Global Business #9 July 2, 2011

Dept of Technology Management for Innovation (TMI), Graduate School of Engineering Professor Kazuyuki Motohashi

工学系研究科 技術経営戦略学専攻教授 元橋一之

http://www.mo.t.u-tokyo.ac.jp

Today’s Class

• What is marketing, why important? • Marketing strategy planning steps • 4P: Product, Price, Place and Promotion • Marketing for emerging economies: China,

India, BOP • Introduction to the next class: Shiseido in

China

Marketing and Sales

Marketing Sales

New customers, potential customer needs

Existing customers

Forward looking (for new product, services)

Existing products

Market analysis for value creation

Actions (Eigyo), and sales force management

Involves whole process of marketing strategy

Focus on “Promotion” in marketing 4P

How marketing fits in corporate strategy ?

Strategic Marketing Planning

Market Analysis and Identifying Opportunities (SWOT analysis)

Market Segmentation

Identifying target market and product (service) positioning

Marketing Mix (4P) and Execution

Ansoff’s Product and Market Growth Matrix

Global Business Context: CAGE and AAA framework

Example of Market Segmentation

Target Segment Identification

Marketing’s 4P

Product

Price

To what extent you can be a price setter, instead of price taker ?

Place (Channel)

Promotion (AIDMA)

Changing to AISAS in Internet Era

Promotion tools (in detail)

Promotion in global business Some caveats

• Regulations over promotion activities: such as whether you can do “comparative advertising”

• Terminology in foreign language • Brand creation (difference in customer’s

perception) • Importance of local ad agency • Lack of product knowledge at local

distributors

Marketing mix by product life cycle

Market Intelligence: China and India

• Concept of PPP（Purchasing Power Parity)

China India JapanGDP 3.45 14.67 129.55Consumption 3.46 13.58 129.16Food, beverages 5.52 21.33 238.42Alcohoic, tabacco 5.75 31.53 97.04Colothing 6.86 16.72 167.23Housing related 3.37 12.33 128.19Furnishing, durables 5.27 22.73 167.25Health 0.69 3.00 64.80Transport 5.98 32.46 162.32Communications 3.14 17.46 127.15Nominal Ex-rate 8.19 44.1 110.22

China India Japan0.42 0.33 1.180.42 0.31 1.170.67 0.48 2.160.70 0.71 0.880.84 0.38 1.520.41 0.28 1.160.64 0.52 1.520.08 0.07 0.590.73 0.74 1.470.38 0.40 1.15

Targeting?

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1985 1995 2001

インドの所得別世代構成比

高所得層

(180,001ルピー

～)上位中所得層

(135,001～180,000ルピー)中所得層

(90,001～135,000ルピー)下位中所得層

（45,001～90,000ルピー）低所得層（～

45,000ルピー）

• Profit=gross margin * sales volume (size of market and competition)

• Difference between durable and consumption goods, customer preference?

BOP(Bottom of the Pyramid)

Over 20,000 US$

1500～20,000 US$

1500US$ and under

75 mil. -100 mil.

150 mil.-1,750 mil.

4,000 mil.

（出典）The fortune at the bottom of the pyramid (C.K. Praharad)

BOP’s Business Chance

（出典）The fortune at the bottom of the pyramid (C.K. Praharad)

Example: ICICI’s micro payment

（出典）The fortune at the bottom of the pyramid (C.K. Praharad)

Next Class: Shiseido Case • Is China is important for Shiseido? Evaluate based on

Shiseido’s domestic and global operation statistics • List merits and demerits of operating in China, as

compared to operations in US and Europe • Characterize Shiseido’s marketing strategy in China.

Take Urara as an example, and discuss its targeted customer and marketing 4P. Do they have a consistent story?

• Compare Shiseido’s marketing in China with those of US and European mega players such as l’Oreal and P&G. It is better to keep such strategy, when Shiseido competes with them in Chinese market?