MKTG6212 Northeastern Wk 2 How to Sell Garbage Disposals in China Discussion How to Sell Garbage Disposals in China Discussion Questions: Why does the U.S

MKTG6212 Northeastern Wk 2 How to Sell Garbage Disposals in China Discussion How to Sell Garbage Disposals in China Discussion Questions:

Why does the U.S. account for 3/4ths of the global demand for garbage disposals?
Is China an attractive market for garbage disposals?
How is InSinkErator adapting its garbage disposal for the Chinese market?
Assess their chances for success in the Chinese market, considering the pros and cons of entry into the Chinese market.

Apple Scraps Like an Underdog in Second Biggest Mobile Market Discussion Questions:

Why does Apple have a 3% market share in India?
Assess Apple’s moves to improve its market position in India.
What are some broad lessons for product adaption from Apple’s experience India and InSinkErator experience in China?

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How to Sell Garbage Disposals in China – WSJ
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BUSINESS
How to Sell Garbage Disposals in China
Emerson’s InSinkErator Rejiggered to Munch Kitchen Favorites Like Eel, Bullfrog Skin and Duck Heads
Emerson Electric hopes China’s housing market will open up for its kitchen disposals. Pictured, workers at its Racine, Wis.,
InSinkErator factory. ROB HART FOR THE WALL STREET JOURNAL
By James R. Hagerty
March 26, 2014 7 31 pm ET
RACINE, Wis.—About half of all U.S. homes have garbage disposals gurgling under kitchen
sinks to grind up food waste. The rest of the world generally doesn’t share Americans’
enthusiasm for this gadget.
That’s a problem for Emerson Electric Co.’s EMR 2.04% ? InSinkErator unit, the world’s largest
disposal maker, whose founder invented the device 87 years ago. The U.S. market for disposals,
totaling about $1 billion at the retail level last year, is mature and slow-growing. Despite
decades of overseas promotion by InSinkErator and others, the U.S. still accounts for more than
three-quarters of global demand for disposals.
So InSinkErator has staked its growth hopes on China, where it sees big potential even though
the product is almost unknown there.
“We are turning the dial up in China,” said Dave MacNair, vice president of global marketing at
InSinkErator. The company in November 2012 opened a plant to make disposals in Nanjing,
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China, its only manufacturing site outside the U.S. It is pitching its product to the Chinese via
online marketing and in-store displays, while working with home builders and local buildingcode and waste-handling o?cials to explain its bene?ts.
While browsing at Jiahe Jiamei Furniture City in Beijing recently, Wang Chao, an o?ce worker,
was skeptical about the disposals on display, costing 1,000 to 4,000 yuan, or $161 and $645. “I
don’t know much about that,” she said, “and I’m not interested in buying one either.”
But James Liu, an antique dealer who studied in Britain, was interested in one to avoid blocked
drain pipes and “disgusting” smells. “Not many of my friends have this at home,” he said.
So far, sales in China are tiny. InSinkErator won’t provide data but says sales are growing
quickly—more than 30% a year—from a small base. The company is competing against several
Chinese rivals, including Beijing Becbas Technology Co. and Ningbo Oulin Kitchen Utensils Co.
China is attractive partly because it has more housing construction than any other country.
InSinkErator executives also believe the Chinese have a greater need for disposals because they
eat less processed food than Americans and have more leftover vegetable peelings, ?sh bones
and other items that can be ground up.
InSinkErator redesigned its disposals for the Chinese market, angling the grinding teeth
di?erently so they could handle tough waste, including eel or bullfrog skin. The device also
grinds more ?nely so leftover rice or noodles won’t clog pipes.
At InSinkErator’s labs in Racine, workers test disposals by feeding them with cow ribs and
pinewood blocks. They also now test food more likely to be found in China, such as white radish
(whose density presents challenges) and duck heads.
The technicians have found shark skin nearly impossible to grind up. Mango pits are equally
tough. “They’re like nature’s Kevlar,” said Dane Hofmeister, a lab manager.
