Planning, Market Intelligence and Segmentation and Positioning

Strategies in International Marketing

Objectives

• To identify and make use of virtual tools formarket intelligence.

• To understand the planning process in International Marketing

• To distinguish between segmentation and positioning and their use in the design of a positioning strategy.

Global Segmentation Fads

• “Standardizationvs. Adaptation”

1970s

• “Globalizationvs. Localization”

1980s• “Global

integration vs. Local responsiveness"

1990s

The Nestlé Way: Evolution Not Revolution

Think and plan long term

Decentralize

Stick to what you know

Adapt to local tastes

Global Strategy

• Disney Princesses:

• Jazmin (Arabic)

• Mulan (Asian)

• Aurora (Western Europe)

Company Objectives and Resources

Foreingmarket

opportunities

Corporateobjectives and

resources

Change themShort term profit vs.Long term run

Solution:

Clear objectives

International Commitment

• Management preparation.

• Long-term marketing plan with realistic time goals for sales growth.

• Regions vs. Countries.

• Competition and digital communication forceglobal commitment.

International Planning Process

Phase 1

• Preliminaryanalysis and screening: MatchingCompany/

Country needs

Phase 2

• Definingmarket

segmentsand adapting

themarketing

mix accordingly.

Phase 3

• Developingthe

Marketing Plan

Phase 4

• Implement. and control

12-9

Phase 1: Preliminary Analysis and Screening

• A critical first step in the planning process is deciding in which existing country market to make a market investment

• A company’s strengths and weaknesses, products, philosophies, modes of operation, and objectives must be matched with a country’s qualities

• First, countries are analyzed and screened to eliminate those that do not offer sufficient potential for further consideration

• Second, screening criteria are established against which prospective countries can be evaluated

• Third, a complete analysis of the environment within which a company plans to operate is made

Phase 2: Defining Target Markets and Adapting the Marketing Mix

• A more detailed examination of the components of the marketing mix is the purpose of Phase 2

• The primary goal of Phase 2 is to decide on a marketing mix adjusted to the cultural constraints imposed by the uncontrollable elements of the environment that effectively achieves corporate objectives and goals

• The answers to three major questions are generated in Phase 2:– Are there identifiable market segments that allow for common

marketing mix tactics across countries?– Which cultural/environmental adaptations are necessary for

successful acceptance of the marketing mix?– Will adaptation costs allow profitable market entry?

Phase 3: Developing the Marketing Plan

• A marketing plan is developed for the target market—whether it is a single country or a global market set

• The marketing plan begins with a situation analysis and culminates in the selection of an entry mode and a specific action program for the market

• The specific plan establishes what is to be done, by whom, how it is to be done, and when. Included are budgets and sales and profit expectations

Phase 4: Implementation and Control

• The planning process is a dynamic, continuous set of interacting variables with information continuously building among phases

• An evaluation and control system requires performance-objective action; bringing the plan back on track should standards of performance fall short

• The system encourages the decision maker to consider all variables that affect the success of a company’s plan

• It provides the basis for viewing all country markets and their interrelationships as an integrated global unit

Alternative Market-Entry Strategies

• A company has four different modes of foreign market entry from which to select: exporting, contractual agreements, strategic alliances, and direct foreign investment

Exhibit 12.2 Alternative

Market-Entry Strategies

Strategic Marketing – STP Model

SEGMENTATIONIdentifiying

meaningfullydifferent groups

of customersTARGETING

Selecting whichsegment(s) to

serve

POSITIONINGImplementing chosenimage and appeal to

chosen segment

Product Price

Distribution

Promotion

Global Market Segmentation

• Separate consumers into groups using macroand micro variables.

MacroCountry FactorsGeographical FactorsMacro-economics F.Macro-cultural F.

MicroBehaviorLifestylePsychographicsDemographicsAttitude and UsageMicro-CulturesBrand Loyalty

Taken from: http://marketability.com.au/lend-lease-psychographic-market-segmentation/

Targeting

• Targeting is choosing which segment would be the most beneficial for the company to focus on based upon segment size, growth, profitability, current and potential competitors as well as the core capabilities of the business and then selecting which segment(s) to target.

Positioning

POSITIONINGImplementing

chosen image and appeal to chosen

segment

PRODUCT PRICE

PROMOTION DISTRIBUTION

Premium

Basic

Durable

Prestige

Fun

Powerful

Premium

Low Price

Value

Intensive

Selective

Exclusive

Positioning

• Positioning involves selecting the target market and creating and sustaining a differential advantage in relation to the competition.

• This involves the use of the marketing mix.

Top of Mind

Top of Heart

Rev

ista

Din

ero

20

12

Marketing Strategy

•Goals•Core Messages•IntegratedCampaign

DemandGeneration

ReputationDevelopment

Employee andCommunity

Outreach

Events

PublicRelations

eMarketing

Positioning Strategy

Business Goals

Positioning

Cost Leadership Cost Focus

Product Differentiation Differentiation Focus

CostDifferentiation

SCOPE OF ACTIVITIES

Broad Market Narrow Market

Hig

he

rB

en

efit

sEq

ual

Be

nef

its

BA

SIS

OF

AD

VA

NTA

GE

http

://freelan

cercon

sultin

g.com

/bu

siness-fram

ewo

rks/po

sition

ing-strategy-sco

pe

-cost-

differen

tiation

-focu

s.htm

l

Cost Leadership

• It is a strategy, by which a business offers an average product at a low cost to the broadest possible market. Economies of scale result in cost savings, partially passed to consumers. (e.g. Wal-Mart)

Cost Focus

• It is a strategy, by which a business offers an average product at a low cost to a specific customer group. Customer relationship largely depends on the cost of the product and a unique connection with a customer. (e.g. Virgin brands)

Product Diferentiation

• It is a strategy that focuses on offering a unique product to the broadest possible market. The product offering necessitates continuous innovation in light of the highly competitive market forces. (e.g. Apple's iPhone, iPad, iPod line-ups)

Differention Focus

• It is a strategy that focuses on offering a unique product to a specific customer group. The customer relationship largely depends on the uniqueness of the product and the way the customer is being served. (e.g. Rolex watches; Rolls Royce cars)

Cost Differentiation

• It is the most difficult strategy to attain. It requires offering a unique product at a low cost to a relatively broad market. This strategy creates the highest benefits and is consistent with the Blue ocean strategy, a strategy that reinvents its market place and competes in entirely new dimension. (e.g. Ikea; Henry Ford's assembly line; Motorola Moto G)

Positioning

Cost Leadership Cost Focus

Product Differentiation Differentiation Focus

CostDifferentiation

SCOPE OF ACTIVITIES

Broad Market Narrow Market

Hig

he

rB

en

efit

sEq

ual

Be

nef

its

BA

SIS

OF

AD

VA

NTA

GE

http

://freelan

cercon

sultin

g.com

/bu

siness-fram

ewo

rks/po

sition

ing-strategy-sco

pe

-cost-

differen

tiation

-focu

s.htm

l

Virtual Tools for Market Research

• CIA World Fact Book

• Kwintessential

• Legiscomex

• Procolombia