Questions given at last page

Chapter 7: Reaching Global Markets Case 7-1: Pederssen Plastics Limited Hans Pederssen started his plastics firm in Thunder Bay, Ontario soon after he immigrated to Canada from h native Denmark in 1995. He had an engineering background and had worked in the plastics industry Denmark for five years prior to coming to Canada. His Canadian firm is a private enterprise, which started as very small firm but which has now grown to two hundred employees, most of whom are employed in th manufacturing side. SOn after he began the company, he hired two assistants, Marni Theodore and Geral Buscher, and together they formed the management team. They are still with him, and he relies heavily on both marketing, not an area of strength for him. derssen Plastics Limited manufactures and markets plastic products for companies primarily in consumer dustries. For example, they supply toy manufacturers with toy parts, beauty care companies with plastic home improvement retailers with brooms, pails, and snow shovels. They concentrate or they believe they can effectively compete on quality and innovativeness. They are ion contracts which would force them to compete against some of the larger enterprises in the know they would be "eaten alive." They also confine their activities to the domestic they have never considered venturing further - and they focus on sales to northwest hey can remain close to the customer. hail from a business acquaintance, Anna Jensen, in Denmark who wanted him to llphones. She was in the plastics industry herself, and it was for a private label large retailer in Germany. However, she was unable to fill it since sh for th next six months. Was Hans interested in the contract? The purchaser wanted a good price, although Anna assured Hans that the buyer was aware that and Gerald the next day to discuss the idea. By the end of the meeting they I agreed tion and to think over the proposition in more depth. They the task of collecting more informati er, if they decided they did want the they had little\"We are never going to make a lot of money by selling just in Canada, even if we expand to Central and Eastern Canada. This contract gives us an entry point into international markets, and I heheve we ought to explort It. In fact, I really don't see much point in this contract if we do not use the e_ nice we gas: to actively pursue other international marketing opportunities. I have not researched all the possible market segments we could target, but 1 have looked at the cellphone face plate market, and it is very large and certamly enough to keep us busy for the foreseeable future.\" She went on to present her arguments in support of her recommendation. She started by saying that there was a global market for cellphones. By that she meant that people all over the world had approxrmately the same needs and wants with respect to cellphones. Aside from these general needs and wants, however, there were some distinct segments, most notably the youth segment. The purchase behaviour of these consumers was strikingly similar across the globe: that bought cellphones primarily as a status symbol and secondarily as a fashion statement. Factors affecting their purchase decision included service offers that accompanied the telephone itself, the ring tones, games installed on the telephone, and, most importantly, the physical design, including the size, ease of use (location of the buttons, etc .), and, relevant to Pederssen, the face plate. Marni reminded Hans and Gerald that the contract on which they intended to bid was for brightly coloured face plates, obviously targeted to the youth market If this youth market existed all over the world, she argued, then this kind of face plate would be in demand elsewhere. She also pointed out that, since the youth market was highly fashion-conscious, then face plate designs would need to change frequently. Did this not mean a steady demand? She noted that designs Would have to be innovative and creative to keep pace with fashion trends, but this seemed Well within Pederssen's capabilities since they had two talented designers on staff. Yes, she acknowledged that it would require an investment of time and energy and a strong commitment, but it was clearly an opportunity, \"landing right in our lap," she said. Gerald concurred. Marni and Gerald both looked at Hans. He was impressed with Marni's analysis, but he had also done some reading and thinking himself. The notion that the youth segment had similar demands globally was certainly appealing since this, of course. implied economies of scale for Pederssen. However, Hans was not at all sure this global demand was true. Based on his own research, there were indications that young people differed in their cellphone needs depending on their culture. If that meant widely different face plate designs, then the rm's potential for high prots was dramatically reduced since the nancial benets of economies of scale would be irrelevant to them. To illustrate, Hans suggested some ideas for face plate designs: graphics based on movie themes, popular heroes, or fashion items such as tattoo designs, jewellery, even clothing. Were these not all culture-specic? Hans did not believe Pederssen Plastics had the resources, either manufacturing or human, to handle what be suspected were widely varying tastes in face plate designs. Moreover, he knew that different cultures utilized their cellphones differently. For example, text messaging was far more popular in Europe than in North America, and broadcast messages were becoming increasingly commonplace there. He had read that the Vatican marketed a cellphone service in which the Pope issued daily inspirational messages and that people, including youth, were subscribing to this service in record numbers. An Islamic organization was offering a service that sent Muslims a text message call to prayer ve times a day on their cellphones. Was there really a global youth segment for cellphone face plates? Should Pederssen Plastics go ahead with the contract (assuming their bid is successful) and, thus, commit the rm to launch an international marketing strategy