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Marketing Strategy: Global, Multi-domestic, or Transnational

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Look at two completely different companies that sell completely different types of products. However, both companies have strong international potential.

The first business you will look at is Yogurtland, a California-based frozen yogurt franchise with 300 locations. Most of the company's locations are in the United States and Australia, but it has also opened up a small number of locations in Mexico, Venezuela, Thailand, and the United Arab Emirates. The company has been successful in part because of customer satisfaction with the flavors, and in part because its self-serve model allows for local franchise owners to open up a new location at a relatively low cost.

The second business to look at is Micromax, an Indian smartphone company that is starting to expand internationally. The smartphone business is a notoriously tough market with dominant competitors such as Apple and Samsung. Micromax is the largest local smartphone company in India and is second only to Samsung in the Indian smartphone market. Micromax has recently started to expand to Russia and is hoping to expand to other countries as well. Given the high price of smartphones from Apple and Samsung, there may be room for a lower priced competitor in the global smartphone market.

1. What kind of strategy do you recommend if Yogurtland continue its international expansion? Would you recommend product standardization or localization? Which overall strategy would you recommend—transnational, multi-domestic, or global? Explain your reasoning and apply the concepts from Carpenter and Dunung (2012) and Jeyarathmm (2008). Make sure to cite some articles on Yogurtland as well.

2. What kind of strategy would you recommend for Micromax's international expansion? Would you recommend product standardization or localization? Which overall strategy would you recommend—transnational, multi-domestic, or global? Explain your reasoning and apply the concepts from Carpenter and Dunung (2012) and Jeyarathmm (2008). Make sure to cite some articles on Micromax as well.

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Solution Summary

The solution provides guidance for International Business strategy of Yogurtland and Micromax. The marketing strategy for these two companies and makes determinations regarding standardization or adaptation and whether they decide to become a global, multi-domestic, or transnational corporation.

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Guidance on Case 1: Yogurtland International Expansion
What kind of strategy do you recommend if Yogurtland continue its international expansion? Would you recommend product standardization or localization?

The business of Yogurtland was started with the mission of providing its customer with a self serve yogurt experience with best quality and variety of flavours (Yogurtland, 2018). The major products of Yogurtland include yoghurt based products and the competence of the company lies in frozen desserts (Luna, 2017: Aug. 28). Yogurtland has been able to survive and sustain competition from companies like Pinkberry who started very competitive products like gourmet tart frozen yogurt in 2005 which had a huge craze at that time (Luna, 2017: Aug. 28). This is despite the fact that the sales of frozen yoghurt including non-dairy ice cream have declined by 10% (Luna, 2017: Aug. 28). The product life cycle of frozen yoghurt is on decline and therefore, innovations and focus on R&D and market research are becoming important for companies in this sector so that new products are with introductory life cycle stage can be launched with price skimming or penetration depending on the country in which the product is launched. Although the product life cycle has declined in United States of America, there is a huge potential in global market as the consumers are still not aware of the concept of frozen yoghurt in international markets. This is evident from the report of Market Research Future revealing that the frozen yoghurt market is expected to grow by CAGR of 14% (Market Research Future, 2018: Mar. 19). Therefore, it is essential for the company to expand internationally. Because, the company is growing geographically, the diverse global markets provide a challenge due to differences in consumer tastes and preferences. Jeyarathmm (2008) describe that the companies going global are affected by competitive moves and therefore, a company has to respond to a variety of factors. Due to these reasons, the company needs a localization strategy and not a globalization strategy. Carpenter and Dunung, 2012 states that strategy can have localization in two forms - one is Product Adaptation and another is Product Invention. Product Adaptation means changing the products as per the tastes and preferences of consumers in local market whereas Product Invention means that a totally new product is created for the target market (Carpenter and Dunung, 2012). Both these strategies must be adopted by the company to cater to different market segments globally. Yogurtland is selling food products including desserts and beverages. Product Standardization will involve standardizing the company's entire product offerings.

The standardization of offerings will lead to fewer flavors and limited products but this strategy will not work worldwide because tastes and cultures across different geographic regions differ. Even within a country the tastes and preferences differ from one regions to ...

Solution provided by:
Himanshu Mahobia, MBA
Education
  • BCom, M.D.S University, Ajmer
  • MBA, M.D.S University, Ajmer
  • PhD, Suresh Gyan Vihar University, Jaipur
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