Week 8 International Marketing
Market Segmentation and Target Markets
According to Tuckwell (2014), market segmentation is one key element in modern marketing which is the process that divides the market in to segments or several groups based on factors such as psychological, geographic, demographic, and behavioral factors. This will assist the marketers to understand their target audience better, thereby making the marketing of the company more effective. In the shoe company in Indonesia, analytical process will be used in marketing segmentation that will put the customers first to make them more satisfied. This will be a gained advantage over the company’s competitors. The forms of segmentation to use in this market will be demographic segmentation and geographic segmentation.
Tuckwell (2014) explains that geographic segmentation divides customers in to segments founded on their geographic areas like neighborhoods, cities, counties, regions, states or nations. The reason why this type of segmentation was chosen is because the purchasing behavior of customers is influenced by where they work or live. This will assist the company in customizing its products, sales efforts, promotion and advertising to fit in the geographical variables needs. Globalization is linking the geographic segmentation to socio-economic and demographic characteristics to form geo-demographic segmentation.
Differentiating marketing strategy will be used to target many market segments with offers that are designed specifically for each segment. This will make the company to have a high sale and stronger position with each market segment. The target market will be cities in the country and nations. This is because the business will be global and is targeting individuals from the country and outside the nation.
The second segmentation will be demographic segmentation which divides customers into sections or segments depending on demographic values such as occupation, education, religion, family life cycle, income, social class, age, nationality, gender, generation, family size and race. This type of segmentation will be more appropriate in the business as the variables are easily measurable. The target markets to use using the segmentation type will be based on gender and age. The shoe company is mostly targeting females as it will produce sports shoes mostly with a feminine touch as majority of sports shoes in the market are designed for men. The second target market is people who are of reproductive age as exercise is essential in keeping their bodies fit.
The business will operate based on four actionable goals; expanding distribution of your product, expanding your target market, reaching a new target market and increasing demand for your product. The first goal is reaching a new target market efficiently and effectively. This will be achieved by incorporating the marketing mix or the four Ps- price, product, place and promotion where each P will act like a leg of the table, and they require each other to support the table. Similarly, each P will be essential in the operations of the company. The other goal will be expanding the target market by attracting demographics and customers. This will be through identification of new markets and opportunities which will remove and prevent stagnation of the company.
Another of the company’s goal is to increase the demand of its products which is key in earning profit and revenue. This goal will vary based on current status and the time frame of the product in the market. This will be achieved through promotions, enhancements, in-store demonstrations or price reductions. The last goal will be expansion of product distribution which will be an effective tool to increase businesses. Product distribution of the company will incorporate both the retailers and wholesalers. Brand building will also be used which will make products to be available in more locations to increase customers awareness.
Global Product Marketing Program
Sports shoes are similar regardless of the region or country; maybe the only variation would be the design to suit the different climatic conditions. This will influence the company to have one global product without variations with regions or nations. The advantage of the company’s product is their universal demand. The company global marketing product will extend the company’s product to the new country without new specifications to the product. In its program, the company will start distribution using local distribution networks, but as it grows, it will establish its own market. Particular attention will be paid on the growing international online market, which will increase the company’s access to its customers worldwide.
Global Pricing Policy
Global pricing is the most complex and critical issue faced by global firms as price is the only instrument of marketing mix that creates revenue while others are incurring cost. The company will use the geocentric pricing policy. According to Lander (2016), a geocentric company is where the management of an organization views opportunities on a global scale, by not concentrating on how to operate on a given country but, on conducting business anywhere in the world. This approach will be advantageous to the company as it will draw the entire world closer making it easier for the business to be competitive wherever it goes. The other reason why this approach is important is because it puts the best people into offices regardless of their origin.
Gerth (2004) explains that marketing channel are firms or individuals who are involved in the process of making a service or a product available for consumption or use by industrial or consumers users. A wholesaler is an intermediary who sells to retailers or other intermediaries and is mostly applicable to consumer markets. Using wholesalers in the business will assist in giving local market knowledge. They will link the company with thousands of retailers that the organization would not have reached on its own. Another channel function that they will perform for the company will be selling and promoting the products. As the company grows, it will have its own intermediaries. These will include manufacturers’ showrooms, sales offices and sales branches.
The company will include retailers and internet in its distribution channels. E-commerce will result in radical change in the strategies of distribution. It will help retailers and consumers to acquire their products. The reason of incorporating this strategy is due to the increase use of internet which may assume the need of physical intermediaries in future. The company is questioning the value of traditional intermediaries in the distribution channels. This disintermediation process will cut cost and improve the channel’s efficiency.
The company will incorporate different sales promotion techniques in its operations. One will be the use of loyalty points. This will involve rewarding its customers which will build a solid base for loyal fans, as it entices to shop more especially at the online stores. An important key to the success of the business is provision of great customer service, and the best promotion is loyalty point system. This will involve discounts if customers buy certain items. According to SparkPay (2014), the advantages of this loyal point system includes; provision of better customer satisfaction, builds a loyal customer base and provides a loyalty system for customers to keep returning to the company. This sales promotion technique will be ongoing in every phase of the business.
Discounting products will be another sales promotion the company will use to boost sales. This is because, customers love to grab a bargain and offering discount would entertain them. However, this type of promotion will be available occasionally maybe during holidays to ensure discounting is not the norm of the company. In achieving this, the set discount will be more attractive to the customers.
A sales agent works as an independent contractor and is self-employed and their earning is based on what they sell. The company will use sales agents in its promotion. This is because independent sales representatives are successful and experienced. They also tend to net better sales as compared to in-house sales force because they have a long and successful career background including sales experience with national and large organization. These individuals will be important as they will deliver important information especially concerning the competitors. Another reason why the company is opting these sales agents is because even though they are more experienced than the sales people, they will require less direction and management.
The sales expense will rise or fall depending with the company’s total sale as the agents are paid in relation to what they sell. A sales agent forms better relationship with customers due to their lifetime commitment to the territory. The agents are professional as majority of them may have 15-20 years of successful corporate experience and many have held important positions in large corporations prior to being agents. Through this, they will give the company consulting services it requires in product promotion.
Gerth, D. (2004). Unit 13: Channels of Distribution, Logistics, and Wholesaling. Retrieved from http://ww2.nscc.edu/gerth_d/MKT2220000/Lecture_Notes/unit13.htm
Lander, S. (2016). Geocentric Advantages & Disadvantages. Azcentral. Retrieved from http://yourbusiness.azcentral.com/geocentric-advantages-disadvantages-27693.html
SparkPay,. (2014). The Top 10 Most Popular Types of Sales Promotions. Capital One. Retrieved from https://www.sparkpay.com/the-top-10-most-popular-types-of-sales-promotions
Tuckwell,. (2014). Chapter 6: Market Segmentation and Target Marketing (1st ed., pp. 116-142). TUCKWELL/TUCKWELL. Retrieved from http://www.pearsoncanada.ca/media/highered-showcase/multi-product-showcase/tuckwell-think-ch06.pdf
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