Date post: | 15-May-2023 |
Category: |
Documents |
Upload: | khangminh22 |
View: | 1 times |
Download: | 0 times |
Katja Johanna Plasmeier
Innovation on Global Markets - Should Companies
Glocalize?
Internationalization and Glocalization in the German Automotive
Industry
MASTER THESIS
submitted in fulfillment of the requirements for the degree of
Master of Science
Programme: Master's programme International Management
Branch of study: International Management
Alpen-Adria-Universität Klagenfurt
Evaluator
Mag. Dr. Ana Kuntaric
Alpen-Adria-Universität Klagenfurt
Institut für Innovationsmanagement und Unternehmensgründung
Klagenfurt, July 2018
Affidavit
I hereby declare in lieu of an oath that
- the submitted academic thesis is entirely my own work and that no auxiliary materials have
been used other than those indicated,
- I have fully disclosed all assistance received from third parties during the process of writing
the thesis, including any significant advice from supervisors,
- any contents taken from the works of third parties or my own works that have been included
either literally or in spirit have been appropriately marked and the respective source of the
information has been clearly identified with precise bibliographical references (e.g. in
footnotes),
- to date, I have not submitted this thesis to an examining authority either in Austria or abroad
and that
- when passing on copies of the academic thesis (e.g. in bound, printed or digital form), I
will ensure that each copy is fully consistent with the submitted digital version.
I understand that the digital version of the academic thesis submitted will be used for the purpose
of conducting a plagiarism assessment.
I am aware that a declaration contrary to the facts will have legal consequences.
Katja Plasmeier e.h. Klagenfurt, 06.07.2018
(Signature)* (Place, date)*
*For reasons linked to data protection it is not necessary to sign the affidavit. Instead, the
electronic version should include the abbreviation “e.h.” after the name.
© Alpen-Adria-Universität Klagenfurt, Studien- und Prüfungsabteilung Version 2018-01-09
Abstract
Although previous research has investigated internationalization approaches, the topic of new
product launch is relatively under researched. The research objective for the present investigation
is to identify factors that need to be considered for innovations when internationalizing as well as
how companies have to adapt their marketing strategies on global markets. As the concept of
glocalization cannot be generalized for all markets and industries, the study focuses on the German
automotive industry. Market analysis, two case studies and a consumer survey form the empirical
framework to answer the research question. Extensive literature review delivers the basis for the
study, elaborating on the new product development process, success factors for product
innovations, different approaches to internationalization and new product launch.
As a result, the most important factors to consider when developing new products are extensive
background study, the voice of the customer, market tests and well planned new product launch.
On the example of Germany, expertise and professionalism, as well as high quality and cost
effectiveness are essential when developing new products. With a well-researched market, clear
strategy building and a well-planned launch, a company has better chances to perform well.
Acknowledgements
I would like to take the opportunity to acknowledge and thank the following important people who
have supported me, not only during the course of this project, but throughout my entire master
studies.
First and foremost, I would like to thank my thesis advisor Mag. Dr. Ana Kuntaric of the
Department of Innovation Management and Entrepreneurship at Alpen-Adria-Universität
Klagenfurt. While she gave me great and helpful feedback, she consistently allowed me to make
this paper my own and steered me in the right direction. Furthermore, she was always available
whenever I needed her advice.
Additionally, I would like to thank my family and Amornpan Tungarat, for their continuous moral
and financial support throughout my studies.
Finally, I would also like to thank all my close friends and participants of the survey who took the
time to support my study.
Table of Contents
1. Introduction ........................................................................................................................... 1
2. Theoretical Framework ........................................................................................................ 4
2.1 New Product Development .............................................................................................. 8
2.1.1 New Product Development Process .......................................................................... 9
2.1.2 Success Factors in Product Innovation ................................................................... 11
2.2 Internationalization......................................................................................................... 14
2.2.1 Market Analysis ...................................................................................................... 14
2.2.2 Internationalization Approaches ............................................................................. 21
2.2.3 New Product Launch............................................................................................... 24
3. Method ................................................................................................................................. 36
3.1 Research Approach and Data Collection ....................................................................... 36
3.2 Sample Description ........................................................................................................ 37
3.3 Market Description ......................................................................................................... 39
3.4 Research Design ............................................................................................................. 39
4. Analysis ................................................................................................................................ 41
4.1 The German Market ....................................................................................................... 41
4.1.1 Market Analysis ...................................................................................................... 41
4.1.2 Cultural Analysis .................................................................................................... 44
4.2 Organizational Perspective: Company Analysis ............................................................ 48
4.2.1 Case Study: Ford Mustang ...................................................................................... 48
4.2.2 Case Study: Landwind CV9.................................................................................... 58
4.3 Consumer Perspective: Survey Analysis........................................................................ 62
5. Conclusion ........................................................................................................................... 69
5.1 Research Outcomes ........................................................................................................ 69
5.2 Practical Implications ..................................................................................................... 71
5.3 Limitations and Further Research .................................................................................. 72
6. List of Literature ................................................................................................................. 74
7. Appendix .............................................................................................................................. 87
Appendix A: PESTLE Analysis summary ................................................................................ 87
Appendix B: Do’s and Don’ts in German Business Etiquette .................................................. 88
Appendix C: OEM and Supplier Density of German Automotive Industry ............................. 89
Appendix D: Product Assortment in Germany and US ............................................................ 90
Appendix E: Equipment included in Basic and Comfort CV9 ................................................. 91
Appendix F: Online Survey Translation ................................................................................... 92
Appendix G: Online Survey in German.................................................................................... 98
Appendix H: Survey Results ................................................................................................... 108
List of Figures
Figure 1: Product Life Cycle........................................................................................................... 8
Figure 2: Cooper's Stage-Gate Innovation Process ....................................................................... 10
Figure 3: Advertising Styles across Cultures ................................................................................ 34
Figure 4: Hofstede's Cultural Dimensions: Germany ................................................................... 45
Figure 5: Motorsound ................................................................................................................... 50
Figure 6: Middle Class in Europe and the USA ........................................................................... 53
Figure 7: German Website Ford Mustang .................................................................................... 54
Figure 8:US Website Ford Mustang ............................................................................................. 55
Figure 9: Ford Mustang Commercial Germany ............................................................................ 57
Figure 10: Ford Mustang Commercial US.................................................................................... 58
Figure 11: Key Visuals Landwind Website .................................................................................. 61
Figure 12: From 1 to 4, how important is it to you, that the brand is/has… ................................. 63
Figure 13: How important are the following attributes for a car purchase? ................................. 64
Figure 14: How much would you be willing to spend for a car? .................................................. 66
Figure 15: What did you like about Commercial B? .................................................................... 67
List of Tables
Table 1: Market Analysis .............................................................................................................. 15
Table 2: Influences of Culture ...................................................................................................... 17
Table 3: Characteristics of High- and Low Context Cultures....................................................... 21
Table 4: Targeting and Associated Actions .................................................................................. 28
Table 5: Strategic Niche Opportunities......................................................................................... 29
Table 6: Product Assortment ........................................................................................................ 50
Innovation on Global Markets – Should Companies Glocalize?
1
1. Introduction
Globalization is shaping our society more and more. To stay competitive and increase their
customer base, companies have every reason to consider internationalizing. Decreasing trade
barriers and modern technology enable companies to take their business to foreign markets more
easily. Technology and easy communication across nations lead to global awareness and
availability of products. Three decades ago, it was described, that the key to success is offering
global products and brands with a standardized marketing approach (Lewitt, 1984). But while
technology and income differences converge across countries, cultural differences lead to
consumer behavior becoming more heterogeneous (De Mooij & Hofstede, 2002, p.85 f.). Merely
finding an appropriate distribution channel and sell the product on foreign markets does not work
for companies. The launch of new products and innovations as well as marketing concepts need to
be adapted to local conditions, such as local laws, distribution channels and consumer preferences.
Having a good strategy is the key to success in any market. Culture plays a bigger role than most
people realize. Many cultural misunderstandings exist in everyday life between individuals, but
also companies still make mistakes when marketing their products on foreign markets. Although,
much is known about the interconnectedness of culture and business, there are still examples of
multinational companies entering foreign markets unsuccessfully due to the lack of knowledge
about local culture.
The term “glocalization” describes “the tailoring and advertising of goods and services on a global
or near-global basis to increasingly differentiated local and particular markets” (Robertson, 1995,
p.28). Increasing globalization on the one side, and cultural differences on the other side, call for
individualization and adaptation to local market conditions when internationalizing, making the
concept of glocalization more important. However, there are also challenges to a company, such
as expertise, time and effort that are necessary for adaptation to local conditions. Many companies
do not consider these aspects at all and prefer implementing a standardized launch and marketing
concepts with minimal adaptations. Hence, successful market entry and market persistence cannot
be guaranteed.
Topics such as globalization and internationalization, the debate of adaptation versus
standardization and market entry methods are all closely linked to glocalization and discussed in
Innovation on Global Markets – Should Companies Glocalize?
2
many research papers (e.g. Douglas & Wind, 1987, p.19 ff.; Mareck, 2014, p.26 ff.; Minei &
Matusitz, 2013, p.106 ff.; Robertson, 1995, p.25 ff.; Vrontis & Thrassou, 2007, p.7 ff.). However,
most of the time, the papers focus on one of the above aspects and rarely include all relevant
factors, that companies need to consider when internationalizing. Furthermore, almost all literature
focuses on the company perspective alone, often by comparing two countries, and give little insight
into the consumer’s point of view. Moreover, practical implications from companies that failed or
succeeded to glocalize are missing altogether in most research papers. Analyzing both points of
views and connecting them, could bring an interesting new approach to the topic of glocalization.
Additionally, the topic of successful new product launch is relatively under researched as well.
Therefore, this paper aims at answering the research question of which factors need to be
considered for innovations/new product development when internationalizing and how companies
have to adapt their marketing strategies on global markets. As the concept of glocalization has to
be tailored individually onto particular geographic markets, the thesis will focus on two case
studies of companies that launched a new product in the German market, to give an example of
how to develop a glocal marketing strategy. Moreover, to incorporate the consumer perspective,
the thesis will explore how sensitive consumers are in terms of glocalization, with the help of a
survey. The empirical research will focus on the German automobile market and target primarily
the group of millennials.
Looking at both consumer and an organizational point of view, a framework that gives
multinational companies a guideline when developing marketing strategies for a new foreign
market, shall be developed. To successfully integrate their products to markets and not waste a lot
of time in trying out different marketing approaches, a guideline as well as practical examples from
Germany, strengthened by consumer insights, will help to get a clear picture of the glocalization
phenomenon. As mentioned above, few empirical researches exists with regards to glocalization,
while this approach is becoming more important, due to globalization and continuous existence of
cultural differences.
The approach that will be used in order to reach the goal of this paper, is to first create a theoretical
background that includes all aspects and approaches to the concept of glocalization. New Product
Development and Internationalization are building the cornerstones of the theory. The chapter will
start with short definitions of terminology important to the topic of the thesis. Furthermore, the
Innovation on Global Markets – Should Companies Glocalize?
3
process of new product development and the success factors to product innovation will be
examined. The second cornerstone, internationalization, focuses on how to obtain knowledge
about the market, as well as different approaches to internationalization. Finally, the last step, new
product launch, will give insights into strategic and tactical decisions, when commercializing the
new product.
Since there is a lot of literature about internationalization in theory, practical examples shall help
to give a clear insight into the topic. Therefore, two case studies focusing on companies entering
the German market successfully and unsuccessfully and a consumer survey will be taken to explain
market specific characteristics and German consumer behavior and culture. As a result, a guideline
for companies who would like to enter Germany as well as a general guideline of how to glocalize
successfully will be developed. The results of the empirical research will be analyzed and put into
context with the theory, before concluding with a discussion and considerations for further
research.
As previously explained, cultural differences exist and also no industry is the same. Therefore, it
is impossible to generalize the concept of glocalization, since the results would be insignificant.
Consequently, this research will focus on the automotive industry in Germany and target the
generation of millennials as a sample.
Innovation on Global Markets – Should Companies Glocalize?
4
2. Theoretical Framework
The following chapter discusses the relevant theoretical framework for the concept of glocalization
in the context of new product launch and marketing strategies. Short definitions of important
terminology are given before the sub-topic “New Product Development” gives an insight into the
new product development process followed by the success factors in product innovation. While
the first sub-chapter focuses mostly on company internal processes, the second sub-chapter
emphasizes on the market and customer side more. The chapter of internationalization starts with
the market analysis, where market research and cultural research are discussed. Furthermore, the
approaches to internationalization, adaptation, standardization, and glocalization, give an insight
into important factors to consider when internationalizing. The chapter ends with the strategic
implementation possibilities for new product launch, which splits into strategic decisions and
tactical decisions.
Definitions
Adaptation
When taking their business abroad, companies need to make strategic decisions. Vrontis &
Thrassou (2007, p.8) define one strategy to enter a foreign market as adaption, which means to
“not treat the world as one single market”, but to study every element of the marketing mix
individually and adapt it according to market specific circumstances. The concept of adaptation
cannot be generalized, since every market is unique. Lipman (1988, p.1) argues, that cultural
differences are important and very much relevant to take specific customer needs into account.
Preferences can differ due to culture, religion, climate and geography (Ambos & Schlegelmilch,
2010, p.50). Adaptation enhances meeting customer needs in the particular country and matching
local requirements (Schlegelmilch, 2016, p.89). While costs are higher when using an adaptation
approach, they may be offset by increasing revenues due to a better adoption of the product by
local customers (Ambos & Schlegelmilch 2010, p.51). The counterpart of adaptation is
standardization, which will be explained later.
Globalization
Over the past decades, globalization has been defined in many ways and has become a key theme
within the concept of international marketing strategies (Douglas & Wind, 1987, p.19). The
Innovation on Global Markets – Should Companies Glocalize?
5
economist Theodore Levitt (1984, p.92) was one of the first authors to populate the term and
describes globalization as the key to success by offering global products and brands with a
standardized marketing approach worldwide; he defined globalization as “the emergence of global
markets for standardized consumer products on a previously unimagined scale of magnitude”
(Levitt, 1984, p.92). However, decades later, the definitions of globalization also focus on doing
business in many countries on a global scale, as described by many scholars (e.g. Acs, Morck, &
Yeung, 2001, p.238; Easterly, Williamson, & Banerjee, 2004, p.40). Low-cost technology being
available worldwide makes communication easier and increase awareness of international
products. Furthermore, reduced trade barriers enhance global economic possibilities and the
movement of goods and production across international borders. It can be said, that “the world is
becoming a global shopping mall in which ideas and products are available everywhere at the same
time” (Kanter, 1997, p.37). Furthermore, the Organization for Economic Co-operation and
Development (OECD, 2005, p.11) defines Globalization as follows: “The term ‘globalization’ has
been widely used to describe the increasing internationalization of financial markets and of
markets for goods and services. Globalization refers above all to a dynamic and multidimensional
process of economic integration whereby national resources become more and more
internationally mobile while national economies become increasingly interdependent”.
Glocalization
The term glocalization became more popular in the 1980s and has been defined as “the tailoring
and advertising of goods and services on a global or near-global basis to increasingly differentiated
local and particular markets” by Robertson (1995, p.28), who explains the word originating from
combining “globalization” and “localization”. Also, the Oxford Dictionary defines glocalization
as “the practice of conducting business according to both local and global considerations”, hence
adapting global products to local conditions (Glocalization, n.d.). Svensson (2001, p.15) defines
the glocal strategy as an approach that “reflects the aspirations of a global strategy approach, while
the necessity for local adaptations and tailoring of business activities is simultaneously
acknowledged” (Svensson, 2001, p.15). He further explains, that business activities are optimized
by balancing standardization versus adaptation and homogenization versus tailoring. Moreover,
literature about glocalization often connects the term with the phrase “think globally, act locally”
(e.g. Kefalas, 1998, p.547 ff.; Lasser, 2014, p.173 ff.; Vignali, 2001, p.97 ff.).
Innovation on Global Markets – Should Companies Glocalize?
6
Innovation
“Innovation consists of the generation of a new idea and its implementation into a new product,
process or service”, as defined by Urabe, Child, & Kagono (1988, p.3). It is a long process that
involves organizational decision making. An innovation, or a new idea, describes the perception
of a new customer need or a new way to produce. The OECD (OECD/Eurostat, 2005, p.16 ff., ibid
for fc) defines four types of innovation: product innovation, process innovation, marketing
innovation and organizational innovation. Product innovation describes a new or improved product
or service, i.e. functional characteristics or technical improvements. Process innovation focuses on
a new or improved production or delivery method. Moreover, a marketing innovation involves
changes in product design or packaging, product placement, product promotion or pricing. Finally,
an organizational innovation describes a new organizational method in, for example, business
practices. In Śledzik’s study (2013, p.90 ff. ibid for fc) about Schumpeter’s view on innovation,
innovation is described as an economic concept and seen as being essential for making profit and
staying competitive. The five ways of innovation according to Schumpeter are creating a new
product or service, new market, new raw material, new methods and new way of organizing.
Schumpeter (1947, p.151) further defines an innovation as “the doing of new things or the doing
of things that are already being done in a new way”, supporting the definitions above.
Internationalization
Reviewing literature on internationalization, there are many approaches to define the term. One
definition is that “internationalization is a synonym for the geographical expansion of economic
activities by firms over a national country’s border” (Ruzzier, Hisrich, & Antoncic, 2006, p.477).
However, according to Johanson and Vahlne (1990, p.18 ibid for fc), internationalization can also
be defined in connection to relationships. The relationships and network focused definition
suggests internationalization as a cumulative process in which relationships are continually
established, developed, maintained and dissolved in order to achieve the firm’s objectives.
Furthermore, Chelliah, Sulaiman, and Yusoff (2010, p.29) describe internationalization as the
process of a firm being involved in international business, including exporting, the presence of
foreign subsidiaries, the inclusion of foreigners in the organization as well as shared ownership
between foreigners.
Innovation on Global Markets – Should Companies Glocalize?
7
Marketing Mix
Czinkota and Ronkainen (2013, p.25 f. ibid for fc) describe the marketing mix as a set of elements
that is implemented to best serve the target market. The marketing mix splits into four P’s, namely
product, place, price and promotion. Product described the tangible and intangible product
characteristics, such as product design and packaging, and product branding and warranties. Place
is the organization of the distribution focusing on wholesalers, agents or retailers. Furthermore,
logistics management focusing on product availability is included as well. Price is the element of
revenue generation and includes the price customers pay for the product as well as prices for
middlemen and eventual discounts offered. Finally, promotion describes how the product is
communicated to customers, middlemen and the public by using advertising, sales promotion,
personal selling and public relations.
Multinational Companies
A multinational company (MNC) operates in many countries and is an “enterprise which allocates
company resources without regard to national frontiers but is nationally based in terms of
ownership and top management” (Maheshwari, 2003, p. 246). As described by Schlegelmilch
(2016, p.231, ibid for fc), MNCs use global production and supply chains, which bring advantages,
such as “access to raw materials, markets and capital, production sites which offer beneficial cost
structures, the ability to tap into knowledge hubs and transfer knowledge from one market to the
other, and economies of scale and scope” (Schlegelmilch, 2016, p.231) to the companies.
Examples for MNCs are Nestlé, which carries over 2000 brands worldwide (e.g. Nespresso, KitKat
and Maggi) or the Volkswagen Group, which sells German cars all over the world.
Product Life Cycle
Especially for managers launching new products, the product life cycle is a useful tool to estimate
how long a product is expected to sustain on the market. Generally, the product life cycle describes
the process, a product undergoes in its lifetime. As described by Levitt (1965, p.91 ff.), the stages
include market development, growth, maturity and decline. In the market development stage, the
new product is introduced, while demand and sales are still low. In the growth stage, the product
“takes off”, while demand and market size increase fast. When more competition enters the market
and market saturation occurs, market maturity is reached, and growth rates are slowing down.
Innovation on Global Markets – Should Companies Glocalize?
8
Finally, in the decline stage, sales begin to fall until the product exists the life cycle. The figure
below shows the product life cycle:
Figure 1: Product Life Cycle
Source: Shaw, 2012, p.39
Standardization
The Oxford Dictionary defines standardization as “the process of making something conform to a
standard” (Standardization, n.d.). In the sense of internationalization, supporters of standardization
(e.g. Buzzell, 1968; Levitt, 1983, p.92 ff.; Vrontis & Thrassou 2007, p.8 ff.) do not believe in a
variation of consumer’s needs, wants and requirements across markets and countries. Lower costs,
consistency, better planning, controlling and exploitation of ideas are arguments that support
selling the same products everywhere in the same way. Consequently, standardization can be
defined as “the offering of identical product lines at identical prices through identical distribution
systems, supported by identical promotional programs, in several different countries” (Buzzell,
1968).
2.1 New Product Development
According to Cooper (2001, p.2 f., ibid for fc), having an innovative product is essential for
success, prosperity and survival on global markets. Product innovation is important to stay
competitive and enter new market places. However, many attempts of new product development
fail, due to poor planning along the process. He further argues, that in order to successfully develop
and launch new products, a new product development process is necessary. Therefore, the
following will describe the steps of new product development as well as success factors for product
innovation.
Innovation on Global Markets – Should Companies Glocalize?
9
2.1.1 New Product Development Process
The new product development process can be divided into several steps, whereas the operational
activities are rather similar, regardless of the labelling of those steps. Schlegelmich (2016, p.95 ff.
ibid for fc) divides the process into six steps, namely idea generation (1), initial screening (2),
business analysis (3), development (4), market testing (5) and commercialization (6). During the
idea generation phase, information is gathered, and stakeholders can be consulted. For example,
involving the customers more, can give valuable insight into consumer needs and behavior. Once
the ideas exist, they are selected according to feasibility in the initial screening stage. The screening
mainly focuses on eliminating those ideas that do not fulfil company goals and can also involve
customer opinion to make that decision. Furthermore, during the business analysis, the idea is
tested against coherence with the market. Moreover, criteria are set, and risks and competition
identified. In the development phase, a physical version of the product exists, and therefore,
prototypes can be tested. For global markets, companies should make sure that attributes such as
colors, shapes and numbers are appropriate for the culture in different countries. The market testing
can happen on selected markets, for instance using one country as a representation for an entire
region. Although the tests are time consuming and costly, they are necessary and promise results
that are valuable for the whole process. During the last step, commercialization, a strategy to
launch the product onto the market is selected. There are two common strategies, sprinklers and
waterfalls. Choosing a sprinkler strategy, the company introduces the product in all relevant
countries at the same time. It enables the exploitation of a wide scale and aims for maximum
market share. Introducing the innovation to one country first and only then expand step-by-step to
other countries, is called a waterfall strategy and constitutes lower risk (Schlegelmich, 2016, p.95
ff.).
