1.

​ ​Be it product strategy, promotion strategy, pricing strategy, or distribution strategy,

if there is an important issue that permeates our course it is whether firms should
standardize or customize global marketing strategy. Thus, we once again revisit the
issue of standardization-customization in “Global Marketing Channels and the
Standardization Controversy,” but this time around we examine whether
distribution/marketing channels strategy should be standardized or adapted (20 pts).

a)​ ​Provide a detailed summary of the article titled “Global Marketing

Channels and the Standardization Controversy.” In your summary, discuss
EACH of the steps involved in the Global Channels Decision Making Process
(as discussed in the article and video lecture module).

“Global Marketing Channels and the Standardization Controversy” intentions are 

to revise the issue of global standardization against accommodation as it addresses 
the international channels of distribution. The authors shaped his ideas based upon 
Keegan’s Multinational Product Planning framework for their proposal of an abstract 
framework for the potential process standardization of global marketing channels.

The conception of global standardization has been respected to be a productive 

strategy for corporations joining international markets since the 1960s. In the 1990s, 
the global standardization model was achieving constant attention and was one of the 
top trends stirring international marketing. There was much examinations on the 
influence of standardization as well as the powerful leverage in adjusting and tailoring 
market intentions to please regional preferences. The thorough literature based on the 
consideration of standardization against customization has been ongoing for decades 
without any conclusion. The authors acknowledged two points in their analysis of 
global standardization literature; First, comparable to other areas of marketing, 
channels of distribution are likely short shrifted in the standardization vs adaption 
debate. Second, of the current literature on the standardization of global marketing 
channels that does remain, scholars and practitioners commonly agree that marketing 
channels cannot be standardized.

The standardization vs. adaptation debate asks if organizations should customize

their domestic marketing strategies when they decide to enter international markets.
The literature on the matter generally proclaims that standardized marketing strategy
works best if the market is considered to be homogenous, and a customized
marketing strategy is often recommended if the market is considered to be
heterogeneous. Authors such as Levitt recommend global orientated marketing
strategies in today’s world because technology, communication and travel make the
world’s culture more homogenous than ever. While Kilough suggests that, “…the
underlying basis of global strategy is to make local adjustment to global strategies,
depending upon a variety of internal and external forces.” Such forces
include;product and industry characteristics and exchange rates. Figuratively
speaking, Quelch and Holf believe that the debate has been misrepresented as a
black and white situation, when in fact the standardization models are made up of
many shades of grey. A multitude of authors agree and believe that
“…standardization may be more realistically placed on a continuum indicating the
relative extent to which the degree of standardization is desirable and feasible.”
Furthermore, authors Peebles, Ryans and Vernon assert that host country’s
marketing infrastructure is well-developed and the economy is similar with the home
market, than standardization should be employed.

b)​ ​What are the key channel design decisions?

The design of global channels is “…the development of new channels or the

modification of existing channel structures.” There are three critical decisions that
must be met relative to the design of global channels. When settling on these
decisions, a manufacturer must acknowledge all variables that will alter its channel
framework such as; markets addressed, product type the environment, and
behavioral elements. The purpose of the channel decision maker is to develop a
design combination that boosts return for all channel members. Below are the three
key decisions that must be resolved by a channel decision maker:

1.The number of levels between the manufacturer and the ultimate user. A channel
decision maker needs to determine how many intermediary levels there will be
between the manufacturer and the product users. The lowest level is two, where the
manufacturer sells directly to a product user,this is introduced to as a direct channel.
There can be many levels between a manufacturer and the product users. For
example, the chain can be as follows: Manufacturer agent, wholesaler, retailer,
consumer.

2.The magnitude at the various levels. Channel decision makers must determine the
amount of intermediaries at each level which could be demanding.

3.The type of intermediary used must also be decided upon. There are many types
of intermediaries,and the channel decision maker must chose the one that will
allocate the product most adequately and will carry out the marketing strategy when
applicable.

c)​ ​Define and discuss the difference between international marketing

channel program standardization and international marketing channel process
standardization. Explain your position in substantive detail.

