final review
tiantian 123
Chapter18GlobalMarketing.pptx
Global marketing
Chapter 18
outline
Marketing
Notes about this chapter
Marketing Review
Marketing Mix
Promotion (Communication Issues)
Distribution Issues
S.T.P.
(Market Research is embedded into this process)
Notes about chapter 18
MAIN THEMES:
Theodore Levitt – “The Globalization of Markets” – proposed that differences are disappearing
The general tension between standardization and localization
Emergence of consumer/customer segments that are sub-national and may be distinct pockets linked globally (instead of country by country)
Marketing review
The marketing mix
Product/Service – what you are marketing
Price – the price you set for the market
Promotion – the methods you use to communicate with the potential customers
Placement – the distribution channels you use to reach the customer
Processes – the processes used by the customer to obtain and use your product/service
People – the people involved in the value chain to help deliver the product/service from producer to consumer
Place – the physical surroundings of the place of business
Distribution issues
Channel Length
The number of intermediaries between producer and consumer
Channel exclusivity
Or “locked up” Channel
SOME CHANNELS THAT ARE DIFFICULT TO ACCESS
Channel density
THE NUMBER OF SELLERS OF A PRODUCT IN A GIVEN MARKET AREA:
Exclusive
Extensive
Expansive
COMMUNICATION ISSUES
Message is not received
Message is not understood
Message is not interesting
Message is drowned out by some noise
Marketing “push” and “Pull”
Push (incentivize resellers) strategies tend to be emphasized:
For industrial products or complex new products.
When distribution channels are short.
When few print or electronic media are available
Pull (communicate directly with consumers) strategies tend to be emphasized:
For consumer goods.
When distribution channels are long.
When sufficient print and electronic media are available to carry the marketing message
Segmentation, Targeting, Positioning
How to identify like groups of potential customers?
How to chose the groups to target?
How to segment those groups?
How to position the brand in the mind of the customer?
Market Segmentation
The process of identifying groups of potential customers with homogeneous characteristics who are likely to exhibit similar responses to a company’s marketing mix.
Targeting
The process of evaluating segments and focusing marketing efforts on a country, region, or group of people that has significant potential to respond
Focus on the segments that can be reached most effectively, efficiently, and profitably
Demographic Segmentation
Income
Population
Age distribution
Gender
Geography
Ethnicity
Education
Occupation
What are the trends?
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Demographic Segmentation (cont.)
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A widening age gap exists between the older populations in the West and the large working-age populations in developing countries
“Stage-of-life” issues (e.g. health, child-bearing, etc.)
Risk perspective
Shopping habits – e.g. mediums, effort, loyalty, etc.
Segmenting by Income and Population
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Income is a valuable segmentation variable
2/3s of world’s GNP is generated in the Triad but only 12% of the world’s population is in the Triad
Do not read into the numbers
Some services are free in developing nations so there is more purchasing power
For products with low enough price, population is a more important variable
Age Segmentation
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Global Teens-between the ages of 12 and 19
A group of teenagers randomly chosen from different parts of the world will share many of the same tastes, mediums of communication and responses
Global Elite–affluent consumers who are well traveled and have the money to spend on prestigious products with an image of exclusivity
Geographic Segmentation
Environmental factors that drive demand for particular goods and services, according to:
Climate and topography
Urban vs. rural
Unique regional characteristics (such as linguistic groups, etc.)
Behavioral Segmentation
Focuses on whether people buy or use a product, and how often and how much:
Users status:
Current user, potential user, first time users, or users of competitors products
Usage rates:
Heavy, light or non-user
Usage time and place:
How and when the product or service is consumed
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Psychographic Segmentation
Grouping people according to attitudes, values, and lifestyles
SRI International and VALS 2
Porsche example
Top Guns (27%): Ambition, power, control
Elitists (24%): Old money, car is just a car
Proud Patrons (23%): Car is reward for hard work
Bon Vivants (17%): Car is for excitement, adventure
Fantasists (9%): Car is form of escape
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Psychographic Segmentation
The Euroconsumer:
Successful Idealist–Comprises from 5% to 20% of the population; consists of persons who have achieved professional and material success while maintaining commitment to abstract or socially responsible ideals
Affluent Materialist–Status-conscious ‘up-and-comers’ – many of whom are business professionals – use conspicuous consumption to communicate their success to others
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Benefit Segmentation
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Benefit segmentation focuses on the value equation
Value=Benefits/Price
Based on understanding the problem a product solves, the benefit it offers, or the issue it addresses
Targeting
Targeting is the process of assessing the attractiveness of the identified segments and associated markets to pursue
Assessing Market Potential
Three basic criteria:
Current size of the segment and anticipated growth potential
Potential competition
Compatibility with company’s overall objectives and the feasibility of successfully reaching the target audience
Current Segment Size and Growth
Is the market segment currently large enough to present a company with the opportunity to make a profit?