Similar to the above, Dr. Robert Cooper (2008, p.213 ff.) developed the Stage-Gate® Innovation
Process, which is a “conceptual and operational map for moving new product projects from idea
to launch and beyond” (Cooper, 2008, p.214). The model helps to improve effectiveness and
efficiency and gives a guideline of what needs to be done and how to do it. The process consists
of stages and gates, as the name already suggests. According to Cooper (2008, p.214 ff. ibid for
fc), each stage includes a set of activities that are needed for progress and moving on to the next
gate. During a particular stage, information is collected to reduce risk and uncertainty. While each
stage costs more than the previous one, also the risk is reduced with each stage. Moreover,
Innovation on Global Markets – Should Companies Glocalize?
10
activities happen concurrently, meaning that every department or function in a team works
simultaneously and all departments are involved at the same time. Gates symbolize decision points
and include deliverables, criteria and outputs. Deliverables describe what managers need to deliver
in terms of results for making a decision. Criteria split into must-meet criteria and should-meet
criteria, against which the project is judged. Finally, outputs are the decisions, deciding over the
project moving further or not, as well as creating an action plan for further procedure. The figure
below shows the traditional Stage-Gate® Innovation Process:
Figure 2: Cooper's Stage-Gate Innovation Process
Source: Stage Gate International, 2018
Looking into stages specifically, there are six stages to consider (Stage Gate International, 2018,
ibid for fc). (0) Idea Discovery, (1) Scoping, (2) Build the Business Case, (3) Development, (4)
Testing and Validation and (5) Launch. During the idea discovery stage, new ideas are generated
and turned into business opportunities. As mentioned before, the stages include activities necessary
to move on to the gates, where decisions are made. After discovering new ideas, they are screened
in “Gate 1” (Figure 2), before moving on to the next stage. Once feasible ideas are identified,
secondary research about the scope of the project is conducted in the first stage (Scoping) to get a
rough insight into the market environment. Both Stage Gate International (2018) and Cooper &
Kleinschmidt (2007, p.52 ff., ibid for fc) suggest, that the preliminary market and technical
research include market potential, need level, customer requirements and technical possibilities
and risks, which is acquired with desk research. Having the necessary background information, in
“Gate 2” a second screen is implemented to audit feasibility of the project. Hence, a decision over
further developing or discontinuing the product is made. A detailed market and technical research
takes place in the second stage, where the business case is built. Hence, a consumer and competitor
analysis are executed, as well as required resources, patent position, manufacturability, costs and
Innovation on Global Markets – Should Companies Glocalize?
11
capital requirements are determined (Stage Gate International, 2018; Cooper and Kleinschmidt,
2007, p.52 ff.). Craig and Douglas (2005, p.12 f.) explain, that primary research is conducted, to
define and describe the product, develop, plan and justify the project. For example, companies can
conduct a market survey to identify how much adaptation is needed in the marketing mix as well
as identify their positioning strategy. Once the business case is built, managers decide, if the project
is ready to move on to the development phase (Stage Gate International, 2018, ibid for fc). In the
development stage, the product, operation and production process are designed and developed.
Taking the market information obtained in the previous stages, also the market launch plan is
developed, before entering the testing and validation stage. Once the project is ready, the product,
marketing plan and production are tested on the market, lab or plant to see if it works. A validation
of the product itself, production process, customer acceptance and economics of the project is
explored to obtain feedback about potential adjustments and improvements, before launching the
product. Finally, the launch stage focuses on the commercialization of the project. Once launched,
there is full-scale operation, production, marketing and selling in place.
As mentioned in the beginning, although both models label the steps differently, they are quite
similar in the contents. The next chapter will explain several success factors, that evolve around
the new product development process.
2.1.2 Success Factors in Product Innovation
Although many companies are successfully using the stage-gate system, there are also many firms
that fail at successful implementation of the process. There are critical success factors to new
product development that distinguish a company from winning and losing. Cooper’s invisible
success factors give an insight into eight controllable denominators that lead to successful new
product projects:
(1) Solid up-front homework is helpful and necessary for the product definition and the
justification of the project (Cooper, 1999, p.116 f.). It involves extensive research to learn about
consumers’ operation, needs and problems. Also benchmarking studies show, that successful
project teams dedicate more time, money and effort towards up-front homework. According to
Cooper and Kleinschmidt (2007, p.53), this success factor is closely related to implementing a new
product development system, such as the stage-gate model, since the up-front homework is
Innovation on Global Markets – Should Companies Glocalize?
12
happening during the first and second stage (scoping and build the business case), before moving
into the development stage.
(2) The voice of the customer plays a vital role, as it is also linked to the market assessment
described above. Cooper (1999, p.117) suggests, that customer tests, field trials and test markets
give valuable insight into the consumer’s perspective. Also, the preliminary and detailed market
studies conducted in the first two stages of the stage-gate system are closely related to the voice of
the customer. Cooper (2006, p.4) further elaborates, that by making the customer part of the entire
process of new product development, the voice of the customer will stay in focus and the entire
team is dedicated to understanding their needs and requirements. Hence, the company should
follow a market- and customer-oriented approach as early as during the idea generation and design
of the product (Cooper, 2013, p.4).
(3) According to Cooper and Kleinschmidt (2007, p.56 ff.), seeking differentiated, superior
products is another success factor, which goes hand in hand with the voice of the customer.
Understanding the consumers is essential to develop a new product, since their needs and problems
form the basis for an innovative idea. Cooper (2013, p.2 f.) suggests, it could be a good value for
money, offering high product quality, exceeding the competition by offering additional features or
better satisfaction of needs, or providing higher usability, that lead to an innovative product. Thus,
the top driver for new products are differentiation, solving customer problems and offer a unique
value (Cooper & Kleinschmidt, 2007, p.52 f.).
(4) Sharp, stable, and early product definition has shown to be contributing to a successful new
product project (Cooper, 1999, p.117, ibid for fc). Before the development begins, target market,
scope, concept, benefits and positioning, requirements, features and specs have to be defined.
Defining the project’s scope could go in the direction of domestic versus international or line
extension versus new product item. Cooper (2013, p.6 f.) elaborates, that the product’s features,
attributes and requirements should be agreed on by all parties and also the target price in context
of positioning has to be discussed. However, since the product definition is based on facts, up-
front homework as described above is necessary (Cooper & Kleinschmidt, 2007, p.56).
(5) A new product launch should be well-planned, well-resourced and well-executed (Cooper,
1999, p.117, ibid for fc). Rather than only thinking of the launch once the product is developed,
the launch should be considered from the beginning of the new product development on. As
Innovation on Global Markets – Should Companies Glocalize?
13
described in the stage-gate model, there are several strategies, a company can pursue when
commercializing the product innovation. Later, those strategies for the new product launch will be
discussed in detail.
(6) Tough decision points are referring to the gates in the Stage-Gate® model. Cooper (1999, p.117
f.) explains, that the gates are also associated with go/kill points, where decisions over a project
moving forward or not are made. Tough decision making is needed, to avoid wrong allocation of
resources. Hence, there is a risk, that projects are moving too far too fast (Cooper & Kleinschmidt,
2007, p.52 ff.; Cooper, 1999, p.117, ibid for fc). If this is the case, it could happen that a project
team realizes in the commercialization stage, that the costs are too high, or the market potential is
not as big as anticipated. Then time and money have already been invested and the whole project
is compromised. Therefore, gates with deliverables and criteria, as described in 2.1.1 need to be
created to evaluate and eventually kill a project in time.
(7) Cross-functional teams have proven to be a success factor in new product development
processes and are the key to reduced cycle time and faster launch (Cooper, 2006, p.5). As
mentioned in the stage-gate process, teams should be working together. A good organizational
design is the key to a functional team, according to Cooper (1999, p.118). Thus, he explains, that
a strong project leader, that stays with the team from the beginning until the end is necessary.
Furthermore, the team leader and team members should be dedicated, focused and committed to
the project. Cooper and Kleinschmidt (2007, p.62) further elaborate, that the team members can
and should come from different functions, such as research and development, (R&D), marketing,
manufacturing and engineering.
(8) An international orientation is given, when products are designed to meet international
requirements from the beginning on (Cooper, 1999, p.118, ibid for fc). This can be done by either
creating a global product, that has one concept for all markets, or a glocal one, that has one concept,
but several variants for different markets. Products that are designed for global markets, not just
domestic ones, perform better and are more successful. An important factor to consider, is to pay
attention to the voice of the customer in different countries, rather than only conducting consumer
research and product testing on the domestic market (Cooper, 2013, p.4). Therefore, having
international teams makes it easier to gather information from different international markets and
enhances different cultural perspectives (Cooper, 1999, p,118).
Innovation on Global Markets – Should Companies Glocalize?
14
2.2 Internationalization
Companies have many reasons to internationalize, for example achieving economies of scale and
scope or entering lucrative markets that exist abroad but not at home (Bennett, 1995, p.18 f., ibid
for fc). Higher turnovers from international sales might open the possibility of extensive new
product research and development, the competition might be smaller on foreign markets and
consumers might be more open to innovative products. Therefore, “firms intending to introduce
new products must adopt an international perspective” (Bennett, 1995, p.18). The following will
give an insight into how to obtain market knowledge, which is essential for new product
development as well as the development of marketing strategies. Often, the component of culture
is overlooked and not given much importance. In general, marketing activities are often
underrated, and market studies omitted, which leads to problems during product launch (Cooper,
2013, p.5 f.). Therefore, this chapter will give detailed information about market- and cultural
research, approaches to internationalization and new product launch for the consumer market.
2.2.1 Market Analysis
As described in Cooper’s success factors in product innovation, solid up-front work is forming the
foundation of the whole project (Cooper, 1999, p.116 f.). This work includes thorough market
analysis, since every country has a unique legal system, culture and socioeconomic infrastructure,
which influences the launch and marketing strategy. The uncontrollable market environment
cannot be generalized for different countries and needs to be analyzed to form marketing strategies
and later develop a marketing mix (Bennett, 1990, p.25). Hence, ways of conducting said research
will be discussed in the following.
2.2.1.1 Market Research
Market research takes place during the scoping phase and builds the business case in the stage-
gate process as described above. While stage one only focuses on desk research, primary research
is conducted in stage two, to define and describe the product, develop, plan and justify the project
(Stage Gate International, 2018). The extent of marketing research always depends on the
company’s budget. International marketing research is a long and detailed process, that cannot be
explained in full detail here. However, three key phases can be derived, as explained by Douglas
and Craig (1995, p.77 ibid for fc). The initial market entry phase helps to identify countries with
the most attractive market opportunities. Furthermore, in the local market expansion phase
Innovation on Global Markets – Should Companies Glocalize?
15
information for the development of marketing strategies is acquired. Lastly, the global
rationalization phase focuses on combining internal and external data to coordinate strategies on
global markets.
The first phase is to gather information for initial market entry, meaning, that a desk research is
conducted to gain knowledge about the general business environment of several countries. Also,
information about the specific industry the product is related to, is acquired in this phase (Craig &
Douglas, 2005, p.11 f.). Both Thorelli & Cavusfil (1990, p.284) and Douglas & Craig (1995, p.11,
ibid for fc) suggest questions, such as which foreign markets are profitable, which sales volume
can be expected, if any modifications to the product are necessary, if the market is price sensitive
and which distribution channels are available and appropriate to use, can be answered. In general,
a preliminary screening of the market includes the demographic and physical environment, the
political environment, the economic environment and the social and cultural environment. While
those are the basic factors, components have been added over the years, resulting in an analysis
known as PESTLE or SLEPTS analysis. The analysis focuses on social and cultural environment,
legal environment, economic environment, political environment, technological environment and
the sustainable component, which is fairly new (Schlegelmilch, 2016, p. 23). Also, a geographic
component can be important, depending on the country the company desires to enter. Geographic
factors and sustainable factors can be summarized into environmental factors. The table below
summarizes the factors included in a market analysis like PESTLE:
Table 1: Market Analysis
Factor Characteristics
Political factors Politics affect the laws and economy, tariffs and non-tariff barriers,
attitudes towards foreign business, trade agreements, system of
government, ideological orientation
Economic factors Level of development, size of economy, growth, population, income,
purchasing power, role of foreign trade, currency, balance of
payments
Social- and cultural factors Literacy rate, education level, middle class existence, language,
religion, values
Technological factors Technological infrastructure, household saturation with technological
goods (e.g. internet access, smartphones, etc.)
Innovation on Global Markets – Should Companies Glocalize?
16
Legal factors International law, tax systems, administrative rules and regulations,
agreements between home and host country, contracts, payments,
product safety, physical contents and dimensions
Environmental factors Sustainability factors:
Environmental efforts, social sustainability or economic regulations
for efforts towards sustainability
Geographic factors:
Country size, terrain, physical geography, climate
Source: Adapted from Bennett, 1995, p. 25 ff.; Craig and Douglas, 2005, p. 88; Schlegelmilch, 2016, p.
23 ff.; Thorelli and Cavusgil, 1990, p.284 ff.
In addition, Douglas and Craig (1995, p.62 f. ibid for fc) suggest acquiring data about the specific
product market. Such data includes for example, market size, market growth, product usage and
the usage of competitive and substitute products. While the availability of data varies across
countries and markets, Nielsen data is an example for a big database for consumer goods.
The second phase is to gather information for local market planning, where primary research is
conducted. Craig and Douglas (2005, p.12 ff. ibid for fc) explain, that companies can conduct a
market survey focusing on elements of the marketing mix to research how much adaptation is
needed with regards to product and positioning strategy. Looking at the product, benefits and
preferences for product attributes might vary from country to country. Furthermore, the
effectiveness of promotion is not the same everywhere. In fact, there might be differences in
literacy, culture, color preferences and meanings, and reactions to visual stimuli. For example, the
color yellow stands for jealousy and betrayal in countries like Germany and France but is
considered a very lucky color in Thailand (Briggs, 2017). Moreover, Craig and Douglas (2005,
p.12 ff.) further elaborate, that the price should depend on income levels, the competitive products
on the market, and the perception of price in general. Finally, the authors claim, that also
distribution preferences, and the reach and availability of distribution channels should be
researched.
According to Douglas and Craig (1995, p.72, ibid for fc), the third phase, global rationalization, is
important when companies operate in several countries already. They need to coordinate their
strategies, make use of the data they already collected, and constantly review and update the data.
Innovation on Global Markets – Should Companies Glocalize?
17
2.2.1.2 Cultural Research
As mentioned earlier, the voice of the customer is one of the success factors for product innovation
(Cooper, 1999, p.117). Additionally, culture affects consumer behavior, which makes it most
relevant when internationalizing. Culture can be defined as an “integrated system of learned
behavior patterns that are distinguishing characteristics of the members of any given society”
(Czinkota & Ronkainen, 2013, p.61). It is complex and includes customs, language, material
artefacts, values, shared systems, attitudes and feelings (Czinkota & Ronkainen, 2013, p.64 ff.).
De Mooij (2005, p.35) suggests, since most of consumer behavior comes from culture, people’s
values need to be reflected in marketing as well. This is especially important for the establishment
of a bond between consumer and brand, which is the objective of every marketing strategy.
“Culture affects what people buy […], when they buy […], who does the purchasing […] and the
overall pattern of consumer buying behavior” (Bennett, 1990, p.28). But it also influences many
other fields, such as attitudes, advertising and the business environment, as shown in the table
below:
Table 2: Influences of Culture
On attitudes towards: On advertising
Work
The upbringing and education of children
Respect for the law and institutions
Religion
Politics
Entrepreneurship
Willingness to accept risk
How local customers perceive market
Positioning of products
Nudity
Degree of elegance, quality, urbanity
Advertising style
On business protocols: On business environments:
Conduct of meetings
Negotiation style
Degree of formality of relationships
Manner of greeting
Buyer/seller relationships
Communication systems
Participation in management decisions
Role of government in business affairs
Employment conditions
Source: Adapted from Bennett, 1990
Some elements of culture are symbols, rituals, heroes, values, as discussed by De Mooij (2005,
p.37). Other literature categorizes elements such as language, non-verbal language, religion, values
and attitudes, manners and customs, material elements and aesthetics (Czinkota & Ronkainen,
2013, p. 65 f.), while De Mooij’s categorization (2005, p.37 ff. ibid for fc) includes most of those
Innovation on Global Markets – Should Companies Glocalize?
18
elements. Symbols can be words, gestures, pictures or objects that carry meaning. It could be a
flag, status symbols and even a hairstyle, that qualifies for a symbol of culture. Symbols are always
superficial and easy to see for observers. Thus, they also include language and material elements.
Moreover, heroes can be people that are real or imaginary as well as dead or alive. They serve as
role models in the society and are as visible as symbols. Rituals describe collective activities within
the culture, for example social and religious ceremonies, sports events, the way of greeting or
paying respect. Values are different from the other categories, as they are not visible. Values can
be defined as a preferred state over another. While they are learned, they are a system of principles
and rules to live by and often difficult to translate to observers. Czinkota and Ronkainen (2013,
p.85 ff., ibid for fc) suggest different ways gaining cultural awareness when expanding to a foreign
country. Local culture should be embraced and building relationships is important. Moreover,
employing locals can help gaining cultural knowledge, and adaptation of products and processes
to local markets is suggested to be a way to gain awareness of the culture.
Many social scientists have developed models to analyze culture. Famous examples are Hofstede’s
cultural dimensions, the GLOBE study, Trompenaars’ model of culture, and Edward Hall’s high-
low context cultures (Hofstede & Hofstede, 2005; House, Hanges, Javidan, Dorfman, & Gupta,
2004; Trompenaars & Wolliams, 2003; Hall, 1989). Most of these models are bipolar dimensional
models, whereas Hofstede’s cultural dimensions are popular and used by many companies to
obtain cultural insights, according to Kieser (1994, p.457). The study was conducted among IBM
employees from 38 occupations in 72 national subsidiaries. The first round of interviews took
place in 1968 and has constantly been updated ever since. On Hofstede’s website, Hofstede
Insights (2018, ibid for fc), it is explained, that while the model initially focused on the four
dimensions Power Distance Index, Individualism versus Collectivism, Masculinity versus
Femininity and Long-term Orientation, two more dimensions were added later: Short-term
Orientation and Indulgence versus Restraint. Although, according to Lynn and Gelb (1996),
Hofstede has received criticism for his model being too generalizing, it is supported that cross-
cultural differences are captured well and help to operationalize culture into marketing. Therefore,
Hofstede’s model will be used for this research, since it gives a guideline to analyzing culture and
gives companies a first grasp of a country’s culture. In the following, Hofstede’s cultural
dimensions will be briefly explained, while emphasizing on the effect on consumer behavior.
Innovation on Global Markets – Should Companies Glocalize?
19
The Power Distance Index describes how a society handles the inequality between people
(Hofstede Insights, 2018). Hence, the score shows to which degree they accept differences in
power. Societies with low scores have flat hierarchies and tend to equalize the distribution of
power, while societies with higher scores have strict hierarchical orders. When applying this
dimension to consumer behavior, De Mooij (2005, p.60, ibid for fc) suggests, that in high power
distance countries, social status is important and made visible with status symbols, such as global
brands. Another indication of high power distance is, that adults and their children live in different
worlds, therefore the portrayal of families should be different. For example, children play with
each other, rather than the parents playing with them, whereas in low power distance countries the
parents play with their children as equals.
As explained on Hofstede Insights (2018), on the one hand, a high score in the dimension of
individualism versus collectivism means, that individuals are “expected to take care of themselves
and their immediate families”. On the other hand, a low score means that a society is more
collectivistic, which means there is a close relationship to the group. Society’s view on people’s
self-image is “we”, while individualistic society’s view the self-image as “I”. De Mooij (2005,
p.64 ff., ibid for fc) explains, that collectivistic countries are “shame societies”, where losing face
is avoided and social norms are more important than personal comfort. In general, the group is
very important and work-life and private life are often intertwined. Furthermore, people build
relationships with the company, not the brand, resulting in products having to have interesting
product features rather than strong branding. Also, in conducting business, a relationship and trust
have to be established before a sales process can start. In individualistic countries however, work-
life and private life are strictly divided, the sales process is fast and to the point and personalities
are expressed through brands.
Masculinity versus femininity is the third dimension in Hofstede’s model, as explained on the
website (Hofstede Insights, 2018). A more masculine society puts importance to values such as
achievement, heroism, assertiveness, and material rewards for success. A feminine society is
characterized by values such as cooperation, modesty, caring for the weak and quality of life.
Consequently, feminine cultures do not like to show off and be the winner, but rather show
sympathy for the loser, as suggested by De Mooij (2005, p.67). On the opposite, masculine
Innovation on Global Markets – Should Companies Glocalize?
20
societies show their success through status symbols and brands. It is important to be the winner
and live by “the stronger, the better”.
Hofstede Insights (2018, ibid for fc) describes the dimension of Uncertainty Avoidance as the
degree to which people feel uncomfortable with uncertainty and ambiguity, and how people cope
with the fact that the future cannot be known. In society, this dimension is visible through many
rules and formalities in countries with high scores. With a structured life, these cultures try to avoid
uncertainty and constrain the unknown. The communication is more formal, and emotions are
shown, while low uncertainty avoidance countries avoid showing emotions.
Long Term Orientation versus Short Term Orientation opposes a normative society to a pragmatic
society (Hofstede Insights, 2018, ibid for fc). Countries with a low score have normative societies
which are more short term oriented and described as conventional historic. People maintain time-
honored traditions and norms and view changes with suspicion. On the other side, countries with
high scores in this dimension are pragmatic societies that are more long term oriented, thus future
oriented.
Indulgence versus Restraint is the last dimension in Hofstede’s model. In an indulgent country, the
emphasis is on having fun and enjoying life (Hofstede Insights, 2018, ibid for fc). Social norms
are not as strict, and people are not suppressed by it. The opposite is the case in restrained countries,
where strict social norms suppress gratification.
Another model to consider, especially when planning the communication in the foreign country,
is the concept of high context and low context cultures, developed by Hall (Hall & Hall, 1990,
p.200). He assumes, that high context cultures communicate with few information, meaning that
the message contains less verbally explicit information. There is no need for in-depth information
in the message itself, as the information is part of the context. De Mooij (2005, p.56) argues, high
context communication is economical, fast and efficient, but might be difficult for observers to
understand if they are not familiar with the culture and its symbols. Therefore, also advertising in
high-context cultures are characterized by symbols and expressions. Hall and Hall (1990, p.200)
suggest, that in low-context cultures most of the information is explicitly stated in the message.
They explain, that detailed background information is needed, and words are important. Therefore,
people communicate direct and unambiguous. In advertising, that means that argumentation and
Innovation on Global Markets – Should Companies Glocalize?
