Reference no: EM131053210

FIRST ONE IS

Individual Article Assignment : This assignment is to be done individually. Each of you are required to complete 4 article assignments (AA) and may choose any three different chapters from the textbook. You will provide a two-page discussion of an article that pertains to the chapter which we have/will soon cover. For example, in the ethics chapter, you should search and read business press articles that pertain to ethics and social responsibility. You should break down your analysis as follows:

(1) Half page summarizing the central theme of the article.

(2) One and a half pages discussing why that article is interesting to you and how it ties in with the
material from that particular chapter. You are required to cite a page number and section title for material you refer to in the text. On the article itself you also must indicate the page number from the textbook next to the related material. In this part of the write up I am looking for your insights, critique and ability to link real world situations to concepts and ideas we learn from our text and in class.

You are expected to search through trade and business press articles. You are strongly encouraged to search through the business article electronic databases available through the UT Library System. You are encouraged also to seek help from the Library staff to conduct these electronic searches. Examples of business publications that may be good sources for such articles are Fortune, Wall Street Journal, Business Week etc. Please search for meaningful articles as opposed to short 1 column clips in newspapers.

Note that you are required to submit a full copy of the article (printed or photocopies are fine). Please ensure you use a cover sheet with your full name and AA submission chapter (which chapter it pertains to) and date. Staple your article with your two page write up and cover sheet. The write up and cover sheet should be typed, double spaced, 1 inch margins and 12 point font.

Also, note that I will randomly select one or more submissions and request that the author verbally present his/her article on the day of that class. This does NOT mean reading it verbatim. All students are encouraged to ask questions or to make comments during their fellow students' verbal presentations.

Case Analysis

Throughout the semester you will be given a case to analyze. Your grade will primarily be based on the depth of your analysis and ability to identify and apply relevant marketing concepts from the readings. Proper and clear writing is expected and will impact your grade.

You are strongly encouraged to have your work reviewed by the Saunders Writing Center in Plant Hall 323 before turning it in for a grade. Poor writing can result in a lower grade.

Chapter 5 Case Study: Nissan and Datsun Expanding into Emerging Markets

China and the United States are the two largest markets for automobiles in the world. Prolonged success for auto manufacturers, however, is likely to come from their ability to sell cars in rapidly developing countries like Russia, Brazil, India, and Indonesia. Often termed "emerging economies" or "emerging markets," these countries have growing economies, an expansion of industrialization, rising incomes, and an increasing middle class that is looking to spend its newfound wealth on items that it could not previously afford-cars being the foremost example.
Selling cars in emerging markets, however, is a bit complicated. Though these countries have a growing middle class, their actual middle class income is relative small when compared to the middle class in more developed countries like the United States, England, or Japan. For this reason, most car companies have found that they cannot simply sell in India the same cars that they sell in Ohio. Instead, they've had to create entire new car lines that are more affordable for consumers in emerging markets.

Nissan, based in Japan, has struggled to expand to emerging markets. Its overall share of global auto sales is just 6 percent; it has just a 6.2 percent share in China, a 6 percent share in Southeast Asia, and a 1.2 percent share in Brazil. With the goal of increasing its global reach, Nissan announced that it would develop and sell six new vehicles specifically designed for the growing middle class of emerging markets. The company aims to produce modern, stylish cars that will visually appeal to consumers. More importantly, it will fit into their budget. The new vehicles will all be priced from $3,000 to $5,000, a dramatic decrease from the company's currently lowest price model, the $8,000 Tsuru (manufactured in Mexico, and sold in Asia, Africa, the Middle East, Central America, South America).

Perhaps the most notable aspect of Nissan's announcement is its plans to revive the Datsun brand name. Datsun Motors was founded in 1931, and after a few years in business, was bought out by Nissan Motors. For decades, Nissan continued to sell cars under the Datsun name, but in 1981, the company decided to re-brand all of its vehicles as Nissans. This change had little, if anything, to do with negative consumer perceptions against Datsun. In fact, Datsuns wereoften prized by consumers for their high value and reliable performance. Instead, the change was made to promote a message of unified corporate identity.

But in bringing back the Datsun brand, Nissan is in effect creating a distinctive identity for a unique set of cars. The emerging middle class wants cars, but it can't afford to spend fifteen or twenty thousand on a family sedan. Thus, automobile companies need to create small, extremely affordable cars, and in order to do so, they must in nearly all cases take a bare-bones approach. This means, for example, that the car will be designed quickly, without too much consideration into aesthetics. During production, the company's usual multilayered quality check process may be pared down to one visual inspection. And in terms of features, well, it's best to say that most of these cars will not have features seen in their corporate cousins. That means no air conditioning, no passenger air bags, no air conditioning, no power windows, and so forth. Simply put, in order to sell a car for $5,000, Nissan needs to make it as simple possible.

Thus, in reviving the Datsun brand, Nissan is in effect creating a new identity for its global ventures. The Datsun brand, sold in emerging markets, will represent low priced, bare bones cars for emerging markets. The Nissan brand, meanwhile, will represent up-scale, feature- rich cars intended for consumers in more developed economies. According to Ammar Master, Ammar Master, an analyst at LMC Automotive in Bangkok, "Datsun could bring in volumes at the lower end of the market...While the Nissan brand will continue to move upmarket."

Questions

What are the benefits for Nissan if it succeeds in expanding to emerging markets like India, Russia, and Indonesia?

In addition to income and financial resources, what other elements of the external environment does Nissan need to take into consideration when expanding into emerging markets?

What method of entering the global marketplace is Nissan using in this case? How might it benefit from using one (or more) of the other methods?

References

Chester Dawson, "For Datsun Revival, Nissan Gambles on $3000 Model," Wall Street Journal, October 1, 2012, https://online.wsj.com/article/SB10000872396390443890304578009284279919750.html (Accessed August 13, 2013).
Siddharth Philip, Anna Mukai, and Yuki Hagiwara, "Nissan Revives Datsun after Three Decades to Boost Sales," Bloomberg, March 21, 2012, https://www.bloomberg.com/news/2012-03- 20/nissan-to-revive-datsun-brand-after-three-decades-to-boost-sales.html (Accessed August 13, 2013).

Caroline Winter, "Behind the Birth, Death, and Rebirth of Datsun," Bloomberg Businessweek, March 21, 2012, https://www.businessweek.com/articles/2012-03-21/behind-the-birth-death-and- re-birth-of-datsun (Accessed August 13, 2013).
Jonathan Soble, "Nissan Sharpens Focus on Emerging Markets," Financial Times, June 27, 2011, https://www.ft.com/cms/s/0/7415066c-a09f-11e0-b14e- 00144feabdc0.html#axzz2ElAJ9Wud (Accessed August 13, 2013).