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Module Guide

International Pricing and Performance


BBM 7 IPF

The Business Faculty


2014-2015
Level 7

International Pricing and Finance 2013-14

Table of Contents
2.

Short Description ............................................................................................................................3

3.

Aims of the Unit...............................................................................................................................4

4.

Learning Outcomes.........................................................................................................................4

4.1.

Knowledge and Understanding .......................................................................................................4

4.2.

Intellectual Skills .............................................................................................................................4

4.3.

Practical Skills .................................................................................................................................4

4.4.

Transferable Skills ..........................................................................................................................5

5.

Assessment of the Unit ...................................................................................................................5

6.

Feedback ........................................................................................................................................6

7.

Introduction to Studying the Unit .....................................................................................................6

7.1.

Overview of the Main Content.........................................................................................................6

7.2.

Overview of Types of Classes ........................................................................................................6

7.3.

Importance of Student Self-Managed Learning Time .....................................................................6

8.

Teaching, Learning and Assessment..............................................................................................7

9.

Student Evaluation ..........................................................................................................................8

10.

Learning Resources ........................................................................................................................8

10.1.

Core Materials.................................................................................................................................8

10.2.

Optional Materials ...........................................................................................................................8

11.

Cases ............................................................................................................................................10

International Pricing and Performance, 2014-15

1.

Module Details

Module Title:
Module Level:
Module Reference Number:
Credit Value:
Student Study Hours:
Contact Hours:
Private Study Hours:
Pre-requisite Learning (If applicable):
Co-requisite Units (If applicable):
Course(s):
Year and Semester
Unit Coordinator:
MC Contact Details (Tel, Email, Room)

International Pricing and Performance


M
BBM-7-IPF
20 CATS points
150
4
1
None
None
MSc International Marketing
2014-2015, Semester 1,2
Dag Bennett
X 6997
Room LR341
bennetd@lsbu.ac.uk

Subject Area: Marketing


Summary of Assessment Method: 100% coursework
External Examiner appointed for Dr. Finola Kerrigan, University of Birmingham
module

2. SHORT DESCRIPTION
International business managers must have an understanding of all major business functions. They
must be able to work in teams of people who come from different backgrounds, cultures and
specialisations and understand how their own aims and priorities relate to larger corporate aims;
balancing marketing, financial and other objectives. This means that managers must speak the
language of finance, at least to the extent that they can use financial information to inform their own
decisions and to assess its relevance in different circumstances.
This unit seeks to provide a solid grounding in the disciplines of International Pricing and Finance. It
aims to build a flexible framework of reference points and analytical tools to enable marketing
managers to work with other functional specialists. It also seeks to provide the basis for
understanding effective cross-border marketing management through an extensive use of
international examples, cases and business situations.
Students taking the unit begin by developing basic numeracy skills for financial analysis. They work
through a variety of exercises designed to make familiar the terminologies, measures and
calculations of financial reporting, progressing to pricing calculations that extend this knowledge from
the domestic to the international arena.

International Pricing and Performance, 2014-15

3.

AIMS OF THE UNIT


This course aims to provide students with a thorough knowledge of strategic and operational aspects
of pricing and revenue decisions on corporate performance. The aims of this unit are to:

4.

a)

provide an analytical framework for understanding pricing methods and strategies.

b)

provide an understanding of how to formulate international pricing strategies.

c)

provide an understanding of the various marketing performance measures.

d)

delineate the financial implications of international marketing activities.

LEARNING OUTCOMES
4.1.

Knowledge and Understanding

Numeracy In this unit, students will use many forms of numerical analysis, including basic
statistics, financial ratios, cost/profit analysis and spreadsheets to expand and deepen their
understanding or academic theories, frameworks and concepts. (A1)
Students will develop a basic understanding of contemporary (and sometimes controversial)
theories at the forefront of academic re(search. This will be driven by reference to established
knowledge in marketing, or empirical generalizations. (A2)
Through casework and article discussions, students will also deepen their understanding of the
analytical techniques used for decision-making in international marketing (A4) and the ethical
dilemmas that are likely to be faced in implementing international strategies (A6)

4.2.

Intellectual Skills

Rational problem solving using quantitative tools This will be developed by means of case
study analysis, quantitative exercises and live company pricing analysis. (B1, B2) There will
also be analysis of company financial reports. (B3)
One key element of the unit is the student-lead group company project in which a team of
students will select a particular company, industry or issue that allows them to demonstrate the
financial implications of particular international marketing decisions (B4). In doing this project,
students will be expected to gather and evaluate advanced scholarship and research to argue
alternative approaches (B5)

4.3.

Practical Skills

Be able to:

identify, assemble and manipulate quantitative information that connects the


marketing function with other managerial disciplines through measures of
corporate performance, (C1, C5)
develop, evaluate and control appropriate international pricing strategies across
a variety of countries, (C4)
create realistic, inclusive and actionable budgets for international marketing
programmes, identifying and accessing key information (C3)

International Pricing and Performance, 2014-15

4.4.

Transferable Skills

Report writing Students will prepare a variety of assignments in report format, beginning with
one-page memos and progressing to managerial reports based on case study analyses (D1)
Teamwork and interactive group skills Students can interact with and within groups to define
roles, negotiate problem solutions, devise recommendations and organise presentations. Group
work will primarily be seminar projects based on case studies. (D2, D3, D4)
IT skills Live case studies require students to gather current information from a many sources
and to manipulate data with a variety of tools and techniques. (D5)

5. ASSESSMENT OF THE UNIT


The assessment of the unit is entirely based on course-work (seminar papers, presentations and
time-constrained assessments). Evaluation will be based on:
-

Identification and description of problems and issues.


Analysis of problems and contributory factors.
Evaluation of alternatives.
Relevance, actionability and clarity of recommendations.
Structure and coherence of argument.
Resourcefulness in gathering and exploiting sources of information.

Feedback through the seminars is meant to provide students with an indication of whether they
are mastering course concepts. There will be a concerted effort to provide substantive comment
and guidance on all seminar work, but especially the presentation and written paper.
The weighting and due dates of assessed course components is:
Week Due

Assignment

Word Limit

Weighting

Case # 1

250

10%

Case # 2

250

10

Case # 3

400

15

10

Time-constrained Assessment 1 hour

25

11
12

Group Case Presentations 20 mins.

10

12
13

Group Case Write-up

30

2,000-4,000

Assignments are due on before the days listed. This is important because cases will be
discussed in class in the week following submission.