21
rhetoric are included in commercials (De Mooij, 2005, p. 56). The table below shows a comparison
of characteristics of low- and high context cultures:
Table 3: Characteristics of High- and Low Context Cultures
Low Context High Context
Prefers direct verbal interaction
Meanings only at one level
Less proficient in reading nonverbal indications
Individualism
Relies on logic
Says “no” directly
Messages are structured, detailed, literal
Prefers written information
Prefers indirect verbal interaction
Meanings at many sociocultural levels
More proficient in reading nonverbal indications
Collectivism
Relies on context and feelings
Avoids saying “no”, talks around point
Messages are simple, ambiguous
Understands visual messages
Source: Adapted from Guffey, Rhodes, & Rogin, 2010, p.73
2.2.2 Internationalization Approaches
After analyzing the market environment and consumer behavior in the sense of culture, at this
point, the company has gained some background knowledge that enables moving on to the next
step, where a strategy is built. Hence, there are different approaches to internationalization, that
lead to strategy, which are explained in the following. An internationalization factors model,
developed by Vrontis and Thrassou (2007, p.20), assumes that tactical behavior refers to the
elements of the 7Ps of the marketing mix: product, place, price, promotion, people, physical
evidence and process and can be either adapted or standardized, while there are several reasons for
either direction. The debate of standardization versus adaptation is widely discussed (e.g. Douglas
& Wind, 1987, p.19 ff.; Levitt, 1983, p.92 ff.; Buzzell, 1968; Schlegelmilch, 2016, p.86 ff.; De
Mooij, 2005, p.229 ff.; Czinkota & Ronkainen, 2013, p.358 ff.). While some literature supports
the standardization approach, some authors claim adaptation is the way to success (Vrontis &
Thrassou, 2007, p.8). The following will give a detailed overview of benefits of both approaches
as well as elaborate on the glocalization approach.
2.2.2.1 Standardization
Due to the many benefits, standardization has been described as the ideal approach to
internationalization (Levitt, 1983, p.92; Schlegelmilch, 2016, p.88). A strong supporter of the
standardization approach is Levitt (1983, p. 92 ff.), who described globalization as being the reason
Innovation on Global Markets – Should Companies Glocalize?
22
for homogenizing of customer needs and interests and therefore the existing need of standardizing
global products. He believed, that high quality is superior to product features, functions, design
and price. While these believes have changed today, standardization does bring several benefits to
a company. Vrontis and Thrassou (2007, p.8, ibid for fc) explain, that studies have shown the
reasons for standardizing being global uniformity and image, economies of scale in production,
research and development (R&D) and promotion, synergetic and transferable experience and
efficiency, consistency, and easier planning and control.
A benefit most relevant to most companies, is cost saving, according to Buzzell (1968) and Levitt
(1983). Regarding product design, companies can offer a basic product and have functional or
design variations for several markets. Both authors agree, that this way, unit costs can be reduced
in the long run, due to spreading costs when producing greater volumes. Furthermore, Buzzell
(1968, ibid for fc) elaborates, that standardizing packaging has the benefit of cost reduction and
can increase memorability at the same time. Promotional material, such as art work and
commercials, can be used in multiple countries. Since the expenses of promotion are usually high,
the lower costs could offset the lost sales through standardized promotion. However, when using
a standardized communication strategy, De Mooij (2005, p.229 f.) argues, that the advertising is
focusing only on product attributes and cannot communicate any values, as there is the risk of
cultural problems.
Besides cost savings, consistency is another benefit of standardization. Both Buzzell (1968) and
Schlegelmilch (2016, p.88) claim, that by keeping the same product style, sales, customer service,
brand names, packages and image, the product is memorable globally, which is especially of
importance to the increasing number of multinational customers. Moreover, consistency is
important when communicating across different media channels, such as newspaper, radio and
television (Buzzell, 1968) and nowadays, the internet, to not confuse customers with different
brand images. Standardization also improves planning and control, for example through the
harmonization of price policies and reduced complexity of portfolio management, as suggested by
many scholars (Buzzell, 1968; Schlegelmilch, 2016, p.88; Vrontis & Thrassou, 2007, p.8).
Lastly, Buzzell (1968, ibid for fc) explains, that good ideas in marketing are scarce, and therefore
another benefit of standardization is that the exploitation of good ideas is possible. However, only
significant marketing ideas can work globally.
Innovation on Global Markets – Should Companies Glocalize?
23
While the many benefits of standardization are encouraging, De Mooij (2005, p.26, ibid for fc)
elaborates, that the decision depends on product category, product life cycle and the culture of the
company as well. In example, the country of origin effect is beneficial for whiskey made in
Scotland, whereas mobile phones are mostly the same around the world and therefore have a higher
probability for global campaigns to be successful. Furthermore, new products are easier to
standardize than mature products (De Mooij, 2005, p.26) and standardized products can be
launched faster, since they do not require any adaptations to local conditions (Schlegelmilch, 2016,
p.88). Finally, the company culture matters, as managers need to be aware of cultural differences
in the first place (De Mooij, 2005, p. 26).
2.2.2.2 Adaptation
Douglas and Wind (1987, p.19) suggest, that a universal standardization of products ignores
significant factors, such as consumer behavior and market characteristics. Also, cultural
differences have led to marketing failure in the past, which is why products need to be adapted to
local markets (Buzzell, 1968). One of Cooper’s success factors (Cooper, 1999, p.117) for product
innovation as described above, is the “voice of the customer”, which means, that the customer’s
preferences need to be considered throughout the entire process of new product development.
Consequently, the adaptation approach supports this success factor as it is consumer oriented.
Although technology and modernization are believed to homogenize values and consumption with
globalization, consumers’ behavior and buying motives are not the same everywhere (De Mooij,
2005, p.26). Thus, reasons for adaptation include culture, market development but also
competition, laws and economic differences (Vrontis & Thrassou, 2007, p.12 ff.). While most
reasons lead to benefits such as increasing sales and better acceptance, some adaptations with
regards to the legal and economic environment, and the climate are obligatory and required by law
(Buzzell, 1968; Czinkota & Ronkainen, 2013, p.359 f.; Schlegelmilch, 2016, p.89). Czinkota and
Ronkainen (2013, p.359) claim, that a fully adapted marketing strategy requires effort and costs.
Therefore, firms evaluate if the adaptation would be worth the costs invested, before making a
decision. However, Schlegelmilch (2016, p.89) argues, that an adapted strategy could lead to better
market and customer acceptance and therefore the costs could be offset with increased sales in the
end. Czinkota and Ronkainen (2013, p.360, ibid for fc) further elaborate, that the adaptations that
are not obligatory are to be more competitive on the market by tailoring the products to customer
Innovation on Global Markets – Should Companies Glocalize?
24
preferences and match competitive offers. Certain factors affect the decision to adapt: All elements
of the PESTLE analysis as well as customer characteristics and culture, product characteristics
such as brand, packaging, product functions and service, and company considerations, such as
market opportunity, profitability, resources and costs.
2.2.2.3 Glocalization
In theory, a complete standardization would mean identical product lines with identical prices,
distribution and promotion in different countries, as explained by Buzzell (1968). On the other
side, a complete localization would mean, that products offered in different countries would not
have any common elements whatsoever. Consequently, the author elaborates, that standardization
and adaptation are two extremes, that are not possible to implement. Rather companies decide to
which degree they standardize or adapt. In this context, the expression of glocalization has been
developed by Robertson (1995, p.28 ff.) and describes a combination of standardization and
adaptation, or better said, a balance between the two extremes. Thus, rather than choosing one
approach, companies can choose to combine them to maximize their benefits. Also in Cooper’s
success factors, an international orientation with the development of global or glocal products is
recommended (Cooper, 1999, p.118). Barlett and Goshall (2002, p.371) as well as Kumar and Geol
(2007) suggest, that by considering cultural differences and local characteristics, business
marketing strategies, and advertising and communication strategies can be glocalized.
Consequently, global efficiencies, global responsiveness, multinational flexibility, local
responsiveness, international learning and improved innovation capabilities can be achieved.
2.2.3 New Product Launch
Along with early product definition, a well-planned launch is one of the success factors for product
innovation as described by Cooper (1999, p.117). As new product launch is generally expensive,
risky and time consuming (Bowersox, Stank, & Daugherty, 1999, p.559), the planning should
already begin before the development phase in new product development processes. Therefore,
strategic launch decisions, including marketing strategy, are already made before the actual launch
(Hultink, Hart, Robben, & Griffin, 2000, p.7; Stryker, 1996). Most literature on new product
launch (e.g. Bowersox, 1999, p.558; Guiltinan, 1999, p.510; Lee, Lin, Wong, & Calantone, 2011,
p.108) categorizes the topic into strategic decisions and tactical decisions. While strategic
decisions include the decisions about target group, countries, timing as well as product-, market-,
Innovation on Global Markets – Should Companies Glocalize?
25
competitive- and firm strategy, tactical decisions include decisions on the elements of the
marketing mix. Although the elements of the marketing mix are a part of the tactical decisions,
they must be considered during strategic decisions already, meaning that the marketing mix is
influenced by the strategy that has been decided on, as suggested by several scholars (Di
Benedetto, 1999, p.531 f.; Hultink, Griffin, Hart, & Robben, 1997, p.245). For the planning of the
entire launch, research has shown, that cross-functional teams are a vital part to success and can
also help to speed up the launch process (Di Benedetto, 1999, p.532).
2.2.3.1 Strategic Decisions
Strategic decisions describe the “what, where and when” of new products (Bowersox et al., 1999,
p.559; Guiltinan, 1999, p.514) and occur prior to the actual launch (Hultink et al., 2000, p.7). In
other words, as described by Lee et al. (2011, p.108), this step of the new product launch includes
decisions about target group, which countries are entered and the timing of the launch. Many
scholars have investigated key decisions in launching a new product. Hultink et al (1997, p.254,
ibid for fc) have summarized previous studies on this topic and categorized strategic launch
variables into product strategy, market strategy, competitive stance and firm strategy, which will
be explained further in the following.
Product strategy describes the nature of the product, which needs to deliver unique and innovative
attributes (Hultink et al., 2000, p.7). This goes along with Cooper’s success factor for product
innovation, where product advantage is created through unique and differentiated benefits
(Cooper, 1999, p.117). Thus, product innovativeness and relative product newness are determined
in product strategy, but also the timing in terms of cycle time is planned (Hutlink et al., 1997,
p.245).
Relative product innovativeness is determined by attributes, benefits, procedures and occasions
for usage of the new product and is also connected to relative advantage, according to Guiltinan
(1999, p.515 ibid for fc). Existing solutions from competitors as well as potential buyer’s
perception of product innovativeness determine relative advantage. Thus, the higher the perceived
benefits of the product, the higher the relative advantage. Furthermore, product innovativeness
also depends on the selected target market, hence whether the company pursues lead or follow
leadership. Leading the market with a “really new product”, new technology or new performance
increases product innovativeness and therefore, also the relative advantage. Consequently, relative
Innovation on Global Markets – Should Companies Glocalize?
26
product innovativeness is interdependent with market strategy. Furthermore, Hultink and Robben
(1999, p.549) suggest, that product newness can be determined by the product being completely
new, a new product line, an addition to a product line, an improved version of a product, a
repositioning or a cost reduction. Empirical research by Hultink et al. (2000, p.15) has shown, that
in the category of consumer products, the newness is more likely to be a modification and less
innovative.
The “when” of strategy decisions refers to the timing of the product launch. Timing-related
decisions include the timing of market entry and the speed of market (Hultink & Robben, 1999,
p.547). As described by Di Benedetto (1999, p.533), this important strategic decision can be
oriented towards different factors, such as business goals, competitors, customers, or execution of
promotion. Guiltinan (1999, p.515) argues, when defining their timing strategy, a firm has the
choice whether and when to preannounce the product launch, as well as if and when old products
will be discontinued with the new product launch. According to Lee et al. (2011, p.108, ibid for
fc), a company can pursue different preannouncement strategies, meaning communication before
the new product is officially introduced. The purpose of such strategies is to educate, and build
curiosity and interest among potential customers, as well as prevent potential competitors from
entering the market. The firm can choose between customer education or anticipation creation.
Lee et al.’s (2011, p.115 f.) empirical studies have shown, that customer education is most effective
during the introduction and growth stage of the product life cycle and enhances market share,
profitability and customer satisfaction performance, by helping consumers understand and learn
about product features. The studies show, that anticipation creation has proven to be most
successful during the mature stage of the product life cycle, where it achieves the same benefits.
Altogether, an early timing has proven to have a positive impact on market acceptance, as found
by Hultink and Robben (1999, p.553).
Market strategy describes the nature of the market, the product is launched into and if the market
is new or already established (Hutlink et al., 2000, p.7). Existing research categorizes the market
strategy into scope of segments served (targeting), stage of product life cycle and target market
growth (Hutlink et al., 1997, p.245). In global marketing strategies, the segmentation of the market
can be executed according to country groups or individual consumer groups, as explained by
Keegan and Green (2008, p.224, ibid for fc). The most popular categories in segmentation are
Innovation on Global Markets – Should Companies Glocalize?
27
demographic, psychographic and behavior segmentation. Demographics focus on income,
population, age, gender or occupation. Psychographic segmentation divides the market according
to attitudes and lifestyle and behavior segmentation focuses on the buying behavior, meaning
whether or not consumers buy the product, how often they buy it and how big the consumption is.
Besides this approach to segmentation, target markets can also be defined as groups that adopt the
new products in different stages of the product life cycle. Rogers (1962, p.281) divides those
groups into innovators, early adopters, early majority, late majority and laggards. Beard and
Easingwood (1996, p.91 f.) have connected the groups of innovators, early adopters, late adopters,
existing customers and competitors’ customers with target markets. They claim, that Innovators
are the first ones to adopt an innovation as they are willing to take risks and cope with uncertainty.
They are social, interact and influence other innovators. Moreover, innovators are young and
educated and want technical support from sophisticated people (Beard & Easingwood, 1996, p.92;
Rogers, 1962, p.282). Furthermore, early adopters are young opinion leaders that are integrated in
local systems (Rogers, 1962, p. 283). Beard and Easingwood (1996, p.92) describe them as price
sensitive and often large organizations with the need for new technologies to stay competitive.
Early adopters are opposed to risk, since the innovation constitutes a high investment for them.
The strategy to target late adopters is “used to launch new products into a market that has already
absorbed and accepted a new technology to a large degree” (Beard & Easingwood, 1996, p.92).
Thus, this category summarizes Roger’s groups of early majority, late majority and laggards,
which are adopting innovations after a degree of time (early majority), after the average member
of society (late majority) or as the very last (laggards). While the late majority is usually suspicious
about innovation, laggards are opposed to change and focus on traditions, therefore take the longest
to adopt innovations and are rarely targeted in the first place (Rogers, 1962, p. 283 f.). Actions for
this group are to establish a high ubiquity of distribution as well as research market expectations
beforehand (Beard & Easingwood, 1996, p.92 ibid for fc). Targeting existing customers can be
used, for example, for rapidly changing technologies. Existing customers are already familiar with
the technology and a trust relationship has already been built. Customer records can be used to
understand their needs and seminars and rice discounts help to convince existing customers of the
innovation. Finally, targeting competitors’ customers is an aggressive strategy, that is intended to
compare the innovation with the competitor’s product. To do so, it should be concentrated on the
Innovation on Global Markets – Should Companies Glocalize?
28
improvements of the own product and a trade-in for the old product could be offered. The table
below summarizes the actions and operations for each group described:
Table 4: Targeting and Associated Actions
Group Associated Actions / Operations
Target innovators Experience and market research to identify innovators, tailor
advertising to innovator profile
Target early adopters Conferences, good product support services, meet needs of large
customers, delay launch to increase awareness
Target late adopters Research market expectations, high ubiquity in distribution
Target existing customers Seminars, price discounts, special support, meet needs of existing
customers
Target competitors’ customers Emphasize on improvements, compare to competition’s product,
offer trade-in for old products
Source: Adapted from Beard & Easingwood, 1996, p.92
Another way to develop a market strategy, as suggested by Guiltinan (1999, p.516 f. ibid for fc),
is to target mass or niche markets. Mass markets are characterized by intense existing competition
and a high level of required resource commitment. Moreover, the product needs to have a strong
relative advantage to exist alongside strong competitive products. While products with a high
degree of newness rarely serve a broad range of buyers and therefore are more likely to serve niche
markets, targeting mass markets requires mass customization. Hence, a product or its
representation is customized for individual customers. In this context, also Green and Ryan (1990,
p.45 ff.) suggest, that an adapted approach for a clear target market proofs to be more successful.
If a firm intends to focus on a niche market, there are several potential segments to target according
to certain buying behavior. Empirical research is grouping those segments similar to the
categorization by Rogers (1962, p.281) and Beard & Easingwood (1996, p.92). Certain “standard”
niche options exist for each type of demand outcome and they are connected to the primary task
of the launch plan as shown in the table below (Guiltinan, 1999, p.517 ibid for fc):
Innovation on Global Markets – Should Companies Glocalize?
29
Table 5: Strategic Niche Opportunities
Desired Buying Behavior Potential Segments
Relative Importance of
Relative
Advantage Compatibility
Adoption/Diffusion
Early Adopters
Late Adopters
Users of competing category
Non-users of competing category
X
X
X
X
Trial/Repurchase
Current customers using our product
Competitor’s customers
Lead users
Buyers with special usage needs
Variety seekers
X
X
X
X
X
Migration
Current customers
Competitor’s customers
Lead users
Buyers who recognize need for
improved performance
Buyers who don’t recognize need for
improved performance
X
X
X
X
X
Source: Adapted from Guiltinan, 1999, p.517
For example, the relative advantage is more important when targeting competitors’ customers, and
the switching costs have to be justified. In addition, when targeting late adopters, the compatibility,
which describes whether the innovation is compatible with values and beliefs, previously
introduced ideas, and needs of innovation, is more important in the product launch.
Competitive stance includes the number of competitors and the desired level of product
advantage, as explained by Hultink et al. (1997, p.245). The phase of the product life cycle, the
innovation is launched into also defines the competitive position of the product. Consequently,
concentrated markets with few buyers have intense competition, whereas markets with few
competitors but growing demand are more attractive (Hultink et al., 2000, p.8). For example,
product modifications and brand extensions are launched into mature markets most of the time
(Adams, 1994, p.221 ff.), meaning that new product development objectives are market- and
competitor focused (Hultink et al., 2000, p.8).
Firm strategy defines the firm’s orientation towards new product development as well as
determines the innovation strategy and product drivers (Hultink et al., 1997, p.245). Hultink et al.
(2000, p.7 ibid for fc) argue, that the orientation towards new product development determines if
a company’s process is driven by the market or the technology. Hence, whether new product
Innovation on Global Markets – Should Companies Glocalize?
30
development efforts follow the objective of creating an innovation, imitation or reduce costs. They
further discuss, that while business to business products are often driven by innovative technology,
consumer products usually pursue the objective to increase market penetration, profitability, and
maintain and increase reputation.
2.2.3.2 Tactical Decisions
Tactical decisions focus on “how” the product is launched on the market (Guiltinan, 1999, p.514).
Most scholars include the elements of the marketing mix, such as product, price, place and
promotion (e.g. Lee et al., 2011, p.108; Guiltinan, 1999, p.510 ff.; Hultink et al., 2000, p.7; Hultink
& Robben, 1999, p.547; Vrontis & Thrassou, 2007, p.10). However, other elements, such as
product innovativeness and timing are also categorized into tactical decisions in some literature
(Guiltinan, 1999, p.515; Hultink & Robben, 1999, p.547). In general, product launch is critical for
product performance and market research is key for planning a launch, as already described by
Cooper (1999, p.116 f.). Di Benedetto (1999, p.533 f.) suggests, that market and product testing
results influence tactical decisions, but certain activities lead to success, according to empirical
research: Selling effort, advertising, service and support should be high quality. Moreover,
marketing plans, launch directions and the launch itself should be clear and well managed, so
should the marketing mix. Lastly, the timing of the launch plays an important role and should be
relative to competition and customers. However, Hultink et al. (2000, p.6) remark, that factors for
a successful product launch have not been researched a lot so far, and there is no empirical evidence
for a generalized approach. In the following, an overview over possibilities and important factors
for tactical decisions will be given.
Product is the center point of challenges and opportunities of global companies, since the product
is the innovation to be launched, as suggested by Keegan and Green (2008, p.327 f. ibid for fc).
Companies must find a balance between adapting and standardizing the product, as described
earlier. By definition, a product can be a good, service or idea, which has tangible and intangible
attributes and creates value for a user. Tangible attributes are physical and can be, for example,
weight, material or packaging. Intangible attributes are, for example, brand reputation and the
offered support and service. In addition, brand and product assortment have been described as
necessary factors to consider by several scholars (e.g. Guiltinan, 1999, p.510 ff.; Hultink &
Robben, 1999, p.547; Hultink et al., 2000, p.8). In fact, a broader product assortment with no new
Innovation on Global Markets – Should Companies Glocalize?
31
brand name could impact market acceptance positively, according to an empirical study by Hultink
and Robben (1999, p.551).
Keegan and Green (2008, p.330 ff.) argue, that considering the branding on international markets,
the company needs to choose whether to implement local branding or global branding, which
brings us back to the standardization versus adaptation debate. They explain, that following a
localization approach, the company would develop separate brands for every market, to cater the
needs and preferences of local consumers. On the opposite, when following a standardized
approach, a global brand would have the same name, image and positioning around the globe.
Kotabe and Helsen (2008, p.374 ff. ibid for fc) elaborate on certain advantages and disadvantages
for either branding strategy, a firm should consider. While a truly global brand is rarely launched,
global branding does result in consistent identity and economies of scale in manufacturing,
distribution and promotion. Since the brand is the same everywhere and available globally, it has
more visibility, thus it is easier to build brand awareness. Additionally, the global branding has
positive effects on the image, due to the perception that the company has the resources to go global.
Local branding on the other side might even be necessary on certain markets. There might be a
trademark on the brand name or products with the same name already existing in other product
categories. Furthermore, cultural barriers could mislead consumers, when they cannot pronounce
the name right or the meaning is a different one in their language. A local brand might even be
more successful in countries that value patriotism and local brands. Since it is difficult to decide
whether to develop global or local brands, many big companies carry local, regional and global
brands.
Another aspect to consider when developing a branding strategy, is the country of origin effect,
which influences people’s perception of quality (Keegan & Green, 2008, p.341 f.; Vrontis &
Thrassou, 2007, p.12 ff. ibid for fc). Some of the major elements that affect the influence of country
of origin on consumer’s perceptions have been identified in existing literature: Experience,
knowledge, stereotypes, ethnocentrism, political/cultural relationship between countries, general
country of origin image and brand image can have either positive or negative effects. However,
Suh, Hun, & Davies (2015, p.2721) argue, that a consumer’s perception towards a country can be
influenced by cultural adoption, meaning, that a company behaving culturally appropriate with
their products in the foreign country, can enhance general attitudes towards their country of origin.
Innovation on Global Markets – Should Companies Glocalize?
32
Furthermore, when the country of origin evokes a positive effect, a “made in” label can be used,
or the heritage made clear in advertisements (Kotabe & Helsen, 2008, p.398). All of the above
should be planned under consideration of relative product innovativeness, targeting, introduction
objectives and product newness (Hultink & Robben, 1999, p.547).