If the answer is ‘no,’ does it have significant growth potential to make it attractive in terms of a company’s long-term strategy?
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Potential Competition
Germany’s DHL tried to enter the U.S. package-delivery market in 2003; to achieve scale, DHL acquired Airborne Express. However, management underestimated the dominance of the entrenched incumbents FedEx and UPS. DHL finally withdrew from the United States market in 2008 after losses totaled about $10 billion.
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Is there currently strong competition in the market segment?
Is the competition vulnerable in terms of price or quality?
Feasibility and Compatibility
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Will adaptation be required? If so, is this economically justifiable in terms of expected sales?
Will import restrictions, high tariffs, or a strong home country currency drive up the price of the product in the target market currency and effectively dampen demand?
Is it advisable to source locally? Would it make sense to source products in the country for export elsewhere in the region?
Is targeting a particular segment compatible with the company’s goals, brand image, or established sources of competitive advantage?
Framework for Selecting Target Markets
Global marketing expert David Arnold has developed a framework that goes beyond demographic data and considers other, marketing-oriented assessments of market size and growth potential. Instead of a “top-down” segmentation analysis beginning with, say, income or population data from a particular country, Arnold’s framework is based on a “bottom-up” analysis that begins at the product-market level. After marketing-model drivers and enabling conditions have been identified, the third step is for management to weigh the estimated costs associated with entering and serving the market with potential short- and long-term revenue streams. Does this segment or country market merit entry now? Or, would it be better to wait until, say, specific enabling conditions are established?
The term product-market refers to a market defined by a product category; in the automotive industry, for example, phrases such as "luxury car market," "SUV market," and "minivan market" refer to specific product-markets. By contrast, phrases such as "the Russian market" or "the Indian market" refer to country markets.
Marketing model drivers are key elements or factors required for a business to take root and grow in a particular country market environment. The drivers may differ depending on whether a company serves consumer or industrial markets. Does success hinge on establishing or leveraging a brand name? Or, is distribution or a tech-savvy sales staff the key element? Marketing executives seeking an opportunity must arrive at insights into the true driving force(s) that will affect success for their particular product-market.
Enabling conditions are structural market characteristics whose presence or absence can determine whether the marketing model can succeed. For example, in India, refrigeration is not widely available in shops and market food stalls. This creates challenges for Nestlé and Cadbury Schweppes as they attempt to capitalize on Indians' increasing appetite for chocolate confections. Although Nestlé's KitKat and Cadbury's Dairy Milk bars have been reformulated to better withstand heat, the absence or rudimentary nature of refrigeration hampers the companies' efforts to ensure their products are in saleable condition.
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Demographic information is a starting point but not the decision factor
Product-Market must be considered
Market defined by product category
Marketing model drivers must be considered
Factors required for a business to take root and grow
Are there any enabling conditions present?
Conditions whose presence or absence will determine success of the marketing model
9 Questions for Creating a Product-Market Profile
Who buys our product?
Who does not buy it?
What need or function does it serve?
Is there a market need that is not being met by current product/brand offerings?
What problem does our product solve?
What are customers buying to satisfy the need for which our product is targeted?
What price are they paying?
When is the product purchased?
Where is it purchased?
Positioning
Locating a brand in consumers’ minds over and against competitors in terms of attributes and benefits that the brand does and does not offer
Attribute or Benefit
Quality and Price
Use or User
Competition
General Global Positioning
| Global | consumers who want offerings that have the same attributes and qualities available in development markets, and willing to pay global prices |
| Glocal | demand products that are near global standards, but willing to pay slightly less than global consumers do. |
| Local | Consumers are happy with local quality and local prices |
| Bottom | Absolute lowest prices |
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