International Pricing and Performance, 2014-15

6. FEEDBACK
Feedback will normally be given to students 7-15 working days after the submission of an
assignment, although some feedback will be immediate, in class. Feedback will take a variety of
forms; for example, in the week following case submissions there will be group feedback on the
case during seminar. There will also be individual feedback on all cases.
Other feedback will be given by students to each group after presentation of group company
reports (the feedback form is attached at the end of the unit guide). These student forms will
then be given to the presenting groups to use to refine their written reports. Verbal feedback will
also be given after group project presentations by the instructor(s).

7. INTRODUCTION TO STUDYING THE UNIT


7.1. Overview of the Main Content
The content of the unit is in the first part numeracy, which requires proficiency in mathematical
techniques. This will be delivered through a number of exercises and cases, combined with selfdirected study of statistics and numerical manipulation

7.2. Overview of Types of Classes


The teaching programme requires the following contact time per week over a 12-13 week period:

One two hour combined lecture and one two-hour seminar.


Occasional guest speakers, sometimes outside the ordinary unit time slot.

Teaching and learning in this unit emphasises interaction, learning-by-doing and practicality.
Students undertake a variety of projects, case studies and practical exercises.
In presenting, students are expected to take the approach of not just demonstrating their
understanding of an issue, but of helping their colleagues to understand as well. Likewise,
discussions are intended to foster group-wide learning

7.3. Importance of Student Self-Managed Learning Time


Prior to each session, students should prepare articles, cases, exercises or reports to be
presented or discussed. Each student whether presenting or not will be expected to participate in
discussion. Project work requires preparation beyond reading and discussing a case, e.g.
calculations, analysis of information and discussion give students the chance to demonstrate
individual skills.
One potentially valuable way to structure time and learning is by using the Pomodoro Technique.
This divides time into 25min (timed) intervals in which one task or objective is completed. It is a
good exercise in both organization, and focus. http://www.pomodorotechnique.com/

7.4

Employability

Employability skills are embedded and developed within the teaching & learning of this unit.
These include numeracy, team working, time management and communication skills. In
particular, the project will develop specific skills to enhance employment potential for positions in
marketing.

International Pricing and Performance, 2014-15

8. TEACHING, LEARNING AND ASSESSMENT


Week

Lecture Activities

Introduction to Unit, Pricing Basics

Pricing Principles, The international environment, S&D


Kotabe & Helsen, ch 1 5 (www.wiley.com/go/global/kotabe)
Nagle Hogan & Zale, ch. 3, 4.
Sharp, Ch 9

Seminar Activities
Getting Organized

Team formation
Hand in Case Study 0

Setting prices, Costs, Consumers, Markets


Nagle Hogan & Zale, ch.1, 2
Kotler & Keller, ch. 12, 13, 16

Hand in Case Study 1


Team-work on group case
Exercises

International Pricing, Transfer Pricing


Kotabe & Helsen, ch 12, Emmanuel & Mehafdi, ch. 3, 4, 5, 8.
http://www.wto.org

Group Project Ideas (3)


Discuss: Case Study 1

Research into Pricing Issues


South bank Pricing Tests, Price-related promotions
Nagle Hogan & Zale, ch.12

Hand in Case 2

Profits, bananas, etc.


Nagle Hogan & Zale, ch. 5
http://mckinseyquarterly.com/marketing

Discuss: Case Study 2


Group project key data
sources

Pricing and Regulation, Dumping, Scurrilous behaviour


Kotabe & Helsen, ch 12, 17

Hand in: Case Study 3

Reading Week

Group Case Prep

Budgeting, Market and Brand measurement


Nagle Hogan & Zale, ch. 7, Sharp, Ch 3-6

Discuss Case Study 3


Group case project
outline

Group Project proposals

10

Time Constrained Assessment

11

Consumer Panels, data into decisions


Nagle Hogan & Zale, Ch. 8.
http://www.economist.com

Presentations
2 Groups each seminar

12

ROI, Corporate responsibility


Nagle Hogan & Zale, ch. 9, 10, 13, Sharp. 14
http://www.iccr.org

Presentations
Group Case write-ups

13

International Pricing and Performance, 2014-15

9. STUDENT EVALUATION
Module content and learning and teaching activities are continually updated based on
tutors and students experiences and reflection. Student evaluation of the module has
been consistently good: Students find it engaging (if demanding at times) and provides
a good, disciplined approach to university learning.

10.

LEARNING RESOURCES

10.1.

Core Materials

Emmanuel & Mehafdi, Transfer Pricing, 1994, Academic Press (Harcourt Brace, London).
Hammond, K & Ehrenberg, 2001 The case against price related promotions, Admap p30-32
th

Kotabe, M. & Helsen, K., Global Marketing Management, 2011, 5 International ed, (Wiley)
th

Nagle, Hogan & Zale 2011, The Strategy and Tactics of Pricing, 5 International Ed, Pearson
Scriven, J, 1999, The South Bank Pricing Tests, Research Report for The Ehrenberg Centre for
Research in Marketing
Background Reading
Sharp, B., Marketing: Theory, Evidence and Practice, 2012, Oxford University Press
Porter, E, The Price of Everything, 2011, Heineman, London
Hooley & Hussey, 1994, Quantitative Methods in Marketing, Academic Press
th

Kotler & Keller, Marketing Management, International, 2006, Prentice Hall, 12 Edition,

10.2.

Optional, but useful

Financial Times
The Wall Street Journal
Marketing Week
The Economist
Chartered Institute of Marketing: http://www.cim.co.uk/
A.C.Nielsen Corporation: http://www.nielsen.com/uk/en.html
Institute for Brand Leadership: http://www.instituteforbrandleadership.org
Marketing Week; www.marketing-week.co.uk
Marketing Power: www.marketingpower.com
Consumer Reports Magazine: Independent product and service evaluations and comparisons
Consumers International Organization: Consumer advocacy worldwide, research & reports
UK Office of Fair Trading: Consumer advocacy & shopper's rights
Que choisir? Magazine: Product and service evaluations and comparisons, consumer advocacy,
Union Fdrale des Consommateurs (in French)
Stiftung Warentest Magazine: Product and service evaluations, consumer advocacy (German)
Which? Magazine: Product and service evaluations and comparisons, consumer association
National Bureau of Economic Research: 'The law of one price' NBER paper, Haskel & Wolf.
National Bureau of Economic Research: 'Market Integration and Convergence to the Law of
International Pricing and Performance, 2014-15

Carnegie Mellon University, USA: 'The law of one price, consumer search and retail pricing'
University of Connecticut, USA: 'Convergence to the law of one price', by Parsley and Wei.
Harvard University: 'The Law of One Price over 700 years', by Froot, Kim, and Rogoff (PDF)

