Export Marketing Assignment Mcdonaldization

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Export Marketing

Assignment

Fahad Ahmad

17U00092

Section A

Q1. Identify a company that uses export and one using overseas production or a strategic
alliance. Describe their market entry strategies and determine why the companies differ in
the entry mode being used. (10 marks)

An example of exporter would be Shan. They are direct exporters of their products in the UAE
and many other countries. They used the strategy to target the people who had moved from
Pakistan, or are Pakistani people living abroad. They have used that market and targeted it
directly, by providing the local Pakistani product to overseas Pakistani.

The example of overseas production or strategic alliance can be Apple. They have their root
causes in US but their production and assembly is being done in China and some other countries.
They have strategic alliance with the company that produces screens and parts for Apple
products and hence Apple is engaged in overseas production.

Q2. Why should an exporter worry about gray market distribution of its products in
foreign markets? What can be one way to protect against this practice? (05 marks)

The grey market is a distribution channel not authorized by the brand or manufacturer of that


product. Grey market goods are sold by unauthorized resellers that may otherwise look reputable
to consumers. An exporter should worry about gray market distribution because it upsets pricing
stability among its distributors and can conflict with prices on direct sales, perhaps eroding them as
well. A gray market can create customer dissatisfaction because as a result of gray market, brand
owners may experience channel conflict, inventory issues, wide price fluctuations, reduced
margins, brand erosion, and brand equity concerns. Grey markets can harm the company as a
whole. The company might have set a set of standards and target markets. But, the grey markets
might have led to the different standards, or different markets, which will in return ruin the
company reputation. An example of this is that Tommy Hilfiger doesn’t officially sell in
Pakistan. But, you can find their products in high end stores. This results in a loss of the hedonic
values of the brand which is tommy Hilfiger. In order to stop gray market distribution first thing
you have to do is identify unauthorized sellers. You can’t stop the grey market if you don’t know
where—and what—it is first. Your current sales data can tell you a lot here. One good identifier
of a grey market seller is a suspiciously low price. So, monitor your prices across all your
distribution channels for any red flags. Second thing is to educate your consumers about where to
shop and why to shop there.

Q3. What is Mcdonaldization? (05 marks)

McDonaldization of society is a phenomenon that occurs when society, its institutions, and its
organizations are adapted to have the same characteristics that are found in fast-food chains.
These include efficiency, calculability, predictability and standardization, and control. Basically
it is the term which refers to becoming an excellence. McDonalds has very high standards of
quality control and worldwide success. So, they have been deemed as the company which
operates on excellence. With so much variety in the menu in different countries and so many
outlets worldwide, you can always get the same standards and same level of efficiency
everywhere. This is known as McDonaldization.

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