Exam 12: Managing Customers

Correct Answer:

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Standardization
Standardization refers to using uniform marketing practices across countries. It allows companies to market and sell products in the same way across countries.
Advantages
$\bullet$ Reduces marketing costs
$\bullet$ Facilitates central control of marketing
$\bullet$ Promotes efficiency in R&D
$\bullet$ Results in economies of scale in production
$\bullet$ Reflects the trend toward a single global marketplace
Disadvantages
$\bullet$ Ignores different conditions of product use
$\bullet$ Ignores local legal differences
$\bullet$ Ignores differences in buyer behavioral patterns
$\bullet$ Inhibits local marketing initiatives
$\bullet$ Ignores other differences in individual markets
Adaptation
Adaptation refers to adapting marketing practices to various local conditions. It accounts for the national differences in consumers' tastes and preferences. It also considers the sociocultural, political, legal, and economic environments and their influence on consumer behavior. These environments ultimately determine what products are in demand and how they should be delivered to consumers. Thus, through the process, companies may need to adjust to consumer demand by changing product designs.
Advantages
$\bullet$ Reflects different conditions of product use
$\bullet$ Acknowledges local legal differences
$\bullet$ Accounts for differences in buyer behavior patterns
$\bullet$ Promotes local marketing initiatives
$\bullet$ Accounts for other differences in individual markets
Disadvantages
$\bullet$ Increased marketing costs
$\bullet$ Inhibits centralized control of marketing
$\bullet$ Requires customized R&D
$\bullet$ Requires customized production
$\bullet$ Inconsistent brand images

Correct Answer:

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Hyundai chose the right distribution strategy. The company did its initial research into the distribution channels and the overall process. The company learned that consumers typically purchase cars at large-scale specialized dealer shops and then receive after-sale services at 4S shops, which provide sales (vehicle sales), spare parts (parts), service (services), and surveys (information feedback). The company decided on utilizing solely 4S shops to sell cars, including both imported and domestically made models after conducting a cost-benefit analysis. The company then used additional resources to expand and upgrade its 4S shop distribution channel, resulting in greater market coverage and branding.
Hyundai did not choose the right distribution strategy. The company should have utilized one of the alternative strategies listed below:
1. Using multiple distribution channels like Volkswagen
2. Using a mix of both 4S shops and traditional dealers
3. Combined or separate distribution for domestically produced models and imported ones
4. Multilevel channel structures
5. Existing channel expansion