Bargaining
University of California at Berkeley: 'Competition, Bargaining, Information, and Price
Discrimination in Cambodia's Psah (Markets)', by Sophal Earl
Business Toolkit: Bargaining contract prices with employees and middlemen.
Industrial Negotiations Centre: Contextual Negotiations (PDF file)
Price and consumer evaluations
Price Scan: Price comparisons and product evaluations
Comparis Switzerland: Swiss price comparison site (in English, Dutch, French and Italian)
Consumer Reports Magazine: Independent product and service evaluations and comparisons
Stiftung Warentest Magazine: The leading German consumer association (in German)
Que choisir? Magazine: Union Fdrale des Consommateurs (French).
Consumers Union: Australian nonprofit publisher of consumer reports
Consumer Coalition for Quality Healthcare: American consumer group concerned with improving
the quality of US healthcare
International price tactics
World Trade Organization: WTO Antidumping gateway.
The Economist: 'When Grey is Good', EU and grey imports.
The Register: Examples of parallel imports
Charles Sturt University: 'Theory and practice of parallel imports', by Hazbo Skoko (PDF file)
Eur-Export: About price adaptation versus standardization.
European Court of Justice: Official website of the European Court of Justice
LLRX.com: A Guide to European Union Law
Market situations, competition and price agreement
US Federal Trade Commission: FTC Bureau of antitrust and competition.
US Federal Trade Commission: Promoting Competition, Protecting Consumers: A Plain English
Guide to Antitrust Laws
Asia Times: 'India: Pills for the world's ills' (India, AIDS, pharmaceuticals)
Kevin Hinde.com: Cartels and collusive behaviour (PDF file)
Japan Law: Japanese Foreign Exchange and Foreign trade Control Law (Roderick Seeman).
Cacex: The Brazilian authority for foreign trade and foreign exchange control (in Portuguese).
All Africa: Information about national contexts in African countries (may require registration)
International Monetary Fund: IMF world economic outlook and database
The World Factbook - CIA
https://www.cia.gov/library/publications/the-world-factbook
The observatory of Economic Complexity
http://atlas.media.mit.edu
globalEDGE International Business Resource Desk
globaledge.msu.edu/ibrd/ibrd.asp
Euromonitor International
www.euromonitor.com
Eurostat Home - European Commission
ec.europa.eu/Eurostat
Mintel: Global Market Research & Market Insight | Mintel.com

www.mintel.com

International Pricing and Performance, 2014-15

11.

Cases

Case 0.1

Goodman v Excelsior

Optional

The Goodman Company produces and distributes a product, which is differentiated from
competing products by a better design. The average market price is 50 and the total market
amounts to 1,000,000 units: Goodmans market share is 10%. The price elasticity for this
product category is in the range 1.7 to 2.0.
The operating data for Goodman are as follows:
Direct unit costs
Fixed costs
Expected rate of return
Invested capital

20
2,000,000
10%
10,000,000

The market research department has conducted a brand image study for Goodman and for its
priority competitor, the brand Excelsior, The attributes importance scores for the product
category are respectively:
.50 / .25 / .25; and the performance scores are:
10 / 6 / 9 for Goodman;
8 / 7 / 9 for Excelsior.
Calculate the target price, the value price and the optimum price. Which pricing strategy do
you recommend?

International Pricing and Performance, 2014-15

10

CASE 0.2 Condomi AG, International, Optional


It is estimated that the global annual market for male condoms is 6.0 billion units. The worlds four
biggest markets are the USA, Japan, India and China. In March 2010, the German condom maker
Condomi AG decided to undercut the established Durex condom brand.
The Durex brand is owned by the UK-based SSL International that was formed in June 1999 by the
merger of Seton Scholl Health Care with London International Group. Durex is the biggest condom
brand around the world with a global market share of about 20 per cent. Generally the SSL
managers run a brand-oriented strategy: We want Durex to be the Coca Cola of the condom world.
Condomi is Europes largest condom manufacturer with Germany as its main market. It produces
300 million condoms a year and has about 15% of the total European market (1.8 billion condoms
per year). Until 2010 Condomis market share in the UK was below 5 per cent. Condomi was
entering the UK consumer market through a deal with distributor Ceura Healthcare to obtain listings
in supermarkets, wholesalers and Boots the Chemist.
Condomi claimed the UKs poor record on unwanted teenage pregnancies (it has the highest rate in
Europe) and the increasing number of HIV infections were linked to the high cost of condoms.
The UK market was dominated by Durex, which had a 70 per cent market share, and Mates, with
about 20 per cent. The Condomi range of six condom variants costs 1.99 for a pack of three. This
compares with 3.99 for Durex Gold while Durex Fetherlite and Mates Ribbed cost 2.25 for a pack
of three. Durex Select, a mixed pack, costs 3.24 for three.
The total condom market in the UK is about 150 million per year. The distribution of condoms in the
UK is shown in table 1.
Table 1, Condom distribution in the UK
Distribution Channel

Supply to retailers and wholesalers for over-the-counter


Sale in shops

60%

Supply to the National Health Service for


Free distribution

23%

Supply via vending machines

17%

Adapted from various sources including www.durex.com and www.condomi.com


Condomi UK director Ralph Patmore said: Condom prices here are far higher than in the rest of
Europe they dont need to be that expensive. For teenagers, condoms are expensive, and they
could have a pint of beer instead.
1. What is the underlying strategy behind Condomis price in the UK?
2. Will Condomi succeed in capturing market share in the UK? Why or why not?
3. In order to reach its market share objectives Condomi considers launching a 3 million
promotion campaign on radio and TV. What would be the necessary sales and market
shares before breakeven would be reached? (Assume a contribution margin of 20 per cent).

