When it comes to international business, developing a global brand through standardization has its advantages in that the management does not have to develop a different positioning every time it enters a different international market. O’Donnell tried to do the same with Irish Cream in the French market.
However the strategy did not succeed in France because the consumer tastes and preferences differed from those in Ireland or the USA. For example, the consumers in the USA used the O’Donnell brand mostly as part of a cocktail drink. However the French consumers preferred traditional spirits and liqueurs and they preferred to drink in bars and restaurants. As a result the management at O’Donnell had to position the brand differently in France. These differences arose out of the different behavioral and psychographic differences characterizing the market in the US and France.
Therefore recommendation 1: O’Donnell should position its brand so that the drink is more suitable in a bar or a restaurant. Recommendation 2: The management should conduct more detailed market research in order to analyze the distribution channels most popular in France. Designing effective distribution channels is essential for enhancing penetration because the channel members have to cooperate with the manufacturer for providing incentives to the customers. 3) Make a comparative analysis of the different promotional schemes to identify which would be most effective.
Using the current distributor is not feasible because brand penetration remains low. There is insufficient information as to the nature of the relationship between The Benedictine Group and O’Donnell. For example, it is not clear whether the management at O’Donnell is providing any sort of incentives to the distributor for achieving high sales.
The case does mention the fact that the distributor is unconcerned about the brand’s slow growth of market share. Therefore it would seem that O’Donnell is not doing anything to motivate Benedictine in working to enhance the market share of the brand. So one strategy would be to reach an agreement with Benedictine which specifies a certain percentage of the sales going to Benedictine in the event of the distributor achieving a certain percentage of market share in a given period of time.
This is essentially a profit sharing agreement so that Benedictine takes a more active interest in growing sales of the brand. If this strategy does not work, the management has to recognize the fact that the distribution it is following is flawed at the basic level because the French consumers are not going to food stores to purchase Irish Cream. Instead they are consuming the product in bars and restaurants. Therefore the management at O’Donnell should explore the possibility of using these establishments as distribution intermediaries. Once sales had reached a critical level in Paris, O’Donnell could follow the same strategy throughout the country since it has the advantage of low price over Baileys.
It would not be feasible to use the Spanish press advertising in France because the purpose of developing a distinctive brand on the part of the O’Donnell management would be lost. The problem of low sales growth is addressable through careful positioning. O’Donnell should be doing the same.
If it were to follow the same kind of promotional campaigns as in Spain, then in France as well O’Donnell would be identified with Baileys and Baileys had failed to gain market share in France. Therefore positioning itself as being indistinguishable from Baileys is not an effective strategy. That is what would happen if O’Donnell opted for the Spanish press advertising in France. Baileys also follows the strategy of positioning itself as an Irish Drink. This is a mistake when it comes to marketing in France because French consumers prefer locally-produced drinks.
Therefore, the idea of following the Spanish press advertising is feasible when the market that O’Donnell is entering has a strong positioning of Baileys. In that case, the idea of being linked with Baileys would work in O’Donnell’s favor. However in the French market, the management at O’Donnell has to take into consideration the fact that it differs from the US or the Spanish markets where consumers are younger and tend to experiment more.
The French market is different in that the consumers there are older and they are more traditional. These differences have to be taken into account when it comes to deciding whether or not follow the Spanish press advertising. BIBILIOGRAPHY
Hill, Charles W. L. International Business. Prentice Hall. 2005.