Creating and Sustaining Wealth in Businesses new to Global Marketing

The key to any business remaining viable is: having an exceptional product/s to sell, engaging the interest of customers with these products, and conceiving a plan to ensure that your business-turf is protected from competitors. This is the rule in all markets, local and global- but can managers otherwise expect to see the same global successes, as was seen from the local product launch-without any changes to the strategy?



In the book "International Marketing- 7th Edition" (The Dryden Press, 1997), authors/college professors: Vern Terpstra and Ravi Sarathy, outline their suggestions for staying competitive in the multi-cultural, oft-times volatile global market-place. Their real-world examples and recommendations are descriptive of how entrepreneurs and business owners could improve their profits considerably by utilizing "Commercialization", rather than a simple Marketing system, when attempting to debut emerging technologies in the global arena.



The following case shows the consequences that companies face when attempting an international product launch without doing proper research. The Heinz Co. may have been a bit hasty in a decision to enter a drink called Fruitsi (that had been successfully launched in Argentina and Venezuela) into the Brazilian drinks market. The initiative did not work.



Brazil had stores on every street corner already selling fresh orange juice. Additionally Heinz was required by regulators to keep natural fruit content at a minimum of 30%. This caused a hike in prices making Fruitsi uncompetitive- also, the added fruit content shortened the shelf life of the drink. After other attempts at resuscitating the market failed- the Heinz Co. decided to pull Fruitsi out of Brazil.



Terpstra and Sarathy make a good case for the benefits of effectively managing a firm’s product innovations, through this Silicon Graphics example. Faced with the certainty that new-generation technology would cause their current technology developments to become obsolete, president, Ed McCracken theorized that the best way to handle the situation (which would lead to market losses and declining profit margins preventing further R&D) would be to create "chaos", by becoming an innovative leader.




Silicon Graphics commercialization plan was this:



1. "Long-term planning is dangerous." Mr. McCracken said in favor of reducing product development time. "In fast-paced industries like this, a company cannot afford to slow stride to start a new product development (NPD) initiative. Leave new initiatives for later!"



2. Product development teams were formed, where R&D staff worked with customers to identify and respond to shifts in preference to 3-dimensional images and digital video in desk-top computing. Engineers were given the autonomy to work with customers, also, in designing new product concepts.



3. To remain competitive, don’t become attached to an existing product that must be phased-out, and build on core capabilities. For example: Silicon Graphics (who provides machines to movie makers that are used for special-effects and animation) offered this product revision: microprocessors with 3-dimensional graphics, with audio and video processing.



The examples given in the book, "International Marketing" show that knowledge of customer needs, and indeed having the customer participate in the NPD process, are vital to successful commercialization. The Heinz Co. would have faired better had they first researched the Brazilian market.