International Pricing and Performance, 2014-15

11

Case 1 -- QuitosOrganic Quinoa startup going mainstream


Quitos are a new savoury snack made from quinoa. Derived from the Spanish spelling of the Quechua
name kinwa, quinoa originated in the Andes where it was domesticated 3,000 to 4,000 years ago. It is
not a cereal because it is not derived from grasses, but a pseudo-cereal that is in many ways healthier.
This is partly because it has historically been less intensively cultivated and is mostly still farmed
organically. For Quitos the manufacturing method is similar to cornflakes but it is to be sold as a savoury
snack. Quitos look like potato crisps but are more golden and regular in shape. Raw materials and
manufacturing costs are higher than for potato snacks but they are healthier in their basic form. They
contain fewer calories and are low in saturates and cholesterol.
Quitos are sweeter than potato crisps but can be flavoured. Consumer trials showed that the versions of
popular crisp flavours received satisfactory reviews. R&D were working on these flavours. Meanwhile the
aim was to launch the product with four flavours that consumers did like: regular, sweet and sour, honey
roasted, and ranch.
Quitos needed dedicated plant that produces the product for a direct cost of 1,500 per tonne, excluding
the cost of capital. With potato snacks selling for 3,000 per tonne, the brand manager was confident
about the products profitability. Her confidence took a serious knock however when Sales, Finance and
Market Research each came up with different recommended prices. The finance officer demanded that
the price be set to cover the usual 100 percent of overhead charge plus a 20 per cent margin. His
suggested price of 3,600 per tonne gave a very satisfactory 190,000 profit for the targeted 300 tonne
annual sales.
Unfortunately, the finance officers view conflicted with the sales managers who wanted the price to be
100 per tonne below potato crisps. The sales manager claimed that only with a price advantage could
they achieve the target sales against the established competition. The sales manager added that a low
initial price would also compensate traders for the extra shelf space Quitos used.
The marketing researchers contribution to the pricing debate confused the brand manager even more.
Rather than giving a price, the researcher gave a string of prices and sales levels and to the annoyance
of the finance officer, some financial information:
Price(000)
2.5
Sales (tonnes) 410

3.0
350

3.5
275

4.0
200

4.5
100

The researcher also estimated the 280,000 annual fixed operating cost for the product and the capital
investment that depended upon the annual volumes produced.
Annual sales (tonnes)
Capital investment (000)

410
2,250

350
2,000

275
1,650

200
1,220

100
600

I assume you know that our average cost of capital is 12 per cent. Commented the finance officer.
All very impressive, said the brand manager, but what price should we charge? That all depends on
what you want to achieve. Replied the researcher.
1. Use the price and sales data provided by the marketing researcher to estimate price elasticities.
Show how you would use them elasticities in setting the Quitos price.
2. What prices give the highest sales value, sales volume, gross profit, gross margin, net profit, Return
on sales, ROCE, capital cost covered (C3), economic value added (EVA)? Choose a price at which
to market Quitos and explain why. How much room is there to manoeuvre around this price?
3. At a price of 3,500 per tonne, sales levels for advertising levels are shown below. What level of
advertising should the company should invest in? Explain the financial implications.
Advertising (000)
Sales (tonnes)
Capital investment (000)

25
180
1,100

50
210
1,250

100
280
1,650

200
360
2,050

400
420
2,300

4. Quitos can use a manufacturing process with a direct cost of 1500/tonne and fixed cost of 300,00,
or a new plant with direct cost of 2,500/tonne and a fixed cost of 50,000. Which is best? Why?
International Pricing and Performance, 2014-15

12

Case 2 Riva International


Francoise Gain, the directrice du marketing at Riva in Brussels, Belgium received astonishing
results from the consumer panels and distributor panels for September and October 1999. It
appeared that sales in Belgium and France of one of its main products, the crme base Riva, were
20% lower than the production level in the Belgian factory, which supplied both markets. No signs of
excess inventories in France and Belgium were noticed by the sales force during visits to
distributors.
Riva Belgium was the subsidiary of Riva Products Corporation, a large US-based multinational,
whose main business lines were related to the cosmetics and beauty care industry. The Belgian
subsidiary was in charge of both the French and the Belgian markets. In 1995 a scientific
breakthrough by the corporate R&D laboratories had led to the development of a new skin care
cream. Several patents had been filed and registered to protect the property.
In Europe, the industrial use of these patents had been licensed to Riva Belgium, which began
producing and selling the new skin care cream in February 1996. Sales increased quickly and the
new product was received favorably by Belgian and French consumers, who liked both its efficiency
and good price-quality ratio. Following instructions from international headquarters, the output of
Riva Belgium was intended exclusively to supply the Belgian and French markets as well as the
markets of French-speaking Africa.
In January 1999 the English subsidiary of Riva, UK Riva Ltd., started producing the same crme
base product. Hefty investments had been made in the English factory to ensure the best quality
and a large production capacity. This product had been launched at the high end of the market for
skin care cream. It was priced high and supported by heavy advertising and promotional expenses.
After a promising start, deliveries had been falling off since August 1999. Actual deliveries to the
English distributors steadily diverged from target sales.
Francoise Gain knew about this situation as she had been engaged as an internal consultant in the
launching of crme base Riva in the UK. However, what worried her most in November 1999 was
the gap between sales to consumer in France and Belgium and ex-works shipments. She informed
Jacques Graff, CEO of Riva Belgium and a member of the international board.
At first he did not seem to be bothered by such a gap, and showed little interest in this problem:
Francoise, you know: panel data, what does it really mean? Our product sells well and that is all
that matters! Tell your panel company to reconsider their samples and their data collection
procedures, and you will see that everything is in fact normal.
Francoise still made the decision to undertake an audit by an external consultant. His findings
exactly confirmed those of the panels and brought evidence of no big excess inventory at the
distribution level. Furthermore, it followed form the auditors investigations that deviations had to be
ascribed mostly to deliveries to two large wholesalers, who ranked among the five largest customers
of Riva Belgium.
One month after his talks with Francoise Gain, Graff received a confidential note, issued by the chief
executive of Riva UK. It stated that a member of his sales force had accidentally seen at an English
wholesaler, a carton containing crme base Riva with country-of-origin label Made in Belgium. The
wholesaler had been evasive if not reluctant to tell the sales representative where it came from.
Jacques Graff asked Francoise Gain to come to his office, and handed her the note without
comment.
I am not surprised by this note, answered Francoise, on the contrary, it is evidence for my
suspicions about parallel imports of our Belgian products to England. I have noticed that our sales
which vanished from Belgium and France were precisely equal to the drop in deliveries of UK Riva.
It is now quite clear that some of our wholesalers export to English distributors and that, before
doing this, they did not warn our sales and marketing group. I examined the cost structure of UK
Riva production and found that our product made in Belgium could be sold by Belgian wholesalers
to English distributors at a profit. Belgian distributors may price it at 15% below the English price
list, even though there are transport costs.
International Pricing and Performance, 2014-15

13

How is that possible? asked Graff, amazed.


