MARKETING

Marketing Case Study: NEILSON INTERNATIONAL IN MEXICO



Case Study

Issues

The case is about the Neilson International venture in the chocolate segment of the Mexican market. The first issue that has been discussed here is that the Mexican market is characterized by high level of competition. Therefore, Neilson international main concern here is to find way ways in order to penetrate the Mexican market. Market penetration is intended to introduce a product specific to the local market, often through a foreign entity. To make this breakthrough actually must have the following (Samu et.al, 1999):

Distribution issue: the issue Neilson was facing distribution issues as they were confused whether Neilson to launch their brand independently using the national distribution or a joint venture. This was creating problem because retailers were looking for competitive advantage.

Competitive Advantage: Pricing was the competitive advantage for Neilson but lower prices in international market was not working for them as their cost was increasing but not the revenue.

Partnership issues: Neilson was not unable to decide whether to be a joint venture of independent seller. Moreover, a big company was not letting them to be as an independent seller and for independent launch they needed money which was limited.

Omitting Nielsen name from joint venture proposal:

Limited resource for the expansion: Neilson had limited resources for the expansion which was their week point and because of this they were facing all the issues.

Alternatives

The main advantage of using national distributor is that it increases the accessibility of the Neilson international product and subsequently the mind shares of their product will also increases.

The benefits of using national distributors are: 

Market knowledge is very good with a permanent local presence in the market, provided however, that the subsidiary has sufficient autonomy to adapt to local conditions;

Control of the marketing policy is very good even though the subsidiary is a separate entity

The subsidiary holding the nationality of the foreign country, the products of the exporting firm are considered domestic and potential customers and partners feel secure about the sustainability of

The company in the market. Its credibility is enhanced; 

It allows to simplify and cost-effective logistics operations, administrative, commercial and financial. The company can achieve economies of scale in distribution costs by streamlining the physical transport and storage and in so doing, reduce logistics costs and

Marketing. In addition, the customer service and monitoring recoveries bills are simplified; 

The exporting company is liable for obligations of the subsidiary than the amount it has taken in this subsidiary

Recommendation

As discussed above that the main issue for ...