Transcript PowerPoint Presentation - Murray State University

3-1
Chapter Ten
Local Marketing in Emerging Markets
MKT568
Global Marketing Management
Dr. Fred Miller
Scenario
Castillo Tools SA is an Spanish manufacturer of small electrical
hand tools (drills, small saws, screwdrivers, etc.) . The firms offers
several types of products with multiple models in each line. Each
line includes wired and cordless tools as well as sets of tools using
the same battery recharging system. Separate promotional efforts
focus on professional and do-it-yourself markets, but both convey
product durability, reliabilty and the benefits 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 Euope through hardware stores, hypermarkets and
online retailers. In international markets the firm wishes to exploit
its patent-protected produces by reaching new customers in new
markets
Global Marketing Decisions in this Chapter
What social and market conditions are
dominant in emerging markets? What
marketing research tools, strategy and
tactics are most appropriate?
What general marketing approaches are most effective
in emerging markets?
How should these strategies be adapted to:
China
India
Distribution of Emerging Markets
Comparative Statistics
Source: World Bank 2002
Area in SQ KM
Countries
24%
26%
33%
High
25%
High
Middle
Middle
Low
Low
51%
41%
Population
17%
15%
41%
Total GNI
3%
High
High
Middle
Middle
Low
Low
80%
44%
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
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
Getting stronger
Strong
Foreign competitors
Weak
Strong
Strong
Financial institutions
Weak
Strong
Strong
Consumer markets
Embryonic
Strong
Saturated
Industrial markets
Getting stronger Strong
Strong
Political risk
High
Medium
Low
Distribution
Weak
Getting stronger
Strong
Media advertising
Weak
Strong
In-store
promotion
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.
Global Marketing Decisions in this Chapter
What social and market conditions are
dominant in emerging markets? What
marketing research tools, strategy and tactics
are most appropriate?
What general marketing approaches are most
effective in emerging markets?
How should these strategies be adapted to:
China
India
Local Marketing in Emerging Markets
Market analysis
marketing infrastructure, income levels, currency
convertibility
Product strategy
simplified, low-cost line; some high-end opportunities
Pricing
balance between skimming and penetration, innovation
required
Promotion
limited media, less clutter, importance of visual images
Distribution and Service
key factor, imagination required, personal service available
Global Edge Emerging Markets
Emerging Markets: Success Strategies
Seek compatible objectives
Help develop local industry
Be sensitive to local cultures and values
Provide training across functional areas
Contribute to social development
Document contributions
Adopt long term perspective
Global Marketing from Emerging Markets?
Costa Rican
Gourmet Coffee
Direct
from
Grower
World
Art
From
Novica
Chinese Jade Seller:
From eBay to
seller’s site
Global Marketing Decisions in this Chapter
What social and market conditions are
dominant in emerging markets? What
marketing research tools, strategy and tactics
are most appropriate?
What general marketing approaches are most effective
in emerging markets?
How should these strategies be adapted to:
China
India
Marketing in China
Market trends
Huge market potential tied to economic development
Barriers - import licenses, tariffs, currency controls,
trading companies
Joint venture, Special Economic Zone opportunities
Role of Hong Kong’s trading companies
Importance of establishing personal relationships - guanxi
Market analysis
Segmentation: geographic and urban/rural segments
Positioning: acceptance of global brands, localization of
names
Marketing in China
Marketing strategy
Product: positive view of well known, foreign brands,
4 big things
Price: high price sensitivity, but imports commonly higher
Distribution: weak national infrastructure, regional
rollouts, many intermediaries state-owned
Promotion: government control, limited media
penetration, authenticity
Global Marketing Decisions in this Chapter
What social and market conditions are
dominant in emerging markets? What
marketing research tools, strategy and tactics
are most appropriate?
What general marketing approaches are most effective
in emerging markets?
How should these strategies be adapted to:
China
India
Marketing in India
Market trends
Huge market potential tied to development of middle class
Socialist era (1950-80) of market control
Liberalization (1980-present), political risk
Dual market, large emerging middle class
Resurgence of domestic brands
Market analysis
Segmentation: urban middle class, poor rural population
Positioning: growing acceptance of global brands, more
demanding
Local Brands in India
Marketing in India
Marketing strategy
Product: full product line, significant first move
effects
Price: value orientation in middle class, especially
for unknown brands
Distribution: weak infrastructure, requires greater
attention/investment
Promotion: linguistic/cultural localization, no
direct attacks
India and Bangladesh
Women’s Bank of Bangladesh Video
What economic statistics are used to portray Bangladesh in
this video?
How does the Women’s Bank initiative respond to these
conditions? What elements of controversy does it generate?
How does the bank address them?
What lessons might a brewer exporting to Bangladesh learn
from the strategies of the Women’s Bank?
Measure
Bangladesh
Iowa
Area
144,695 km2
144,000 km2
Population
147,365,352
2,966,334
Per capita income
$ 470
$ 19,674
Access to safe water
74%
100%
Women’s Bank of Bangladesh Video
Update:
Mohammed Yunus and Grameen Bank shared the
2006 Nobel Peace Prize,
Grameen now has 6 million borrowers worldwide
Microlending and microfranchising have been
widely adopted by other organizations.
Chinese Management &
Modern China Videos
Explain the role of the following in traditional Chinese
management style and practices
Family relationships and quanxi
Harmony and loyalty
Span of control and operational responsibility
Respect for superiors and creativity
How are these values related to the traditions covered in the
Legacy of China video?
How are these values related to Hofstede indices for China?
High Power Distance, Low Uncertainty Avoidance
Collective, Masculine
How have state-owned enterprises, rural populations and
private enterprises been affected by economic reform?
3-1
Chapter Ten
Local Marketing in Emerging Markets
MKT568
Global Marketing Management
Dr. Fred Miller