Question

You are the head of worldwide product for Dynasty International – a large CPG (consumer product goods) company that makes and markets shampoo, conditioner, etc. PLEASE FOCUS JUST ON BASIC HAIR CARE FOR THIS EXAM. SHAMPOO AND CONDITIONER – ONE LINE PRODUCT LINE

• You are considering entering a specific, RURAL China market (Western China) for your line of shampoo, where most people earn less than $2 per day. Still, it’s an opportunity that you don’t want to miss.
• At first you thought you could offer a truly standardized product (same exact shampoo as you offer in the USA market) at a similar price point (once you have factored in the exchange rate), but after doing some extensive market research, it appears you may have to make a few adjustments to your marketing mix (4 Ps of marketing).
• You also need to concern yourself with not only the best entry strategy, but the best international strategy in the region.
• 1.What would you suggest the BEST international strategy be for your company? Please select one and describe.
• 2.What would you suggest the BEST entry mode would be for Dynasty International? (Assume they are currently not in China at all but want to enter the country in the market described above). Please select one and briefly describe.

Answer 1

Answer

1.It is more to suitable to choose  licensing strategy because the above mentioned situation is

Licensing is another way to enter a foreign market with a limited degree of risk. The international licensing firm gives the licensee patent rights, trademark rights, copyrights or know-how on products and processes. In return, the licensee will: produce the licensor's products, market these products in his assigned territory and pay the licensor fees and royalties usually related to the sales volume of the products. This type of agreement is generally welcomed by foreign public authorities because it brings technology into the country.Inn the above mentioned case the firm is in its entry stage and the firm in an alien firm to the country so this strategy is more suitable for the firm to start business

2.The firm should reduce the price of the product to the as which it covers the variable cost of the firm because if it reduced beyond this point the firm cannot survive in the market due shut down of the production in the firm   .Which ever is the country in the entry stage the firm should introduce the product (if the country is a rich country it can charge high price because if the firm charge a low price in rich countries they will feel the product is inferior so the pricing is done accordingly )which will help the firm attract customer during the entry stage