Case Study
John Kirby had just returned from a first exploratory visit to Slovenia in Central Europe. As MD of Milton's, a medium-sized UK brewery, he knew that the company's future lay with export business. The UK beer market was saturated, and Milton's had been successfully exporting their bottled beers to Holland, Italy and Austria for the past 5 years. These EU markets were served by specialist beer distributors, and while the logistics costs were high, Milton's could still make profits from these exports by concentrating on sales of their Coronet and Monarch brands of premium bottled beers.
John Kirby realised that entering Slovenia would have its risks, and certainly the Slovenian beer market was not large, with volume estimates of 3-4m hectolitres per year, and per capita consumption of 44 litres a year, well below UK consumption of 99 litres per capita. However, he considered the market to be sufficiently attractive for a medium-sized company like Milton's, while the longer-term prospects were good, since recent and projected growth in the Slovenian economy (4-5% pa) would likely drive up the demand for premium beers, a specialist quality segment familiar to Milton's.
Historically, the Slovenian brewing industry has been fragmented, with regional producers predominant, though recently a number of imported beers have entered the market, and international groups such as Interbrew are said to be considering local production, having seen the potential in the market.
Regarding Slovenia, John Kirby's first interest was how to serve the market as an exporter, and with this in mind he had made an initial visit to two local beer and wine distributors, who were keen to represent Milton's in Slovenia. After these exploratory meetings, Kirby had invited each distributor to develop a detailed submission on their qualifications and how they would handle the Milton's business, for a 2-year trial period. These submissions were to be sent to Milton's UK Head Office within 21 days.
Additionally, and separate from the distributor meetings, during his trip John Kirby had visited the Maribor Brewery in Northern Slovenia, whose management were seeking some
joint-working arrangement with a Western brewer, in order to improve their product quality and widen their product range. Kirby had been non-committal during this visit, though since then he has been considering more seriously the scope Maribor might offer for some local production in Slovenia, possibly to supply nearby markets also.
Answer the following Questions
John Kirby will shortly receive the submissions from the two distributors applying to handle Milton's products in Slovenia. Advise him on what criteria to use in the distributor selection process, and briefly consider what performance targets he could propose for the selected distributor to work to within the 2-year trial period.
Critically review the general strategic case for local production in Slovenia, with a brewer such as Maribor; and also identify and comment on two possible formal collaborative arrangements by which this might be realised.
A major German manufacturer of baby-foods is planning to carry out a multi-country market research survey across 12 EU countries. Identify and critically comment on the practical issues involved in such a research undertaking.
Describe the main components of culture and examine how they might influence the international marketing mix for a US-based carpet manufacturer.
Taking as an example a company operating in any (named) product field, illustrate how and for what marketing objectives it might make use of sales promotion in its international markets.
Using examples where possible, identify and review the types of legal issues and problems that companies may face in doing business in overseas markets. In your answer, consider briefly the measures that companies might take to deal with such issues.