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International Marketing- EXPORT MARKETING
Please read carefully the attached case study on ‘Exporting Ford Automobiles to Japan’ and answer all five questions referring to this. The length of the whole document with your answers should range between 3,000 and 3,500 words. Each question should be answered separately.
Exporting Ford automobiles to Japan
The 29-year-old customer wheels his old Toyota onto the lot at the Ford dealership and parks near the showroom. A polite salesman greets him and accepts the Toyota’s keys. After some brief paperwork, the salesman and customer walk to another area outside the showroom. There, the salesman goes through the delivery checklist and then hands the customers the keys to a new dark-green Ford Mustang coupe that sports a 3.8-liter V6 engine.
What’s so unusual about this story? Well, this scene occurred in Tokyo, Japan, and both the salesman and customers were Japanese. For much of the 1960s, ’70s, and ’80s, Japanese car companies like Toyota and Honda pretty much had their way in the U.S. car market. Meanwhile, American companies either had little interest in exporting to Japan or found the process very difficult.
Ford has decided to change all that. The new Mustang that Seiichi Tsuzuki bought represents Ford’s flagship model in a new line of cars it introduced in Japan in mid-1994. Although Japanese cars have their steering wheel on the right-hand side of the car, Ford’s Mustang is a left-hand-drive model that targets a high-profile niche market. Ford is positioning the Mustang squarely against Nissan’s Z cars and Toyota’s Supra cars that have dominated the ‘muscle car’ niche in Japan. Along with the Mustang, however, Ford is introducing three right-hand-drive models -Probe, Laser, and Mondeo – that will target the compact-sedan market long ruled by Honda’s Accord. This segment accounts for one-third of the Japanese market. Ford produces these new ‘world cars’ as part of a 6 billion dollar development effort. They represent the first time any American car company has offered right-hand-drive cars in Japan.
Mr. Tsuzuki, a manager at a life insurance company, believes that the Mustang is ‘sexy’, and he appreciates the ‘roughness’ of its mystique. The cars running-horse emblem, he notes, is a symbol of the United States,’ and he finds the car’s design very impressive. He also appreciates the fact that the Mustang offers safety features, like airbags and anti-lock brakes that cost much more on Japanese cars. Another recent customer, 72-year-old Tadashi Okabe, points out that ‘People say bad things about foreign cars – that the service is bad and that they don’t run efficiently. But the Mustang is not like that. It is big, cool, and durable, and it also has airbags.”
Although the Mustang offers images and accessories, its real advantage may be price. In recent years, the yen has gained strength relative to the U.S. dollar, falling from about 130 yen to the dollar to about 100. This means that Japanese consumers find American goods about 23 percent cheaper than they had been. For example, Mr. Tsuzuki’s Mustang cost about 2.3 million yen or about USD 22,000. That is at least USD 7,000 lower than a comparable Japanese sports car’s price. Ford is pricing its world cars at USD 2,000 to USD 3.............
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