we struggle to protect limited targets and save up the ransom money.
We need to find and combat the culprits of such threats, and often it is us. With all our elegant computerization and artificial intelligence, we have largely lost control of management capabilities both at work and at home. At the same time, we are increasingly exposed to sudden shifts in our lives. We often work without backup with rising risk. Only five years ago, who would have prepared for a large and convenient “home office”? Many of us encounter a lack of clarity in communication that weakens our capabilities The Covid-based loss of one whole school year will offer serious repercussions for years to come.
Here is a collateral damage example. My family went to dinner leading up to an outdoor performance. We had explained our plans well in advance, including the dinner timeline so that we would be punctual. The time came and went, but no hosts were in sight. We knocked on the kitchen door where we found waiters in distress. As they told us, the computer did not perform and they did not know how to directly deal with pricing, adding, and allocating meal expenses to guests. What a pity!
We need an annual event devoted to catching up. That time would help us to see and test the shortfalls in our understanding of processes. Flipping a switch or pushing a button should alert the system that attention is needed. Those on the controls need to know why they have just undertaken a measure and what it does. We need to remember what we may have forgotten. We must recall with a personal, replicable event the rationale, causality, and linkages of our actions. Doing so will greatly strengthen our capabilities to plan, understand, and reduce risk exposure.