The English crme base Riva was launched with heavy production and promotion costs, explained
Francoise. It is positioned at the high end of the market. Its price is higher than any of the
competing products. I told them before launching it that this retail price level was too high. But I
faced disapproval. The finance department at UK Riva wanted a quick return on investment, taking
into account the large cash outflows at the start. The marketing people, backed by the advertising
agency, claimed the opportunity to seize a segment that was at the very top end of the market and
which up to then had been neglected by competitors. Consequently my opinion was put aside.
Jacques Graff started to walk back and forth. As chief executive of the Belgian subsidiary, Im
delighted. Our plant works at full capacity. But as a member of the international board, I cant let
the English subsidiary plunge. What can we do?
One thing is certain, answered Francoise, We cannot prevent our customers, namely independent
wholesalers, from exporting to England if they wish to. As for the English distributors, one cannot
blame them for seizing a better-priced offer and simultaneously taking advantage of the promotional
effort of UK Riva! I know it is more easily said than done, but you should have defined, a long time
ago an international pricing strategy at the international board level.
It is never to late to do the right thing. Francoise, please prepare a report on your suggestions to
cope with this problem of parallel imports of the crme base Riva. Said Graff in conclusion.
Questions
1. Where do the problems of parallel imports in this situation come from?
2. What can be done to stop wholesalers exporting to England? What do you recommend?
3. Is it necessary to change the marketing strategy of crme base Riva, and especially its
price? Where and how?
4. How should the company organize for coordinating international marketing strategy across
markets?
Please prepare the suggestions for Francoise Gain to present to Graff and the international board.

International Pricing and Performance, 2014-15

14

Case 3

Billing Boats AS

Dag Bennett & Jon-Erling stvold


Norway has a long tradition of boatbuilding stretching back to before Viking times. This is due,
no doubt, to Norways proximity to the sea, ample forests, and long coastline. Among luxury sailing
yachts, the boats of Aker, Seil and Hyen are internationally known and admired. There are over 100
other boat builders in Norway that turn out 10,000 sailing yachts yearly. Although most Norwegian
sailboat companies are situated on the south coast, Billing AS is located in the town of Steinkjer,
roughly 450 kilometers northeast of Oslo. Billing was founded in the town partly because of the efforts
of the Norwegian Regional Development Council, which provided a loan of twenty million Norwegian
Crowns (Kroner, or NOK) to Billing AS, a privately owned company, to start its operations in the Nord
Trndelag area because of the regions relatively high rate of unemployment.
The present product line consists of three types of fibreglass sailboats. The Billing 16 is a coastal
sailing yacht with a new design approach. This approach is to provide a craft that enables a family to
make weekend and holiday cruises in coastal waters and also offers exciting sailing. The sailboat is
very fast. The Norwegian Yacht Racing Association stated in its test in which the Billing 16 was
judged to be the best in her class: She is delicate, lively, spacious, and easy to steer. She is well
balanced and has a high-quality interior. She is especially fast on the beat and lively to handle in a
free wind.
The Billing 16, a small day cruiser with berths for two adults and two children, has a sail area of
130 square feet, weighs one-half ton, and has an overall length of a little over 16 feet. The hull is
made of glass-reinforced plastic (GRP), and the mast and boom are made of aluminium. The boat
has a drop keel that is useful when negotiating shallow anchorages or when lifting the boat on a trailer
for transportation.
The Billing 33 is a relatively large motor sailer that sleeps seven people in three separate
compartments. The main saloon contains an adjustable dining table, a full galley, and a navigators
compartment and is separated from the fore cabin by a folding door. The aft cabin, entered by a
separate companionway, contains a double berth, wardrobe, and
lockers. The toilet and shower are situated between the fore cabin
and the main saloon. The boat has a sail area of 530 square feet,
weighs about five tons, and has an overall length of 33 feet 5
inches. A significant feature of the craft is that she is equipped
with a 47 horsepower diesel engine. The Billing 33 has the same
design approach as the 16. She is well appointed, with sufficient
space for seven people to live comfortably. An important feature is
that the three separate living compartments allow for privacy. In
addition however, the modern hull is quite sleek, making her an
excellent sailing yacht.
The Billing 35 was designed for a different purpose. Whereas the 16 and 33 are oriented toward a
family approach to sailing combining the features of safety and comfortable accommodations with
good sailing ability the 35 is first and foremost a sailing craft. It has only two births, a small galley,
and toilet facilities, but the emphasis is on sailing and racing rather than comfort. The boat has a sail
area of 420 square feet, weighs a little less than four tons, and has an overall length of 34 feet 6
inches. The boat is also equipped with a small (7 horsepower) diesel engine for emergency power
situations. The Billing 35 is a traditional Swedish design and, therefore, is directed solely to the
Swedish market.
Billing AS was established in order to manufacture sailboats for export. The Norwegian sailboat
market is small because of the short sailing season. Even so, the company has been successful in
marketing the 16 in Norway, although this was difficult in the beginning because of the lack of dealers.
To solve this problem, Billing persuaded several new car dealers throughout the country to handle the
Billing 16 on an agency basis. This involved the company providing one boat to each car dealer to put
in the showroom. The dealer then marketed the sailboats for a 25 percent sales commission.
Though some scoffed at this idea, the system produced reasonable sales and also made the
company known throughout Norway. This contributed to an arrangement with one of the largest
International Pricing and Performance, 2014-15

