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3-1 Chapter Eight Local Marketing in Mature Markets MKT568 Global Marketing Management Dr. Fred Miller Marketing Environments and Tasks Emerging markets - build infrastructure New growth markets - market development Mature markets - build market share Analysis and strategy focus by market type Global Marketing Decisions in this Chapter What social and market conditions are dominant in mature markets? What marketing research tools, strategy and tactics are most appropriate? What general marketing approaches are most effective in mature markets? How should these strategies be adapted to: Europe and the EU Japan Australia and New Zealand North America 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 Porter’s Diamond Competitive Advantage for Countries Firm strategy, structure and rivalry Factor conditions Demand conditions Related and supporting industries Source: Adapted and reprinted with the permission of the Free Press, a division of Simon and Schuster, from The Competitive Advantage of Nations, by Michael E. Porter. Copyright © 1990 by Michael E. Porter 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. Distribution of Mature Markets Global Marketing Decisions in this Chapter What social and market conditions are dominant in mature markets? What marketing research tools, strategy and tactics are most appropriate? What general marketing approaches are most effective in mature markets? How should these strategies be adapted to: Europe and the EU Japan Australia and New Zealand North America Local Marketing in Mature Markets Market analysis market segmentation, positioning, brand image, country of origin Product strategy wide line, differentiated, first mover (leaders); me-too (followers) Pricing range of options, relative to product position Promotion brand image, sales promotion for support, differentiated position Distribution solid infrastructure, full channels, slotting fees, piggybacking Customer satisfaction quality, technical vs emotional quality, surprise CS and Two Kinds of Quality High Level of satisfaction Autobytel Survey reported in USA Weekend, Nov 2002 Almost one third of potential new car buyers would switch cars if dissatisfied with cup holders. Emotional quality High Low Functional quality Low exhibit 9.3 Level of quality Global Marketing Decisions in this Chapter What social and market conditions are dominant in mature markets? What marketing research tools, strategy and tactics are most appropriate? What general marketing approaches are most effective in mature markets? How should these strategies be adapted to: Europe and the EU Japan Australia and New Zealand North America Pan-European Marketing Market trends Reduction of NTB’s (1992 initiative), growth of EU economic, financial, political integration, Constitution rejected by France and Denmark, June 2005 Market analysis Segmentation: pan-European, regional or local markets Positioning: market retreat, pan-European competition, niche position Marketing strategy Product: euro-brands, wide lines for diverse segments Price: Euro currency (€), price sensitivity and transparency Distribution: trend toward large, integrated units Promotion: pan-European reach, visual emphasis with voiceovers Enlargement in 2004 & 2007 Florida 27th state 1845, 69 yrs after DoI Newest Members 2004, Euro 2007-10 Czech Republic Estonia Cyprus Latvia Lithuania Hungary Malta Poland Slovenia Slovakia 2007, 50 years after ToR Bulgaria Romania No date specified Turkey Currency Introduction in 2002 Common banknotes, Common/country coin design Currency issued 1 Jan 2002 Thirteen member countries as of January 2007 (Slovenia), about 315 million people Objectives: transparency, efficiency, reserve currency Euro Notes and Coins Dual Pricing in a Sample Ad Global Marketing Decisions in this Chapter What social and market conditions are dominant in mature markets? What marketing research tools, strategy and tactics are most appropriate? What general marketing approaches are most effective in mature markets? How should these strategies be adapted to: Europe and the EU Japan Australia and New Zealand North America Marketing in Japan Market trends More penetration, import competition, value consciousness Market analysis Segmentation: more diverse segments, richer markets Positioning: traditional market=quality, emerging=value Marketing strategy Product: broader lines, multiple price points, function without fault Price: more price sensitivity, intrabrand competition, value analysis Distribution: complex, difficult, emerging larger intermediaries Traditonal: fragmented, based on relationships with intermediaries Promotion: indirect, subtle, image based Insider Japan Video How does the geisha ceremony for food oil executives illustrate traditional Japanese culture and business practices. In what ways is Sosha Honda’s approach to business consistent with the traditional Japanese approach? In what ways does it represent a new trend? In your opinion, what factors in the video are keys to success in modern Japan. 3-1 Chapter Eight Local Marketing in Mature Markets MKT568 Global Marketing Management Dr. Fred Miller