Place focuses on the distribution structure and availability of the product (Guiltinan, 1999, p.520),
meaning how and where the product is going to be sold, to fit buying behavior (Hultink et al.,
2000, p.9). Keegan and Green (2008, p.429) explain, that the design of supply chains determines
how the manufacturers are connected to the customers. This also highly depends on the nature of
the business, if it is business to business (B2B) or business to consumer (B2C). Either way, the
product can be sold through a distributor or agent, online and offline, or directly from manufacturer
to consumer. Especially in the Fast-Moving Consumer Goods (FMCG) industry, retailing plays an
important role. Thus, the products can be sold in department stores, supermarkets, outlet stores etc.
Di Benedetto (1999, p.532 ff.) suggests, that also logistics play a key role in strategy development.
Hence, supply chains, production facilities, transportation and warehousing must be planned as
well (Keegan & Green, 2008, p. 429).
Price reflects the products’ competitive position, quality, innovativeness and benefits (Hultink et
al., 2000, p.9). The pricing is used to achieve financial goals, such as return on investment or profit.
However, some companies focus on other objectives, such as increase of market share and sales
(Lee et al., 2011, p.108). Besides the objectives, obviously also company costs play a role when
setting prices. As elaborated by Kotabe and Helsen (2008, p.408 ff. ibid for fc), at least all costs
of the company must be covered with the selling price, considering manufacturing, marketing and
distribution of the product. Furthermore, the consumer’s willingness to pay sets a certain price
limit. In addition, buying power and price-sensitivity should be considered. The last driver to
consider in global pricing is the distribution channel. Depending on the channel, there are certain
margins that need to be taken into consideration, when calculating prices.
Generally, there are two pricing strategies, namely skimming and penetration pricing (Guiltinan,
1999, p.519; Hultink & Robben, 1999, p.549; Keegan & Green, 2008, p.364 f.). Choosing
skimming for the pricing, serves the objective to reach a market segment that is willing to pay a
premium price (Keegan & Green, 2008, p.364 f. ibid for fc). Especially when introducing new
products to the market, skimming is often used. While the competition and production capacity
Innovation on Global Markets – Should Companies Glocalize?
33
are not high yet in the introduction phase of the product life cycle, once the growth stage is entered,
companies tend to cut prices. Penetration prices are low and are used in the introduction phase
mostly to increase the market share or sales, rather than pursuing financial goals. Thus, penetration
pricing can be used as a “competitive weapon” to gain more price-sensitive customers. Empirical
research has shown, that penetration pricing leads to positive market acceptance (Hultink &
Robben, 1999, p.551). Generally, companies should be aware that both setting the price too high
or too low can have negative impacts and result in losses. Charging too much could result in
customers not buying the product and too low prices could be perceived as low quality (Kotabe &
Helsen, 2008, p.433 f.).
Promotion includes many different tactical activities, such as advertising, sales promotion, direct
marketing, and events (Kotabe & Helsen, 2008, p.448). However, most scholars (Beard &
Easingwood, 1996, p.92; Guiltinan, 1999, p.511 ff.; Hultink et al., 2000, p.9) focus on advertising
as it is the most commonly used tool to communicate to the customer.
When developing advertisements, the decision between standardization and adaptation comes up
again. When the company chooses to develop a standardized version of advertisements, they can
generate economies of scale, portray a consistent image and exploit successful ideas (Kotabe &
Helsen, 2008, p.447 ff.). However, they also ignore cultural differences and risk violation of
advertising regulations. Thus, firms can save costs and effort, but also take the risk, that it is not
appealing to consumers in some countries (Keegan & Green, 2008, p.434). Also, in the creation
of a slogan, Kotabe and Helsen (2008, p.438 ff. ibid for fc) suggest, to consider the connection to
culture. Language barriers might change the meaning of the slogan or the slogan simply cannot be
translated into the foreign language. Moreover, other examples such as religious differences,
portrayal of women or meanings of symbols can be completely different across cultures. Here, a
cultural research becomes vital, as information about the aforementioned examples can be
obtained, for example with the help of Hofstede’s model.
Keegan and Green (2008, p.434) further explain, when using a glocalized approach to advertising,
it can also be called “pattern advertising” or “pattern standardization”, which is a middle ground
between the two extremes, standardization and adaptation. Pattern advertising means “developing
a basic pan-regional or global communication concept for which copy, artwork, or other elements
can be adapted as required for individual country markets” (Keegan & Green, 2008, p.434). The
Innovation on Global Markets – Should Companies Glocalize?
34
headquarters of a company would design guidelines in terms of positioning theme and brand
identity but leave the execution to the local experts (Kotabe & Helsen, 2008, p. 452).
Advertisements can be functional or emotional (Lee et al., 2011, p.108). Which one to choose
highly depends on the culture of the foreign country. Functional ads focus on the objective and
rational expression of product attributes and features and focus on information (Lee et al., 2011,
p.108; Shimp & Andrews, 2013). Emotional ads appeal to consumer’s needs for personal
expression, social approval and self-esteem and portray subjective and symbolical benefits of the
product. This can be done with, for example, humor or fear (Cutler & Javalgi, 1993; Lee et al.,
2011, p.108).
The cultural models described earlier are connected to consumer behavior and both together are
very important when designing advertising for global markets. De Mooij (2014, p.179 ff. ibid for
fc) attempted to translate culture into advertising styles, where Hofstede’s cultural dimensions are
linked to Hall’s high- and low-context cultures and put into relation with advertising styles:
Figure 3: Advertising Styles across Cultures
Source: De Mooij, 2014, p.195
The two left quadrants show countries where direct, explicit and personal communication is
important. Uniqueness, identity and personality should be reflected in the advertisement, which
Innovation on Global Markets – Should Companies Glocalize?
35
can also be endorsed by a presenter. The right side focuses on direct-implicit and indirect-implicit
styles. Countries located in the upper left of the matrix, prefer serious, structured and detailed ads.
Due to the explicitness, information and data should be provided, and often advertisements in those
countries include a demonstration of the usability of the product. In addition to that, advertising in
countries in the lower left quadrant can also make use of humor. Are the countries more masculine,
celebrities are a good tool for the presentation, whereas in more feminine countries, the personality
of the presenter is downplayed. The upper right corner covers several styles since several
dimensions are combined. Most of the countries communicate indirect and implicit, thus the
meaning is in the context. Celebrities are used as well, however, they do not present and address
the audience directly, but play a symbolic role. To position the product, metaphors and symbols
can be used. Hence, advertisements should focus on likeability rather than persuasion. In countries
from the lower right, advertisers can make use of visuals, word plays and symbolism. Due to the
high score in power distance, group norms and maintaining face are valued and direct modes of
communication preferred.
Innovation on Global Markets – Should Companies Glocalize?
36
3. Method
The following chapter presents the method chosen for the empirical framework. First, the research
approach and data collection will be explained. Afterwards, the sample as well as the market will
be further elaborated before a detailed description of the research design is given.
3.1 Research Approach and Data Collection
The aim of this research is to find out which factors need to be considered for innovations/new
product developments when internationalizing and how companies have to adapt their marketing
strategies on global markets.
In the theoretical framework, extensive review of existing literature has shown a research gap with
regards to detailed examination of the new product launch, as well as glocalization in general.
Therefore, to answer those research questions, the focus is on new product launch, thus the
commercialization of the new product. As described earlier, new product launch splits into two
parts: strategic decisions and tactical decisions. However, strategic decisions are mostly company
internal, hence information cannot be obtained through secondary sources. Therefore, this study
focuses on tactical decisions from two case studies evolving around the marketing mix: product,
price, place, and promotion. Success factors for product innovations have already been identified
in the theoretical part. Two of those success factors were market research and voice of the
customer. With regards to market research, it was explained that extensive homework in terms of
background analysis needs to be done. Therefore, the first part of the analysis focuses on analyzing
the German market with the help of a PESTLE analysis and investigate the culture with the help
of Hofstede’s cultural dimensions. The voice of the customer will be investigated with the help of
a survey, which will be elaborated further later.
As explained earlier, glocalization is a concept that cannot be generalized for all markets.
Therefore, on the example of the automotive industry in Germany, two perspectives are analyzed.
On the one hand, two case studies from the automotive industry investigate the company
perspective, explaining how a new product was launched in Germany, so that degrees of
standardization and adaptation can be derived. The companies were chosen according to the
following criteria: the company has to be international and from a non-German-speaking country,
the company has entered or tried to enter the market and sufficient information about the
company’s activities is available. To find suitable companies, extensive online research was
Innovation on Global Markets – Should Companies Glocalize?
37
carried out. Several obstacles needed to be overcome to find a suitable example, since most
companies do not communicate their failures and the automotive industry is well-researched,
where companies usually put a lot of effort into the planning of the launch since it is connected to
high costs. As a successful example, Ford has been chosen as it is the most successful international
car brand in Germany (Bekker, 2018). As a second case study, the Chinese brand Landwind was
investigated, which tried to enter Germany, but failed due to several reasons, that will be explained
later.
On the other hand, the perspective of the consumer is reviewed with the help of an online survey,
to get insight into how millennials in Germany think about tactical decisions when a new
international product is launched. The sample and its importance will be explained in detail later.
Several online platforms offer the opportunity to create surveys. For this research the service of
Googledocs has been chosen, as it is reliable and easy to handle. Furthermore, the data can be
directly exported to excel, which is a service, most online providers include in their paid services.
During the time of Wednesday, June 6th until Wednesday, June 13th, 2018, the survey was posted
on social media and reached a sample size of 114 participants. An insignificant number of
participants (4) were from another country than Germany and over 37 years old (7). However,
their participation in the survey did not distort the results.
To summarize, results will be derived from the analysis of the German market with regards to
macro-environmental factors and a cultural analysis, two case studies from automotive companies
glocalizing in Germany successfully and unsuccessfully and finally, a consumer survey.
3.2 Sample Description
As it will be explained in the following, Germany’s society is changing, also because of millennials
slowly taking over the middle class. For these reasons and the personal relatedness to Germany,
the author chose millennials in Germany’s automotive industry as a target for the research. In the
following, the specific target group will be introduced further.
The research focuses on millennials, a group that has received a lot of attention recently, as they
are entering the work force and will form the new middle class. Millennials are born between 1982
and 1996 and are expected to represent 20% of the German population until 2020 (Kecskes, 2018).
The generation, that is also called Generation Y in several sources, grew up in a globalized world
with growing uncertainty about the future (Klaffke, 2014). But also, events like technological
Innovation on Global Markets – Should Companies Glocalize?
38
development, terrorism, war in Afghanistan and Iraq, and the world economic crisis shaped the
millennials (Alexy, 2015). Especially the development of the internet changed everyday life
(Klaffke, 2014, ibid for fc). While in the beginning, internet access was desired for the purpose of
having access to information, the invention of Social Media evoked the desire of participation, co-
creation and networking. Whereas in 2002, only 66% of households had access to internet, in 2010
it was already 96%. The internet is a part of everyday life that no one seems to be able to live
without anymore, also since the invention of smartphones gave the opportunity to be online
everywhere anytime. According to Kecskes (2018), 30% of non-food products are already
purchased online and the trend to also purchase food online is increasing. An online lexicon
(Onlinemarkketing.de, 2018 ibid for fc) explains, that in general, millennials expect companies to
be available and reachable at all times and best stay in contact with their target group. Moreover,
a presence on Social Media is seen as essential throughout the different channels. Also, a mobile
version of the website, or even an app is already regarded as standard from a millennial’s point of
view. Due to a big part of their life happening online, influencer marketing has become an
important channel to reach millennials and also customer co-creations, where consumers can
design products themselves, became more popular, re-shaping the marketing landscape
(Onlinemarketing.de, 2018). Kecskes (2018, ibid for fc) from the renowned Market Research
Institute GfK further elaborates on their website, that publicity and protection of privacy, freedom
and commitment, fun and responsibilities seem like two extremes to older generations, but
millennials manage to combine them, which is also shown in other aspects of life: they want to
buy regional but still enjoy international food, they want convenience but also quality and fair-
traded products, products should be functional but also sustainable for society and environment.
More than ever, this generation creates their own value-for-money concept (Kecskes, 2018). In
working life, a work-life balance is important. Due to technology being in their lives since birth,
millennials are technologically affine. They also invest a lot of time and money into education and
are therefore eager and motivated to learn (Onlinemarketing.de, 2018). The work place needs to
fulfil high expectations. While the job should be fun, also the colleagues should be nice, there
should be enough free-time and good benefits (Alexy, 2015 and Onlinemarketing.de, 2018).
Another important aspect that needs to be mentioned when talking about millennials is the size of
the group. A millennial includes a 22-year-old as well as a 35-year-old. Obviously, those two are
in very different stages of their lives (Hosie, 2017). Several sources (Hosie, 2017 and
Innovation on Global Markets – Should Companies Glocalize?
39
BridgeWorks, 2017, ibid for fc) suggest that the group should be split into people born
before/during and after 1986. As the economic crisis in 2008 happened, people born before or
during 1986, had to face an unstable economy and even losing their jobs. The other group however,
grew up knowing the impact of a financial crisis and therefore already expected to have a lower
standard of living.
Millennials grew up with globalization, international product availability and intercultural teams.
Therefore, it will be interesting to see if they put importance to glocalized marketing approaches,
giving an indication to companies, if a standardized or adapted approach is more appropriate.
3.3 Market Description
Germany is one of the most important countries in the European Union (Market Research Reports,
2017) and has an impressive automotive industry with many well-known brands. In 2017, the
automotive industry in Germany generated 426 billion EUR revenue (Statista, 2018a) and brands
like Mercedes Benz, BMW and Volkswagen belong to the leading car brands worldwide (Statista,
2018b). With its leading production and sales market for the automotive industry in Europe,
Germany is a magnet for foreign direct investments, as it has good infrastructure, stable economy,
secure legal framework and a competitive tax system (Germany Trade and Invest, 2016, p.13 f.).
Appendix C shows the density of German automotive original equipment manufacturers (OEM)
and suppliers. A detailed assessment of Germany will follow in chapter four, where a PESTLE
analysis is conducted to obtain knowledge about the country’s political, economic, socio-cultural,
technological, legal and environmental characteristics.
3.4 Research Design
The first part of the empirical research was to conduct qualitative research with secondary data
obtained online. The chosen companies were assessed mainly through information found on their
websites as well as newspaper articles and press releases. The research was conducted along the
marketing mix, product, price, place and promotion. Consequently, information on product
assortment, pricing, availability and commercials were obtained and analyzed. To derive a degree
of adaptation, the results were analyzed according to several factors, depending on their
availability. The online presence in the country of origin, as far as accessible, was used to compare
if there are differences in product assortment, distribution channels, prices and promotional
Innovation on Global Markets – Should Companies Glocalize?
40
activities. But also, to which degree the mix has been adapted to the German culture was used as
a factor.
To analyze the consumer’s point of view, primary data with the help of a quantitative survey was
obtained. While the focus is on millennials in Germany, it was aimed to reach a sample size of 100
participants. The questions were a mix of multiple choice questions, close-ended questions, Likert-
type scales, open questions and yes/no questions. The survey was designed based on the theory,
therefore, along the marketing mix, product, place, price and promotion.
To get information about the attitude towards the products itself, the survey contained questions
about the brands of cars people prefer, mainly to find out if they would prefer German brands.
Furthermore, it was aimed to find out, which attributes they connect to German and international
brands and which product attributes are most important to them. Moreover, information if the
country of origin makes a difference to them, was obtained to determine the importance of
glocalization of car brands and to see, if the results support the findings from the cultural analysis.
Questions about the pricing were included as well. For example, it was asked, how much the
participants would spend on a car as well as if the price is an essential criterion for the purchase.
Furthermore, the survey included questions about the place where a car would be purchased as
well as the time the consumer would be willing to wait for it. Lastly, questions about the promotion
of the products were asked. Two commercials for the same car were shown to the participants to
find out which one they liked better. One commercial was designed for the German market and
one for the US market. Based on that information, it was aimed at determining which advertising
styles are more appealing to German millennials. Moreover, questions about the channels were
asked to obtain insight which channels are important for car commercials, which Social Media
channels are relevant to the target group and which channels are used to get information on car
brands. The full survey can be found in Appendix F (English translation) and G (German version).
Before publishing the survey on Social Media and addressing the target group, the survey was
tested on five Austrian students fitting the age of millennials to review the appropriateness and
analyze potential misunderstandings or errors. After receiving and implementing the feedback, the
survey was posted online. 98% of 20 to 29-year-old’s and 93% of 30 to 39-year-olds are present
on Social Media (Statista, 2018h). Hence, the channel chosen to post the survey was Facebook,
whereas some participants were addressed directly.
Innovation on Global Markets – Should Companies Glocalize?
41
4. Analysis
The following chapter emphasizes on the analysis of the German market, company case studies as
well as the consumer’s perspective to acquire empirical knowledge and answer the research
questions. The German market will be analyzed by using the PESTLE analysis approach and the
cultural analysis will be conducted with the help of Hofstede’s cultural dimensions. Furthermore,
two company case studies will give an insight into international automotive companies on the
German market and show how they implemented the new product launch successfully and
unsuccessfully. Finally, the consumer’s perspective will give an insight into attitudes and buying
behavior of German millennials.
4.1 The German Market
As mentioned earlier, well executed market research is essential for new products to succeed. To
understand the German market, a market analysis and cultural analysis of Germany will be
conducted. As explained in chapter 2.2.1, background knowledge can be obtained with the help of
a PESTLE analysis, as well as cultural models, such as Hofstede’s Cultural Dimensions and Hall’s
high-low context cultures. Therefore, in the following, those models will be used to give a brief
overview of relevant factors on the German market, that will also help to determine if international
companies should glocalize in Germany.
4.1.1 Market Analysis
The PESTLE analysis gives an overview over political, economic, social, technological, legal and
environmental factors, as follows:
Political Factors
As the country profile of BBC (2018, ibid for fc) shows, Germany has a stable democratic political
system and is divided into 16 states. The current chancellor Angela Merkel, who governs the
country since 2005, holds the executive power, meaning that she implements laws and manages
the everyday business. The chancellor is elected by the absolute majority of the federal assembly
every four years. Moreover, the current president Frank-Walter Steinmeier is the head of state and
elected by the federal convention. In general, political parties need at least 5% of the votes to be
represented in the parliament (Export Entreprises, 2018). While the biggest parties CDU (Christian
Democratic Union) and SPD (Social Democratic Party) are usually the leading parties during
elections, the latest elections in 2017 voted the populist anti-immigrant alliance (AfD) into the
Innovation on Global Markets – Should Companies Glocalize?
42
parliament for the first time. The party gained votes due to the refugee crisis and made use of the
public’s fears caused by the high number of refugees allowed to enter the country (BBC, 2018).
In Germany, people are generally treated equally, whether they have different genders, believes,
lifestyles or sexual orientation (Deutsche Welle, 2015).
Economic Factors
After the two World Wars and the division of Germany into two separate parts during the Cold
War, today Germany is an economic giant on the continent and a main player in the European
Union (BBC, 2018). The country’s GDP was 3,466 billion US$ in 2016, whereas 38% were
imports and 46% exports. In comparison, the United States have a GDP of 18,624 billion US$ and
the United Kingdom 2,647 billion US$ (The World Bank, 2018). The annual growth rate of
Germany’s GDP is 2.9% and the GDP represents 5.59% on a global scale. The GDP per capita
PPP (purchasing power parity) is 44,072 US$, which is higher than the European average (Trading
Economics, 2018). Therefore, Germany is the fourth largest economy by nominal GDP and the
fifth largest by purchasing power parity (Market Research Reports, 2017). Germany has a
population of 82 million inhabitants (2016) and a current unemployment rate of 3.4%, which is
lower than most European countries (The World Bank, 2018 and Trading Economics, 2018). The
main industries in Germany are tourism, IT, automotive, healthcare and beer (Market Research
Reports, 2017) and the main import partners are China, the Netherlands, France and the United
States (Trading Economics, 2018). All in all, economically, Germany is a very attractive market
for foreign investments.
Social Factors
An average German family consists of a couple with one or two children (Zech, 2017, ibid for fc).
Most of the parents are already in their 30s, when having their first child, therefore the number of
children in German families is not that high. However, the government gives a lot of support to
families to increase the number of children per family. For example, parents receive financial
support from birth onward and can receive extra money for their children and for themselves, as
well as make use of tax advantages (Bujard, 2014, p.1).
In general, life satisfaction in Germany is high, scoring a seven out of ten (OECD, 2016, ibid for
fc). Germany scores above average in work-life balance, jobs and earnings, income and wealth,
environmental quality, social connections, civic engagement, housing, personal security,
Innovation on Global Markets – Should Companies Glocalize?
43
subjective well-being and education and skills. In fact, the OECD (2016) determined, that 86% of
adults between 25 and 64 have completed an upper secondary education. Work-life balance is
important to Germans, therefore, only 5% of the people work long working hours, while the OECD
average is 13%. With a life expectancy of 80 years (2016), 75% of Germans live in a single or
two-person household (The World Bank, 2018 and Germany Trade & Invest, 2018).
While the man religion in Germany is Christianity, divided into equal parts into catholic and
protestant, non-believers are the largest group with 34% (World Population Review, 2018, ibid for
fc). Being the second most popular destination for immigration after the United States, 12% of
Germany’s population are immigrants. Furthermore, higher death rates and a population drop are
caused by the aging society. The median age in Germany is higher than most countries. In 2017,
it was 47 years, while in the United Kingdom it was 40 years and in the United States 38 years
(Statista, 2018c).
According to BBC (2018) and Germany Trade and Invest (2018), 90% of German households have
cable or satellite TV and people are generally better informed, with regards to pre-purchase
decisions. People are characterized by an individual value-for-money concept, where they always
try to find the best deal. While sustainability is a global trend at the moment, also Germans prefer
green, fair-traded and bio products and are willing to pay a higher price for it (Umweltbundesamt,
2013). Around 91% of the population is aware of the importance of environmental protection and
the majority agrees, that personal behavior needs to be adapted to protect the environment
(Umweltbundesamt, 2008).
Technological Factors
Germany is the world leader in innovation and invests a lot in research and development. With its
innovations, Germany continuously contributes to science and technology (European
Commission, 2012). Also, the government prioritizes research and innovation and there are
technology parks and centers for all industries all over the country (German Center for Research
and Innovation, 2018). Moreover, Germany has an economic and innovation policy in place, that
focuses on the digital economy and infrastructure, digital workplaces, environments, education,
research, science, culture and media (International Trade Administration, 2017).
Innovation on Global Markets – Should Companies Glocalize?
44
In 2016, 92% of German households had internet access (Statista, 2018d). The Social Media use,
as described in the guide to social media platforms in Germany (Simpson, 2017, ibid for fc) is
much lower than in other countries. In 2017, only 46% of Germans were on Facebook, while in
the United Kingdom it was 64% and in the United States 81%. However, looking at Millennials,
over 80% are using Social Media in Germany. Facebook is the market leader with 90% market
share, but Instagram is on the rise, expected to have 13 million users in 2018 in Germany. While
Twitter and Google+ are rather unpopular or mostly used to get information, Linkedin and the
German equivalent Xing are important for business to business relations and professional
networking.
