Nowadays, emerging markets are becoming more and more attractive for multinational companies. Particularly the Asian market, headed by China, represents an enormous potential. Asians consumers are motivated by a complex range of cultural factors and are becoming more interested in pursuing brands to experience their reputation, to stand out from the crowd or to create new trends of a modern high-class lifestyle in purchasing items of established, mostly western brands. Especially the uprising group of young urban professionals, the so-called Yuppies, is eager to spend big amounts of their comparatively high income on upscale brands. Hence, many multinational companies, particularly those selling premium fashion, luxurious accessories or sought-after consumer electronics on the Asian market, recognize a steady double-digit percental increase in sales. Nevertheless, the raising income levels of Asian high earners are still relatively low compared to more developed economies. In fact annual income levels within the peer group of Asian Yuppies living in tier one metropolises reached in 1999 from $ 12.000 in Thailand to $ 18.000 in Taiwan to about $ 35.000 in Korea and China. Moreover housing costs throughout the Asian cities are comparatively high. This is why not every Asian Yuppie is able to spend excessively, and young professionals generally stay with their parents even after starting work and beyond. Consequently, this segment of the Asian yuppies cannot be considered as homogenously, since some are able to spend on expensive upscale brands and others have to focus on middle class brands, offering products that pretend to be high class.
Thus, the potential of the Asian market appears to be an attractive and challenging field to a wide range of companies. However, entering a new market is not trivial; strategies must be established according to the market and the target group to provide a distinguished marketing mix. The Asian market is composed by many countries what also involve different cultures and preferences, as well as unequal living standards.
To get an approach to the unknown market in order to design the marketing mix the segmentation of the market is the primary step. There are three main different ways to segment the market; geographically, demographically and psychographically.
Generally the geographical market segmentation is based on variables such as region, country size, and density of the population. Referring to Asia the market is very diverse in the geographical aspect. So, the geographical segmentation should be the first step. On the one hand there are wide agrarian or barren areas with little infrastructure, sparsely populated by inhabitants with low incomes on average.
The first step is to (1) determine which kinds of customers exist, then (2) select which ones we are best off trying to serve and, finally, (3) implement our segmentation by optimizing our products/services for that segment and communicating that we have made the choice to distinguish ourselves that way (Consumer Psychologist, n.d.). •
The 80’s were a decade of great change. It became obvious that there was a widening between the classes. The middle class was disappearing and people took different approaches to dealing with this fact. One way of life that became synonymous with the 80’s was being a young, urban professional, or what people at the time coined a Yuppie. Due to the widening wealth gap, it became essential to market products as either upscale and downscale. Producers were forced to place their items in one frame of reference of the other, fancy of frugal. To sell items with the high price tag advertisers played on the yuppie habit of compensatory spending. Yuppies did not want to be confused with low class or middle class, so they spent in order to show their status to the world (Ehrenreich, 229).
Segmentation variables can be classified into four major classes; geographic, demographic, psychographic and behavioural. The use of these categories either individually or in combination assists companies to identify and establish market segments which is relevant to the product or service they are offering. This in turn helps these organisations to evaluate the relevant segments to choose the pertinent target market.
However, entering into a market as different as Japan is not without its risks, and must be ensured to be successful, with the help of market research, marketing, and operational theories, lest the new venture become a very costly mistake. Target Consumer Market When moving to a market with a consumer culture so different from the home market, a company must be careful to analyse its target audience in detail, to avoid costly cultural faux pas. To get a good feel for the Japanese culture, a good place to start would be the experts in the cultural studies field. Hofstede’s cultural dimensions, created during his in-depth GLOBE study of the cultures of the world, gives a good comparison between the priority differences between Japanese and English culture. A detailed analysis of the cultural differences will be given in the ‘Marketing Issues’ section of the report.
World War 2 drew a hard blow and left a serious and lasting effect to many Asian countries. This however, did not hamper the growth of countries such as China, Japan and Vietnam as their governments were taking serious steps to recover economically. Thus, the global market cannot deny a place for these 'Asian Dragons', because these countries are growing at a tremendous pace to the extent of being capable in emerging as global market leaders.
Other factors include communication infrastructure and availability of skilled workers. Most of the Asian countries are embracing new technologies that grow much knowledge of the diverse beverage drinks. Secondly, the demand conditions play a significant role in enhancing competitiveness for the firms. Both Coca cola and Pepsi are an Coca cola has always dominated the markets outside United States unlike Pepsi’s internationalization strategy that took too long.
Hill, C., Wee, C. and Udayasankar, K. 2012.International Business:An Asian Perspective. 8th ed. Singapore: McGraw-Hill.
Terrell, E. (n.d.). Market Segmentation. (Business Reference Services, Library of Congress). Retrieved April 6, 2014, from http://www.loc.gov/rr/business/marketing/
International business can be quite challenging and unsuccessful, if multinational companies do not look at the environment where they want to explore and invest. There are different aspects and market dimensions that can tell decisions makers if it’s convenient to invest in different markets. According to Global Edge (2014), “Global marketing has become more and more important over the years with the increasing trend of internationalization. Faced with too many choices, marketers have the challenge of determining which international markets to enter” (para. 1). The market potential indicator (MPI) is an index that can help marketers understand statistically how consumers behave and use these numbers to analyze potential countries and its risks. Based on the MPI
Segmentation, targeting and positioning are interrelated activities which are important to achieving a successful Marketing Mix. Discuss these concepts in theory and give practical examples of how they can be applied to one industry of your choice
Segmentation is a marketing strategy that involves separating a wide target market into small groups of customers who share the common need of using or purchasing the product that needs to be marketed. Market segmentation strategies are utilized to identify these groups of consumers and strategies are designed and implemented to make the product or service appeal to them. Support and also the product will be strategically placed in order to successfully achieve the ultimate marketing goal. Businesses and organizations may come up with different type of strategies involving different products and catchy phrases depending on the product or the target segment.
Caroline and Jennifer said that ‘Market segmentation is a crucial marketing strategy. Its aim is to identify and delineate market segments or set of buyers which would then become targets for the company’s marketing plans.’ (Tynan and Drayton, 1987) There are many ways to segment the market, such as age, region, environment, psychology and wages (Hall, Jones and Raffo, 2010).
Good understanding of the marketing mix is important for an organization. When a company is developing a marketing plan, it must consider each element. Just as important is an understanding how to use the element in the marketing process. They must create a marketing plan, which incorporated all four elements. This is usually formalized in a marketing plan consists of three phases. These phases are planning, implementation and control.
In conclusion, it can be said that global marketing has been emerged very rapidly in recent years. It has provided various opportunities for the companies to expand their business to the other regions of the word. However, there remain certain environmental issues that need to be considered before entering in to the desired region. These issues can be resolved with designing the strong global marketing plans and strategies, the data for which can be gathered through conducting global market research. Despite numerous issues, one can easily say that globalisation has reduced the global reach of the organizations as well as customers. It would not be wrong to conclude that
According to Kotler et al 2013 market segmentation is defined as dividing a market into smaller segments of buyers with distinct needs, characteristics or behaviours that might require separate marketing strategies or mixes. As per the industry data which we were operating we used different theories to segment the market one of them is STP process. In this method whole market is sub divided into different segments based on three activities these are segmentation, targeting and positioning. From the market information in case study we identified similar groups of consumer under market segmentation activity. For example market E had consumers travelling between mini hub to medium city that had a new and growing market. While targeting the market we identified which group of consumers to aim for instance market D had major university and service sectors. Lastly in the product and brand positioning we created a concept so as to appeal the target market by running as discount airline. One of the approaches for market segmentation according to Kotler et...