This article first talk about the standardization of products in the international market place and the issues associated with not customizing products. The report demonstrates the necessity of shaping the product value proposition according to the needs of each market place by investigating on two real case studies; Starbucks and EuroDisney.
Secondly this article discusses in regards to the opening of foreign investments in India and the on how companies compete in the Indian market place with the help of Coke & Pepsi case study and the Fair and Lovely case study.
The case studies are analyzed and compared by applying elements of the international marketing task diagram (Cateora et. al, 2012).
Case 1 and 2: Starbucks and EuroDisney.
‘As current markets become saturated, new ones must be found. With globalization, companies would require to provide standardized goods to all countries rather than customized products for individual countries.’ as stated by Theodore Levitt (1983).
In the case of Starbucks, the domestic market in the USA and Canada were reaching its saturation point in the mid 1990s, where they began to cannibalize the sales of existing cafes with the introduction of new ones. The company operated more than 10,000 cafes across USA and Canada, which along with coffee offered high-speed internet access at 1200 of their cafes. Starbucks had successfully turned coffee into premium commodity (Vishwanath & Harding, 2000) with its $3 lattes. With regards to the down turn in economy, people started to cut back. With saturated markets and the slow economy, the company wanted to increase their revenues by expanding into the European markets.
As in the case of EuroDisney, they already had theme parks running successfully in Anaheim, California and Orlando, Florida. They had already set up a Disneyland in Japan where, within the opening year, more than 10 million people had visited and the numbers bettered every year (Fusaho, 1988). After this success, Disney now wanted to expand into Europe.
Moreover, when Starbucks and EuroDisney entered the European market place, keeping in mind Levitt’s advice of standardization, there were many difficulties that both multinational companies had to face.
For Starbucks, entering the European market place, they didn’t realize that in Italy the local cafes where selling cheaper and better coffee than what Starbucks was offering i.e. American java. Competing in the Italian marketplace would prove even more difficult as there are some 200,000 local coffee bars that served food as well as coffee. Starbucks lacked with a proper food menu to cater to the culture and the needs of Italian people.
On the other hand, in France, there was a culture of consuming bitter coffee. Local cafes in France served darker coffee than what Starbucks served and that the people were hesitant to change to their sweeter coffee.
Employment of staff in cafes in France would also prove to be an issue. France’s arcane...