Download 9 - Murray State University

3-1
Chapter Nine
Local Marketing in New Growth Markets
MKT568
Global Marketing Management
Dr. Fred Miller
Scenario
Krutsch SA is a Swiss manufacturer of small electrical kitchen
appliances (blenders, coffee makers, food processors etc). The
firms offers several types of appliances with multiple models in
each line. These differ in styling and features to serve diverse
segments based on patterns of kitchen use. Promotion builds
each brands image and focuses on the value of each model for its
target segment. Prices vary from discount to expensive in each
line, but are slightly above competitors’ prices at each product
level. The firm sells across Europe through department stores,
mass merchandisers, hardware stores, online retailers and its own
eBusiness Web store. In international markets the firm must
maintain its brand image by managing its manufacturing and
marketing processes very tightly.
An Optimal Entry Mode Matrix
Company
strategic
posture
Emerging
High-growth
Mature
Services
Incremental
Indirect
exports
Indirect exports
Direct exports
Licensing/
Alliance
Protected
Joint
venture
Indirect exports
Alliance/
Licensing
Licensing
Wholly
owned
subsidiary
Acquisition/
Alliance
Wholly owned
subsidiary
Franchising/
Alliance/
Exporting
Control
Exhibit 6.3
Product/Market Situation
Global Marketing Decisions in this Chapter
What social and market conditions are
dominant in new growth markets? What
marketing research tools, strategy and
tactics are most appropriate?
What general marketing approaches are most effective
in new growth markets?
How should these strategies be adapted to:
Latin America
Asia
Three Marketing Environments
Exhibit 9.1
Feature
Life cycle stage
Product/Market situation
Emerging
New growth
Mature
Intro
Growth
Mature
Tariff barriers
High
Medium
Low
Nontariff barriers
High
High
Medium
Domestic competition Weak
Foreign competitors
Weak
Getting stronger
Strong
Strong
Strong
Financial institutions
Consumer markets
Industrial markets
Political risk
Distribution
Media advertising
Strong
Strong
Strong
Medium
Getting stronger
Strong
Strong
Saturated
Strong
Low
Strong
In-store
promotion
Weak
Embryonic
Getting stronger
High
Weak
Weak
Porter’s Diamond
Competitive Advantage for Countries
Firm strategy,
structure and rivalry
Factor
conditions
Demand
conditions
Related and
supporting industries
Source: Adapted and reprinted with the permission of the Free Press, a division of Simon and Schuster, from The Competitive
Advantage of Nations, by Michael E. Porter. Copyright © 1990 by Michael E. Porter
Dominant Marketing Dimensions
Product/Market Situation
Task
Emerging
New growth
Mature
Research focus
Feasibility
Economics
Segmentation
Primary data sources
Visits
Middlemen
Respondents
Customer analysis
Needs
Aspirations
Satisfaction
Segmentation base
Income
Demographics
Life style
Marketing analysis:
Exhibit 9.2
Dominant Marketing Dimensions
Product/Market Situation
Task
Emerging
New Growth
Mature
Market
development
Participation
in growth
Compete for share
Competitive Focus
Lead/follow
Domestic/foreign
Strengths/
weaknesses
Product line
Low end
Limited
Wide
Product design
Basic
Advanced
Adapted
New product intro
Rare
Selective
Fast
Pricing
Affordable
Status
Value
Advertising
Awareness
Image
Value-added
Distribution
Build-up
Penetrate
Convenience
Promotion
Awareness
Trial
Value
Service
Extra
Desired
Required
Marketing strategy:
Strategic focus
Exhibit 9.2
cont.
Comparative Statistics
Source: World Bank 2002
Area in SQ KM
Countries
24%
26%
33%
High
High
25%
Middle
Middle
Low
Low
51%
41%
Population
Total GNI
80%
15%
3%
41%
High
High
Middle
Middle
Low
Low
17%
44%
Distribution of New Growth Markets
Global Marketing Decisions in this Chapter
What social and market conditions are
dominant in new growth markets? What
marketing research tools, strategy and tactics
are most appropriate?
