Transcript Chapter 7

International Strategic Planning
Dana-Nicoleta Lascu
Chapter 7
Copyright Atomic Dog Publishing, 2
2008
Chapter Objectives
• Develop a general understanding of international marketing
strategy at the different levels of the international organization
and provide some insights into the international marketing
planning process of selected companies.
• Identify the rationale for adopting a particular target marketing
strategy in international markets.
• Introduce the concept of country attractiveness analysis and offer
a blueprint for conducting the analysis.
• Identify the bases for consumer segmentation and offer company
application examples.
• Describe the three targeting strategies used by companies
worldwide.
• Describe the six positioning strategies that international
companies can use to position their brands in the minds of target
consumers.
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Developing an International Marketing
Strategy
• Involves developing and maintaining a strategic fit between the
international company’s objectives, competencies, and resources
and the challenges presented by its international market or
markets.
• The international strategic plan forges a link between the
company’s resources and its international goals and objectives in
a complex, continuously changing international environment.
• Given the changing nature of the environment, the strategic plan
cannot afford a typical long-term focus (a 5- or 10-year plan);
rather, the planning process must be systematic and continuous,
and it must reevaluate objectives in light of new opportunities
and potential threats.
• Most relevant: the company’s commitment to its international
markets.
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The International Strategic Plan
Creates a link between company resources and its
international goals and objectives. Levels:
Corporate
Division
Business Unit
Product Level
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Levels of Strategic Planning
Corporate
• Strategic plan allocates resources and establishes
objectives for the whole enterprise worldwide.
• Has long-term focus.
• Involves the highest levels of management.
• Involves international target market selection.
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Levels of Strategic Planning,
continued
Division
• Strategic plan allocates resources to each business
unit based on division goals and objectives.
• Portfolio analysis is used to decide which brands to
harvest, invest in, or divest.
• Has longer-term focus.
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Levels of Strategic Planning,
continued
Business Unit
• Planning involves decisions on which consumer
segments to target in each country and how to
target them.
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Levels of Strategic Planning,
continued
Product Level
• A marketing plan is developed at product level,
product line level, or at brand level.
• Has shorter-term focus.
• Involves the marketing department.
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Developing the International
Marketing Plan
• Develop strategies for the target market
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Product mix
Distribution
Promotion mix
Pricing
• Plan international marketing programs
• Manage the international marketing effort:
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Organize
Implement
Control
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International Target Marketing
• Defined as the process of identifying and focusing on
those international market segments that the
company can serve most effectively and designing
products, services, and marketing programs with
these segments in mind.
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International Target Marketing Is Used by
Companies to:
• Identify consumer segments with similar traits.
• Select segments company can serve efficiently.
• Develop products tailored to each segment.
• Target marketing involves offering products to the
target market, and communicating, through the
marketing mix, product traits and benefits that
differentiate it in the consumer’s mind .
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International Segmentation
The process of identifying countries and/or consumers
that are similar with regard to key traits, such as
product-related needs and wants, that would respond to
a product and related marketing mix.
MUST BE performed at country level AND at
consumer level.
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Effective International Segmentation
Requirements
• Measurability
• The ability to estimate the size of the market.
• Important questions:
Are population statistics and economic
development data reliable?
Are consumers accessible for data collection?
Are they willing respondents?
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International Segmentation Requirements
(contd.)
• Substantiality
• The extent to which the international market is
large enough to warrant investment.
• Important questions:
What is the segment’s growth potential?
What is the projected per capita income in the following
ten years?
Are population statistics and economic development data
reliable?
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International Segmentation Requirements
(contd.)
• Stability over time
• The extent to which international consumer
preferences are stable over time.
• Important questions:
What is the likelihood that the segment will change as a
result of a rapidly changing environment?
How often should we re-evaluate our market segment?
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International Segmentation Requirements
(contd.)
• Accessibility
• The ability to communicate with the international
target market.
• Important questions: Are population statistics and economic
development data reliable? Are consumers willing
respondents for marketing research studies? Is it possible to
effectively communicate with the target consumers?
Brands such as Coca Cola, Avon, and
others are now rapidly entering the
Tibetan market. A new train connecting
mainland China with Tibet has created
new access to this once closed market.
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International Segmentation Requirements
(contd.)
• Actionability
• The extent to which the international target market
is responsive to the marketing strategies used.
• Important question:
Will consumers buy the company’s product?
