INTERNATIONAL MARKETING ASSIGNMENT
Customer buying behavior in emerging markets is very different from the customer buying behavior in developed markets. In emerging markets the major share of theto the Bottom of the Pyramid (BoP). People belonging to the Bop represent economic group with low average incomes. They often earn less than $2 per day for them a key aspect in purchase decisions, therefore, is price and products that are affordable, simple and easily accessible. Let’s take the example of shaving. There are major differences in the behavior of customers in emerging and developed markets. Companies catering to these markets such as P&G often have to adapt to these difference. For example in the US the new Fusion Pro Glide with five blades is the top selling razor of P&G’s Gillette product portfolio priced at around $4. However this product does not address the needs of Indian customers. Most Indian people still shave with double-edged razors while balancing a hand held mirror. P&G realized that in order to enter India they had to investigate the needs of the Indian BoP customers. They sent a research to India to observe the shaving behavior of Indians and to understand the role that shaving plays in their daily life. P&G found out that Indian customers need a simple razor that can use without running water and which limits the risks of cuts while shaving. After conducting this research they introduced a simple razor called the Gillette Guard. It has just one blade, can easily be cleaned without running water, is safe and costs a fraction of the price of the Fusion Pro In fact, the razors and blade cartridges sell for about $0.30 and $0.10, respectively. To market the Gillette Guard, P&G focused on Indian kiranas, or local shops, since thisiswhere BoP customers preferto shop. For their promotion P&G used a local approach with ads and TV spots hosting Bollywood actors. Using local actors plays an important role in India. The campaign focused on the convenience of the Gillette Guard with respect to use and cleaning and blade change. The Gillette Guard has turned out to be a very successful innovation. It not only gained 4% market share in its first quarter but is by now the best-selling razor in India commanding 50% market share Furthermore P&G learnt its innovation lessons from the Gillette Guard.

They learnt to go deep Into the field to be immersed in the lives of poorer customers to understand their needs. P&G developed a product that genuinely addressed these needs – and seemingly better than any of its competitors The case highlights P&G’s global innovation strategy. The company did not develop this geocentric perspective of the market when it was established, but developed it over time. Usually companies start out to market their offerings domestically and then explore different international market opportunities. a) What are the motives for companies to internationalize? There are two different types of motives. Explain. b) The fact that companies develop an internationalization strategy usually from a domestic market before they explore new international markets takes on board an evolutionary perspective. Explain a model that helps to describe this internationalization process. 2. Emerging markets have different needs than mature markets. How can companies deal with this challenge? How did Gillette manage to be successful in India? 3. Did P&G use a local or global marketing communication approach? What are benefits of these different approaches?

Research &Presentation (15 Marks) Your work should be word processed and presented in the form of a report. Credit will be awarded for good presentation (e.g. report is well structured and work has been spell checked,etc.) You must support your answers by referring to appropriate literature. Credit will be awarded for the range of reference sources consulted, how well they are used within the report and the correct use of the Harvard System of Referencing.