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A company today has the opportunity to compete in a global market. There are many factors to consider when a company decides to market its product in another country. It must research the country targeted for sales to determine if there is a demand for the product. It must decide on the modifications needed in the product to match the new market, and it must develop a plan to market and distribute the product in this new business environment. See if you can crack the international market for bicycles!

                     Pedal Power, Inc.
1000 Manufacturers Lane,  
Los Angeles, CA 90005

  International Trade Consultants
  10000 Trade Center Drive
  Los Angeles, California
         
  
  Dear Sir:
  Our company, Pedal Power, manufactures bicycles in Los Angeles.  
  We have been in business for two years and sell our bicycles 
  through local distributors. Currently, our bicycles are sold only in 
  California, Oregon, and Washington.   
  
  With the heavy competition we face in our current markets, we are 
  considering entering the export market.  We believe that bicycles 
  are fairly universal, and  we think we can adapt our product to 
  any market in the world.  With slight alterations in gears, wheels 
  and frame components, we can make a bicycle for basic transportation,
  hauling, recreation, mountain biking, or racing. Although 
  we have received inquiries about selling our bicycles in other 
  countries, none of our employees has ever been involved in exporting or 
  or marketing abroad.
  
  We would like your firm to explore the possibility of selling our 
  bicycles in the following countries: China, South Africa, Mexico, 
  Brazil, Israel, Mali, Saudi Arabia, Germany, Russia or Japan.  We 
  will need a Business Plan for each of these countries along with 
  your recommendation of which country we should choose to 
  export our product first. The bicycles will be manufactured in our 
  Los Angeles plant and shipped to their destination needing only 
  minor assembly.  We seek your recommendations on adaptations that
  are needed in our method of marketing and distribution for each
  target market country. 
  
  Yours sincerely,
  
  John Q. Pedal
                 
  John Q. Pedal
  President, Pedal Power

Resources


Task

Your consulting firm has received the letter above from Pedal Power to engage your team in determining if and how their company should sell its bicycles abroad. Your team of experts must use its research and critical thinking skills to evaluate whether Pedal Power should market their bicycles in any one of the countries named in the letter. The expert team will create a plan specifying how Pedal Power should modify and market their bicycles in a presentation to the Board of Directors of Pedal Power.


Process

Assign four experts for each for the following countries: China, South Africa, Mexico, Brazil, Israel, Mali, Saudi Arabia, Germany, Russia or Japan. Classes may elect to do only level one of the export plan or do both levels depending on the time you are willing to spend and the sophistication level of the students.

Each group will find as much information as it can on the listed topics. Not all the information will be found on each country. In the process of research, a team may want to include other factors that are not specified, but are important enough to affect the outcome of the business plan.

Step 1: Country Research

In order to decide what bike would be best to sell in your country and how to market it, you must find out the following factors about the country assigned to you and fill out the following Country Background Market Worksheet:

Step 2: Modifying the product

Once you have researched the target export country, you need to narrow your focus so you can select your particular "Market Niche" within the country.

  1. What will be the bicycle's primary use?
  2. What is the terrain of the country or region? How will it affect the type of bicycles that can be used?
  3. To which group within the country will you try to sell? Write a statement that includes: the group's age range, location, gender(s), and income range.
  4. Choose the model and price that will best suit your target market and country from the Bike Models Marketing sheet.

 

Developing an Operations Plan

Step 3 - Establish a Sales Plan for 3 years:

No. of Units Sales Price Profit Per Unit
Year 1 - Target Cities or Region of Country


Year 2 - Target Cities or Region of Country


Year 3 - Target Cities or Region of Country


Step 4 - Develop a Marketing Plan

With your "Market Niche" in mind create a promotional brochure or website. Connect the 'Sale's pitch' of the brochure or website to the needs of your target buyers.

Step 5 - Select a Distribution Plan

Select one of the following distribution models and write a rational for your choice based on country research and product marketing needs.

  • Ship and distribute to established retail outlets (bike shops and sporting goods stores)
  • Sell directly to the consumer by mail, infomercials on TV, and/or using the Internet
  • Set up individual distributors who will sell directly to the customer


Presentation

Each team presents its finding about the target country using posters, charts, and technology. The team demonstrates the relationship between this research and its product selection. Then the team uses this information to argue for its Marketing and Distribution. Students will listen to all the presentations and fill in the two rubric charts(Operations Rubric, Country Rubric). After all the presentations are completed discuss the merits and drawbacks of each plan.

  • Designate the Plan that will represent the class.
  • Consult your rubric.
  • Select best plan.
  • Suggest revisions in the plan as needed.
  • Submit plan to ______________.

 


Learning Advice

This lesson is designed on two levels. If your time is limited and your goal is to have a practical mission for students to learn about countries addressed in the tenth grade standards, learn research skills, and use critical thinking skills by matching a product to a country; do level one only. Classes with a bit more time that want to incorporate more economic and business objectives may also choose to go on to the second level.

Before beginning the unit, students should be familiar with the following economic terms for level 2.


Glossary of Economic Terms

Balance of Payments --- an accounting of trade/financial records, which takes into account the money a nation owes or is owed at the conclusion of a set time period.

Balance of Trade -- an accounting of the differences between a nation's imports and exports.

Comparative Advantage -- the ability of a nation or company to produce a certain good or service cheaper than another.

Foreign Exchange Rate -- the rate at which one nation's money can be exchanged for another's.

Free Trade -- the international trade policy, where trade among nations is not restricted by protective tariff or other governmental restrictions.

Import Quota -- the limit of a foreign-produced good that may be imported into another country.

Protective Tariff -- the tax or custom duty placed on an import to restrict their sale to protect a nation's domestic industry.

Revenue Tariff -- the tax or custom duty place on imports to raise money.

Trade Barrier -- a limitation place by one nation against another to restrain the exchange of goods.

 


Evaluation

The class will develop a rubric based on the following criteria:

  • scope, depth and accuracy of the information
  • persuasiveness
  • clarity of the oral presentation
  • innovative proposals
  • listening to others


Process:

  • What part of the project did you like the best?
  • What part did you like least?
  • How would you change the way your group interacted or the process you used in developing your project?


Last revised 3/31/06