What general marketing approaches are most
effective in new growth markets?
How should these strategies be adapted to:
Latin America
Asia
Local Marketing in New Growth Markets
Raw materials (authoritarian) vs FDI (capitalistic) markets
Market analysis
trade blocs, introduction/growth stage of PLC, emerging middle class
segments favorable view of foreign products
Product strategy
localization required, adaptation optional, brand support, foreign origin
Local Marketing in New Growth Markets
Pricing
status pricing, tempered with need to build loyalty
in low income markets
Promotion
build brand image for long term potential,
intellectual property problems
Distribution
nurture relationships, invest in channel structure
Global Marketing Decisions in this Chapter
What social and market conditions are
dominant in new growth markets? What
marketing research tools, strategy and tactics
are most appropriate?
What general marketing approaches are most effective
in new growth markets?
How should these strategies be adapted to:
Latin America
Asia
Latin American Countries and Population
United States
United States Bahamas, The
Bahamas, The
Bahamas, The
Bahamas, The
Cuba Bahamas, The
Bahamas, The
Mexico
Mexico
Jamaica
Belize
Guatemala
Honduras
El Salvador
Nicaragua
Haiti Dominican Republic
Puerto Rico Antigua & Barbuda
Guadeloupe
Aruba
Martinique
St. Lucia
Grenada
Trinidad and Tobago
Costa Rica
Panama
Venezuela
Guyana
Suriname French Guiana
Colombia
Ecuador
Population
Persons
Peru
Brazil
56 - 43,410,900
53,142,970 - 258,833,000
Bolivia
894,608,700 - 1,302,862,775
Missing values
Paraguay
Uruguay
Chile
Argentina
Falkland Islands
Chile
Marketing in Latin America
Market trends
Concentration of wealth, common linguistic/religious
influences
Importance of regional trade groups – NAFTA, LAIA,
Mercosur (Argentina, Brazil, Venezuela, Uruguay,
Paraguay) 5 associate members
Major markets are Argentina, Brazil, Mexico, Chile
Pan-regional marketing strategies
Market analysis
Segmentation: urban/rural and age are major dimensions
Positioning: urban similar to mature markets (80% of
purchasing power), rural very difficult
Marketing in Latin America
Marketing strategy
Product: language/packaging localization, limited
adaptation
Price: premium for elite, value for emerging middle
class
Distribution: weak infrastructure, emerging
integrated intermediaries (hypermarkets)
Promotion: detailed information, family
orientation
Global Marketing Decisions in this Chapter
What social and market conditions are
dominant in new growth markets? What
marketing research tools, strategy and tactics
are most appropriate?
What general marketing approaches are most effective
in new growth markets?
How should these strategies be adapted to:
Latin America
Asia
Asian Countries and Population
Population
Persons
56 - 43,410,900
53,142,970 - 258,833,000
894,608,700 - 1,302,862,775
Missing values
Marketing in Asian New Growth Markets
Market trends
Variations in size and ethnic composition
Ambivalence toward Japan
Recovery from economic crisis reversing trend of rapid
economic growth
Major markets are South Korea, Taiwan, Hong Kong
Pan-regional marketing strategies possible, but risky
Leading markets for emerging economies
Market analysis
Segmentation: urban/rural, ethnic, religious dimensions
Positioning: global identification of consumers, especially
in emerging middle class
Marketing in Asian New Growth Markets
Marketing strategy
Product: small packages, full lines for “harmonious whole”
Price: entry strategy crucial, sensitivity to changes, gray
trade risk
Distribution: weak rural infrastructure, strong retail sector
in urban areas
Promotion: message extension, language/culture
localization
When You Say Bud video
What firm-specific advantages are at issue here
for Anheuser Busch? for Budejovice Budvar?
What entry method did Anheuser Busch
attempt to employ in this situation? Why did
the firm select this approach?
How did Budejovice Budvar respond to this
effort? Why?
When You Say Bud video
Cyprus
France, Germany, USA
3-1
Chapter Nine
Local Marketing in New Growth Markets
MKT568
Global Marketing Management
Dr. Fred Miller