Process and program standardization are two aspects of the global orientation
marketing strategy that have been widely discussed in international marketing
literature. Process standardization is defined as “…the development of uniform
marketing management practices, including the sequencing of tasks,problem solving
processes, decision making processes, and performance evaluation procedures.”
Some ways Multinationals can execute process standardization is by creating an
international career path for managers, standardizing training and education, and
solidifying a common company language. The overall message of literature based on
process standardization is that ” …it is more important and possible to standardize
global marketing planning and decision making than it is to standardize the content
of the entire marketing mix. On the other hand, program standardization is defined
as, “…the development of a uniform marketing mix for global markets…offering
identical products at identical prices using identical means of promotion through the
use of identical distribution systems for each country bring targeted.” A majority of
research and literature on program standardization has been focused on the
standardization of promotion,specifically advertising.

d)​ ​Does this article deal with the issue of international marketing channel
program standardization or international marketing channel process
standardization? Explain your position in substantive detail.

The article handles international marketing channel process standardization. Process

standardization is described as “…the development of uniform marketing
management practices, including the sequencing of tasks, problem solving
processes, decision making processes, and performance evaluation procedures.”
The general agreement of international literature is that marketing channel
standardization is immensely difficult to accomplish due to government regulations,
marketing infrastructure as well as other attributing factors. Still ,standardization can
be viewed as having two elements; program standardization and process
standardization. The authors consider that “…at the process standardization level,
the standardization of marketing channel strategy is a viable and feasible
alternative.” They understand that the development for marketing channel critical
decision making can be standardized, and convey a total of six strategic distribution
decisions that must be discussed by a multinational before the development of a
marketing channel strategy. The authors then applies adapted ideals from Keegan’s
Multinational Product Planning framework for a theoretical framework in regards to
Global Channel Strategy Planning. They give four outcomes and recommendations
which suggest to either adapt or employ process standardization based on the
outcomes of their framework.

e)​ ​In your estimation, can international marketing channels (i.e., the design
and structure of marketing channels) be standardized? Explain your position.

Within the bulk of the cases, it is not possible for marketing channels to be
standardized. There are two elements of standardization; process and program
standardization. It is very laborious to employ program standardization and process
standardization can be accomplished, but it is a hard task to complete correctly. As a
result, I determine that the whole standardization of marketing channels, containing
 both process and program standardization, can only take place in extremely rare
cases.

2.​ ​The following questions are based on the article entitled “Seven Rules for
International Distribution” (10 pts).

a)​ ​Provide a summary of the article in substantive detail. In your summary,

identify and explain EACH of the seven rules of international distribution.

The author, David Arnold, begins his article “Seven Rules for International
Distribution” by indicating that most endorsed corporations make the mistake of
moving too quickly and not strategically planning their distribution approach before
introducing themselves to emerging markets. These corporations hire an
independent local distributors, and see great results at first, however, a stagnation of
sales occurs after a few years. Corporations usually blame low sales on the poor
performance of local distributors. They rush in to make major changes, often firing or
buying distributors to reacquire distribution rights so they will be able to start their
own direct-sales subsidiary. A fast transition from indirect to direct sales is both
pricey and disruptive. It also can create long-term issues, and “…executives may
discover a few years later that they’ve gone too far…saddling the multinational with a
dense and inefficient network of national distributors.”

Arnold also studied the “imbalance and correction” of international distributing

operations in eight different corporations from the consumer, industrial, and service
sectors over a two-year period. His research unveiled that this kind of negligence
usually did not derive from crudely run independent regional distributors. He
discovered that corporations could avoid negligence by integrating and supervising
the marketing strategy from the beginning of market entry. The author introduces
seven guidelines that bypass problems which typically come about when
corporations implement their international distribution strategies in emerging
markets:

