Running head: CONSUMER ANALYSIS, MARKET SEGMENTATION 1
Amazon: Consumer Analysis, Market Segmentation and Market Coverage
BUSI 520
Liberty University
Dr. Wilson
15 September 2018
CONSUMER ANALYSIS, MARKET SEGMENTATION 2
Q5. Explain how potential global markets will be evaluated for potential
entry. (Ch. 8)
"Many companies prefer to sell to neighboring countries because they understand
them better and can control their entry into the global market cost more effectively"
(Kolter & Keller, 2016, p. 221). Psychic proximity refers to countries that are similar in
language, laws, and culture; most U.S. firms prefer to sell to countries like Canada,
England, and Australia rather than to European countries. On the other hand, psychic
proximity plays a vital role in these choices as well. Companies should be cautious when
choosing potential global markets according to cultural distance. By making a decision of
this magnitude, a company could potentially overlook a better possible market choice;
they may explore only the real differences that can put their company at a disadvantage.
Amazon in recent years has crossed over into the U.K., Germany, and other parts
of Europe, fueling the growth of their company. A new challenge faces Amazon with their
entry into the global markets; issues arise when developing a global product,
communications, and distribution strategies. Even though Amazon was successful in
infiltrating the global market, not all companies will have the same success that Amazon
has had. "For Amazon to stay relevant on the global markets, they will have to know the
products and services that can be easily standardized and take the appropriate approach to
achieve these strategies" (Kolter & Keller, 2016, p. 232).
Hopkins (2017) states that "globalizing your business can result in the company
potential to expand" (p.158). However, with that potential, there is also an enormous task
that comes with the increased complexity of connectivity as well as the interrelation of
other countries and companies. The expansion into the global market is a feasible feat.
CONSUMER ANALYSIS, MARKET SEGMENTATION 3
The real challenge occurs when conducting the necessary research and planning to
accomplish a smooth transition in the global market which will be beneficial for the
company.
Actionable intelligence can be created by Amazon by incorporating their insights
that can increase offers, interactions, and superior customer service retention. Even
though there is agreeance between marketing leaders companies still struggle to realize
the potential for these benefits. According to Zoghby & Schneider (2012), “the 2012
CMO Insights Survey, sponsored by Accenture, of the 400 senior marketing respondents,
72 percent agreed to the importance of turning customer data into actionable insight, but
only 12 percent said they are leading edge at it” (p. 2).
Companies such as Amazon possess the capability to continuously control their
ever-expanding customers, transactions, and digital data generated from point of sale and
mobile and social platforms. Companies that lack control their ever-expanding customers,
transactions, and digital data generated from point of sale and mobile and social platform
lose the capability to survive in the future marketplace. In addition, positive customer
insights ensures an increase to sales and customer retention. This can be done while
decreasing operational cost (Zoghby & Schneider, 2012, p. 2).
Yet even as the volume and types of data that can lead to better insights continue
to expand, companies are challenged to reconcile and use that data to improve business
results. After a decade of innovation in the analytics area, companies often find they have
a number of point analytics solutions that are costly to maintain and difficult to integrate
CONSUMER ANALYSIS, MARKET SEGMENTATION 4
into a holistic view of the customer. In fact, a recent Accenture report detailed how
fragmented analytics efforts undermine value creationii. Further, just as the need for data
analytics has exploded, it has become increasingly difficult to find and retain the right
data and analytics talent to provide ongoing enterprise support.
Q6. Discuss the most likely mode or modes of global market entry (Ch. 8)
The most likely mode or modes of global market entry are equity and non-equity
modes. "Non-equity mode includes exporting, direct export, indirect exports, contractual
agreements, licensing, franchising, outsourcing, and co-marketing. For many companies
new to the international business, exporting is the market entry method of choice"
(Schlegelmilch, 2016, p. 45). Exporting is the first choice for most companies' mode of
global market entry. Choosing export as a mode of global market entry offers more
flexibility because fewer resources are needed, and risks are limited.
If the expectation of the export market is not what the company anticipated, then
it is relatively easy for the company to withdraw from the market. "However, in many
cases, companies tend to combine modes of entry, with joint ventures or wholly owned
subsidiaries" (Schlegelmilch, 2016, p. 45). Many businesses have the potential and the
CONSUMER ANALYSIS, MARKET SEGMENTATION 5
capabilities to be successful while being sustainable if the only mode of global market
entry is the exporting of their products.
Another viable option for a company to be successful and sustainable is by
adopting other international market entry modes. Hopkins (2017) identifies other
optional modes that companies may take into consideration when making entry into the
global market such as "turnkey projects, licensing, franchising, joint ventures, or by
utilizing wholly owned subsidiaries as mention before" (p. 210). The use of turn-key
projects is a dynamic mode to be used to infiltrate global market entry.
Turn-key projects usually require the involvement of the host country government
agencies to be involved in the process. This process would require a contract for design,
construction, and testing if applicable as part of the process. With the host country
involvement to this extent, it would not be an easy withdrawal as it would be with the
exportation process. “The turn-key process comes with disadvantages to companies' who
intend to establish a presence in a host country with their competitors being the host
country. With the host country maintaining dominance over their government and
consumers” (Hopkins, 2017, p. 24).
By choosing any one of these modes, a challenge may present itself, but that too
can be overcome. Once the company has identified a potential target market, they are
then ready to proceed into the segmentation process. The key to the segmentation process
approach is to analyze the process from various angles. The most crucial aspect is
deciding on which variable of the segmentation process will be the most effective will be
based on the mode of the global market in which the company enters into.
CONSUMER ANALYSIS, MARKET SEGMENTATION 6
"Global marketers determine the response variables of greatest interest and then
seeks to find the right "ingredient list" of different country variables" (Hopkins, 2017, p.
39). Based on the ingredient list criteria this will determine the specific objectives of the
marketing plan and its potential for overall success in the global market.
CONSUMER ANALYSIS, MARKET SEGMENTATION 7
References
Hopkins, R. A. (2017). Grow your global markets: A handbook for successful market
entry. United States: Apress. (Hopkins, 2017, p1)
Kotler, P., & Keller, K. L. (2016). Marketing management. Upper Saddle River, NJ:
Pearson Prentice Hall.
Schlegelmilch, B. B. (2016). Global marketing strategy: An executive digest (1st 2016
ed.). Switzerland: Springer. doi:10.1007/978-3-319-26279-6
Zoghby, J., & Schneider, J. (2013). Accenture Customer Insight. Retrieved October 10,
2018, from https://www.accenture.com/us-en/~/media/Accenture/Conversion-
Assets/DotCom/Documents/Global/PDF/Technology_8/Accenture-2044-
Customer-Insights.pdf
Andrea, There is a substantial body of literature on cultural influences covering a
large number of potential variables making up the concept of culture. From a marketing
perspective understanding culture in its broadest sense, whilst interesting, does not
provide us with marketing insights that are actionable in terms of generating future
transactions in favor of the firm. For this reason cultural dimensions need to be
understood in terms off how they influence Amazons customers preferences. Once this
list of preferences has been identified in specific terms, then they can be ranked and
weighted in relation to how the customer will potentially make their buying choices. Once
