Cohort: MBAMM/09/PT Jan INTAKE
Examinations for 2009 – 2010 Semester II
/ 2010 Semester I
MODULE: INTERNATIONAL MARKETING AND STRATEGY
MODULE CODE: MKTG 5118
Duration: 3 Hours
Instructions to Candidates:
1. This paper consists of Sections A and B.
2. Section A is compulsory.
3. Answer any three questions from Section B.
4. Always start a new question on a fresh page.
5. Total marks 100
This question paper contains 5 questions and 4 pages.
Page 1 of 4
SECTION A: COMPULSORY
QUESTION 1: (40 MARKS)
Auto-by-Tel - An example of reintermediation in the value chain
Auto-by-Tel was founded in 1995 by Peter Ellis, who based his business around the
simple concept that he could take advantage of the Net’s interactivity to sell cars on
the Web (www.autobytel.com). In just four years Ellis became a heavyweight in the
vehicle distribution business. Since its inception the company has helped more than
2 million online buyers find a car. With a staff of fewer than 200, the company
currently grosses 1 per cent of new car sales in the United States.
The goal of a cybermediary is to step in at several points along the economic chain
and integrate buyer/seller relationships. Some cybermediaries specialise and
become Internet brokers, allowing clients access to a broader information base and
enhancing both selection processes and negotiating power. This is what Auto-by-Tel
Based on a network of 2,700 dealers, Auto-by-Tel matches buyers with the nearest
car dealer that meets their criteria. When clients put in an order for a specific model
the request is sent to a server that contacts all qualified dealers geographically close
to the client. Within 48 hours a product proposal is sent to the client. The network is
composed of certified car dealers ready to sell cars at the price listed on the website.
Auto-by-Tel updates its database continually and has a staff of 35 working on site
maintenance alone. The service it provides is free for clients and has the advantage
of being cheaper than traditional advertising. Car dealers who want to be an Auto-by-
Tel franchisee pay an entrance fee as well as a monthly fee.
Page 2 of 4
Auto-by-Tel is an e-alliance with a solution strategy. The Auto-by-Tel website offers a
complete solution for car owners, integrating a number of services that are relevant
for car owners and buyers. More specifically, four different services are offered via its
website. The first service is new car purchases: customers select cars on the Auto-
by-Tel website; Auto-by-Tel then e-mails the nearest dealer to ask for a price and
checks that it is fair; dealer and customer are then left to themselves to conclude
their deal. A second service is buying and selling used cars: both dealers and private
persons may offer used cars for sale; private sellers pay a fee to do so. Third, a
number of insurance companies offer their products via the Auto-by-Tel website, and
finally, clients can also obtain finance from Auto-by-Tel. Customers can compare
both insurance and finance on the Auto-by-Tel website.
Auto-by-Tel has also entered into relationships with contractual partners. There are
two categories: the dealer network and the insurance and finance partners. The car
dealers with which it has concluded partnerships do the actual car selling. The
objective is to have a number of dealers, who profit because Auto-by-Tel expands
their marketing and sales channel.
Source: adapted from: De Man et al. (2002), Jallat and Capek (2001);
(a) Is it possible to sell cars on the Internet? (8 marks)
(b) Explain how reintermediation is working in the case of Auto-by-Tel.(12 marks)
(c) Which elements of Auto-by-Tel’s concept is it possible to internationalize and
standardize across borders, and which elements should be localised?
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SECTION B: ANSWER ANY THREE QUESTIONS
QUESTION 2: (20 MARKS)
If a label on a product states "Made in Thailand" and a similar product has a label
"Made in Germany" then why do consumers consider the latter to be better than the
former? What different does a label make in the perception of a consumer?
QUESTION 3: (20 MARKS)
Companies entering emerging markets for the first time must exercise particular care
in choosing a channel intermediary. Generally, a local distributor is required. What
are some of the guidelines that should be considered in selecting a distributor in
order to avoid any problems?
QUESTION 4: (20 MARKS)
There is an ongoing debate between "Standardization" versus "Adaptation"
pertaining to global advertising. Explain how different sides of the arguments fit into
the global context.
QUESTION 5: (20 MARKS)
Leaders of global companies are facing the resistance to globalization in many
countries. How should the executives handle the situation?
***END OF QUESTION PAPER***
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