Which of the following circumstances favour “Sprinkle Approach” for launching products in international markets?

A. The life cycle of the product is relatively short.
B. The competitive intensity of the market is very high with strong and fierce competitors
C. Cost of entry in markets is relatively high.
D. Firm has large resources to manage simultaneous product launch in multiple markets.
E. The size of the target market is small with low growth potential.

Choose the most appropriate answer from the options given below:

Correct option is A

The Sprinkle Approach (also known as the simultaneous or global rollout approach) is a strategy in international marketing where a company launches a product in multiple international markets at the same time rather than sequentially. This approach is typically used under the following circumstances:

• (A) The life cycle of the product is relatively short: Since the product may quickly become obsolete or face competitive saturation, a simultaneous launch helps in maximizing profits before the decline phase.

• (B) The competitive intensity of the market is very high with strong and fierce competitors: A global presence is necessary to build brand recognition and compete aggressively.

• (D) Firm has large resources to manage simultaneous product launch in multiple markets: Sufficient financial, operational, and logistical capacity is essential to support simultaneous distribution, promotion, and adaptation needs.

Information Booster:

• Definition: It refers to launching a product in several countries at once to capture market share quickly and build global brand recognition.

• Time-sensitive Products: Products like technology gadgets, fashion items, or seasonal goods often adopt this approach.

• Global Branding Strategy: Helps in standardizing the product image across countries.

• Risk Distribution: Revenue generation is spread across multiple markets, reducing dependence on a single economy.

• Economies of Scale: Large-scale production and marketing reduce per-unit costs.

• Resource Intensive: Demands well-coordinated logistics, marketing efforts, and support systems.

• Brand Leadership: Helps in positioning the brand as an industry leader by leveraging the first-mover advantage.

Additional Knowledge:

• (C) Cost of entry in markets is relatively high:
  This condition does not support the sprinkle approach. High entry costs make simultaneous launches risky and financially burdensome. Firms prefer staggered (Waterfall) entry to manage costs efficiently.

• (E) The size of the target market is small with low growth potential:
  A market with low potential doesn’t justify the effort and resources needed for simultaneous launch. It is more feasible to ignore or delay entry in such markets until core markets are established.