5 pages country analysis

Chapter 7 - INTERNATIONAL STRATEGIC PLANNING

Marketing Strategy: A process by which organizations concentrate their resources on a plan of action to increase sales and achieve competitive advantage. A good marketing strategy should be drawn from market research and focus on the right marketing mix (4Ps). A marketing plan is the practical application of the marketing strategy.

Marketing planning activities take place at the Corporate level, Divisional level, Business Unit level as well as Product level.

Developing an International Marketing Plan: Decisions are closely linked to the product’s life cycle and the market-entry strategy selected.

Target Marketing: The process of focusing on consumers that company can serve most effectively. A company’s target market will most likely buy what the company sells.

Market Segmentation: Identifying & grouping target markets into homogenous groups that are similar with regard to key traits.

International Market Segmentation: Identifying countries & consumers that are similar with regard to key traits.

Requirements for international segmentation:

1. Measurability: easily identified and measurable.

2. Substantiality: the segment should be large enough to warrant investment.

3. Stability over time: rapidly changing world environment where products are in different life-cycle stages and where preferences are changing with the Internet and e-commerce.

4. Accessibility: Ability to communicate with & serve the target market –the market segment must be open to international companies and it must be reachable.

5. Actionability: market segment should respond to the marketing strategies used.

6. Differential response: Segments should respond differently from other market segments to the tailored marketing strategies.

International market segmentation takes place at 2 levels – Macro and Micro segmentation.

Macro segmentation: Focusing on the entire country

1. Market potential: Can be evaluated based on economic development using such indicators as GDP, market size, and consumer buying power.

2. Political, legal, and financial environment: Countries can be evaluated based on several factors that we learned in previous chapters. Companies are not likely to perform well in markets with high political risk or ambiguities in the legal system.

3. Marketing support infrastructure: Country attractiveness is assessed based on the availability and reliability of distribution & logistics providers, competent supply chain partners, and advertising and information technology.

4. Brand/company franchise relative to competing products and companies: Markets where a brand name is already established with local consumers offers high potential to the company.

5. Degree of market fit with company policies, goals, and resources: If a company has limited resources, it must select markets that are perceived as the most appropriate for their goals and that have the lowest level of risk.

Micro segmentation: Focusing on the Target Consumer.

1. Demographic: Statistics that describe the population such as age, gender, race, ethnic group, national origin, income, education, occupation, social class, life-cycle stage, and household size. Easy to measure and compare across countries.

2. Psychographic: Based on different behavioral and psychological factors such as values, opinions, interests & attitudes. Hard to measure.

3. Geographic segmentation: Can be performed at the country level (macro segmentation), as well as consumer level (micro) within the country.

4. Benefit segmentation: Involves understanding the motivation behind consumer purchases, in order to be able to send the appropriate message to the relevant market segments.

5. Usage and user status segmentation: Usage segmentation is based on the usage rate for the product, targeting the "heavy users". User status segmentation refers to the familiarity of the consumer with the product (ex: ex-users vs. non-users vs. potential users vs. regular users)

Target market decisions: The target market strategy

A. Differentiated strategy: Companies identify several market segments that want different benefits from a product and target each segment with different brands using different marketing strategies.

B. Concentrated strategy: Selecting only one market segment and targeting it with one single brand. Also includes niche marketing.

C. Undifferentiated strategy and standardization: Product is aimed at all the markets using a single product strategy regardless of number of countries and the locations where it is marketed.