15

cooperative wholesale-retail operations in Norway. Like most cooperatives, this organization began
with agricultural products: however, the product range of the company now includes virtually every
conceivable consumer product. The present contract states that the cooperative will purchase eighty
Billing 16 boats per year for the next three years.
The Swedish market is served by a selling agent, although this representative has not been
particularly effective. Because Sweden is also the home of many sailboat builders, the company has
tried to market only the 35 in that country. In Denmark, France, Holland, Germany and the United
Kingdom, Billing has marketed the 33 through importers. These importers operate marinas in addition
to selling new sailboats. They purchase the boats from Billing for their own accounts and mark up the
price by 60 percent or more. In return for exclusive marketing rights in their respective countries, they
agree to purchase a minimum number (usually three or four) of the 33 design per year. None of these
importers is interested in marketing the 16 or the 35; the shipping cost for the 16 is too high compared
with the value of the boat, and there is little customer interest in the 35.
Billing is planning to introduce a new sailboat. Whereas the present products were designed by
people in the company who were relatively unknown (to the customers), the hull of the new sailboat
has been designed by an internationally known boat designer. The cost of these design services was
a $160,000 initial fee plus a $2,200 royalty fee to be paid for each boat produced. The new sailboat,
the Billing 29, has an interior quite similar to that of the Billing 33 because the same people designed
the interiors and decks of both sailboats.
The new boat is a motor sailer that sleeps six people in three separate compartments, is 28 feet 9
inches long, weighs 4 tons, and has a joined cabin space and a separate aft cabin, small galley, toilet
and shower facilities, and a 22 horsepower diesel engine. Because a new construction technique
greatly reduces the amount of fibreglass required, the variable costs to construct the boat are only 60
percent of the cost for the 33. With a preliminary
selling price of 195,000 Norwegian Kroner, the
Billing 29 is receiving favourable attention, and
the company is concerned that sales may have
an adverse effect on sales of the 33.
The company categorizes the marketing
expenses as fixed costs because allocating
these expenses to specific products is difficult. The major element of the program is participation in
international boat shows in London, Paris, Hamburg, Amsterdam, Copenhagen, and Oslo. The initial
purpose of participating in these shows was to locate suitable importers in the target markets;
however, this effort is maintained in order to support the marketing programs of the importers. The
importers are also supported by advertising in the leading yachting magazines in the national markets.
Billings selling effort consists mostly of servicing the importers and agents and staffing the exhibitions
at the boat shows. Most of the sales promotion costs are the result of the sales brochures that the
company has developed for each boat. The costs are increased however by having to print a relatively
small number of each brochure in Russian, Polish, French, English, German and Swedish. The
brochures are provided to the agents and importers and are used at the boat shows.
Enter the Dragon
At a recent boat show held at Earls Court Exhibition Centre in London, after a long series of
discussions, Billings company president received a proposal from the president of Sea Dragon Boats,
a Chinese company located in the formerly Portuguese colony of Macau. The company is like Billing
in that it sells several hundred traditional style sailing craft per year within China, and to the Chinese
communities around Asia. But although the company has made boats in the traditional manner for
over 200 years, it is beginning to shift its focus: from commercial coasting boats, to boats configured
as luxury yachts, and from wood construction to fiberglass and composites. For that reason it recently
built a modern fiberglass and composites production facility in Zhuhai Special Economic Zone (SEZ).
At Earls Court, Sea Dragon proposed entering into a 49-51 joint venture for Sea Dragon to
produce the B-29 for the Chinese market. Billing would need to transfer its design and production
expertise to Sea Dragon. In return, Sea Dragon would handle production and marketing across Asia
for the B-29. The advantages of the JV are that Macau has direct linkages with the Zhuhai SEZ, in
which taxes are not paid on goods that are exported, so export prices are generally competitively low.
Sea Dragon also said that its production costs in Zhuhai would be 25 percent lower than Billings own
International Pricing and Performance, 2014-15

16

Norwegian production cost, and suggested that this would make Chinese-produced boats profitable in
the European market, even after transportation costs to Europe.
Sea Dragon had previously hosted Billings executives at the Macau Yacht show which showed
Billings that there was rising demand for sailing yachts in Asia, that yachts were assuming a rather
global character and style, and that Chinese buyers were keen to obtain the latest in yacht designs.
Billings executives also felt the Chinese factory was suitable for production of the B-29, though the
production workers would need careful training.

Going forward
The company is in the process of preparing its production and marketing plan for the coming year
in order to arrange financing. The president is strongly committed to the continued growth of the
company, and the market indications suggest that there is a reasonably strong demand for the 16 in
Norway and for the 33 in most of the other national markets. The sales results of the previous and
present years are shown in Table 1: the profit statement for the present year is shown in Table 2.

Table 1

Billing AS Sales
Last Year

B-16
B-29
B-33
B-35

Present Year

No.

Ave
a
Price

Revenue

200
30
4

28,500
341,000
199,900

5,700,000
10,230,000
799,600

No.
240
36
5

Average
a
Price

Revenue

29,700
356,000
207,900

7,128,000
12,816,000
1,039,500

16,729,600
a

20,983,500

All prices are manufacturers prices: prices and revenues are in Norwegian Kroner: 1.00 NOK = U.S. $0.175

Table 2

Billing AS Profit Statement for Present Year


As a
percentage
of sales

In NOK
Sales Revenue
Variable costs (direct labor and materials)
Fixed costs:
Production (buildings, production management salaries, etc.)
Product design costs (salaries, prototypes, testing, consultants)
Administration costs (salaries, insurance, office expenses)
Marketing costs (salaries, advertising, boat shows, sales promotion,
travel, etc.)
Total Fixed costs
Profit before taxes
a

20,983.500
13,640.000

65.0%

945.000
1,345.000
650.000

4.5
6.4
3.1

2,300.000

11.0

5,240.000
2,103.500

25.0
10.0

All prices are manufacturers prices: prices and revenues are in Norwegian Kroner: 1.00 NOK = U.S. $0.185

The main problem in developing the plan for next year is determining the price for each sailboat in
each market. In previous years, Billing had established its prices in Norwegian Kroner, on an exfactory basis. Management has become convinced however that it must change the terms of its prices
in order to meet competition in the foreign markets. Thus, the company has decided to offer CIF
prices to its foreign customers in the currency of the foreign country. The use of truck ferries between
Norway and Sweden, Denmark, Poland, Russia and Germany is expected to make this pricing
approach more competitive.

International Pricing and Performance, 2014-15

17

Billing would also like to assure its agents and importers that the prices will remain in effect for
the entire year, but the financial manager is concerned about the possible volatility of exchange rates
because of the varying rates of inflation in the market countries. The present exchange rates,
expected inflation rates, and the estimated costs to ship the Billing 35 to Stockholm and the Billing 29
and 33 to the other foreign marinas are shown in Table 3.

Table 3 Shipping Costs for Billing 35 to Sweden and Billing 29 and 33 to Other Countries
Present Exchange
Rates in Norwegian
Kroner

Expected
Inflation
Rate
3%

Estimated Freight and


Insurance Costs per Boat

Denmark

Danish Kroner = 0.73

15,500 NOK

Russia

Rouble = 4.22

15

25,000 NOK

Poland

Zloty = 2.02

22

19,000 NOK

Sweden

Swedish Kroner = 0.73

12,500 NOK

United

English Pound = 11.31

24,500 NOK

Euro = 7.91

22,500 NOK

Kingdom
Germany
Norway

A second difficulty in pricing the product line for Billing is to establish a price for the 29 that will
reflect the value of the boat but will not reduce the sales of the 33. There are three schools of thought
concerning the pricing of motor sailers. The predominant theory is that price is a function of the overall
length of the sailboat. A number of people, however, believe that the overall weight of the craft is a
much more accurate basis. The third opinion argues that price is a function of the special features and
equipment. Table 4 was prepared by a Swiss market research firm and shows the relationship
between present retail prices and the length of new motor sailers in the West European market.

