One feature in international selling that is becoming more common is the idea of piggybacking; that is,
Question:
One feature in international selling that is becoming more common is the idea of piggybacking; that is, tying up with existing sales channels to distribute and sell your products. Examples include Dunkin' Donuts (as the name suggests, the confectionery chain)
combining with Baskin-Robbins (the ice-cream chain) units to sell in Canada, Mexico, and Indonesia. According to business proponents of piggybacking, it allows a significant reduction in costs and risks by sharing resources such as dining space, staff, and so forth, leading to better profitability. However, the concern is that a foreign partner, often chosen as the piggybacking partner (unlike the example just stated) could devote less attention to the foreign product. If the piggybacking is with a unit in the same business, considerable cannibalization can also take place. Discuss the conditions under which a piggyback strategy would be appropriate and under which conditions it would not be appropriate.
Step by Step Answer:
Global Marketing Management
ISBN: 9781118466483
6th Edition
Authors: Masaaki Kotabe, Kristiaan Helsen