1. Select distributors. Don’t let them select you​.Multinational

corporations should make a strategic decision to enter markets only after
careful market assessment. However, the author claims that mot
companies in his study entered markets in reaction to proposals from
potential distributors. Strong and eager distributors are often the wrong
people to partner with because they may also serve competitors. The
distributors may have desirable market contacts, however,they also have
the power to control the market and keep competing multinationals in
balance with each other. Arnold suggests having a systematic and
thorough assessment of potential partners.
2. Look for distributors capable of developing markets, rather than
those with a few obvious customer contacts​.Multinationals frequently
make the mistake of hiring a “market fit” distributor that has experience
serving major customer prospects with similar product lines. This leads to
an impressive sales at first, and then stagnation sets in. Arnold suggests
that multinationals can make better choice in partners by seeking out a
“company fit,” which is a partner with a culture and strategy that align with
the multinationals initiatives. For long-term success, multinationals should
bypass the obvious and tempting choice of going with a “market fit”
distributor.
3. Treat the local distributors as long-term partners, not temporary
market-entry vehicles.​ Multinationals should consider granting national
exclusivity to a distributor or creating an agreement that rewards the
distributor with strong incentives when goals are achieved.Multinationals
should avoided drawing up short-term contracts that permit them to buy
back distribution rights after a few years.
4. Support market entry by committing money, managers, and proven
marketing ideas​.Multinationals must make an early commitment of
corporate resources in order to retain strategic control, create better
relationships with local partners, and enhance business performance.
They must go beyond sending in technical and sales personnel or offering
training to distributor employees. Many multinationals are now taking
minority equity stake in independent distribution companies in order to
increase cooperative marketing between the local partner and HQ.
5. From the start, maintain control over marketing strategy.
Multinationals should employ control over marketing strategies including
budgeting, product portfolio and product positioning, while still allowing
independent distributors to adapt to local conditions
6. Make sure distributors provide you with detailed market and
financial performance data. ​Multinationals should aim to collect quality
data about the market from the distributor. Any contract made with the
distributor should include a clause that requires them to provide frequent
detailed market and financial performance data. If distributors are not
willing to provide this information, and consider price levels and customer
identification to be “key sources of power in their relationships with
suppliers,” than this should serve as a warning sign for multinationals to
not enter business with this distributor as the business relationship will
likely fail in the future
7. Build links among national distributors at the earliest opportunity.
Multinationals should encourage the flow of ideas within local markets in
order to improve performance and achieve greater consistency in the
execution of their international initiatives. This can be done by
 establishing a regional corporate office or a distributor council.This leads
to consistency across the region and decreases the variations between .

b)​ ​What is the thesis of the article? Do you agree or disagree? Why or why
not?

I do agree with the thesis of the article “Seven Rules for International
Distribution.” David Arnold conveys that multinationals must get ready for predictable
phases that come up within international distribution operations in order to prosper in
developing markets. This development will work to avert the application of costly and
disturbing corrective measures. I agree with all of the guidelines he suggested which
circumvent problems that typically arise when corporations execute their international
distribution strategies in emerging markets.

Also, I agree with the author’s suggestions in defense to consolidating a

successful long-term business relationship amongst multinationals and regional
distributors. Multinationals should acknowledge this relationship to be like marriage ,
and should respect regional distributors as their long-term partners. Additionally, I
would also agree that when goals are met, multinationals should reward regional
partners with incentives as well as create an early guarantees of corporate resources
in order to acquire strategic marketing control

c)​ ​Are there any other rules that you can suggest in addition to those
identified by the authors? Explain each of your suggestions in substantive
detail.

There are a few “rules” that one can suggest in addition to those recognized by
David Arnold.

Rule #8: ​Formal research should be conducted before entering a developing

market. ​In Kashani’s article “Beware the Pitfalls of Global Marketing,” he makes the
point that companies should not presume that one market’s expertise is
exchangeable to others, and that not enough research is a costly bypass.
Multinationals should be given a clear idea of what their continuous marketing
actions are before choosing a local distributor so they can find the best match.

Rule #9: ​Multinationals must always follow-up with their local partners and
keep strong communication flows in order to keep momentum levels high for
any given campaign​. ​There must be an existence of communication channels for
allocation and building including sufficient solutions to problems.

Rule #10: ​Multinationals should employ a participative leadership style where

they share decision-making power with local partners.​ ​Multinationals should 
 assert direction over marketing strategies, however, regional distributors should 
possess a sufficient amount of decision-making power since they understand the 
market best. Multinationals should discuss with regional partners, and take into 
consideration their suggestions when formulating final decisions.

1.​ ​The following questions are based on the HBS Kentucky Fried Chicken—Japan
(KFC-J) case (20 pts).

a)​ ​Based on your assessment, what is the central problem facing KFC-J?