Legal Factors
Germany has a well-established juridical system (Germany Trade & Invest, 2018, ibid for fc).
Regarding foreign business, there is no distinction between Germans and foreign nationals
concerning investments and company establishments. In most cases, companies do not need an
import permit, however, some product do have import duties, such as foods and chemicals.
Furthermore, Germany has patent laws, that ensure protection of intellectual property.
Environmental Factors
Environmental protection is a part of German basic law and also as a reaction to climate change,
a strategy of adaption to climate change (DAS) is in place (Umweltbundesamt, 2017 and
Umweltbundesamt, 2013, ibid for fc). The level of tiny particulate matter in the air (PM2.5), which
contributes to air pollution and harms human health, is 14 micrograms per cubic meter in Germany.
This is a little higher than the OECD average of 13.9. Moreover, 93% of the population are satisfied
with the water quality (OECD, 2016). Germany retrieved 35% of power from renewable energy
in the first half of 2017 and aims to eliminate nuclear power completely by 2022 (Wacket &
Kirschbaum, 2017). In Appendix A, a summary of the most important facts of the PESTLE
analysis can be found.
4.1.2 Cultural Analysis
As for every country, many stereotypes exist for Germany, too. Germans are supposedly
hardworking, efficient, disciplined, humorless (Erlinger, 2012), accurate, rational and cold
(Beutelsbacher, 2015). However, 73% of Germans do not confirm those stereotypes and say they
Innovation on Global Markets – Should Companies Glocalize?
45
are not that honest, punctual and thorough (Welt, 2012). The following will give an insight into
German culture to find out, if those stereotypes are valid.
There are not only cultural differences between other countries and Germany, but even regionally
within Germany (Haerdle, 2014, ibid for fc). While there are differences in dialect, food and
traditions, also the temperament might differ across regions. For example, an after-work drink with
colleagues will happen much earlier in the Rhineland than in Swabia. While those regional
differences exist, there are still certain similarities in whole Germany, which can be explained with
Hofstede’s cultural dimensions, to give an idea about important cultural values. The figure below
shows Germany’s scores in all six dimensions:
Figure 4: Hofstede's Cultural Dimensions: Germany
Source: Adapted from Hofstede Insights, 2018
Power Distance
Scoring a low 35 points, Germany is a country with low power distance (Hofstede Insights, 2018,
bid for fc). With a strong middle class, Germans tend to communicate directly and participative.
Control by leaders is disliked and they gain respect through expertise, rather than authority. This
is also shown by flat hierarchies in companies. People need to be competent to be respected and
staff is usually involved in decision making. Pretentious behavior or showing off is rather
35
67 66 65
83
40
0
10
20
30
40
50
60
70
80
90
Power
Distance
Individualims Masculinity Uncertainty
Avoidance
Long Term
Orientation
Indulgence
Germany
Germany
Innovation on Global Markets – Should Companies Glocalize?
46
uncommon (Welt, 2012). With a low power distance, Germany strives for equality. They are very
tolerant towards other religions, lifestyles or sexual orientation (Deutsche Welle, 2015, ibid for
fc). Women and men have equal rights, so do hetero- and homosexual partners. Basically,
everyone can be and do what they want, as long as they do not hurt anyone and be considerate of
others.
Individualism
Germany has a very individualistic society. As already mentioned in the PESTLE analysis,
German families mostly consist of the parents and one or two children, making it a rather small
family, compared to other countries (Hofstede Insights, 2018, ibid for fc). People are considered
independent, which is also shown by the early age, young people move out from home. Much
lower than in other European countries, the average age of young people moving out from home
in Germany is 23.7, while the European average is 26 (Statista, 2018e). In the work place, contracts
between employer and employee clearly regulate responsibilities, which evokes a sense of duty
(Hofstede Insights, 2018, ibid for fc). Also taking responsibility and learning from mistakes, is in
Germany’s culture. With regards to communication, Germans are “honest even if it hurts”,
indicating their direct and explicit communication style, making it a low context culture. In other
words, Germans communicate clearly with all information in the message and there is no reading
between the lines (ICUnet.AG, 2014, p. 12).
Masculinity
Germany is a masculine society, scoring 66 on this dimension. In general, masculine societies
value competition, achievement and success, which is also valid for Germany (Hofstede Insights,
2018). Additionally, ICUnet.AG (2014, p.14, ibid for fc) describes values such as punctuality,
security, privacy, discipline, and straightforwardness to be associated with German culture. Being
late to meetings, private or professional, is considered rude and also deadlines are to be kept. As
privacy is valued, building relationships takes longer and are developed slowly. Moreover, private
and professional spheres are kept separately. With a “live in order to work” mentality, Germans
are disciplined and will always do the job 100%. Furthermore, ICUnet.AG (2014, p.12 f., ibid for
fc) further elaborates, that Germans are task oriented and put importance to reliable results, that
are created by first understanding the problem and then finding the best solution. This also
resembles that Germans are perfectionists.
Innovation on Global Markets – Should Companies Glocalize?
47
As described by Edelstein (2013, p.1, ibid for fc), all those values are developed in early childhood,
where the German school system divides children into separate schools according to educational
levels. Pursuing a secondary education, there is a choice between “Hauptschule”, “Realschule”
and “Gymnasium”, while gymnasium is the highest possible education with the possibility to study
at state universities afterwards. However, the educational system established ways for everyone to
be able to study after graduation, by offering different types of universities as well.
Uncertainty Avoidance
Germany is rather uncertainty avoidant, meaning that the unknown is preferred to be constrained.
This is shown in the detailed law system as well as the self-evidence to obey the rules (Hofstede
Insights, 2018). Those rules also exist in the neighborhood, where nighttime lasts from 10pm to
6am where one is supposed to be quiet (Deutsche Welle, 2015).
While being appreciative of structure and rules, Germans are characterized by outstanding time
management, where long-term planning is preferred, as described by ICUnet.AG (2014, p.12 ff.
ibid for fc). Also, when managing a project and looking for solutions, Germans need a systematic
overview of the whole situation before proceeding, to have all relevant information and find the
best solution. Furthermore, uncertainty avoidance is resembled by the desire of security, whereas
Germans have insurance for many aspects of their lives. But also caring for the environment
belongs to German behavior structures (Deutsche Welle, 2015, ibid for fc). Recycling is an
important rule to follow, as Germany separate their trash into paper, plastic, biological waste and
other trash. In addition, plastic bottles, glass bottles and even cans belong to a bottle deposit
system, where people receive money back when they bring back the containers.
Long Term Orientation
With regards to long-term orientation, Germany is a pragmatic country. Traditions are easily
adapted to changing conditions and saving, investing, thriftiness and achieving results are
important (Hofstede Insights, 2018). As described above, Germans are perfectionists and try to
achieve results with careful planning and giving it a 100%. Moreover, Germans are very sensitive
to pricing and would switch to a less expensive provider when there is a price increase (Meier,
2013).
Innovation on Global Markets – Should Companies Glocalize?
48
Indulgence
Germany has a restrained society and tends to cynicism and pessimism. While restrained countries
do not put too much importance to leisure time (Hofstede Insights, 2018), it fits with the “live in
order to work” mentality described earlier. However, millennials might shift this attitude, as they
are looking for the perfect work-life balance and do put importance to leisure time
(Onlinemarketing.de, 2018).
With the information obtained on German culture and the often paradox information on
millennials, a shift in German culture can be noticed. While the above describes Germans as
accurate, organized and competitive workaholics, the generation of millennials puts a twist to this
view. By still carrying those values of competition, achievement and success, they also care more
about work-life balance and the environment. The survey conducted for this research will help to
determine behavior and attitudes of millennials in Germany and give valuable insight into certain
aspects of culture of millennials.
4.2 Organizational Perspective: Company Analysis
With the help of described theory and German market analysis, real examples of international
companies operating in Germany can be analyzed. Since secondary research only allows limited
insight into company strategies, the focus is on tactical decisions during new product launch.
Therefore, the marketing mix and to which degree companies adapt or standardize their products
in Germany will be examined.
4.2.1 Case Study: Ford Mustang
The first company chosen for the empirical research is Ford, due to its success on the German
market. The model of Ford chosen to be analyzed is the Ford Mustang, since a new model was
launched in Germany in 2018 and therefore, is the most recent example.
Despite the big competition with Germany’s local automotive manufacturers, Ford entered
Germany in 1925 and managed to stay on the market since (Ford Motor Company, 2018a). With
a workforce of 2,500 employees, Ford has the highest sales among international car manufacturers
and even outsold the German brand Opel in 2017 (Bekker, 2018, ibid for fc). With a market share
of 18.4%, Volkswagen is the market leader and Ford comes in 5th place with 7.2%, right after
BMW with 7.6%.
Innovation on Global Markets – Should Companies Glocalize?
49
When Ford launched the new model of the Ford Focus in 2012, they changed their strategy and
used a global marketing campaign for the first time (LaReau, 2011, ibid for fc). The campaign was
developed by a European team and focused on a highly standardized version, where 80% of the
car parts were the same between Europe and the United States. That time, Ford announced that all
future campaigns will be global and regional headquarters can choose between two campaigns,
rather than creating their own market specific ones. As learned from previous chapters, the level
of standardization and adaptation is a matter of degree. Therefore, the following will examine the
degree of adaptation in the marketing mix for Ford’s new Mustang model, that was launched in
Germany in 2018.
Product
When closely examining the website of Ford in the United States (US) and Germany, one can find
a feature, where the user is able to configure the new Ford Mustang to their own preferences (Ford
Motor Company, 2018b and Ford Motor Company, 2018c, ibid for fc). It becomes apparent, that
Germany and the US have similar product assortments, however, there are a few differences which
will be explained in the following.
The features that can be personalized are style, model, engine, color and upholstery, whereas both
configurators also offer more special features under the category options. Germany offers two
styles of the new Ford Mustang, namely “Fastback” and “Convertible”. Whereas the US also has
these two styles available, the model “Shelby” is also included in the product assortment.
Furthermore, in both countries several models are offered. While in Germany, customers can
choose between the “EcoBoost” and “GT” model, the US additionally offers both options in a
premium variant with more extra equipment included. The engines are the same for each model,
while the Shelby offers a special engine. Moreover, both in the US and Germany, customers can
choose between eleven colors. Lastly, the upholstery color choices are much higher in Germany
(11), than in the US (2). The table below shows the options in numbers and in Appendix D a
detailed comparison of the product assortment in Germany and the US can be found.
Innovation on Global Markets – Should Companies Glocalize?
50
Table 6: Product Assortment
Germany US
Style 2 3
Model 2 4
Engine 4 5
Color 11 11
Upholstery 10 2
Source: Own illustration
A press release by Ford, released in 2017 (Ford Media Center, 2017, ibid for fc) states, that the
new Ford Mustang 2018 is specially adapted to European customer’s wishes. The company claims,
that the car is faster, sharper and more modern than before and even offers some special features,
such as the “good-neighborhood” mode, that takes the need of being quieter at nighttime into
consideration. Furthermore, a pre-collision feature that warns the driver when pedestrians are
crossing the street as well as an assistant to keep track of staying in the lanes is offered.
As learned in the cultural analysis, Germans are considerate of others and obey rules. With the
“good-neighborhood” mode, Ford established the possibility to consider their neighbors nighttime
and not upset them with the loud motor. It also resembles, that the car as a status symbol is not as
important, but the driving experience is in focus.
The figure below shows the description of the different sounds to be chosen from. German
customers can choose between the loud and the quiet mode:
Figure 5: Motorsound
Source: Ford Motor Company, 2018b
Innovation on Global Markets – Should Companies Glocalize?
51
With regards to the branding, Ford is implementing a global branding strategy, since the name
“Ford Mustang” as well as the logo are the same worldwide. As explained in the theory, global
branding results in consistent identity and economies of scale in manufacturing, distribution and
promotion, as well as more visibility.
As a middle to high class sports car, Mustang also has the same positioning in Germany as it has
in the US. As explained in earlier chapters, the country-of-origin effect, can have negative or
positive influences on a brand. As seen on Statista (2018f), the US is somewhere in the middle and
appears after all European countries with regards to reputation. Therefore, Ford does not
emphasize on the “made in USA” label, as it might have negative effects on the brand, also due to
Germany’s distinct automotive industry. However, the fact that Ford is a well-established renown
brand in the US, helps to create trust for the consumer.
In conclusion, Ford has used a glocalized approach for their product Ford Mustang. While the
brand and basic features of the car are standardized, many features have been adapted to specific
European and German customer needs. Thus, the degree of adaptation is high.
Place
As mentioned earlier, Germany has a distinct infrastructure for producing automobiles. Ford is
making use of that and established four production plants located in Köln-Niehl, Köln-Merkenich,
Saarlouis and Aachen (Ford Motor Company, 2018a). To distribute car parts and cars, Ford is
working with the German company DHL as their European lead logistics provider (Deutsche Post
DHL, n.d., ibid for fc). With this partnership, Ford is able to ensure timely production and promises
95% on time arrival. Furthermore, while meeting the challenges of a highly competitive market,
efforts to reduce the environmental footprints are made. By working with only one provider,
efficiency and supply chain transparency can be improved.
With a vast offer of car dealer websites offering the Ford Mustang, Ford has a configurator directly
on their own website. The customer can choose between the different options, get a price indication
and will be forwarded to the nearest dealer, that will make the final offer (Ford Motor Company,
2018b). As learned about the culture, effectiveness and planning ahead are important for Germans.
By offering the tool that allows the user to completely design and configure their desired version
of the Mustang, they can already collect all necessary information about options and pricing, which
Innovation on Global Markets – Should Companies Glocalize?
52
is forwarded to the dealer directly. This way, the dealer already knows, what the potential customer
wants, and the process is much faster and effective. In addition, it gives the customer a clear picture
of their future car, letting them plan everything to the smallest detail before the purchase.
The availability of the car depends highly on the options chosen, thus if the car is a standard edition
or if special features or combinations are added. A car guide (Leicht, 2017) states, the current
waiting time for a Ford Mustang is 36 weeks, while a local dealer claims to have the car available
on stock (Kögler GmbH, 2018). Thus, delivery times depend on the car as well as the geographic
area.
With production facilities in Germany, also German standards are implemented, which creates
trust with local customers. By additionally being able to test drive the product, the user gets to
experience the car, which creates confidence in the product.
Evidently, Ford established a local supply chain and has the cars available locally. The cars are
not imported but produced in Germany. Therefore, Ford has a highly adapted distribution strategy.
Price
The Ford Mustang’s price varies significantly depending on the options chosen, similar to any
other car. Ford is using a skimming strategy, as the car is positioned in the middle to premium
price class and resembles luxury. While in Germany, the standard version of the Ford Mustang is
starting from 39,500 EUR (Ford Motor Company, 2018b), in the US, the price is significantly
lower, starting from 25,680 US$ (Ford Motor Company, 2018c) which is 21,947.60 EUR (Oanda,
2018). The main competitor to the Ford Mustang is Audi TT (Autoblog, 2017), which is positioned
in the same price-class for a slightly higher price starting from 42,000€ (Audi AG, 2018). Thus,
Ford should not offer the Ford Mustang for the US price in Germany, as it would not fit the
positioning with competitors on the German market.
While there are many factors influencing price levels, one reason to explain the difference in
pricing is the much bigger middle class in Germany, compared to the US. The figure below shows
the percentage of the adult population in lower-, middle- and upper-income households:
Innovation on Global Markets – Should Companies Glocalize?
53
Figure 6: Middle Class in Europe and the USA
Source: O’Sullivan, 2017
As it can be seen in the figure above, 72% of Germany’s population has a middle income, whereas
in the US it is only 59% and 26% with lower income. Thus, more people in Germany could afford
the Ford Mustang. To help potential customers purchase a car, Ford offers several financing
services (Ford Motor Company, 2018d, ibid for fc). Depending on their financial means,
consumers can choose between a flat rate, selection financing, classic financing, private leasing,
flat rate full-service, and car insurance. Thus, a potential customer can acquire both the car and the
financing service at Ford, which saves time and effort to find a suitable external service, when
financing options are needed.
With Germans being price sensitive and thrifty, most consumers expect a discount when buying a
new car and would switch to a different brand if those expectations are not met (Aral
Aktiengesellschaft, 2017, p.11-12). However, while cost effectiveness stays important, attributes
such as comfort, design and security are relevant as well.
Concluding the above, also the price has a high degree of adaptation.
Promotion
Focusing on the commercials published by Ford as well as the presentation on the website, several
implications for adaptation can be found (Ford Motor Company, 2018b, ibid for fc). The first thing
to see, when visiting the website path to Ford Mustang, is a picture, that changes in three variants.
Innovation on Global Markets – Should Companies Glocalize?
54
The keywords identified from the appearance in this campaign are freedom and popularity
underlined by the slogan “Just do it” (in German: “Einfach mal machen”). Furthermore, the key
visuals that can be found on the website, focus on the driving experience. The figure below shows
the website of Ford Mustang in Germany:
Figure 7: German Website Ford Mustang
Source: Ford Motor Company, 2018b
As identified earlier, Germany is a low-context culture. Therefore, also on the German Ford
Mustang website (Ford Motor Company, 2018b, ibid for fc), a lot of information can be found.
Scrolling down from the picture seen above, one of the first information given on the car, is the
price, followed by an explanation which exact features are included in that price. The text is
straightforward and clearly explains the facts, rather than trying to paint a picture. The statement
translates to: “The equipment attributes are available depending on the equipment variant chosen.
Either standard or optional with additional surcharge, eventually only as part of an equipment
package. Please find further details in the price lists or ask your Ford partner” (Ford Motor
Company, 2018b).
Scrolling down, the user gets the opportunity to design their Mustang model right away with a
feature that lets them choose between the different models and see different colors. Once color and
model are identified, the user gets the option to “configure” the vehicle and is forwarded to the
page, where the entire car can be planned out.
In general, everything on the website is clearly structured and rather than having big pictures, they
are small with explanatory paragraphs next to them. Ford gets right to the point and lets the user
Innovation on Global Markets – Should Companies Glocalize?
55
play around with the different features, rather than advertising the new Mustang extensively with
slogans, pictures or videos. This is different on the website of Ford Mustang in the US (Ford Motor
Company, 2018c, ibid for fc). A video is shown on the first page, introducing the Ford Mustang
and all its features. Different colors, sides of the car, cockpit inside of the car, the car driving as
well as the logo can be seen. The figure below is a screenshot from the website in the US:
Figure 8:US Website Ford Mustang
Source: Ford Motor Company, 2018c
The contents on the website mostly focus on special features and add-ons of the car. While in
Germany, the driving experience is underlined, the US campaign focuses on status, great design
and making it special, which is supported by many pictures showing close-ups from the car.
Additionally, the writing style of the content differs. While in Germany, the explanations are down
to the point and explanatory, the US website presents it more figuratively: “There’s nothing like a
Mustang. It’s fastback silhouette conjures up a deep history of show-stopping design. […] And
those design cues flow into the body lines to the back, where its muscular haunch lets everyone
else on the road know what just passed” (Ford Motor Company, 2018c). On the pictures and in
the texts, the focus is on the car being a status symbol and “showing off”.
When scrolling down on the first page, there are many pictures showing the features of the car.
Every single extra feature is explained separately and there is an extensive focus on how to
customize the car. The configurator is only at the end of the website, thus the focus is on giving
all the information first, before the users can design their car. Additionally, in the configurator it
Innovation on Global Markets – Should Companies Glocalize?
56
is emphasized on the “premium” option, which offers more add-ons and special features such as
heated/cooled seats or voice-activated technology.
Before bringing the Ford Mustang onto the German market, the Ford Media Center published a
press release pre-announcing the car and its features (Ford Media Center, 2017, ibid for fc). To
educate, and build curiosity and interest among potential customers, Ford gave detailed
information about the technical data, special features specifically developed for the European
market and official release date as well as pictures.
With regards to Ford’s advertising, two commercials for the new Ford Mustang were investigated:
the commercial for the German market and the one for the US market. As it can be seen in the
German commercial, scenes are cut back and forth between a girl in the apartment calling for her
mother and asking if she would be doing laundry today, and a Ford Mustang driving on a road
(Ford Deutschland, 2018, ibid for fc). The girl soon finds a note with a heart on it, stuck on the
laundry detergent. At the same time, the parents are in the new Mustang having a great time and
enjoying music. Their daughter calls, and the couple anticipates that she would be asking for the
laundry. Not answering the call, the parents go back to enjoying their ride carefree. The
commercial ends with the slogan “Einfach mal machen” which translates to “Just do it”.
Throughout the commercial, the phrase “100 pro” is mentioned twice, which translates to “100
percent” and is meant in the context of “for sure”. While the protagonists use the phrase as an
answer to the probability of their daughter calling about the laundry, it is most likely also supposed
to be connected to the car, meaning, that the Ford Mustang is giving a 100% performance. The
story told in the commercial emphasizes on the parents taking a break and enjoying themselves,
rather than taking care of daily chores, such as doing their daughter’s laundry. Thus, focusing on
the enjoyment and just for moment, forget about responsibilities and “just do it”. Furthermore, the
commercial contains technical information about the car, as well as the price is shown.
A few implications learned from the cultural analysis can be derived. The commercial shows a
typical German family structure: A middle-aged couple with one daughter. The commercial
focuses on the driving experience, as the car is seen to drive on a deserted road. Thus, there is no
focus on showing off the car to other people. Furthermore, the ability of driving fast is emphasized
on, as well as the function to stop the car, despite driving very fast. Thus, the security of the car is
underlined. Moreover, the technical details and the price shown in the commercial resemble the
Innovation on Global Markets – Should Companies Glocalize?
57
explicitness of German culture. As shown in the cultural analysis, Germany is an individualistic
country with high uncertainty avoidance and low power distance. Therefore, the advertising style
suggested by De Mooij (2014, p.195) is to provide details, data and a demonstration of the usability
of the car. The commercial does all that, in combination with presenting the car as fun, secure and
functional. The figure below shows a screenshot of the couple in the car. It can be seen, that the
color chosen for the car is bright and fun:
Figure 9: Ford Mustang Commercial Germany
Source: Ford Deutschland, 2018
The figure also shows a note at the bottom of the screen where it is stated in German, that the
illustration shows optional equipment for additional charge. This shows again, the low-context
culture, where relevant information is explicitly given.
Looking at the commercial in the US, not only the language is different, but it is a whole different
commercial. It shows a woman and two men in two separate cars, the woman driving a Ford
Mustang. They are seen driving into a garage where only one parking spot is left and are seen
racing for the spot. In the end, the woman in the Mustang scores, symbolizing, that the Mustang is
faster, better and sexier. The car is portrayed as a status symbol and, just like it was already
emphasized on the website, the focus is on the different options and add-ons. This is also
underlined with the slogan “make it personal”. The figure below shows a screenshot of the US
commercial. It can be seen, that the color chosen for the car is dark and luxurious:
Innovation on Global Markets – Should Companies Glocalize?