Questions for Discussion


1. Determine the manufacturers selling price in the Norwegian market for all Billing
sailboats for the coming year. Explain your rationale for setting prices.
2. Determine the CIF prices, in the foreign currencies for the B-29 and B-33 to the
importers in Denmark, Sweden, Poland, the UK, Germany, and Russia.
3. Develop a production plan (how many of each type of boat) for Billing AS for the
coming year. Support your plans by using relevant marketing metrics, e.g. sales,
margins, company profits, etc.
4. Using your production plan, develop a projected profit statement for the coming year.
5. Should Billing enter the Joint Venture with Sea Dragon?
Explain your answer thoroughly.

International Pricing and Performance, 2014-15

If so, on what basis?

18

Table 4 Retail Price in the European Market of sailing yachts as a function of Length

Note: All boats to the right of the bold line are priced above $150,000.

International Pricing and Performance, 2014-15

19

To:

International Pricing and Performance Students

From: Don Corleone


Date:

27/01/2015

Re:

Group Company Project

This project is an opportunity to investigate a firms international marketing activities and the effects on
the companys financial situation. You may choose any firm, provided that you can get both marketing
and financial information about it. For that reason, it might be best to choose a publicly traded firm, and
one that is currently doing something newsworthy internationally.
Each group will review the organizations current position and likely future strategies, applying relevant
models/theories/analysis schemes as appropriate.
Methods
1.

Obtain a business or start-up guide. These typically lay out all the essentials of successful
business (at least in bankers views). This is for background information to see what bankers want
to know about a company, and what kind of issues they feel are important.

2.

Choose a firm--probably publicly traded so that company accounts can be obtained. It should also
be marketing-oriented. A particular product category or division within a firm may also be selected
so that the project is more manageable. (newsworthy events such as the introduction of a new
product/brand/technology to a foreign market make good starting points).

3.

Describe the firms industry: Structure, Competition, Factors required for success, Major industry
developments, etc. Groups should draw on readings, lectures and discussion and should use any
information relevant to their project. Quantify whatever possible.

4.

Outline the companys present marketing strategyand critique it. Quantify whatever possible.

5.

Discuss the activity under investigation (new market entry, new product, etc.) and the likely results
of that activity. Reflect further on how this will affect the companys overall situation. Quantify, etc.

6.

Clearly show how your work has resulted in new or better understanding of the financial implications of
marketing activity.

Assignment
Give a 20 minute presentation to the class in session 11 or 12
Provide a written report of 2000-4000 words (excluding appendices) detailing findings, conclusions and
implications, incorporating feedback, one week or less after presentation.
Evaluation Criteria
1. Effective communication (verbal and written) in response to the brief;
2. Accuracy, currency, and relevance of information;
3. Realistic and supportable conclusions (suitable to presentation to a company board);
4. Evidence of good team-work and organization, and contribution from all members;
5. Teach something to the class that they did not already know

International Pricing and Performance, 2014-15

20

FORMULAS FOR ASSESSING MARKETING ACTIVITY


Sales volume (SV)
Increasing the quantity sold (sales volume) is a driving force behind much marketing activity.
There are good reasons for this:
Increased sales are an indicator of success and most companies want to grow
Increased market share shows competitive success.
If sales do not match production, capacity will be under-used or customers
disappointed.
Net proceeds from sales (S)
Increased sales volume may show competitive success but net proceeds from sales show the
cash flowing into the company. It is the value of sales made, less returns. The popular idea of
everyday low prices can increase sales but not always by enough to cover lost margins. Sales
value and sales volume sometimes do not move hand in hand. A company that increases
sales by 5% by cutting prices by 10% increases sales volume but reduces sales value:
Action
Price ($)
Sales (units)
Sales ($)

Regular
price

10%
discount

Percentage
change

1.00
100
100.00

0.90
105
94.50

(10.0)
5.0
(5.5)

Gross profit (GP)


Gross profit is the difference between net proceeds from sales (S) and the cost of goods sold
(COGS). The costs are the variable costs incurred each time a product is made. It typically
includes raw materials, labour, energy, and so on.
The interplay between gross profit and price is dramatic. The 10% price cut has much more
impact on gross profits than sales:
Action

Regular
price

10%
discount

Percentage
change

Sales
Price ($)
Sales (units)
Sales ($)

1.00
100
100.00

0.90
105
94.50

(5.5)

Cost of goods sold


Unit cost ($)
Sales (units)
Cost ($)

0.50
100
50.00

0.50
105
52.50

5.0

50.00

42.00

(8.0)

Gross Profit
Net profit (NP)

Gross profit shows the contribution made to the company by each unit sold but neglects many
other trading expenses. These include fixed costs like rates, staff, and so forth, and strategic
expenditure like research and development. Interest paid on debts is sometimes not included
because this depends upon the capital structure of the company.

International Pricing and Finance 2013-14

The fixed cost means that net profit is more volatile than gross profit. This sensitivity
encourages companies to convert some of their fixed costs into variable ones, for example,
hiring trucks rather than buying them:
Regular
price

Action
Sales ($)

10%
discount

Percentage
Change

100

94.5

(5.5)

Cost of goods sold ($)

50

52.5

(5.0)

Gross profit ($)

50

42.0

(8.0)

Other trading expenses

40

40.0

0.0

Net profit

10

2.0

(80.0)

Return on sales (ROS)


ROS = NP/Sales
Return on sales (or margin) measures the ratio of profit to sales. This can be useful in
comparing results over time. From year to year a company may note changes in sales and net
profit but not fully understand profitability, so ROS is a useful measure. A 10% price drop
increases sales volume but reduces return on sales:
Regular
price

Action
Sales ($)
Net profit ($)

100
10

Return on sales ($)

10.0

10%
discount

Percentage
change

94.5
2.0

(5.5)
(80.0)

2.1

Return on capital employed (ROCE)


Some companies, like grocery chains, can have low returns on sales but are very profitable.
They achieve this because the critical measure is return on capital employed. This is the
product of return on sales and the speed that assets are turned over (the activity ratio):
ROCE

ROS

ACTIVITY

NP
Sales

Sales
Assets

By turning over its assets four times each year a supermarket can achieve a 20% return on
capital employed although its return on sales is only 5%:
Supermarket ROCE

=
5
x 100 = 20 per cent
=
100
25
In contrast, an exclusive clothes shop has very high margins but turns its assets over slowly.
Clothes shop ROCE

