[img]2012q1/ct_etoefm_etoeflistz_1172_20121[/img] [br] What did Ted Levitt mean

Narrator: Listen to part of a discussion in a business class.
Professor:
Industry analysts report that multinational food companies are trying to use the same types of strategies  Q29
that automobile and electronics manufacturers have found to be successful in the global marketplace.
The problem is that general rules for products that tend to be traditional for national or even regional
tastes... these products are very difficult to identify and sales aren’t easy to project. But, the
companies that tend to do best are those that are the most responsive to local tastes. And they spend
development dollars on taste testing in the local markets before they formulate the final product. Can anyone  Q30
recall any examples from the case studies in the text? Sandy? Student 1’
McDonald’s Big Mac has more mustard in the special sauce in Paris than it does in New York.
Professor: Because?
Student 1:
Because taste tests verified that people in the United States liked sweeter condiments than people did
in France. In fact, I think the... the sugar content for export foods in general usually has to be modified
when American products are taste tested overseas.
Professor:
Right you are. Probably the company that’s adapted most to local tastes is Nestle. Can you believe that
they produce more than 200 slightly different blends of Nescafe for export to different countries?
Amazing but true. But sometimes taste is less a problem of ingredients and more a matter of the way a food
product looks or feels. One case study that comes to mind is the one about the soft cookies that just
don’t sell as well in England as crisp cookies. So, you can see that taste extends way beyond just flavor.
It’s really a combination of flavor preferences and local expectations.
   Look, here’s another example of accommodation that had more to do with the expectation for a
process than the flavor of the product. In this case study, it was cake. Remember when Betty Crocker
cake mixes were introduced in England, they weren’t accepted because the English homemaker felt
more comfortable with convenience foods that required more than water to prepare them. Go figure. But
that was the problem uncovered by extensive market research. So when the mix was reformulated
without an egg, and the preparation included adding an egg with the water before mixing it, well, Betty
Crocker cake mixes became very popular in England.
   Any other examples come to mind? They don’t have to be from the case studies inthe book.  Q31
Student 2: How about serving sizes?
Professor: Go on.
Student 2:
Well soft drinks for one. Just compare the serving sizes in the United States and many foreign markets
where soft drinks are sold. The cans in foreign markets are much smaller because consumers expect it.
But, uh, in the United States, well, super sizing is probably a consideration when a foreign company is
trying to crack the American market.
Professor:
That’s a great example. So the taste can be acceptable, but the packaging has to compare favorably  Q32
with the competing brands and the public’s expectations.
Student 3:
Yeah, but that makes products more expensive, doesn’t it? I mean because you can’t standardize the
product or the packaging so that would make it more... more costly to produce, wouldn’t it?
Professor:
Right you are, Chris. In fact, you’ve really gone to the heart of the issue. A compromise has to occur
between the requirement that products be adapted to please the taste and the expectations of local
consumers and the pressure to standardize products for maximum cost effectiveness. Now, let’s
complicate that even further. Even the experts don’t agree on the importance of how far to go in adapting
products for local markets. A few years ago, Ted Levitt—he’s the editor of the Harvard Business
Review—Levitt pred cted what he called a "pluralization of consumption." What he means is that at least  Q33
in some areas, tastes are likely to converge, which makes sense when you think about the increased opportunities for travel and sampling of foods, as well as the continued global marketing efforts by
multinational corporations. So logically, it’s smarter to simply identify the areas in which tastes are most likely
to be the same, and concentrate efforts on those food products.
   But there’s also the issue of global marketing. How about the potential to create taste? I mean,  
selling the image that surrounds using a product. If consumers want to associate themselves with that
image, won’t they develop a taste for the product that does that for them? For example, there’s some  Q34
evidence that the popularity of products seen in movies and television spills into the foreign
maretplace.This subtle brand association with the movie or the celebrities in it translates into high dollar deals
for cerain brands to be Visibly displayed in widely distributed films.
Student 3:
Oh, right. I was reading about that. It was in a couple of the case studies. The bottle, a can, or... or a
package appears as part of the character’s persona, and if it’s a character that audiences choose to
identify with, then the taste for the product may follow, or at least that’s what the marketing experts are
betting on.
Professor:
And that includes foreign audiences. Anyone drink Starbucks coffee? Well, Starbucks began as
a regional coffee in Seattle, Washington, and made the global leap in 2000, opening shops in China, a
huge market surely, but also a traditionally tea-drinking society. So what’s the attraction? Starbucks is
marketing to the cosmopolitan consumer, the young trendy set looking for a modern image as well as a
different taste.
   Still, there have been some real surprises in the multinational dinner party. No one has really figured
out why the Italians, Germans, and British love Kraft’s Philadelphia cream cheese, and the Greeks
simply don’t buy it. And why did Perrier, a mineral water from France... why did Perrier take America by
storm while other imported mineral waters... didn’t? In short, success in the food export industry is
probably a combination of the real taste... the flavor of the product, with some adaptation for the local
markets, the satisfaction of certain expectations for the preparation and packaging, and the taste for the
product created by images in the global marketing plan. Add to this mix the potential for a short shelf life
or even perishable products and, well, you have a very challenging problem for the multinational food
industry.