FSN 400 Lecture Notes - Lecture 8: Target Australia, Profit Margin, Net Profit
29 Mar 2016
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Basic products: more stable and predictable in demand, higher stock keeping units (skos, between 60% and 80, more competition. 6. lower profit margin less forecast error less likely to obsolete quickly. Fashion products less staple and unpredictable in demand lower stock keeping units (skus, between 2-% and 40%) less competition. 3: higher profit margin, more forecast error, more likely to become obsolete quickly, higher overstock or out-of-stock situations. Effective when large differences exist between countries. Advantages: product differentiation, local responsiveness, minimized political risk, minimized exchange rate risk. Global strategy (globalization, standardization) products are the same in all countries centralized control little decision-making authority on the local level effective when differences between countries are small advantages: cost, co-ordinated activities, faster product development. Polycentric: customize product to meet needs of local market. Factors influencing price setting: high rate of product introduction (internal/external, price cutting as a strategy to maintain or regain market share (internal/external) 3: more efficient and better informed buyers/consumers (external)