InSinkErator regularly seeks meetings with local Chinese o?cials to explain how disposals
could reduce the amount of household waste that needs to be hauled away and buried in
land?lls. One victory came in early 2012 when the Shanghai Urban Construction and
Communications Commission, under a pilot program, recommended use of disposals in certain
types of housing.
The disposal was invented in 1927 by John Hammes, an architect in Racine, who got the idea
while watching his wife clean up after dinner and built a primitive grinder from sheet metal
and a small electric motor. He obtained a patent eight years later and formed the company in
1938. InSinkErator sales didn’t take o? until after World War II, when housing construction
boomed.
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Sales depend heavily on new construction because it is expensive—often $400 to $800—to
retro?t disposals into old homes. For that reason, they’re far more common in the Western U.S.,
with its newer housing stock, than in the Northeast’s older cities.
In the 1970s, InSinkErator used wild-haired comedian Phyllis Diller as a pitchwoman. Her lines
included: “Every woman needs a leftover lover.” It diversi?ed into trash compactors, which
squash refuse into smaller bundles, but quit making them because they weren’t a big hit. It
found more success with kitchen spigots that provide instant hot water at temperatures near
boiling.
Still, disposals are the company’s mainstay. “We know kitchen waste solutions better than
anyone,” says a banner hanging from the ceiling in the company’s bustling Racine factory,
which has about 900 workers and 24 robots, including one nicknamed Wilma after the
“Flintstones” cartoon character.
In the U.S., InSinkErator disposals retail from about $80 to $340. The company competes
against General Electric Co. and the Waste King brand of Anaheim Manufacturing Co., both of
whom import disposals from Asia.
For now, InSinkErator is focusing e?orts on China’s high end, but it may eventually have to
o?er lower-cost versions, Mr. MacNair said. “We think it will become a mass market [good],” he
said. “The question is how long it is going to take.”
—Lilian Lin in Beijing contributed to this article.
Write to James R. Hagerty at bob.hagerty@wsj.com
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Apple Scraps Like an Underdog in Second Biggest Mobile Market – WSJ
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TECH
Apple Scraps Like an Underdog in Second
Biggest Mobile Market
In India, tech giant is forced to work on brand awareness where Samsung has head start on
smartphones
Apple chief executive Tim Cook met last year in New Delhi with Indian Prime Minister Narendra Modi. PHOTO: PRESS
INFORMATION BUREAU OF INDIA ASSOCIATED PRESS
By Newley Purnell and Rajesh Roy in New Delhi, and Tripp Mickle in San
Francisco
June 22, 2017 5 30 am ET
Apple Inc . AAPL 2.35% ? is broadening its push into India, perhaps the iPhone’s last great
growth market.
The company’s ?rst ever Indian-made iPhones began selling locally this month with hopes
reduced prices will boost sales in the sprawling country where Apple has just 3% of the
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smartphone market.
The Cupertino, Calif., company is considering opening ?agship stores in India’s megacities
and is helping hundreds of third-party resellers open new shops at an unprecedented pace. It
also has set up development centers to build apps for Indian customers and enhance local
mapping capabilities.
While Apple’s strategy typically is to sell high-price handsets to telecom carriers, its e?ort in
India re?ects the realities of an emerging market where wages are low, cellular speeds are
sluggish and consumers mostly buy phones from small, una?liated shops. The company also
must overcome weak brand awareness and its relatively late arrival in a market where Samsung
Electronics Co. has a head start.
“It’s not a push for premium—it’s a push to sell an Apple device by any means necessary,” said
Lauren Guenveur, an analyst with market research ?rm Kantar Worldpanel.
India, already the world’s second-largest mobile market after China, is expected to add more
mobile subscribers—310 million—than any other country in the four years through 2020,
according to estimates from GSMA, a global association of mobile-service
providers. Apple wants to make sure all the growth doesn’t go to Samsung and rising Chinese
competitors such as Xiaomi Corp. and Lenovo Group Ltd.
There is “a lot of headroom [in India] in our mind, and so we are working very hard to realize
that opportunity,” Chief Executive Tim Cook said on a call with investors in October.
Samsung, which holds 27% of India’s smartphone market, announced this month it was
doubling its capacity in India with a $760 million investment in its smartphone and refrigerator
factory outside India’s capital.