The central problem that KFC-J faced during the early 1980's was the reluctance 
to accommodate to the new strategic planning, which had been profitable in the United 
States. Loy Weston, President of KFC's share undertaking in Japan,disclosed resistance in 
fulfilling this strategic planning due to the favorable outcomes in his menu adjustments and 
innovations in marketing to target audiences. Some of these adjustments included 
replacing mash potatoes with French fries and reducing the amount of sugar in the 
cole-slaw. Weston had invested so much time and effort attempting to continuously adjust 
to Japan's culture and was finally seeing the fruits of labor with profits, which lead him to 
doubt this strategic planning from Headquarters. All this time, he was fabricating most of 
these changes without authorization from Headquarters, but all of this changed when R.J. 
Reynolds attained the company in 1982. As a result, the central problem was how to 
suitably manage the International

b)​ ​What are the four key action issues for which different strategies/solutions
need to be articulated? Describe each of them in substantive detail.

The first issue comprised of deciding the suitable performance level that should be 
expected from international stores. It wasn’t suitable to determine the level of infiltration 
in various overseas markets by equating them to more developed markets, since this level 
of anticipation would be impractical. Instead, the focus should be on constant 
advancement and arranging a more sensible way to expectations in performance levels of 
arising overseas markets.

The second action issue comprised of the command that Headquarters has on all
of its international operations. The decision was not easy to make on what to standardize
and coordinate since Headquarters and other international markets had contrasting
beliefs in regards to the menu expansion and management report submittals. Japan was
an excellent model of opposition in standardizing the menu, since Weston felt
wholeheartedly about his menu addition’s equivalence to his overall increase in
profitability.

The third action issue comprised of outlining the suitable procedure on broadening 
into new countries. Buhrow believed that the people-dependent approach is not as 
effective as it once was due to the continual changes in different markets. Instead, Buhrow 
hinted that before embarking on a new market, there needs to be an appropriate analysis 
and research. This would permit Headquarters to compose an appropriate entry strategy 
for a new region by diminishing risks and acquiring a much higher success rate. However, 
Weston had a contrasting view on how to suitably spread to a new market. He thought 
that in order to have a favorable outcome, the leader of this new expansion region should 
have entrepreneurial qualities and have an obvious vision on how to adjust to a new 
market.

The final action issue comprised of deciding on the requisite skills that management should 
be requested to have, so they can effectively supervise overseas operations. Mayer divided this up 
into three stages in country management evolution. These three stages began from the 
entrepreneurial stage and concluded with professional management who would supervise the 
market for the long haul. .

c)​ ​Describe in substantive detail the three stages in country’s management

evolution discussed in the case.

The first stage in a country’s management evolution consists of of the 

entrepreneurial stage. This stage predominantly consists of early stages of growth 
where the manager or leader doesn’t automatically need orientation since at that 
stage, the true goal is to startle the vision and make the change work in any method 
that the manager seems suitable for that condition.The second stage is more 
restraint as subdivisions start to form and the several managers take advantage of 
their knowledge in regional markets and adjust it to their style of operations. This 
would result in properly creating a blueprint for that nation’s store functional 
demands. The last stage would comprise of professional management that would 
supervise stable planning for the future of the market. This group would be held 
primarily accountable. 

d)​ ​What implications and cues you can draw from the three stages in
country’s management evolution that will help you identify various options for
managing Loy Weston, i.e., what options do you have if you were the Weston’s
manager in HQ? What would YOU do with him? Then, based on your
assessment, what should be the best option that Mayer should consider
relative to Weston?

One crucial connotation from the three stages would be the final stage
where a manager similar to Weston would be constrained to stick to the
professional management group from Headquarters. As explained in the study
case, this has already turned into an issue since Weston is refusing to approve
adding crispy chicken into the menu, since he believes it won’t work due to his
broad knowledge on regional culture and consumer requests. If I was Weston’s
manager, one of the choices I would introduce would be to move him from the
Japanese market to position where he can educate and supervise the
entrepreneurial stage for high target overseas market expansions. His
background and progress within the Japanese market should put him as a top
applicant for that type of position. Another choice would be to develop market
objectives for Japan’s market and to allow him carry on to manage Japan

In my opinion, I would move Weston to a different role where he wouldn’t

feel confined to manage and apply his entrepreneurial skills. This would not only
help Weston, but also focus on the third action issue and would directly complete
Weston’s method into broadening to a new market. This would also be taking into
consideration of the research that was completed by Headquarters. This would
be the best choice for Mayer because he would then have the ability to favorably
apply the third stage to the Japanese market by administering the strategic plan
urged by headquarters and getting dependable responses from the management
accounts.