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ISSUES IN GLOBAL MARKETING

Market Segmentation:
Market segmentation refers to identifying distinct grou s of consumers !"ose urc"asing #e"a$ior differs from ot"ers in im ortant !ays% &irms must ad'ust t"eir marketing mi( from segment to segment% In internationa) #usiness* segmentation needs to consider t"e e(istence of segments t"at transcend nationa) #orders and understand differences across countries in t"e structure of segments% &or a segment to transcend nationa) #orders* consumers in t"at segment must "a$e some com e))ing simi)arities t"at )ead to simi)arities in urc"asing #e"a$ior% +"ere suc" simi)arities do not e(ist* t"ere must #e some customi,ation if t"e firm is to ma(imi,e erformance in t"e market% T"is customi,ation may #e in t"e roduct* t"e ackaging* or sim )y t"e !ay in !"ic" t"e roduct is marketed% -roduct Attri#utes A roduct can #e $ie!ed as a #und)e of attri#utes% .ifferent customers $a)ue different attri#utes* as !e)) as $a)ue t"e same attri#utes different)y% A soccer mom in t"e USA may $a)ue "er automo#i)e for its ease of use* #ut "er Latin American counter art may $a)ue its dura#i)ity% -roduct attri#utes "a$e to #e $aried from country to country to account for differences in consumer tastes and references% .ifferences in consumer tastes and references #et!een countries are a function of differences in cu)ture and economic de$e)o ment% .istri#ution Strategy .istri#ution strategy is a#out c"oosing t"e #est c"anne) to de)i$er a roduct to t"e consumer% Significant country differences !it" regard to distri#ution systems e(ist% In some countries* t"e retai) system is $ery concentrated* !"ereas in ot"ers it is $ery fragmented% In some countries c"anne) )engt" is s"ort* !"ereas in ot"ers it is )ong% +"i)e in some countries access to distri#ution c"anne)s may #e difficu)t% T"e )onger t"e c"anne)* t"e greater t"e aggregate mark/u and t"e "ig"er t"e rice t"at consumers are c"arged for t"e fina) roduct% +"en t"ere are e(c)usi$e distri#ution c"anne)s* it can #e difficu)t for outsiders to o#tain access to markets% E(c)usi$e c"anne)s are often #ased on )ong esta#)is"ed and successfu) re)ations"i s% Occasiona))y in order to gain market access a firm may "a$e to de$ise an entire)y ne! distri#ution strategy% +"i)e cost)y* t"at may #e t"e on)y !ay to o#tain access* and it may e$en gi$e t"e firm a com etiti$e ad$antage%

0ommunication Strategy A critica) e)ement in t"e marketing mi( is communication strategy% T"is is t"e rocess of communicating t"e attri#utes of a roduct to ros ecti$e customers% A num#er of different communications c"anne)s are a$ai)a#)e to a firm% T"ese inc)ude direct se))ing* sa)es romotion* direct marketing* and ad$ertising $ia many different media% -us" strategy and a u)) strategy1 T"e main c"oice !it" regard to communication strategy is #et!een a us" strategy and a u)) strategy% A us" strategy em "asi,es ersonne) se))ing !"ic" re2uires a com etent sa)es force and is cost)y% +"ereas a u)) strategy em "asi,es mass media ad$ertising to communicate t"e marketing message to otentia) customers% T"e c"oice #et!een us" and u)) strategies de ends u on roduct ty e and consumer so "istication* c"anne) )engt"* and media a$ai)a#i)ity%

-us" strategies tend to #e em "asi,ed more in t"e fo))o!ing circumstances1 34 for industria) roducts and5or com )e( ne! roducts* 64 !"en distri#ution c"anne)s are s"ort* and 74 !"en fe! rint or e)ectronic media are a$ai)a#)e% -u)) strategies tend to #e em "asi,ed more in t"e fo))o!ing circumstances1 34 for consumer goods roducts* 64 !"en distri#ution c"anne)s are )ong* and !"en 74 sufficient rint and e)ectronic media are a$ai)a#)e to carry t"e marketing message% -ricing Strategy1 t"e conce t of strategic ricing "as to! as ects* !"ic" are refereed as redatory ricing and e( erience cur$e ricing% -rice discrimination e(ists !"ene$er consumers in different countries are c"arged different rices for t"e same roduct% T"e conce t of strategic ricing "as t!o as ects* !"ic" are refereed as redatory ricing and e( erience cur$e ricing% -redatory ricing in$o)$es using t"e rofit gained in one market to su ort aggressi$e ricing in anot"er market* t"e o#'ecti$e #eing to dri$e com etitors out of t"e market% 8ere t"e rice is used as com etiti$e !ea on to dri$e !eaker com etitors out of a nationa) market #y ricing $ery )o!% Once t"e com etitors "a$e )eft t"e market* t"e firm can raise rices and en'oy "ig" rofits% Many 9a anese firms "a$e #een accused of ursuing t"is strategy% E( erience cur$e ricing in$o)$es aggressi$e ricing to #ui)d u accumu)ated g)o#a) $o)ume as ra id)y as ossi#)e* t"ere#y mo$ing t"e firm do!n t"e e( erience cur$e as ra id)y as ossi#)e% A firm #ui)ds its accumu)ated roduction $o)ume o$er time* unit costs fa)) due to :e( erience effects; due to )earning cur$es and economies of sca)e% 0onfiguring t"e Marketing Mi( Standardi,ation $ersus customi,ation In rea)ity* most firms standardi,e some t"ings and customi,e ot"ers% +"en )ooking at t"e o$era)) marketing mi( and message* one often finds some as ects of standardi,ation and some as ects of customi,ation in a)) roducts de ending on )oca) re2uirements and o$era)) cost structures%

New Product Development


Ne! roduct de$e)o ment is a "ig" risk #ut "ig" return acti$ity% In order to #ui)d u a com etency in ne! roduct de$e)o ment* t"e internationa) #usiness must do t!o t"ings1 34 .is erse R<. acti$ities to t"ose countries !"ere ne! roducts are #eing ioneered 64 Integrate R<. !it" marketing% %

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