Chinese brands such as BBK Electronics Corp.’s Oppo and Vivo are rapidly gaining ground, with
their 50% share of the smartphone market in the ?rst quarter representing a doubling from a
year earlier, according to Kantar Worldpanel.
Apple may need to temper investor expectations in India where by 2020 it is likely to increase
its market share to just 5% worth about $10 billion, not much for a company with more than
$215 billion in annual revenue, said Mizuho Securities analyst Abhey Lamba.
“They can’t ignore it,” Mr. Lamba said “But it’s not enough to move the needle.”
India is using its giant domestic market to woo global manufacturers, charting a di?erent path
to development than that of the export-powered economies of Japan, South Korea and China. If
a lower-cost iPhone became popular with a rising middle class of Indian consumers, production
could be expanded and more jobs could be created—which in turn would help lift living
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Apple Scraps Like an Underdog in Second Biggest Mobile Market – WSJ
standards and discretionary
spending. It is comparable to
what Ford’s inexpensive Model-T
did a century ago for the young,
up-and-coming economy in the
U.S.
India has worked hard to
persuade Apple to produce
phones locally. The government
has eased foreign-investment
restrictions, with an eye toward
fostering an ecosystem of phoneparts manufacturers to supply
international electronics
makers. The e?ort is in keeping
with Prime Minister Narendra
Modi’s Make in India initiative.
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Under
investmen
t
restrictio
ns,
foreignowned
singlebrand
retailers
like Apple
A salesman checks a customer’s iPhone at a mobile-phone store in New Delhi. PHOTO: ADNAN ABIDI REUTERS
were
required
to source
around 30% of their products locally in order to open their own shops. Apple was rejected when
it pushed for that restriction to be waived. New Delhi later said companies could be given three
years to reach the requirement, according to government o?cials.
Apple was also refused permission to import used iPhones to be refurbished and sold in India,
said one Trade Ministry o?cial who asked not to be named.
“The government is eager to have the world’s most-valued company have its operations
here,” the o?cial said. “We hope something mutually agreeable is worked out in near future.”
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When the company decided to make its own phones here, Apple picked Taiwan’s Wistron Corp.
to begin assembling the iPhone SE, its least expensive model, with production starting in May.
The high prices on iPhones are the biggest reason Apple can’t sell more in India. Analysts
estimate more than 75% of the smartphones sold in the country sell for less than $250 and 95%
sell for less than $500. The iPhone SE was introduced last year at about $600 and now sells for
around $325—could fall further to a level more Indians can a?ord.
If it were priced below $300, the model could win buyers now spending a similar amount for
higher-end Android phones, said Faisal Kawoosa, principal analyst at research ?rm CMR.
Apple has been trying to expand its distribution network in India, where about 85% of
smartphone sales occur across a fragmented network of small retailers, according to Mizuho
Securities. Apple supports resellers with marketing materials, furniture and other assistance.
It plans to back 200 new stores in the next year, according to a person familiar with the
company’s thinking.
As it plunges into India, Apple faces a consumer-awareness problem, with nearly half the
population unfamiliar with the brand, according to a Morgan Stanley survey. To build
awareness, the company has been considering opening ?agship stores in New Delhi, the tech
hub of Bangalore and the ?nancial center of Mumbai, according to a person familiar with the
company’s plans.
Meanwhile, Apple is doubling down on content. In March, it opened an app-development center
in Bangalore to help coders making iOS apps for India. The country has nearly 3 million mobile
app developers, but fewer than 15% of those make iOS products, said Jayanth Kolla, founder of
research ?rm Convergence Catalyst. Apple has also opened an o?ce in Hyderabad to boost
mapping capabilities.
Of course, Indians don’t have to buy iPhones to bond with the Apple brand. In a bid to get young
users hooked, Apple this year started o?ering Indian college students its Apple Music service,
which is also available on Android devices, for the equivalent of 93 cents a month—less than
one ?fth the cost in the U.S.
—Karan Deep Singh in New Delhi contributed to this article.
