V. Before reading the text, discuss these questions. Then read the text.

1. What are the advantages for a company of expanding beyond its domestic market?

2. What kinds of problem do companies face when they go international?

3. What methods can companies use to enter overseas markets?

4. Think of some global brands – for example in the car, fast food or soft

drink industries. How are they tailored to meet local needs?

Zumo – creating a global brand.

Background

The best-selling sports drink, Zumo, is produced by Zumospa, a food and drinks company based in Valencia, Spain. In the last financial year, Zumo contributed €30 million to Zumospa's annual sales revenue, accounting for 20% of the company's total turnover, and €4.5 million in profits. It is, in fact, Zumospa's cash cow, generating more revenue than any other of its products.

At present, Zumo is sold only in Europe. However, the sports drink market is the most rapidly growing segment of the world beverage market. Zumospa would like to make Zumo a global brand, even though the market is very competitive, with major companies such as Coca-Cola, Pepsi Cola and Heinz fighting for market share.

Marketing

• Launched in the mid 1980s. Positioned as an energy product for fitness-conscious people, especially sportsmen and women between the ages of 20 and 45.

• Distributed mainly through grocery stores, convenience stores and supermarkets. Also through sports clubs. Also, sales generated through contracts with professional leagues, such as football, golf and tennis associations.

• Press, TV and radio advertising is backed up by endorsement contracts with famous European footballers and tennis stars.

• Zumo is offered in four flavours and its price is in the medium range.

Developing a global brand

Zumospa needs to reposition Zumo for the global market. Initial research suggests that Zumo is perceived as a Spanish drink, and its close identification with Spain may not be suitable when developing a global brand.

Zumospa would like to launch a global campaign focussing first on South America, Mexico, the Southern states of the US and Japan, where they have regional offices. A decision has been taken to use a standardized advertising theme in these markets, although the copy of the advertisements and language of the TV and radio commercials will be adapted to local needs.

VI. Before setting up focus groups in the areas and commissioning market surveys, the Marketing Department of Zumospa have organised an informal departmental meeting to brainstorm ideas for their global marketing strategy. You are members of the Marketing Department of Zumospa. Work in groups and brainstorm the points listed below. Then give a presentation on the development of a new drink, using the phrases given in exercise II above.

1. Does Zumo need a new name? If so, what?

2. Introduce new Zumo varieties for different market segments (Diet Zumo? Other versions?)

3. Re-design Zumo bottle/can? If so, how?

4. Create a new slogan? Suggestions?

5. Ideas for TV and radio advertisement? Also, newspapers and magazines?

6. Price-Medium range?

7. How to compete against similar products from Coke, Pepsi, Heinz, etc?

8. New market opportunities for Zumo?

9. Create a special division to market Zumo world wide.

10. Apply to be official sponsor at next Olympic games.