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Global Business#8June 10, 2013 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
Feedback : HCMC case Q2 • Not what have happened, but what would be expected at the timing of divorce. Q3 • Strategy: what you do and what you don’t. And, why? (SWOT, 5 force, etc) • Product, service, region ...? Q4 • Data in the case material • Construction machinery specific story • Fair assessments
Today’s Class • What is marketing, why important? • Marketing strategy planning steps • 4P: Product, Price, Place and Promotion • Marketing for emerging economies: China, India • Bottom of the Pyramid (BOP) Business
Ansoff’s Product and Market Growth Matrix Global Business Context: CAGE and AAA framework
Price To what extent you can be a price setter, instead of price taker ?
Promotion (AIDMA) Changing to AISAS in Internet Era
Promotion in global businessSome 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
Market potential of China and India Middle Class = Volume zone • Profit=gross margin * sales volume (size of market and competition) • Difference between durable and consumption goods, customer preference?
Average household income by decile (2010, US$) Premium Market
Another concept of price: PPP • Concept of PPP（Purchasing Power Parity) • Big Mac price by Economist magazine US: 4.07 $, China: 14.7 RMB=2.27 US$ (▲44%)
Premium or good enough? Adapted from “The Battle for China’s Good-Enough Market” by Gadiesh, Leung and Vestring, HBR September 2007
Destructive Innovation Technology Speed＞Customer’s Requirement Speed Innovator’s Dilemma by Clayton Christensen
Knowing local market: two way interactions • Sensor function at local (B to C): Panasonic’s life style research institute in China and India (understand consumer’s life-style in less developed area) • Local partnership as a door to new customer (B to B, B to G): Hitachi’s joint venture with LG group for water business • “Finding great ideas in emerging market”: finding unforseeable use, arbitrage strategy for ideas: Intel’s emerging market project (use of PC for social tool-> netbook (ultra) book concept) • More to be discussed in the global R&D session!
BOP(Bottom of the Pyramid) 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)