58
Figure 10: Ford Mustang Commercial US
Source: The Exclusive, 2018
Ford has adapted its presence on the German website, as well as made a separate commercial, that
is not only translated, but communicates a different message than the commercial in the US. Also,
the slogans are different. They have not simply been translated but contain different messages, as
the German slogan translates to “Just Do It” and the US slogan is “Make It Personal”. Ford seems
to develop separate slogans in every language, since also the Netherlands and France all have
different slogans. Whereas keeping the same key visuals, the slogans translate to “the road, your
Mustang and you” and “a sense of absolute freedom” (Ford Motor Company, 2018e and Ford
Motor Company, 2018f). Thus, the promotion strategy has a high degree of adaptation.
4.2.2 Case Study: Landwind CV9
Landwind is one of the strongest brands of Jiangling Motor Holding (JMH), which is one of the
biggest car manufacturers in China. The brand promises international high-tech, Chinese
craftsmanship and efficiency (www.landwind.eu, 2018). JMH attempted to enter the German
market several times (Kriebel, 2010 ibid for fc). In 2006, they introduced the model “Fashion” in
Paris to enter the European market. In 2008, they tried again with the Landwind X7. Two major
factors lead those attempts to fail: Firstly, the cars had significant similarities to cars from different
manufacturers. The Fashion model included many similarities with the Opel Zafira and the
Landwind X7 looked like an exact copy of the British Jaguar Range Rover. Secondly, the cars
failed the crash tests and lost faith of German customers before the launch (Focus Online, 2014).
Innovation on Global Markets – Should Companies Glocalize?
59
In 2011, JMH attempted to launch their new model, the CV6, in Germany. The following will
elaborate on the tactical decisions, the Chinese manufacturer made, while the comparison to the
Chinese offer is limited due to the different internet regulations in China and therefore,
unavailability of information.
Product
JMH stands for Jiangling Motor Holding, thus the name already indicates the country of origin of
the company. Therefore, JMH created the European sounding brand name “Landwind”, to make
it more appealing to customers in Europe. In 2010, the company introduced the new model
Landwind CV9, a low-priced minivan, that was first distributed in Belgium and the Netherlands
(Kriebel, 2010). Visiting Landwind’s website, it becomes apparent, that the CV9 is the only model
offered by the brand (www.landwind.eu, 2018). The car was designed by the Italian design studio
I.D.E.A and is advertised as a car for everyone in every occasion. The company promises flexible
use of space, security, affordability, comfort, high-seating position and many add-ons (LMWC
Europe B.V., 2011, p.3 ff. ibid for fc). The model can be purchased in two variations: Basic and
Comfort each with either 1.6-liter motor with 97 PS or 2-liter motor with 141 PS. Appendix E
shows an overview of the equipment included in each model. Both models include a security
package which consists of front airbags, ABS system, steel body and seatbelts with belt force
limiters. The comfort model includes additional features such as fog lights, central locking system,
audio system and electric window lifters. Furthermore, there are five different colors to choose
from.
Looking at German car standards, anti-skid protection (ESP), radio, air condition, central locking,
a remote key and fog lights belong to the standard equipment and are included in cars in the lowest
price class (AutoScout24, 2017). While ESP is not included in any model of the CV9, all other
components belong to the comfort model (www.landwind.eu, 2018), meaning, that the consumer
would have to pay more for the equipment, that is already standard for German consumers. Hence,
while the product variety is already low, the basic model is far below German standards.
As every car in Germany, also the CV6 has to undergo security and crash tests. The renown
institute to conduct named tests is The European New Car Assessment Program (Euro NCAP).
From Euro NCAP, the CV9 received two out of five stars and was described as having low security
standards (Euro NCAP, 2010, p.4 ibid for fc). While the passenger compartment was relatively
Innovation on Global Markets – Should Companies Glocalize?
60
unstable, higher speed during impact would lead to a complete collapse and severe injuries. Also,
the driver’s chest only received marginal protection and child occupants would not be protected
enough during a frontal impact. Moreover, Euro NCAP claims, that the CV9 includes security
equipment that is too basic. For example, the car only includes two front airbags, while every other
standard German car includes side airbags as well. Thus, the CV9’s security equipment is below
standards, which is a problem, considering German’s desire for security. A high score in the crash
test would resemble high expertise, which is valued in German culture. However, not doing well
in tests like these has negative effects on the consumer’s trust. Seeing that basic standards are
barely met, it can be assumed that security standards in China are lower. Since the cars are
imported and therefore produced and assembles outside of Europe, it can be assumed that the cars
are highly standardized for global markets.
Looking at the country of origin effect, products from China are not very popular in Germany. As
seen on Statista (Statista, 2018g), in 2017 only 10% in Germany perceived products made in China
as positive.
All in all, Landwind offers a very limited product selection, whereas this selection is below
German standards. Only the design and the brand name can be highlighted as positive for the
German market. With a negative country-of-origin effect, poor security features and little variation
of car models that do not meet general standards, on top of the strong German competition, JMH’s
product strategy to succeed in Germany is questionable.
Place
JMH’s import headquarter is currently located in Belgium (www.landwind.eu, 2018, ibid for fc).
Hence, the cars are not produced locally, but imported according to orders received. There are not
many dealers selling Landwind cars. While the distribution is more established in Belgium and
The Netherlands, there are only six dealers in Germany offering the brand. Looking at the location
of those dealers, they are based in western and southern parts of Germany, whereas the north is
not covered at all. Since the import headquarter is in Belgium, it can be assumed, that dealers in
Germany would have to obtain the cars from Belgium, which prolongs delivery times and
complicates supply chains. With the cars being imported on demand and the underdeveloped
distribution network in Germany, JMH does not follow an adapted approach.
Innovation on Global Markets – Should Companies Glocalize?
61
Price
With a price starting from 12,995 EUR, the CV9 is in the price class of small cars, although it is a
minivan (LMWC Europe B.V., 2015). Comparable German cars in this size usually cost more than
20,000€, giving Landwind a significant competitive advantage in pricing (Bähnisch, 2011).
Therefore, Landwind is using a penetration pricing strategy, targeting the more price-sensitive
customers.
Promotion
Looking at Landwind’s promotional efforts on the German market, there is not much advertising
to be found. The company has established a website, which is the only channel used to promote
the brand. The page is standardized for several countries in Europe, namely The Netherlands,
Belgium, United Kingdom, Germany and France (www.landwind.eu, 2018, ibid for fc). The
website offers standardized contents, translated into the respective language. With their slogan
“Easy as 1-2-3” they have three sequences describing the steps as (1) take a look, (2) make your
choice and (3) find your dealer. The second sequence uses the steps (1) practical, (2) roomy, (3)
easy driver and in the third sequence (1) spacious, (2) multi-functional, (3) easy access & high
seating. In the figure below, the different pictures used with the different steps show the key visuals
on the website:
Figure 11: Key Visuals Landwind Website
Source: www.landwind.eu, 2018
Innovation on Global Markets – Should Companies Glocalize?
62
Looking at the pictures, no clear structure can be seen. The pictures show the CV9, families, people
riding bikes, sceneries and older couples being active. In addition, the pictures are underlined with
terms describing the features of the car. However, the pictures and terms seem random and do not
resemble a lot of connection.
Moreover, the design of the website seems basic and less professional than the websites of other
established car brands (e.g. Ford). The pictures used on the website are unclear and pixelated and
some of the headlines contain spelling mistakes (in the German version). Altogether, the website
does not seem very professional, which is an important factor for German people to have trust in
a brand. The sentence “a combination of global technology and Chinese efficiency” leaves the
visitor of the website wondering where the technology is coming from, and what Chinese
efficiency means exactly.
The website itself seems structured following the essential information at first sight. However, the
interface is very basic, and one has to click for every single piece of information. As Germans
value efficiency and structure, Landwind has a disadvantage with all information being hidden
behind drop-down menus rather than having the most important information summarized in one
page. Furthermore, the user is forwarded to pdf files to get detailed information about included
equipment, model choices and prices, rather than having this information clear and visible on the
page directly.
With the low score in the NCAP crash test, Landwind received a lot of bad press, calling the brand
a “flop” and questioning the ability of Chinese brands to fulfill basic security standards (Bild,
2011). In addition, the brand has been accused years before to have copied other car’s designs,
which leads to bad reputation of the brand. Especially in a market like Germany, where quality,
security and expertise are the first words coming to mind when thinking about the automotive
industry, Landwind managed to not be associated with either of them.
4.3 Consumer Perspective: Survey Analysis
The survey consisted of 30 questions and received 114 responses, whereas the majority was
between 22 and 31 years old (70.2%). The second largest group to participate was between 32 and
36 (23.7%) and an insignificant amount of 6.1% was above 37 years old. From the 114 participants,
81.6% own a car. As structured in the previous chapters, also the survey was structured along the
Innovation on Global Markets – Should Companies Glocalize?
63
marketing mix product, place, price and promotion. Therefore, the following will elaborate on the
consumer’s perspective on the four P’s.
Product
From the 81.6% owning a car, the most frequent brands were Volkswagen (21.7%), Opel (13%)
and BMW (10.9%), which are all German car brands. Also, when asking the participants, which
three brands they would prefer when buying a new car, German brands were in the lead. Audi was
by far the most chosen brand with 67.6%, followed by BMW (49.1%) and Volkswagen (48.2%).
The brands following were Mercedes (33.3%), Opel (21.1%), Ford (19.3%) and Toyota (10.5%).
As also seen in the sales numbers earlier, Ford is the leading international brand chosen after the
German brands.
The most important factors for the participants were trustworthiness, quality and design. The figure
below shows the responses regarding important factors:
Figure 12: From 1 to 4, how important is it to you, that the brand is/has…
Source: Own illustration
As it can be seen in the chart above, trustworthiness, quality and design are the most important
factors for the participants. 89.5% think that trustworthiness is either important or very important.
Quality is important to 50% and very important to 46%. Good design is important or very
important to a total of 93%. The car being produced in Germany is an insignificant factor with
60% regarding it as not important for the purchase of a car. Three factors received high percentages
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
Trustworthy Produced in
Germany
Quality
Equipment
German Good Design German
Technology
Produced
sustainably
Not at all important Not important Important Very important
Innovation on Global Markets – Should Companies Glocalize?
64
of not being important but also significant votes for being important. While 46% regard the brand
being German as not important, 24% think it is an important factor. Considering, that most
participants drive German cars and would also buy German brands, as seen in the questions before,
it seems like people are either not aware of the importance for the brand being German or there
are other factors that make them prefer German cars. Furthermore, the technology coming from
Germany is regarded as not important by 54%, but as important by 20%. Moreover, the
sustainability factor is relatively balanced, since 59.6% think it is not at all important or not
important and 40.4% regard it as important or very important.
When asking, which attributes are associated with American and German cars, no attribute was
the same for both countries of origin. American cars were associated with size (90.4%),
consumption (84.2%) and performance (54.4%), while German cars were connected to quality
(99.1%), equipment (43%), and performance and service (both 39.5%). Attributes that are not
influencing the participants when buying a new car, thus have been regarded as not important or
not important at all, are advertising (89%), popularity of the brand (67%) and internationality of
the brand (69%). Quality and security are the two most important factors and have received 61%
and 63% of votes saying it is very important. Also, performance, design, color, price, discounts
and special offers, and environmental friendliness are important to the majority of participants.
The country of origin is regarded as important by 36% and 46% regard it as not important. The
figure below shows the outcomes of question 12:
Figure 13: How important are the following attributes for a car purchase?
Source: Own illustration
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
Not at all important Not important Important Very important
Innovation on Global Markets – Should Companies Glocalize?
65
Although, the majority of participants said, they do not put importance to the country of origin of
the car, when asking the participants if they would buy a car from a Chinese manufacturer, a large
majority of 71.1% answered with “no”. Most reasons for the reluctance were connected to
mistrusting Chinese products, lack of quality and the brands to be unknown and mostly unavailable
in Germany. This is also supported by the example from Landwind CV9. The brand does not have
many dealers in Germany, where the car could be seen, tested and purchased. With the rather
simple website, which could seem unprofessional to Germans, the mistrust towards Chinese
products is strengthened. Most of the answers given to why participants would not buy a Chinese
car also support the negative country of origin effect, as answers included “negative reputation”,
“bad image”, “lack of quality” and “mistrust”. A full list of reasons for rejection of Chinese car
brands can be found in Appendix H.
Looking at the results above, some contrasts can be noticed. While quality stands out as the most
important factor connected to cars, it is also quality that is associated the most with German cars.
However, the majority of participants claims, that the car being produced in Germany or the brand
being German are not important to them. Furthermore, they claim, the country of origin is not
important either. Yet, when asking which brands would be taken into consideration when buying
a new car, the leading brands are all German. While the participants say, the popularity of the
brand is not important, the most chosen brands when buying a new car are the most popular ones
(e.g. Audi, BMW, Volkswagen). Seeing those results, it can be assumed, that the participants are
not aware of how important the popularity of the brand is to them. Furthermore, it could be
assumed, since German cars are connected to quality, they trust those brands more, but do not see
the brands as being German, but trustworthy.
Place
Most participants would buy a used car from a dealer (63.2%). Thus, would not buy a new car, but
put more trust towards a dealer, rather than buying it from a private vendor. A new car from a
dealer is preferred by 21.1%. Looking at the delivery time, the results are mixed with no time
frame standing out. However, the majority would be willing to wait for more than 8 weeks, which
is in favor of both Ford Mustang and Landwind CV9, since they both have long delivery times.
As seen from the answers, why people would not buy Chinese cars, many answers referred to the
problem of the cars not being available everywhere, showing that availability and being able to
Innovation on Global Markets – Should Companies Glocalize?
66
see and test drive the car is of importance. Furthermore, participants would be worried about
maintenance and spare parts with Chinese cars, supporting the importance of local availability.
Price
91.2% of participants regard the price as an essential criterion for the purchase of a car, which
supports the statement, that Germans are price sensitive. A majority of 39.5% would spend 11,000-
20,000 EUR for new car, which is the price class, Landwind positions the CV9 in. Furthermore,
21.9% are willing to spend 21,000-30,000 EUR and 14.9% prefer the price class between 31,000-
50,000 EUR, where the Ford Mustang is positioned. The opinion about a higher price equaling
better quality is split, but 84.2% would be willing to pay more for better quality (e.g. high-quality
equipment, local production, etc.). The figure below shows the allocation of votes about the
amount willing to spend for a car:
Figure 14: How much would you be willing to spend for a car?
Source: Own illustration
As explained in the case study, Ford puts a lot of focus on their high-quality equipment and extras,
as well as their local production for their Mustang. Thus, they are giving Germans a justification
for the price and gain their acceptance through producing quality cars. For the Chinese brand
Landwind CV9, the low price is the only argument to sell, addressing the German’s price
sensitivity. Since they offer the minivan in the same price class as a small car, it could be tempting
to get a bigger car, by spending much less. However, seeing the high importance Germans put
towards quality and security, the competitive advantage in pricing could be offset by the lack of
meeting quality and security standards.
15%
39%22%
15%
9%
Less than 10.000€
11.000€ - 20.000€
21.000€ - 30.000€
31.000€ - 50.000€
More than 50.000€
Innovation on Global Markets – Should Companies Glocalize?
67
Promotion
In the survey, the participants were asked to watch the two commercials described in the case study
of Ford Mustang. One commercial was designed for the German market and one for the US market.
When asking, which ones they favor, 63.2% preferred the German commercial. They defined three
attributes as the most likable about the commercial: the car as a symbol for fun (55.3%), the humor
used in the commercial (47.4%) and the presentation of the car (39.5%). The figure below shows,
what the participants liked about the German commercial:
Figure 15: What did you like about Commercial B?
Source: Own illustration
The participant’s opinions are split about whether the commercials in German TV should be in
German language. 54% agree or strongly agree, while 46% disagree or strongly disagree. As
learned in the theoretical part, De Mooij (2014, p.195) explains, that advertising in Germany
should be serious, structured and detailed and that information and data should be provided. As
seen from the sample, 62% agree, that functionality of the car should be presented in a commercial,
supporting the theory. Furthermore, 53% agree, that the commercial should include technical
information about the car. According to the theory, humor should not be used in advertising in
Germany. However, the participants did like the humor used in the German commercial and also
92% disagree or strongly disagree, that humor is misplaced in car advertising. Additionally, the
47.4%
39.5%
13.2%
21.1%
55.3%
34.2%
5.3%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%
Humor
Presentation of the car
Communication of information
Close to reality
The car as a symbol for fun
Portrayal of family
Slogan
Innovation on Global Markets – Should Companies Glocalize?
68
theory suggests, that using a presenter in the commercial is preferred. In the German commercial,
the presenters are the parents and 34.2% of the participants liked the portrayal of the family.
However, 97.4% do not think, that a car gets more interesting, when they know that a famous
person is driving it. Thus, a famous testimonial is not primarily important. Nevertheless, 27% of
the sample remember Jürgen Klopp doing advertisement for the car brand Opel. Thus, it can be
concluded, that Germans prefer commercials that are structured, contain information about
technical details and functionality. However, humor is not at all misplaced, but actually liked in
commercials, which proves the assumption made in the theory to be wrong.
The channels, where such commercials would be expected are TV, print and websites, whereas on
TV, the commercial would be expected strongly by 58%. Radio and Guerilla marketing are not
expected to have advertising for cars.
Although millennials are strongly represented on Social Media, only 22.8% follow car brands on
Social Media channels. The top four brands to be followed are Audi (39.4%), Mercedes and BMW
(both 30.3%), and Volkswagen (15.2%). The channels include Facebook (61.8%), Instagram
(35.3%) and YouTube (14.7%). Consequently, TV commercials stay the most important for car
advertisement. However, the internet is the most important source to obtain information about cars,
seeing that 90.4% collect information online. Thus, an online presence is as important as airing
commercials. All results from the survey can be found in Appendix H.
Innovation on Global Markets – Should Companies Glocalize?
69
5. Conclusion
To conclude on all findings from the analysis, the following chapter will summarize the research
outcomes, give practical implications, explain limitations and discuss further research that could
not be covered by this thesis.
5.1 Research Outcomes
In the theoretical part, important factors for new product development, and especially new product
launch have been identified. Success factors to product innovations were determined as (1) solid
up-front homework, (2) voice of the customer, (3) seeking differentiated, superior products, (4)
sharp, stable, and early product definition, (5) well-planned product launch, (6) tough decision
points, (7) cross-functional teams and (8) international orientation.
Furthermore, several approaches to internationalization were elaborated. A company can
standardize, adapt or glocalize their approach to new markets, while a certain degree of adaptation
is necessary on the particular example of Germany. This has been shown with the help of two case
studies: Ford Mustang as a successful example and Landwind CV9 as an unsuccessful example.
Analyzing the commercialization or new product launch of the Ford Mustang in Germany, it
became apparent, that basic features and design of the product itself are standardized. However,
everything else is adapted to local conditions and preferences in Germany. Looking into product
specific features, there are special assistants, such as the “good-neighborhood feature”, that were
developed for European markets. It connects to German’s wanting to obey rules, in this case, the
rule to be quiet during nighttime. It also resembles, that the car as a status symbol is not as
important, but the driving experience is in focus. Furthermore, the options, when configurating the
car are different in Germany and the US. Moreover, Ford has established local supply chains and
uses the infrastructure given in Germany to produce their cars locally instead of importing them.
In addition, the price is adapted to German standards as well as the promotion is highly adapted
with a separate slogan, commercial and key visuals.
All in all, the analysis of the presence of Ford in Germany with regards to product, place, price
and promotion has shown, that the company uses a glocalized approach. Hence, while being a
global brand, Ford adapts their marketing mix at a high degree to Germany’s local market
Innovation on Global Markets – Should Companies Glocalize?
70
environment and consumer preferences. It has proven to be successful, since Ford is the best
performing international car brand in Germany as well as shows increasing sales numbers.
In contrast to that, the marketing mix of the Chinese brand Landwind CV9 has minimal adaptations
to the German market, thus it is mostly standardized. The equipment offered is not in accordance
with German standards and the car also performed mediocre in crash tests. As seen from statistics
and the survey, China struggles with a negative country-of-origin effect, which leads to customers
not having faith in the brand. Quality and security have been identified as the most important
attributes by the participants of the survey. Landwind does not offer high security or high quality.
The most attractive feature of the car is the pricing, since it is positioned in a lower price class,
while offering a lot of space. Nevertheless, as known from the theoretical analysis, a price that is
set too low, could result in the perception of poor quality. Furthermore, while only having a website
and no other promotional presence, the presentation is not convincing either. Pictures on the
website have low resolution and the contents have little details. Thus, the whole website does not
communicate expertise, which is so important in German culture.
To conclude, Landwind struggles with appropriate standards for equipment and security measures
for their CV9, which does not give convincing arguments to buy the car. Thus, they need different
added values that would convince German customers to buy a Chinese car. While the low price
could be a good argument, the low availability, mediocre representation on the website and the
bad press seem to be too many factors that affect the brand negatively.
The outcomes of the survey show, that German consumers prefer German cars, while they might
not be fully aware of that. Every question asked in connection to car brands, the top three brands
chosen were German, which are also the best performing brands worldwide. As it could already
be identified in the cultural analysis, Germans value expertise, professionalism and quality work.
This is also supported by the survey in connection to the automotive industry, since quality stood
out as the most important attribute. Furthermore, German’s need for security and long-term
orientation could also be supported by the results. Security is of utmost importance to the majority
of participants and also the case study of Landwind shows, that a car that performs poorly in the
crash test, does not sell well due to the lack of trust.
Looking at the results of the survey, it becomes apparent, that most participants do not put
importance to the country of origin of the car, or if it is produced in Germany. Furthermore, the
Innovation on Global Markets – Should Companies Glocalize?
71
majority is willing to wait for the car more than eight weeks. All of this shows, that the
characteristics of “place” do not seem to be as essential as the other elements of the marketing mix.
Hence, the participants do not make their purchase decision according to where the car has been
produced. Price, however, is extremely important and does influence the purchasing decision for
a car. As identified in the cultural analysis, Germans are very price-conscious, which is also
supported by the survey. Besides the price being important, also special offers and discounts are
valued, which would be a strengthening argument for Landwind. However, the price alone is not
enough, is the other elements are not attractive enough, as explained in the case study. As most
participants liked the German commercial more, the results supported the assumption, that
Germans like functional advertisements with technical details, due to their low-context culture.
There was no importance towards the language used in the commercial, thus the content is more
important, than the commercial being in German. From the results of the survey, it can be derived
that the most important element of the marketing mix is “product”. It can be said, that a company
should focus on high quality, fulfilling safety standards and performing well in crash tests, and
have a well-established and adapted public representation.
5.2 Practical Implications
To get back to the question, if companies should glocalize, on the example of the German
automotive industry, it can be answered with “yes”. Germans have particular values and needs that
companies should adapt to. A car needs to be safe and secure and offer certain standards to be
accepted and able to succeed on the German market. While there is a distinct local offer on the
market already, only by showing expertise and professionalism, Germans would trust an
international brand.
