Learners, welcome to Milestone 3: Cross Country Innovation. This will be the agenda. We will have two components, each with four sub components. So component A will be a reformulation of your vision and strategy which includes why go abroad? What region? What country and what segment? So component B will be a reformulation of your marketing mix so from a cross country standpoint, you get to reformulate your product, your promotion, your price and your place. So let's get started. So let's begin by asking ourselves why do we want to go abroad? Of course, there is always this major economic reason as to why you want to do that. Often because your domestic market isn't doing so well. Or you're lured by the opportunities abroad. But it should be broader than that. It should be more strategic than that. Such as to acquire new technology. Such as to acquire managerial no how. Such as how to be a good global marketer. And the scoring tip here is to make your motivation sound convincing, make it sound reasonable. Don't say, we're going because we have to, because other companies are doing the same. And if the motivation is not sound, well then this may end up costing you not only money but a loss of time and attention that should be paying more to your home market. So let's look at what YK did, the exemplar case. Well, as you can see, part of the reason to go abroad could've been economic. Because we learn in the case towards the end that the domestic market is slowing down. Some of their segments are not growing, but as we can see here it was more strategic than that, it was broader than that. The chance to share their know how with other countries, such as to create a greater good will for their CSR activities. So if you do decide to go abroad, this is almost like as I said in one of my lectures, a funneling process. We have to whittle it down. Start from what region, what country, and what segment. So again, the first step is to decide on what region and it could be as broad as a continent or part of that continent and it should make sense. There should be synergy in terms of your home market and the region that you have chosen. And what we're also looking for is scalability. Since we have more than just one country involved, there should be something in common that engenders economy at it's scale such as in production, such as in logistics. Such as in R&D and even in marketing. So the scoring tip here therefore should be, how much synergy there is and how much scalability there is in the region that you have chosen. So in the case of YK, I think it makes perfect sense that being a company based in an Asian country, that being South Korea that they chose Asia. And in a way they limited it to North Asia. North Asia itself is quite big because it includes big countries like China, and also Mongolia and Taiwan and even North Korea. So from a political standpoint, it makes, I think, perfect sense that North Korea is a country that was part of the region chosen by YK. And this was in part requested by Kimberly Clark to share the kind of innovation and CSR know how that YK had attained for 25 plus years. Now that we've chosen the region, again this is a funneling process, we have to choose the country. And the keyword here is landing market. This is like a landing market. This will be the beachhead market from which you can grow. So size matters of course because ideally you want to sell in that first landed market. But it doesn't end there. So it can act as a gateway for your future expansion. And the landing market from a political standpoint can be also something that generates good will. Specially in your future expanded markets. So the Scoring Tip here is to choose a country that not only has adequate size but if you don't satisfy that size condition at least that has influence that enables you to expand to other markets. So what country did YK choose? They chose many countries, in fact. So I think one of the first countries that they chose was Taiwan, and it stands to reason because, especially in terms of their per capita income. It was very similar to Korea. So the synergy between Taiwan and South Korea would have been that good. So there wasn't too much tweaking that was needed but as for their more strategic or broader objectives, they often chose countries like Mongolia, which of course from an economic development standpoint was very different from South Korea, and even China. So there, I think they were looking further ahead in terms of expansion in the future. But also in the case of Mongolia and especially North Korea, it was less economic but much more political. Political in a good sense. The fact that deforestation is a big issue for Mongolia. That allow the yellow dust comes from Mongolia. And so, I think for Korea, it makes sense that we want to reforest those countries so that not only that it helps them but again, it also helps us. Finally, what segment? And so, we're at the almost very end of that funnel where you want to choose from a segmentation targeting and positioning standpoint, what target to use as your first market. So here we can think about the so called two step communication. Which I talk about in sports and entertainment. And so, it's not just the initial target that were concerned about but their influence on their followers. So a good example of that might be a career-minded woman, the so called Gold Misses who themselves are a sizable segment. But more importantly, they have scores of followers. So the scoring tip here would be to choose, as we did with the country. A segment that is in and of itself, or large enough, but more importantly one that has influence on the potential of your mind. So in the case of YK, they're at a crossroad especially for their paper products because South Korea is now aging and it has a low birth rate. So in the case of diapers ironically, a segment that they can target in the future might be adults, older adults, aging adults. So diapers are used not only by babies but they're also used by aging seniors. And with the aging population not only in Korea, but also in other Asian countries are increasing, that could be a sensible target going forward in terms of baby skin care that they are contemplating at the end of the case. It could be health and eco-concious mothers and this leverages the eco-friendlybrand image of Yuhan Kimberly.