=
=

40
100

100
300

= 13.3 per cent

These are powerful ratios that can define how a company can do business. Aldi, the German
discounter, succeeds with margins half those of many grocers. Its margins are very low (2-3%)
but it keeps its return on capital employed high by high stock turnover and keeping its other
International Pricing and Performance, 2014-15

22

assets low it has a small range of products, buys in great bulk and trades in less costly goods
than traditional grocers.
The main benefits from increasing asset turnover are: improved return on capital employed and
reduced fixed costs. The firm hiring trucks rather than buying them reduces its fixed costs and
therefore its sensitivity to volume changes. Also, by reducing its assets it increases its activity
ratio and return on capital employed. Increased assets turnover is one of the direct benefits of
Just in Time (JIT) stock management, lean manufacturing and re-engineering. JIT cuts down
the assets tied up in stock, and improves quality. Lean manufacturing reduces investment in
plant while re-engineering can reduce capital investments, costs and working capital.
Capital cost covered (C3)
Assets cost money and return on capital costs takes that into account. It is a powerful tool
because it combines three critical business ratios:
C3 = ROS x ACTIVITY x CAPITAL EFFICIENCY
C3

NP
Sales

Sales x
Assets

Assets
Cost of capital

The cost of capital is the weighted average cost of debt and shareholder equity. For a
supermarket the figures could be:
Debt
(after tax)

Equity

Debt/equity split

0.50

0.50

Cost of capital (%)

4.00

16.00

Partial cost of capital (%)

2.00

8.00

Weighted average
cost of capital (%)

10.00

At 4%, debt cost less than equity (16%), so by having both, the firm reduces the average
weighted capital cost to 10.00%. A firm can reduce its average cost of capital by taking out
more debt but the amount used is limited by the risks involved.
Debt is relatively cheap because it bears no risk; equity is relatively expensive because it bears
the whole risk of the business. If a firm tries to increase its lending too much, a bank, or other
lending body, will refuse to give more money or demand a higher interest rate.
For the supermarket an asset of $25m would cost $25m x 010 = $2.5m to finance. Therefore:
C3 =

5 x
100

100 x
25

25
2.5

NP
CC

= 2.0

In other words, the net profit is double the capital cost the company is healthy. This ratio is
more discriminating than the familiar distinction between profit and loss. If the capital cost
covered is below zero a firm is making a loss. A capital cost covered above zero indicates a
profit. However, capital cost covered between zero and one shows a firm is in profit but not
adding value its profit does not cover its cost of capital.

International Pricing and Performance, 2014-15

23

Economic value added (EVA)


Economic value added makes a direct comparison between the cost of capital and net profits.
It is a simple idea that has hugely increased the value of companies using it. Christened EVA
by Stern Stewart & Company of New York, many leading companies see it as a way of
examining the value of their investments and strategy. Amongst early users are Coca-Cola,
AT&T, Quaker Oats and Briggs & Stratton. William Smithburg, Quakers former CEO explains
that EVA makes managers act like shareholders.
EVA = Net profit Cost of capital
For the supermarket:

EVA = 5 2.5 = $2.5m

Profit, economic value added and capital cost covered, are related concepts: profit shows how
a companys trading is going, economic value added shows a companys wealth creation in
monetary terms, while capital cost covered gives the rate of wealth creation.
C3

EVA

NP

Economic state

>1

>0

>0

II

1>0

<0

>0

III

<0

<0

<0

A profitable company which is adding


economic value.
A company whose profits do not cover
the cost of capital. No economic value
is being added.
A loss-making company.

Category

The supermarket is a clear category I company; this contrasts with the clothes store whose
capital is more expensive because the clothes market is cyclical and fashion-dependent:
Clothes store

Debt

Equity

Debt/equity split

0.25

0.75

Cost of capital (%)

5.0

20.0

Partial cost of capital (%)

1.25

15.1

Weighted average
cost of capital (%)

16.25

Assets of $300m give a capital cost of $48.75m.


C3

EVA ($m)

Supermarket

2.0

2.5

Clothes store

0.8

(9.5)

40

II

NP ($m)

Category

__________________________
Sources: Alan Wolfe, Price Wars, Marketing Business (November 1991); Shawn Tully. The real key to creating
wealth, Fortune (20 September 1993), 24-30. Raj Srivastava, Emory University, Liao & Feng, An all-around Analysis
of EVA: An Evaluating Indicator of Operating Performance, China-USA Business Review, 2005

International Pricing and Performance, 2014-15

24

ORAL PRESENTATION ASSESSMENT CRITERIA

Category

Below
40%

Assessment Mark
40-49%

50-59%

60-69%

70-79%

Above
79%

Content, of which:
Introduction
Main Body - information
Main Body - coverage
Main Body - analysis
Conclusions & Recommendations
Q & A Session
Presentation Skills, of which:
Graphics/Visual Aids
Delivery
Teamwork
Conviction
Timing
Overall Quality of Presentation
Overal Grade/Mark

International Pricing and Performance, 2014-15

25

Harvard System Referencing


All students will use the Harvard System of referencing. References are indicated in the
text as either Recent work (Smith 2011) or Recently Smith (2011) has found. Where a
direct quotation is used the page number should be noted e.g. (Smith 2011 pg. 17). All
such references should then be listed in alphabetical order at the end of the paper in
accordance with the following conventions:
1. Books
surname, forename and/or initials, (year of publication), title, place of publication:
publisher,
e.g. Burns, P. (2011), Entrepreneurship and Small Business, Basingstoke, Palgrave.
2.Journal Articles
surname, forename and/or initials, (year) title, journal name, vol, issue, pages,
e.g. Vargo, S. and Lusch, R. (2004) Evolving to a New Dominant Logic for Marketing
Journal of Marketing Vol.67 No.1 pp.1-17
3.Contributions in books, proceedings, etc.
surname, forename and/or initials, (year), title, In:, editors surname and/or initials,
book title, place of publication: publisher, pages,
e.g. Doyle, Peter (2003), Managing the Marketing Mix. In: Baker, Michael J, ed., The
Marketing Book5thEdn, London: Heinemann Ltd., pp. 227-267.
4.Websites / Online resources.
Author/Editor surname, forename and/or initials, (year), title[online], place of
publication: publisher. Available at: URL, [accessed date]
e.g. Baker, Michael J. (2011), Individual Branding, Westburn Dictionary of Marketing
[online], Helensburgh: Westburn Publishers Ltd. Available at:
http://www.westburn.co.uk/tmd/searchDetails.cfm?PageNum_Record=180 [Accessed
14th February 2011].

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26