Write to Newley Purnell at newley.purnell @wsj.com, Rajesh Roy at rajesh.roy@wsj.com and
Tripp Mickle at Tripp.Mickle@wsj.com
Appeared in the June 23, 2017, print edition as ‘Apple Recharges E?ort in India.’
Copyright © 2019 Dow Jones & Company, Inc. All Rights Reserved
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D’Amore-McKim School of Business
3: Product Policy
Meeting Varying Customer Needs
Ravi Sarathy
Week 2 L1
1
D’Amore-McKim School of Business
Product Policy for Global Markets
Which products to offer in international markets (relevant
product attributes)
How broad a product line to offer
Adaptation of individual products and product lines
Factors affecting standardization verses adaptation decision in
foreign markets
Segmentation in international markets
Product line and related marketing mix choices affected by
variations across markets
Customer needs
Conditions of use
Ability to buy
2
D’Amore-McKim School of Business
Standardization versus Adaptation
Standardization influenced by
Need to lower costs
Convergence of tastes
Similarity in country markets
Industrial product setting
Centralized global marketing (GM) management
Availability of scale economies
Standardization by competitors
3
D’Amore-McKim School of Business
Factors Favoring Product Standardization versus Adaptation
Standardization
Adaptation
High costs of adaptation
Differences in technical standards
Primarily industrial products
Primarily consumer and personal-use products
Convergence and similar tastes in diverse country markets
Variations in consumer needs
Predominant use in urban environments
Variations in conditions of use
Marketing to predominantly similar countries (that is, the
triad economies)
Variations in ability to buy—differences in income
levels
Centralized management of international operations when
mode of entry is mainly exports
Fragmentation with independent national
subsidiaries
Strong country-of-origin image and effect
Strong cultural differences, language, etc., affecting
Scale economies in production, marketing, and research and purchase and use
development (R&D)
Local environment-induced adaptation: differences in
Standardized products marketed by competitors
raw material available and government-required
standards/regulations
Adaptation strategy successfully used by competitors
4
D’Amore-McKim School of Business
Standardization versus Adaptation
Factors favoring adaptation
Differing technical standards
In a consumer-product setting
Variation across countries in consumers and conditions
of use
Income differences
Cultural differences
Local environment requirements
Fragmented management across subsidiaries
Adaptation by competitors
5
D’Amore-McKim School of Business
Buyer Decision Process
Need:
latent or
conscious
Search for
product/
service
Evaluation of
Alternatives:
Multi-attribute
evaluation
Choice:
Preferences,
social norms,
and conformity
Point-of-sale
factors and
outcomes
6
D’Amore-McKim School of Business
Adoption and Diffusion of New Products
Awareness
• Peer group, word of mouth
• Advertising
Deepening
interest
• Information seeking
• Other user’s experience (for example, Yelp)
Evaluate
the new
product
Trial
Adoption
phase
Internation
al
adaptation
• Decide whether to try
• Actual first use of new product
• Assess use experience and satisfaction, decide whether to continue using new
product
• Market tests, pilots
7
D’Amore-McKim School of Business
Product Attributes in Global Marketing (GM)
Product features, price, and value to customer can vary across
markets
Country of origin effect—Specific products from certain
countries have a more favorable image (for example, German
cars, Italian fashion design)
Branding choices:
Local, regional, and global brands; umbrella branding
Brand extensions
Private branding and OEM markets
Protecting intellectual property (piracy and counterfeiting)
8
D’Amore-McKim School of Business
Product Attributes in International Marketing (cont.)
Product standards
Global versus regional and country-specific standards (for example,
smartphones: emerging 5G standards; older standards: Global System for
Mobile communications (GSM-Europe), Long-Term Evolution (LTE), and
Code-Division Multiple Access (CDMA-U.S.)
Competing to establish a standard: barrier to entry, customer lock-in
Customer satisfaction, loyalty, and repeat sales
Packaging and labeling, warranties and service
Bundling products and services
9
D’Amore-McKim School of Business
Adapting Product Attributes
Products can be seen as a bundle of attributes
For example, automobiles: power, performance, design, style,
image, status, safety, quality, comf…
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