The Ford Mustang can be seen as a successful example, as it is a high-quality car with equipment
beyond standards that has features specifically adapted to European markets. Furthermore, Ford
makes use of the infrastructure, created local supply chains and adapted their promotional activities
to German preferences. Hence, Ford mainly adapted their marketing strategies to a high degree.
Seeing that Landwind barely adapted any of their tactical decisions to the German market, the
brand is performing poorly and has a lot of room to improve. Thus, a certain degree of adaptation
is needed, to succeed in the German automotive industry.
Innovation on Global Markets – Should Companies Glocalize?
72
In general, from the research outcomes it can be derived, that no market or industry is the same
and cannot be generalized. However, it can be said, that thorough background research and using
the voice of the customer can be the first steps to determine which degree of adaptation is needed.
The analysis part of this thesis can be seen as a guideline to the background research needed for
internationalization, while the two case studies show, how to adapt tactical decisions.
Thus, it should be underlined, that the factors to consider when developing new products are
extensive background study, the voice of the customer, market tests and well planned new product
launch. On the example of Germany, expertise and professionalism, as well as high quality and
cost effectiveness are important factors to consider when developing new products. With all this
said, the marketing mix needs to be consistent, with all elements playing well together. With a
well-researched market, clear strategy building and a well-planned launch, a company has better
chances to perform well.
5.3 Limitations and Further Research
Although this study showed results of significant importance, there are certain limitations, that
could not be further covered or elaborated. First of all, the cultural analysis is only giving an
overview over German cultural values and leaves room for further research. Hofstede’s model is
one of many opportunities to analyze a culture and the best would be, to do an extensive primary
market research, rather than using secondary sources.
Furthermore, regarding the case studies, only information that have been made public could be
used. Therefore, the author had to focus on new product launch only and could not analyze how
companies plan their new product development processes and new product launch, but could only
elaborate on the tactical decisions, that are visible to the public.
As the automotive industry is very advanced and well-researched, it was very difficult to find an
example for an unsuccessful company. Although Landwind shows many mistakes that can be
made on the German market, a more established company with promotional presence on the
market would have served as a better example to analyze.
In general, showing one successful and one unsuccessful example does not give a universal guide
to glocalization. Every market and every industry is different and companies have to make the
effort to research and analyze those markets before they enter them, in order to succeed.
Innovation on Global Markets – Should Companies Glocalize?
73
While this study focused on the opinion of millennials in the automotive industry, it would be
interesting to see, how other generations think, thus if their opinions differ from younger or older
generations. Furthermore, there is room for more research in seeing if the values identified are also
valid in other industries.
Possibly, primary research with companies that internationalized could give better insight into
tactical decisions and the strategy behind them. A larger sample size from all age groups for the
consumer survey could also help to see the differences between generations.
Innovation on Global Markets – Should Companies Glocalize?
74
6. List of Literature
Acs, Z.J., Morck R.K. and Yeung, B. (2001). “Entrepreneurship, globalization, and public policy”.
Journal of International Management, Vol. 7 No. 3, pp. 235-251.
Adams, D. (1994). “Parallel market analysis: A technique for risk-averse brand innovation”.
Journal of Brand Management, Vol. 2, pp.221–226.
Alexy, N. (2015). Millennials @ Work: Eine Studie über die Generation Y im beruflichen Kontext
in Deutschland [PDF file]. Retrieved from
http://www.bundesakademie.de/dokumentationen/generation_y/alexy.pdf
Ambos, B., Schlegelmilch, B. (2010). “The New Role of Regional Management”. Hampshire/New
York: Palgrave Macmillian.
Aral Aktiengesellschaft (2017). “Trends beim Autokauf 2017“ [PDF file]. Retrieved from
https://www.aral.de/content/dam/aral/Presse%20Assets/pdfs-Broschueren/Aral-Studie-Trends-
beim-Autokauf-2017.pdf
Audi AG (2018). Neuwagensuche. Retrieved from https://www.audi-
boerse.de/neuwagen/audi/tt/tt-coupe/url-2_15-list.htm#/i/s|10,AACG/l|12,1,PRICE_SALE,U
Autoblog (2017, April 11). Ford Mustang outsells German Competition…in Germany”. Ford
Performance. Retrieved from http://performance.ford.com/enthusiasts/media-room/2016/04/ford-
mustang-outsells-german-competition----in-germany.html
Autoscout24 (2017). ”Ausstattung“. Ratgeber. Retrieved from
http://www.autoscout24.de/themen/autokauf/ratgeber/ausstattung/
Bähnisch, S. (2011, March 15). “Das kostet der Landwind CV6“. Auto Bild News. Retrieved from
http://www.autobild.de/artikel/landwind-cv9-preis-1584275.html
Bartlett, C. A. & Ghoshal S. (2002). “Managing Across Borders: The Transnational Solution”.
Boston: Harvard Business School Press.
BBC News (2018, March 15th). Germany Country Profile. Retrieved from http://www.bbc.com.
Innovation on Global Markets – Should Companies Glocalize?
75
Bekker, H. (2018, January 5). 2017 (Full Year) Germany: Best-Selling Car Manufacturers and
Brands. Retrieved from https://www.best-selling-cars.com/germany/2017-full-year-germany-
best-selling-car-manufacturers-brands/
Bennett, R. (1995). “International Marketing“. London: Kogan Page Limited.
Beutelsbacher, S. (2015, August 10). “So ticken die Deutschen wirklich“. Welt. Retrieved from
https://www.welt.de/wirtschaft/article145001725/So-ticken-die-Deutschen-wirklich.html
Bild (2011, October 17). “Billig-Chinese Landwind CV9 floppt im Crashtest!“. Bild. Retrieved
from https://www.bild.de/auto/2010/china-auto-floppt-im-crashtest-14769074.bild.html
Bowersox, D. J., Stank, T. P., Daugherty, P. J. (1999). “Lean Launch: Managing Product
Introduction Risk Through Response-Based Logistics”. Journal of Product Innovation
Management. Vol. 16, pp. 557-568.
BridgeWorks (2017, March 29). “Early Millennials + Recessionists: Meet the Two Millennial
Subgroups”. Generations. Retrieved from http://www.generations.com/2017/03/29/early-
millennials-recessionists-meet-the-two-millennial-subgroups/
Briggs, O. (2017, January 26). “What Colors Mean in Other Cultures”. Huffingtonpost. Retrieved
from https://www.huffingtonpost.com/smartertravel/what-colors-mean-in-other_b_9078674.html
Bujard, M. (2014, October 24). “Familienpolitische Geldleistungen“. Bundeszentrale für
politische Bildung, pp. 1-5. Retrieved from
http://www.bpb.de/politik/innenpolitik/familienpolitik/193715/familienpolitische-geldleistungen
Buzzell, R. D. (1968). “Can You Standardize Multinational Marketing?”. Harvard Business
Review, November, Retrieved from https://hbr.org/1968/11/can-you-standardize-multinational-
marketing
Chelliah, S., Sulaiman, M., Yusoff, Y. M. (2010). “Internationalization and Performance: Small
and Medium Enterprises (SMEs) in Malaysia”. International Journal of Business and
Management”, Vol. 5 No. 6, pp. 27-37.
Claudio Vignali (2001). "McDonald’s: “think global, act local” – the marketing mix". British Food
Journal, Vol. 103 No. 2, pp.97-111.
Innovation on Global Markets – Should Companies Glocalize?
76
Cooper, R. G. (2001). “Winning at New Products Accelerating the Process from Idea to Launch”.
New York, NY: Perseus Book Group.
Cooper, R. G. (2006). “Formula for Success in New Product Development”. Marketing
Management Magazine, March/April. Retrieved from http://www.stage-
gate.net/downloads/wp/wp_23.pdf
Cooper, R. G., Kleinschmidt, E. J. (2007). “Winning businesses in product development: The
critical success factors”. Research-Technology Management, Vol. 50, No. 3, pp.52-66.
Cooper, R. G. (2008). “Perspective: The Stage-Gate® Idea-to-Launch Process – Update, What’s
New, and NextGen Systems”. The Journal of Product Innovation Management, No. 25, pp.213-
232.
Cooper, R. G. (2013). “New Products --What Separates the Winners from the Losers and What
Drives Success” in Kahn, K. [Ed.], PDMA Handbook of New Product Development. Hoboken, NJ:
John Wiley & Sons. Available online http://www.bobcooper.ca/images/files/articles/1/1-New-
Products-What-Separates-The-Winners-From-The-Losers-and-What-Drives-Success.pdf
Cutler, B.D. and Javalgi, R.G. (1993). “Analysis of print ad features: services versus products”.
Journal of Advertising Research. Vol. 33 No. 2, pp. 62-69.
Czinkota, M. R., Ronkainen, I. A. (2013). “International Marketing“. Singapore: South-Western,
Cengage Learning.
De Mooij, M. (2005). “Global Marketing and Advertising: Understanding Cultural Paradoxes”.
Thousand Oaks, CA: Sage Publications.
De Mooij, M. (2014). “Translating Advertising: Painting the Tip of an Iceberg”. The Translator.
Vol. 10 No. 2, pp.179-198.
De Mooij, M., Hofstede, G. (2002). “Convergence and divergence in consumer behavior:
implications for international retailing”. Journal of Retailing, Vol. 78 No. 1, pp. 61-69.
De Mooij, M., Hofstede, G. (2010). “The Hofstede model: Applications to global branding and
advertising strategy and research”. International Journal of Advertising. Vol. 29 No. 1, pp. 85-
110.
Innovation on Global Markets – Should Companies Glocalize?
77
Deutsche Post DHL (n.d.). “Lead Logistics Provider Solution Creates Competitive Advantage for
Ford [PDF file]. Retrieved from
http://www.dhl.com/content/dam/downloads/g0/logistics/case_studies/dhl_auto_ford_llp_case_st
udy.pdf
Deutsche Welle (2015, September 18). „10 Dinge, auf die man in Deutschland achten sollte“.
Erste Schritte in Deutschland. Retrieved from http://www.dw.com/de/10-dinge-auf-die-man-in-
deutschland-achten-sollte/g-18720282
Douglas, S.P., Craig, C. S. (1995). “Global Marketing Strategy”. New York, NY: McGraw-Hill,
Inc.
Douglas, S.P. and Wind, Y. (1987). “The Myth of Globalization”. Columbia Journal of World
Business, Vol. 22 No. 4, pp. 19-29.
Easterly, W., Williamson, J. and Banerjee, A.V. (2004). “Channels from Globalization to
Inequality: Productivity World versus Factor World”. Brookings Trade Forum, pp. 39-81.
Edelstein, B. (2013, July 23). “Das Bildungssystem in Deutschland“. Bundeszentrale für politische
Bildung. Retrieved from http://www.bpb.de/gesellschaft/bildung/zukunft-bildung/163283/das-
bildungssystem-in-deutschland
Erlinger, R. (2012, January 26). “German stereotypes: Don't mention the towels”. Süddeutsche
Zeitung. Retrieved from https://www.theguardian.com/world/2012/jan/26/german-stereotypes-
dont-mention-towels
Euro NCAP (2010). “Test Results Landwind CV9” [PDF file]. Retrieved from
https://www.euroncap.com/en/results/landwind/cv9/11017
European Commission (2012, September 26). Germany, a world leader in technology, engineering
and innovation. Retrieved from https://ec.europa.eu/digital-single-market/en/news/germany-
world-leader-technology-engineering-and-innovation
Export Entreprises S.A. (2018, May). Germany: Economic and Political Outline. Retrieved from
https://en.portal.santandertrade.com
Innovation on Global Markets – Should Companies Glocalize?
78
Focus Online (2014, November 24). “Kopier-Skandal: Billig-Range-Rover aus China“. Retrieved
from https://www.focus.de/auto/neuheiten/landwind-x7-billig-range-rover-aus-
china_id_4298242.html
Ford Deutschland (2018, April 28). „Der neue Ford Mustang – Einfach mal machen. TV
Werbung“ [Video file]. Retrieved from https://www.youtube.com/watch?v=axPy3NCw0nE
Ford Media Center (2017, September 11). “Der neue Ford Mustang kommt 2018 nach Europa –
schneller, schärfer und noch moderner” [Press Release]. Retrieved from
https://media.ford.com/content/fordmedia/feu/de/de/news/2017/09/11/der-neue-ford-mustang-
kommt-2018-nach-europa--schneller--schaerf.html
Ford Motor Company (2018a). Ford in Deutschland. Retrieved from https://www.ford.de/ueber-
ford/standorte-anfahrt
Ford Motor Company (2018b). Der neue Ford Mustang. Retrieved from:
https://www.ford.de/fahrzeuge/der-neue-ford-mustang#
Ford Motor Company (2018c). Ford Mustang. Retrieved from
https://www.ford.com/cars/mustang/
Ford Motor Company (2018d). Für jeden Geschmack die richtige Wahl“. Retrieved from
https://www.ford.de/finanzen/finanzierung-und-versicherung/privatkunden
Ford Motor Company (2018e). Ford Mustang. Retrieved from https://www.ford.nl/alle-
modellen/mustang
Ford Motor Company (2018f). Nouvelle Ford Mustang. Retrieved from
https://www.ford.fr/voitures-neuves/mustang
German Center for Research and Innovation (2018). Research and Innovation. Retrieved from
http://www.germaninnovation.org/research-and-innovation.
Germany Trade & Invest (2018). Consumer Markets and Retail Landscape. Retrieved from
http://www.gtai.de/GTAI/Navigation/EN/Invest/Industries/Consumer-industries/consumer-
markets-retail.html
Innovation on Global Markets – Should Companies Glocalize?
79
Germany Trade & Invest (2018). Foreign Business in Germany. Retrieved from
https://www.gtai.de/GTAI/Navigation/EN/Invest/Investment-guide/The-legal-
framework/foreign-businesses-in-germany.html
Germany Trade and Invest (2016). Industry Overview: The Automotive Industry in Germany [PDF
file]. Retrieved from
https://www.gtai.de/GTAI/Content/EN/Invest/_SharedDocs/Downloads/GTAI/Industry-
overviews/industry-overview-automotive-industry-en.pdf
Glocalization [Def. 1]. (n.d.). In: Oxford Dictionary. Retrieved April 3, 2018 from
https://en.oxforddictionaries.com/definition/glocalization
Green, D. H. and Ryans, A. B. (1990). “Entry strategies and market performance: Causal
modelling of a business simulation”. Journal of Product Innovation Management. Vol. 7, pp.45–
58.
Guffey, M. E., Rhodes, K., Rogin, P. (2010). “Business Communication: Process and Product”.
Toronto: Nelson Education Ltd.
Haerdle, B. (2014, November 3). “Deutsche Länder, deutsche Sitten“. Der Tagesspiegel. Retrieved
from https://www.tagesspiegel.de/wirtschaft/soziale-kompetenzen-deutsche-laender-deutsche-
sitten/10918474.html
Hall, E. T. (1989). “Beyond Culture”. New York, NY: Anchor Books.
Hall, E. T., Hall, M. R. (1990). “Understanding Cultural Differences“. Yarmouth, ME:
Intercultural Press.
Hofstede, G., Hofstede, G. J. (2005). “Cultures and Organizations: Software for the Mind”. New
York, NY: McGraw Hill.
Hosie, R. (2017, May 2). “The Millennial Divide: How a generation can be split into two very
different halves” [Blog]. Independent. Retrieved from https://www.independent.co.uk/life-
style/millennial-divide-generation-split-old-young-financial-crash-internet-smartphones-
a7704021.html
Innovation on Global Markets – Should Companies Glocalize?
80
House, R. J., Hanges, P. J., Javidan, M., Dorfman, P. W., Gupta, V. (2004). “Culture, Leadership,
and Organizations: The GLOBE Study of 62 Societies”. Thousand Oaks, CA: Sage Publications.
Hultink, J. E., Hart, S., Robben, H. S. J., Griffin, A. (2000). “Launch Decisions and New Product
Success: An Empirical Comparison of Consumer and Industrial Products”. Journal of Product
Innovation Management. Vol. 17, pp. 5-23.
Hultink, J. E., Robben, H. S. J. (1999). “Launch Strategy and New Product Performance: An
Empirical Examination in The Netherlands”. Journal of Product Innovation Management. Vol.
16, pp.554-556.
Hultink., J. E., Griffin, A., Hart, S., Robben, H. S. J. (1997). “Industrial New Product Launch
Strategies and Product Development Performance”. Journal of Product Innovation Management.
Vol. 14, pp.243-257.
ICUnet.AG (2014). HOW DO GERMANS TICK? Intercultural Handbook Germany [PDF file].
Retrieved from https://www.mpikg.mpg.de/5483753/How-do-Germans-tick---Dez-14.pdf
International Trade Administration (2017, September 28). Germany – Information and
Communications Technology. Retrieved from https://www.export.gov
Johanson, J., Vahlne, J. (1990). "The Mechanism of Internationalisation". International Marketing
Review, Vol. 7 Issue: 4.
Kanter, R.M. (1997). World Class: Thriving Locally in the Global Economy. New York, NY: Free
Press.
Kecskes, R. Dr. (2018). Millennials und iBrains: Zwei Generationen verändern Märkte. Retrieved
from http://www.gfk.com/de/landing-pages/landing-pages-de/millennials/millennials-und-
ibrains/
Keegan, W. J., Green, M. C. (2008). “Global Marketing”. London: Pearson Education Ltd.
Kefalas, A.G. (1998). “Think Globally, Act Locally”. Thunderbird International Business Review,
Vol. 40 No.6, pp. 547–562.
Kieser, A. (1994). Book Reviews: Geert Hofstede: Cultures and Organizations. Software of the
Mind: 1991, Maidenhead, UK: McGraw-Hill. 279 pages. Organization Studies, 15(3), 457-460.
Innovation on Global Markets – Should Companies Glocalize?
81
Klaffke, M. (2014). “Millennials und Generation Z – Charakteristika der nachrückenden
Arbeitnehmer-Generationen“ in Klaffke, M. (Ed), Generationen-Management. Wiesbaden:
Springer Gabler.
Kögler GmbH (2018). “Ford Mustang Facelift 2018: Ab sofort für Sie bei Ford Kögler
verfügbar!“. Retrieved from https://www.ford-koegler.de/de/ford-pkw/ford-mustang-facelift-
2018
Kriebel, S. (2010, September 17). “Neuer Wind aus Osten“. Auto Bild. Retrieved from
http://www.autobild.de/artikel/minivan-landwind-cv9-1256954.html
Kumar, S. & Goel, B. (2007). “Glocalization in Food and Agribusiness: Strategies of Adaptation
to Local Needs and Demands.”. Retrieved 23/4/2018, from:
http://www.researchgate.net/profile/Sushil_Kumar74/publication/241869506_Glocalization_in_
Food_and_Agribusiness_Strategies_of_Adaptation_to_Local_Needs_and_Demands/links/53fb4
7d80cf20a4549706516.pdf
LaReau, J. (2011, March 21). “Ford’s global marketing plan starts with Focus”. Automotive News.
Retrieved from http://www.autonews.com/article/20110321/RETAIL03/303219966/fords-global-
marketing-plan-starts-with-focus
Lasser, C. (2014). “Thinking Globally, Acting Locally and Thinking Locally, Acting Globally” in
Mori, K. (Ed.), Concept Oriented – Research and Development in Information Technology (pp.
173-181). Hoboken, NJ: John Wiley & Sons.
Lee, Y., Lin, B., Wong, Y., Calantone, R. J. (2011). “Understanding and Managing International
Product Launch: A Comparison between Developed and Emerging Markets”. Journal of Product
Innovation Management. Vol. 28 No. 1, pp.104-120.
Leicht, L. (2017, January 19). “Lieferzeiten bei Neuwagen: Ein Jahr bis zur Auslieferung“. Auto
Motor Sport. Retrieved from https://www.auto-motor-und-sport.de/ratgeber/lieferzeiten-bei-
neuwagen/
Levitt, T. (1965). “Exploit the Product Life Cycle”. Harvard Business Review. November, pp.81-
94.
Innovation on Global Markets – Should Companies Glocalize?
82
Levitt, T. (1983). “The Globalization of Markets”. Harvard Business Review. May-June, pp. 92-
102. Retrieved from https://hbr.org/1983/05/the-globalization-of-markets
Lipman, J. (1988). “Marketers Turn Sour on Global Sales Pitch Harvard Guru Makes”. Wall Street
Journal”, May, p.1.
LMWC Europe B.V. (2011). Landwind CV9 [PDF file]. Retrieved from
http://www.landwind.eu/images/stories/brochures/BrochureDE.pdf
LMWC Europe B.V. (2015). Landwind CV9 Preisliste [PDF file]. Retrieved from
http://www.landwind.eu/images/stories/brochures/PrijslijstDE.pdf
Lynn, M., Gelb, B. (1996). “Identifying innovative national markets for technical consumer
goods”. International Marketing Review. Vol. 13 No.6, pp.43–57.
Maheshwari, R. P. (2003). “Principles of Business Studies”. New Delhi: Pitambar Publishing
Company.
Mareck, M. (2014). “Global, Local or Glocal? The debate continues”. Research World, April/May,
pp. 26-29.
Market Research Reports Inc. (2017, October 12). Germany PESTEL Analysis Market Research
Report. Retrieved from https://www.marketresearchreports.com
Meier, K. (2013, November 14). Deutsche beim Kaufverhalten sehr preissensibel.
Handwerkmagazin. Retrieved from https://www.handwerk-magazin.de/kaufverhalten-deutsche-
sehr-preissensibel/150/3/213103
Minei, E., Matusitz, J. (2013). “Diffusion and glocalization: dialectical tensions for Wal-Mart de
Mexico”. Global Business Perspective, pp.106-121.
Oanda (2018). Currency Converter. Retrieved from https://www.oanda.com/currency/converter/
OECD/Eurostat (2005). Oslo Manual: Guidelines for Collecting and Interpreting Innovation
Data, 3rd Edition. The Measurement of Scientific and Technological Activities, OECD
Publishing, Paris, Available online: http://dx.doi.org/10.1787/9789264013100-en
OECD (2005). OECD Handbook on Economic Globalization Indicators. Organization for
Economic Co-operation and Development (OECD).
Innovation on Global Markets – Should Companies Glocalize?
83
OECD (2016). OECD Economic Surveys: Germany 2016. Paris: OECD Publishing. Retrieved
from http://dx.doi.org/10.1787/eco_surveys-deu-2016-en
Onlinemarketing.de (2018). Lexikon: Millennial. Retrieved from
https://onlinemarketing.de/lexikon/definition-millennial
O’Sullivan, F. (2017, April 26). “How America's Middle Class Compares to Europe's”. Citylab.
Retrieved from https://www.citylab.com/life/2017/04/euro-vs-american-middle-class/524193/
Robertson, R. (1995). “Glocalization: Time-space and Homogeneity-heterogeneity” in
Featherstone, M. et al. (Ed.). Global Modernities (pp. 25-44). London: Sage Publications.
