Multinational product strategy

after a review of some basic notions of probability. This is not as well done as it could be. But then this is true of most marketing research textbooks. For instance, confidence intervals and sample size are discussed only in the context of proportions. This seems to be because the authors are concerned only with the measurement of attributes (not variables), and they define an attribute as “some characteristic by which each sampling unit may be classified in two (or more) categories.” However, there are characteristics that are interval or ratio scaled instead of nominal, such as consumption, income, sales, profit. Even attitude measures are often assumed to be intervally scaled. Hence, confidence intervals and sample sizes sometimes need to be computed on an interval or ratio scaled variable. Chapters 10 and 11 are the only two Data Analysis chapters. Chapter 10 should be entitled “Decision Making Under Uncertainty ’ ’ instead of “Decision Making Under Certainty. ’ ’ The first half of the chapter is on hypothesis testing, the last half on Bayesian analysis. Hypothesis testing (like confidence interval and sample size) is discussed only in the context of proportions. With Chapter 11 concerned with regression and correlation analyses, we move from proportions (i.e., nominal scaled variables) to interval or ratio scaled variables. More importantly, cross-tabulations (and Chi-Square) are left under the rug. This may be the most serious omission of this book since so many marketing research results are presented to professionals in cross-tabulation form (more so than in regression or correlation form). One way to define a cross-tabulation is to say that it is a measure of the association between two nominal scaled variables (while a correlation is a measure of association between two interval or ratio scaled variables). Finally, Chapters 12 and 13 deal with two topics of major importance to professionals, namely the measurement of market potential and forecasting. It seems quite fitting to have these two chapters in this book given the target market. They are both well written and organized. In summary, the content of the book is appropriate given the intended audience. Compared to a typical marketing research textbook, there is more in MIS and marketing data and less on sampling, experimentation and data analysis. Moreover, it is for the most part well written and organized (e.g., the chapters on MIS, marketing information, market potential and forecasting). The sampling and data analysis chapters could be improved, though; but these are minor parts of the book. Finally, the case studies, planning drills, exercises and other learning devices (which are found throughout the

book) add to the whole package useful to the reader.

which should prove

Philippe Cattin Assistant Professor of Marketing University of Connecticut l

Leroy, Georges, Multinational Product Strategy, Praeger, New York, 220 pp.

The goal of this book is to define and classify altemative multinational strategies open to multinational companies (MNCs). Strategy is viewed as a pattern in a stream of significant decisions rather than as a systematic development emanating from building an integrated plan of future action. The concept of the stream of decisions permits the study of a strategy as resulting, even after the fact, from the decision-maker’s behavior. The unit of analysis is the product. The framework covers product innovation and diffusion with the location of innovation being termed the product development dimension. The sequence of production and market entries into various countries forms the diffusion process. This process is studied over the life of the product. In comparison, the classic view of international growth is based only on the relative locations of production and markets and thus on the diffusion process. Innovation is considered as related specifically to a product technology, and refers to where knowhow was developed and not to basic research. Other strengths specific to the firm, such as management policies and organizational structures, which make the firm competitive are excluded on the grounds of being extremely difficult to measure. In a two-country model, given that innovation occurs in the home country, there are four basic states in which a firm can find itself: 1. 2. 3. 4.

Home market, Home production Home market, Host production Host market, Home production Host market, Host production

Further, when innovation occurs in the host country, there are four corresponding basic states. MNC growth strategy alternatives consist of the many feasible sets emerging from moving from one basic state to others. The study maps the actual strategy of five manufactur283

ing MNCs within the above framework: Alcan Aluminum Ltd., Dymo Industries, Gillette Co., Hewlett-Packard Co. and Massey-Ferguson Ltd. These were chosen because they represented a broad range of product stratagies and had knowhow originating in both home and host countries. The products selected were at the end of their life cycles, so all stages of the cycle could be followed. International business executives will be interested in the variety of alternative time paths of products strategies which might be employed and the large number of feasible options. They will also find the discussion of alternative multinational strategies especially useful. The actual history of the particular products studied illustrates quite vividly the global reach and confidence that can be developed through experience by an MNC. Knowhow, manufacturing plants, and markets can be spread among different countries. Also the mature MNC develops a level of information about foreign countries which enables it to reduce the actual and perceived risk of its international operations. Researchers should get a new slant on the typology of international product strategies. They will also find the attempts to relate the empirical study to the theories of international business, in general, and that of private foreign direct investment, in particular, quite informative. The study, however, has certain weakness. Because of its small diversified sample of five firms, it is fairly inconclusive as to generalizable results. Moreover, its definition of a product as composed of a specific set of technological features is quite unique. Previous empirical studies and many theories, including that of the intemational product cycle, define the product on an industry classification based on end use or in marketing terms as related to consumer satisfaction/benefit segments. The unique technological definition used in this study makes it difficult to test whether the observed strategies can be used to invalidate the theory of the international product cycle or other existing theories. The international product cycle model suggests that a product initially exported from an advanced country will later be produced abroad in cheaper labor cost locations. This happens as the market matures and competition occurs on a cost basis. Finally the product is imported into the advanced country from lower cost manufacturing locations abroad. None of the products in this study were observed to have completed the cycle to the final state. However, the international product cycle may have been working. This study was exclusively concerned with trade within an MNC an used a limited definition of a product, which did not 284

match SITC product categories. Therefore, it was impossible to ascertain from government trade statistics whether, at the end of the international product cycle for the products studies, the advanced country home market was being supplied by other competing MNCs out of their domestic production and/or foreign production or by foreign competitors. Overall the book does not make easy reading. However, for the international business executive who ploughs through it, there is a goodly amount that should spark interest as regards possible strategies. The pure researchers could possibly be disappointed but the theorist may like it for its new approach and viewpoints. V. H. Kirpaluni Pruj&ssor of Marketing Concordiu Universit) Montreal, Cunada 0

Majaro, Simon, International Marketing, and Sons, New York, pp. 303, $22.50.

John Wiley

This book focuses primarily on the principles which underline international marketing. Mr. Majaro’s starting point is that most corporations have tended to engage in international marketing without the benefit of detailed forward planning, and the book emphasizes the need for a more systematic approach. All the key elements of the subject-product strategy, pricing, distribution, and communications-are dealt with in an essentially conceptual form, although there is no lack of practical examples. The writing is clear and concise, and good use is made of diagrams and other illustrations in support of the text. For all these reasons, the book will be especially valuable to students. Considerable attention is given to the need to understand and adapt the marketing mix to changes and differences in the environment around the world. In support of this repeated references are made to the necessity for the prior collection and analysis of information on market needs as input in determining strategy. Thus, although some of the early chapters on market segmentation and on the problems of conducting research on an international basis, will suggest little that is new to most readers, they do serve to stress this fundamental point, which is still often neglected by corporations operating