SVKM’s NMIMS UNIVERSITY
INTERNATIONAL BUSINESS
DATE: MARKS : 100
TIME:
QUESTION NO 1: I.E. CASE STUDY IS COMPULSARY. CARRIES 25 MARKS.
ANSWER ANY 5 OUT OF THE REMAINING 8 QUESTIONS, EACH OF 15 MARKS.
TOTAL MARKS = 100
Break up:
5 questions x 15 marks = 75 marks +
1 case study x 25 marks
DURATION = 3 HOURS.
QUESTION NO 1) CASE STUDY:
Introduction
All products have a life-cycle. It starts with preparations for the product's launch, followed by the launch itself.
Some products are an immediate success; they capture public imagination. Often this results from well targeted, exciting promotional and advertising activity and from careful market research that has identified a genuine gap in the market. Other products take longer to come to consumers' attention, and longer still to become popular. Some new products flop, and soon disappear from sale.
The growth stage comes next. Growth can take weeks or months (eg the latest fashion clothes) or years (eg the typical packet or canned food and drinks found in supermarkets). Eventually the maturity stage is reached, where sales of the product and consumers' level of product awareness are both high. At this stage, products risk going into decline, largely because they have become too familiar and are seen as less exciting than recently launched alternatives
The life-cycle of a product
Marketing departments are expected to ensure that products do not go into decline. Mature products need new life injected into them, to keep the buying public interested and aware of the product's benefits.
This case situation invites suggestions and recommendations on how to put new life into a favourite, leading brand: Kit Kat.
Why Kit Kat needed revitalising
Kit Kat is the UK's best-selling chocolate bar and the market leader since 1985. However, in the competitive modern world consumers' tastes continually change. As a result, even the most popular icons have to re-invent themselves from time to time in order to keep their appeal and stay 'on top'. For example, pop stars adjust their image, film animators amend their favourite cartoon characters, and car designers re-design old favourites such as the Volks Wagon Beetle. One secret of success is to retain enough of the old image to keep the loyalty of present enthusiasts for the product, whilst making sufficient innovations to attract a whole new group of consumers.
In the world of popular chocolates and sweets, there has been in recent years an ongoing revolution in modifying products. In previous times, sweets and chocolate bars remained in more or less the same form for many years. Today, however, modern sophisticated consumers constantly seek novelty and change, and consumers have become the driving force behind product modification.
- Take Cadburys for example, which has undergone a series of changes in recent years. Until the late 1990s, Cadburys came in well-established The Cadbury’s Standard Dairy Milk Bar, with standard colours and packaging.
Every alert, market-focused producer recognizes the need for regular change. This is required because:
- consumers want and demand change
- rival firms are constantly re-inventing themselves and their products
- innovation and inventiveness keep an organization flexible and able to respond to further change.
Although Kit Kat continued to be the Number 1 confectionery brand, by the early 2000’s its volume sales were falling. Faced with several increasingly attractive competitive offerings, consumers began to see Kit Kat in its traditional form as lacking in excitement and interest, with purchases being driven more by habit than positive choice. Although the four-finger Kit Kat continued to be highly popular with its core target market of 25-40 year olds, it was losing popular appeal with younger consumers.
The image problem was most evident among core segment i.e. 12-20 year olds. In this important age group, while Kit Kat had been part of 'growing up' and may also have made regular appearances in lunch boxes, it was hardly relevant to their lifestyle. The traditional four-finger Kit Kat did not seem relevant to them.
Nestlé saw a dip in the market share thereby making its leadership position vulnerable on one hand and the soaring popularity of new International players like Hersheys, Cadburys etc on the other. The company decided to revisit its Performance and Quantitative objectives and do whatever it takes and confront this challenge. The task was seemingly even more difficult as it involved taking decisions around their flagship product: The KitKat 4 finger chocolate bar. A top think tank team was set up to evaluate options and come up with a solution to maintain their leadership position and maintain their loyal customer base. Some of the areas which the team thought they need to look in to and will provide the solution were:
- Changing the product to better meet the needs and wants ofconsumers.
- Using price to influence market share e.g. change prices relative to those of the competition.
- Altering patterns of distribution e.g. by making the product more widely available.
- Changing the style of promotion; for example, by creating brand awareness through advertising and promotions which show the additional benefits of new aspects of a product.
- New product launch.
All the above keeping in mind that the most intriguing aspect of the task at hand is that of revitalizinginterest in the Kit Kat line, in an International market i.e. the UK, at a time when the existing product is still ringing in cash registers for the company in its home market – Switzerland.
This is what is daunting Nestle – their best brand having a rather compressed product life cycle in an International market whilst still in growing stages in the home market.
Kindly recommend your solution to this situation and come up with suggestions keeping in mind that your strategy should not have a knock-on effect into other demographic segments / International markets and also not have a negative effect on the sale of the traditional four-finger Kit Kat in the UK and worldwide.
End of Case.
ANSWER ANY 5 OUT OF THE FOLLOWING:
QUESTION NO. 2)The Essence of Multinationality: Elaborate this concept in the context of International Business.
QUESTION NO. 3)Discuss the following FDI Theories: Market improvement approach, PLC, Transaction cost, Eclectic paradigm
QUESTION No. 4)Discuss the Critique of Theory of Comparative Advantage.
QUESTION NO. 5) Explain what are the different criteria for selecting an entry strategy.
QUESTION NO. 6) Write short note on Transfer pricing.
QUESTION No. 7) What are the factors that you should consider in a make – or - buy International decision.
QUESTION No .8)How will you evaluate the socio-economic performance of an International enterprise ?
QUESTION No. 09) Describe the distinguishing characters of different trade groupings.
What are the objectives of trade groupings?
END OF EXAM….