Ruzzier, M., Hisrich, R. D., Antoncic, B. (2006). “SME internationalization research: past, present,
and future”. Journal of Small Business and Enterprise Development, Vol. 13 Issue: 4, pp. 476-
497.
Schlegelmilch, B. B. (2016). “Global Marketing Strategy – An Executive Digest”. Vienna:
Springer International Publishing.
Schumpeter, J.A. (1947). The Creative Response in Economic History. The Journal of Economic
History, Vol. 7 No. 2, pp.149-159.
Shaw, E. H. (2012). “Marketing strategy: From the origin of the concept to the development of a
conceptual framework”. Journal of Historical Research in Marketing. Vol. 4 No. 1, pp.30.55.
Shimp, T.A. and Andrews, J.C. (2013). “Advertising, Promotion and Supplemental Aspects of
Integrated Marketing Communications”. Mason, OH: Thomson South-Western.
Simpson, J. (2017, October 27). A guide to social media platforms in Germany [Blog post].
Retrieved from http://www.wordbank.com/blog/social-media/essential-german-social-media-
guide/
Śledzik K., (2013). “Schumpeter’s view on innovation and entrepreneurship”. SSRN Electronic
Journal, April, pp. 89-95.
Stage Gate International (2018). Innovation Process – Stage-Gate® Idea to Launch Model.
Retrieved from https://www.stage-gate.com/resources_stage-gate_full.php
Innovation on Global Markets – Should Companies Glocalize?
84
Standardization [Def. 1]. (n.d.). In: Oxford Dictionary. Retrieved April 3, 2018 from
https://en.oxforddictionaries.com/definition/standardization
Statista (2018a). Umsatz der Automobilindustrie in Deutschland in den Jahren 2005 bis 2017 (in
Milliarden Euro). Retrieved from
https://de.statista.com/statistik/daten/studie/160479/umfrage/umsatz-der-deutschen-
automobilindustrie/
Statista (2018b). Ranking der nach Markenwert wertvollsten Automarken weltweit (Stand: März
2018; in Millionen US-Dollar. Retrieved from
https://de.statista.com/statistik/daten/studie/195548/umfrage/markenwerte-der-wertvollsten-
automarken-weltweit/
Statista (2018c). Median age of the population in selected countries in 2017 (in years). Retrieved
from https://www.statista.com/statistics/264727/median-age-of-the-population-in-selected-
countries/
Statista (2018d). Share of households with internet access in Germany from 2007 to 2016.
Retrieved from https://www.statista.com/statistics/377677/household-internet-access-in-
germany/
Statista (2018e). Durchschnittsalter junger Menschen* beim Verlassen des elterlichen Haushalts
nach Geschlecht in Ländern Europas im Jahr 2017. Retrieved from
https://de.statista.com/statistik/daten/studie/73631/umfrage/durchschnittliches-alter-beim-
auszug-aus-dem-elternhaus/
Statista (2018f). Germany: Perception of products made in selected countries in 2017. Retrieved
from https://www.statista.com/statistics/683001/made-in-country-index-germany-by-country/
Statista (2018g). Wahrhehmung von Produkten aus China in ausgewählten Ländern in 2017.
Retrieved from https://de.statista.com/statistik/daten/studie/678430/umfrage/umfrage-zur-
wahrnehmung-von-produkten-aus-china-in-ausgewaehlten-laendern/
Statista (2018h). Share of Social Media Users in Germany in 2017, by age group. Retrieved from
https://www.statista.com/statistics/790969/social-media-usage-share-by-age-germany/
Innovation on Global Markets – Should Companies Glocalize?
85
Stryker, J. (1996). “Launching a new business-to-business product”. In Rosenau, M. [Ed.], The
PDMA Handbook of New Product Development. New York, NY: John Wiley & Sons, pp. 363–
380.
Suh, Y., Hun, J., Davies, G. (2015). “Cultural appropriation and the country of origin effect”.
Journal of Business Research. No. 69, pp.2721-2730.
Svensson, G. (2001), ““Glocalization” of business activities: a “glocal strategy'' approach”.
Management Decision, Vol. 39 No. 1, pp.6-18.
The World Bank (2018). Germany. Retrieved from https://data.worldbank.org.
Thorelli, H. B., Cavusgil, S. T. (1990). “International Marketing Strategy”. Oxford: Pergamon
Press.
Trading Economics (2018, May). Germany GDP. Retrieved from https://tradingeconomics.com
Trompenaars, F., Wolliams, P. (2003). “Business Across Cultures”. Chichester: Capstone
Publishing Ltd.
Umweltbundesamt (2008, December 10). Environmental awareness among Germans is high
[Press Release]. Retrieved from
https://www.umweltbundesamt.de/en/press/pressinformation/environmental-awareness-among-
germans-is-high
Umweltbundesamt (2013). Grüne Produkte in Deutschland [PDF file]. Retrieved from
www.uba.de/publikationen/gruene-produkte-in-deutschland.
Umweltbundesamt (2013, June 19). German Adaptation Strategy. Retrieved from
https://www.umweltbundesamt.de/en/topics/climate-energy/climate-change-
adaptation/adaptation-at-the-federal-level/german-adaptation-strategy
Umweltbundesamt (2017, February 23). The German Environmental constitutional law. Retrieved
from https://www.umweltbundesamt.de/en/the-german-environmental-constitutional-law
Urabe, K., Child, J., Kagono, T. (1988). Innovation and Management: International Comparisons.
Berlin: Walter de Gruyter & Co.
Innovation on Global Markets – Should Companies Glocalize?
86
Vrontis, D., Thrassou, A. (2007). “Adaptation vs. standardization in international marketing – the
country-of-origin effect”. Innovative Marketing, Vol. 3 No. 4, pp. 7-20.
Wacket, M., Kirschbaum, E. (2017, July 3). “Germany breaks green energy record by generating
35% of power from renewables in first half of 2017”. Independent. Retrieved from
https://www.independent.co.uk.
Welt (2012, September 25). “Die Deutschen haben das „typisch deutsche“ satt“. Welt. Retrieved
online https://www.welt.de/vermischtes/article109452067/Die-Deutschen-haben-das-typisch-
Deutsche-satt.html
World Population Review (2018). Population in Germany. Retrieved from
http://worldpopulationreview.com/countries/germany-population/
www.landwind.eu (2018). Landwind. Retrieved from http://www.landwind.eu/
Zech, T. (2017, September 5). Wie Familien in Deutschland leben. Retrieved from
https://www.deutschland.de
Innovation on Global Markets – Should Companies Glocalize?
87
7. Appendix
Appendix A: PESTLE Analysis summary
Factor Characteristics
P - Democracy with 16 states
- Chancellor holds executive power, President is head of state
- Political parties need min 5% of votes to be represented in parliament
- 2017 elections AfD entered parliament (populist anti-immigrant alliance)
- Gained votes due to high number of refugees entering the country
E - 3,466 billion US$ GDP (2016), annual growth 2.9%
- Imports 38% of GDP (2016)
- Exports 46% of GDP (2016)
- Represents 5.59% of world
- GDP per capita PPP 44,072 USD
- Population 82 million (2016)
- Current unemployment rate 3.4%
- Main import partners: China, Netherlands, France, USA
S - Life satisfaction high (7 out of 10, average of 6.5)
- 86% of adults aged 25-64 have completed upper secondary education
- 90% of German households have cable or satellite TV
- Average German family consists of couple and one or two children
- Aging Society
- Sustainability trend, green, fair-traded and bio products preferred
T - Germany world leader in innovation
- Invests a lot in research and development
- Research and innovation among government’s highest priorities
- Facebook and Instagram important
L - Well established juridical system
- Foreign business: no distinction between Germans and foreign nationals
regarding investments and company establishments
- Well protected intellectual property (patent laws)
E - Environmental protection is part of German basic law
- 93% are satisfied with water quality
- Germany aims to eliminate nuclear power by 2022
- 35% of power by renewable energy in first half of 2017
Source: Own illustration
Innovation on Global Markets – Should Companies Glocalize?
88
Appendix B: Do’s and Don’ts in German Business Etiquette
DO’S DON’TS
- Introduce yourself and shake hands
when meeting for the first time
- Tell your opinion
- Give clear instructions and confirm in
writing
- Be on time, private and business
- Bring a gift to dinner (e.g. bottle of
wine)
- Use history as small-talk topic
- Call older people by their first name or
say “Du”
- Ask too personal questions
- Use too extensive gesticulation
- Come late to a meeting
Source: Adapted from ICUnet.AG, 2014, p.14 ff.
Innovation on Global Markets – Should Companies Glocalize?
89
Appendix C: OEM and Supplier Density of German Automotive Industry
Source: Germany Trade and Invest, 2016, p.8 f.
Innovation on Global Markets – Should Companies Glocalize?
90
Appendix D: Product Assortment in Germany and US
Source: Adapted from Ford Motor Company 2018b and Ford Motor Company 2018c
Style
Model
Eco
Bo
ost
GT
Eco
Bo
ost
GT
Engine
2.3l
Eco
Bo
ost
, 6-g
ear,
man
ual
2.3l
Eco
Bo
ost
, 10-
gear
, au
tom
atic
5.0l
6-g
ear,
man
ual
5.0l
10-
gear
, au
tom
atic
2.3l
Eco
Bo
ost
, 6-g
ear,
man
ual
2.3l
Eco
Bo
ost
, 10-
gear
, au
tom
atic
5.0l
6-g
ear,
man
ual
5.0l
10-
gear
, au
tom
atic
Color
Upholstery
Style
Shel
by
Model
Eco
Bo
ost
, Eco
Bo
ost
Pre
miu
mG
T, G
T P
rem
ium
Eco
Bo
ost
, Eco
Bo
ost
Pre
miu
mG
T P
rem
ium
GT3
50
GT3
50R
Engine
2.3l
Eco
Bo
ost
, 6-g
ear,
man
ual
2.3l
Eco
Bo
ost
, 10-
gear
, au
tom
atic
5.0l
6-g
ear,
man
ual
5.0l
10-
gear
, au
tom
atic
2.3l
Eco
Bo
ost
, 6-g
ear,
man
ual
2.3l
Eco
Bo
ost
, 10-
gear
, au
tom
atic
5.0l
6-g
ear,
man
ual
5.0l
10-
gear
, au
tom
atic
5.2l
6-g
ear,
man
ual
Color
10 c
olo
rs, O
pti
on
s fo
r d
iffe
ren
t ta
pe
stri
pe,
ro
of
colo
r an
d r
acin
g st
rip
e
Upholstery
1 va
rian
t2
vari
ants
USA
Fast
bac
kC
on
vert
ible
11 c
olo
rs, O
pti
on
s fo
r d
iffe
ren
t ta
pe
stri
pe
and
ro
of
colo
r11
co
lors
Fast
bac
kC
on
vert
ible
8 co
lors
10 v
ari
ants
German
y
Innovation on Global Markets – Should Companies Glocalize?
91
Appendix E: Equipment included in Basic and Comfort CV9
Source: LMWC Europe B.V., 2011, p.2
Innovation on Global Markets – Should Companies Glocalize?
92
Appendix F: Online Survey Translation
Dear participant,
My name is Katja Plasmeier and I am studying International Management at Alpen-Adria
University in Klagenfurt. For my master thesis I am researching the new product launch on the
German automotive market. The survey addresses German citizens from 22-36 years and will take
about 10 minutes of your time. There are no right or wrong answers. I am looking for your honest,
personal opinion.
All information from this study is handled strictly confidential and anonymous. The results are
only used for academic research.
Thank you very much for your participation.
1. Gender
a. Male
b. Female
2. Age
a. 16-21
b. 22-31
c. 32-36
d. 37+
3. Nationality
a. German
b. Other
4. Do you own a car?
a. Yes
b. No
5. If yes, which brand is your car?
a. VW
b. BMW
c. Audi
d. Mercedes
e. Opel
f. Ford
g. Toyota
h. Honda
i. Hyundai
j. Other, …
6. If you were to buy a new car, which brand would you prefer? (Choose three
answers)
a. VW
b. BMW
c. Audi
d. Mercedes
Innovation on Global Markets – Should Companies Glocalize?
93
e. Opel
f. Ford
g. Hyundai
h. Toyota
i. Honda
j. Other, …
7. From 1 to 4, how important is it to you, that…
Not important
at all
Not important Important Very
important
The brand is
trustworthy
The car was
produced in Germany
The equipment is of
high quality
The car is from a
German brand
The car has a nice
design
The technology of
the car is German
The car was product
sustainably
8. Which attributes would you connect to American cars?
a. Quality
b. Performance
c. Design
d. Equipment
e. Service
f. Innovation
g. Size
h. Consumption
9. Which attributes would you connect to German cars?
a. Quality
b. Performance
c. Design
d. Equipment
e. Service
f. Innovation
g. Size
h. Consumption
Innovation on Global Markets – Should Companies Glocalize?
94
10. Would you buy a car from a Chinese manufacturer (e.g. SAIC Motor, Brilliance,
BAIC)?
a. Yes
b. No
11. If you answered with “no”, why would you not buy a car from a Chinese
manufacturer?
a. Open answer
12. From 1 to 4, how important are the following attributes for a car purchase?
Not important
at all
Not important Important Very
important
Advertising
Country of Origin
Popularity of the
brand
Internationality of the
brand
Quality
Design
Color
Price
Discounts and special
offers
Environmental
friendliness
13. Is the price an essential criterion for a car purchase?
a. Yes
b. No
14. How much would you be willing to pay for a car?
a. Unter 10,000€
b. 11,000€ bis 20,000€
c. 21,000€ bis 30,000€
d. 31,000€ bis 50,000€
e. Mehr als 50,000€
15. A higher price means higher quality.
a. Agree
b. Disagree
16. Are you willing to pay a higher price for higher quality (e.g. valuable equipment,
local production)?
a. Yes
b. No
17. Where would you buy a car?
a. Used car dealer
b. Used from a private vendor
Innovation on Global Markets – Should Companies Glocalize?
95
c. Used from a car dealer
d. New from a car dealer
18. How long would you be willing to wait for your car (delivery time)?
a. The car must be available right away
b. 2-4 weeks
c. 4-6 weeks
d. 6-8 weeks
e. More than 8 weeks
19. Which commercial do you find more appealing?
a. Commercial A
b. Commercial B
20. What did you like about commercial A (more answers possible)?
a. Humor
b. Presentation of the car
c. Communication of information
d. Closeness to reality
e. The car as a status symbol
f. Sex appeal of the car / of the actress
g. Slogan
21. What did you like about commercial B (more answers possible)?
a. Humor
b. Presentation of the car
c. Communication of information
d. Closeness to reality
e. The car as a symbol for fun
f. Portrayal of the family
g. Slogan
22. Where do you collect information about cars (more answers possible)?
a. Car dealer / personal consultation
b. Online research
c. Friends
d. Magazines
e. Exhibitions
f. Roadshows / events
g. Others, …
23. On which communication channels do you expect advertising for cars?
Expecting it
strongly
Expecting it Expecting it less
TV
Print (newspaper,
magazines)
Radio
Innovation on Global Markets – Should Companies Glocalize?
96
Social Media (Facebook,
Instagram, YouTube, etc.)
Websites / Onlinebanners
Billboards / Out-of-Home
Guerilla
24. When researching online, which device do you use to get information about cars?
a. Smartphone
b. TV / Smart TV
c. Computer
d. Laptop
25. Do you follow car companies on Social Media?
a. Yes
b. No
26. If yes, which companies do you follow?
a. VW
b. BMW
c. Audi
d. Mercedes
e. Opel
f. Ford
g. Hyundai
h. Other, …
27. On which Social Media channel do you follow car companies?
a. Facebook
b. Instagram
c. YouTube
d. Twitter
e. Other, …
28. Agree or disagree to the following statements:
Strongly
disagree
Disagree Agree Strongly
agree
Advertising on German TV
should always be in German
language
Commercials should
communicate the functionality
of the car
Advertising should
communicate technical details
of the car
Humor is misplaced in car
commercials
Innovation on Global Markets – Should Companies Glocalize?
97
Commercials should not make
other companies look bad
29. To which statement do you agree more?
a. If I know, that a famous person drives the car, the car is becoming more
interesting to me
b. I don’t care, if a famous person drives the car, to me functionality and design are
more important
30. Can you name a famous person that advertises a car brand?
a. …
Innovation on Global Markets – Should Companies Glocalize?
108
Appendix H: Survey Results
1. Gender
2. Age
3. Nationality
Innovation on Global Markets – Should Companies Glocalize?
109
4. Do you own a car?
5. If yes, which brand is your car?
Innovation on Global Markets – Should Companies Glocalize?
110
6. If you were to buy a new car, which brand would you prefer? (Choose three
answers)
Innovation on Global Markets – Should Companies Glocalize?
111
7. From 1 to 4, how important is it to you, that…
8. Which attributes would you connect to American cars?
0
10
20
30
40
50
60
70
80
Auf einer Skala von 1-4, wie wichtig ist es für dich, dass...
Überhaupt nicht wichtig Nicht wichtig Wichtig Sehr wichtig
Innovation on Global Markets – Should Companies Glocalize?
112
9. Which attributes would you connect to German cars?
10. Would you buy a car from a Chinese manufacturer (e.g. SAIC Motor, Brilliance,
BAIC)?
11. If you answered “no”, why would you not buy it?
Unbekannt
Kenne die Marken nicht, schlechtes Gefühl
Im Moment noch zu wenig Vertrauen in Technik / Service / Haltbarkeit
Weil die Qualität nicht an die eines deutschen Herstellers heran kommt
Zu wenig Infos, keine passenden Ansprechpartner vor Ort.
Innovation on Global Markets – Should Companies Glocalize?
113
Schlechte Qualität, Patentrechtsverletzungen
Mindere Qualität und Image
Negative Reputation und Image
Noch nie von den Marken gehört.
Erweckt spontan kein Vertrauen
Ich kenne diesen Marken nicht, stelle mir Reparaturen hier in Deutschland komplizierter vor (Ersatzteile etc.) und die lange Lieferzeit würde mich abschrecken.
Sind lokal nicht zu erwerben.
Qualität mangelhaft
Mit chinesischen Produkten verbinde ich: Masse, eher schlechte Qualität, Menschen arbeiten unter schlechten Bedingungen, wenig vertrauenswürdig, geringes Umweltbewusstsein
Kein Vertrauen in die Qualität
Unbekannte Marken, die sich daher nicht seriös anhören und die keiner fährt
Ich kenne diesen Marken nicht, stelle mir Reparaturen hier in Deutschland komplizierter vor (Ersatzteile etc.) und die lange Lieferzeit würde mich abschrecken.
Bedenken bzgl. der Qualität, Service
Kein Vertrauen
Kein Vertrauen
Kenne die Marken nicht
Ich kenne diese Autos nicht, dass wäre für mich die Katze im Sack kaufen. Was der Bauer nicht kennt, dass frisst er nicht.
zu viele Kopien westlicher Marken ohne eigene wirkliche Entwicklung
Ich kenne keinen der so ein Auto fährt und somit keine Erfahrung oder Feedback bekommen.
Billig
Ich musste mal ein Referat über chinesische Autos schreiben und war schockiert von der Qualität
Zu wenig Erfahrung
Die übernehmen eh schon alle Märkte, das sollte man nicht unterstützen. Außerdem verbinde ich chinesische Autos mit geringer Qualität.
Kommunistische Diktatur
Ich bevorzuge die deutsche Qualität
Kein Vertrauen
Kenne ich nicht
Nicht vertrauenswürdig
Bauchgefühl
Mein Bauchgefühl sagt mir, dass chinesische Hersteller am falschen Ende sparen. Ich hätte Angst, häufig in die Werkstatt zu müssen
Kann ich auch gleich auf einem esel reiten. Kopieren deutsche technik. In germany nicht kaufbar. Kein vertrauen in die qualität.
Abneigung gegenüber chinesischen Produkten
Nicht vertrauenswürdig
Kein gutes Gefühl bzgl. der Sicherheit
Weil ich den chinesischen Qualitätsstandards nicht vertraue
Schlechte Erfahrung
Die können "noch" keine Autos bauen + kaum verfügbar in Europa, selbst wenn ich eins kaufen wollen würde.
Minderwertige Qualität
Innovation on Global Markets – Should Companies Glocalize?
114
12. From 1 to 4, how important are the following attributes for a car purchase?
13. Is the price an essential criterion for a car purchase?
0
10
20
30
40
50
60
70
80
Auf einer Skala von 1-4, wie wichtig sind Dir die folgenden Eigenschaften für einen Autokauf?
Überhaupt nicht wichtig Nicht wichtig Wichtig Sehr wichtig
Innovation on Global Markets – Should Companies Glocalize?
115
14. How much would you be willing to pay for a car?
15. A higher price means higher quality.
16. Are you willing to pay a higher price for higher quality (e.g. valuable equipment,
local production)?
Innovation on Global Markets – Should Companies Glocalize?
116
17. Where would you buy a car?
18. How long would you be willing to wait for your car (delivery time)?
19. Which commercial do you find more appealing?
Innovation on Global Markets – Should Companies Glocalize?
117
20. What did you like about commercial A (more answers possible)?
21. What did you like about commercial B (more answers possible)?
Innovation on Global Markets – Should Companies Glocalize?
118
22. Where do you collect information about cars (more answers possible)?
23. On which communication channels do you expect advertising for cars?
0
10
20
30
40
50
60
70
80
90
TV Print (Zeitung,Magazin)
Radio Social Media Websites /Onlinebanner
Plakate / Out-of home
GuerillaMarketing
Auf welchen Kommunikationskanälen erwartest du Werbung für Autos?
Erwarte ich sehr stark Erwarte ich Erwarte ich weniger
Innovation on Global Markets – Should Companies Glocalize?
119
24. When researching online, which device do you use to get information about cars?
25. Do you follow car companies on Social Media?
Innovation on Global Markets – Should Companies Glocalize?
120
26. If yes, which companies do you follow?
27. On which Social Media channel do you follow car companies?
510
1310
23
144
111
2111111111
0 2 4 6 8 10 12 14
Volkswagen
BMW
Audi
Mercedes
Opel
Ford
Hyundai
Keine
Porsche
Lexus
Volvo
8
Toyota
Skoda
Seat
Tesla
Mazda
Honda
Lamborghini
Pagani
Jaguar
Ferrari
Welchen Automobilherstellern folgst Du? (Mehrere Antworten möglich)
Innovation on Global Markets – Should Companies Glocalize?
121
28. Agree or disagree to the following statements:
29. To which statement do you agree more?
30. Can you name a famous person that advertises a car brand?
01020304050607080
Werbung imDeutschen Fernsehen
sollte in DeutscherSprache sein
Werbung sollte dieFunktionalität desAutos vermitteln
Werbung solltetechnische
Informationen zumAuto enthalten
Humor hat beiAutowerbung nichts
zu suchen
Werbung sollte nichtandere Hersteller
schlecht darstellen
Chart Title
Stimme gar nicht zu Stimme nicht zu Stimme zu Stimme voll zu