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International Segmentation Requirements
(contd.)
• Differential response
• The extent to which international market segments
respond differently to marketing strategies.
• Important questions:
Can we distinguish segments from each other? Do
consumers have different preferences in this international
market?
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International Macro-Segmentation
• Market potential – indicators:
 Gross domestic product (GDP) per capita.
 Industrial and agricultural sector statistics.
 Market size and potential.
 Consumer buying power.
 Investment figures (FDI, other trade statistics).
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International Macro-Segmentation
(contd.)
• Political, legal and financial environment
of country:
• Involves assessing:
 Ethnic conflict.
 History of war engagement.
 Antiforeigner sentiment.
 Recent nationalization activities.
 Legal ambiguity.
 Trade barriers.
 Exchange rate controls.
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International Macro-Segmentation
(contd.)
• Marketing support infrastructure: Involves
assessing the following:
 Availability and reliability of distribution and
logistics providers.
 Availability of competent partners for strategic
alliances.
 Quality of telecommunication and transportation
infrastructure.
 Availability of other service providers:
- Marketing research firms.
- Financial firms.
- Management consulting firms.
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International Macro-Segmentation
(contd.)
•
•
Strength of brand or company franchise relative
to competing products and companies: Markets
where a brand name is already established with
local consumers offers high potential to the
company.
Degree of market fit with company policies, goals,
and resources.
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Bases for Micro-Segmentation
• Demographics: Statistics that describe the
population:
- Age
- Occupation
- Education
- Income
- Ethnicity
- Race
- Nationality
- Life-cycle stage
- Social class
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Bases for Micro-Segmentation (contd.)
•
Psychographic segmentation: Involves clustering
consumers based on different behavioral and
psychological dimensions.
- Hofstede dimensions:
• Power-distance
• Masculinity-femininity
• Uncertainty avoidance
• Individualism-collectivism
- Global segments:
• Global teenagers
• Global elite
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Bases for Micro-Segmentation
(contd.)
• Benefit Segmentation: Involves understanding
the motivation behind consumer purchases, in
order to be able to send the appropriate message
to the relevant market segments.
 Example: cooking oil markets can be
segmented based on benefits sought: olive oil
is targeted to consumers who seek health
benefits.
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Bases for Micro-Segmentation
(contd.)
• Geographic Segmentation: Can be performed at
the macrosegmentation level, as well as within the
country, identifying different consumer segments
within a geographic region.
 Example: Avon segments its market
geographically.
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Bases for Micro-Segmentation
(contd.)
•
Usage and usage status segmentation: groups
consumers based on the usage rate for the product
(usage segmentation), or based on the familiarity of the
consumer with the product (user status segmentation).
•
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Usage
Nonusers
Occasional users
Medium users
Heavy users
User Status
- User of competitors’ products
- Ex-users
- Potential users
- First-time users
- Regular users
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Country Screening and Selection
•
Assigning an importance score to country screening
criteria:
•
•
Involves aggregating a selection of criteria, with each
criterion having an importance weight.
The criteria are:
market potential
political and financial stability
the availability of the appropriate marketing infrastructure
the degree of brand and company franchise in the local market
the degree of market fit with company goals, policies, and
resources.
•
Evaluating country performance on each of the
screening criteria.
•
Calculating the country attractiveness score: The
importance score is multiplied by performance. The
attractiveness score is the total score for each
country calculated by adding the resulting scores.
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Target Market Decisions
•
Differentiated
 Companies identify or create market segments
that want different benefits from a product and
target them with different brands using the
appropriate marketing strategies.
 Example: Procter & Gamble’s brands – Dreft,
Tide, Ariel are targeted at different segments
who want different types of performance from
their laundry detergent.
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Target Market Decisions (contd.)
•
Concentrated
 Select only one market segment and target it
with a single brand.
 Example: Mont Blanc pens aimed at
consumers who want a high-performing pen
with status cachet.
 Note: Niching (targeting a niche market) is an
example of a concentrated strategy.
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Target Market Decisions (contd.)
•
Undifferentiated

Product is aimed at the market using a single
strategy regardless of number of countries
targeted, and regardless of the locations where it
is marketed and the number of market segments.

Example: powder milk, beans
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Positioning the Brand
Steps Involved in positioning the brand:
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Identify competitors
Determine how they are perceived by consumers
Determine positioning in consumer’s minds
Analyze customers
Select positioning
Monitor position
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Positioning the Brand (contd.)
Firms use different approaches to positioning the brand:
• Attribute/benefit positioning:
• Uses product attributes and benefits to position it in the
consumers' mind relative to competitors' products and
services.
• Price/quality positioning:
• Products are positioned as either offering the best value for
the money (especially useful when marketing in developing
countries) or as being the best product that money can buy,
stressing its high price and quality.
• Use or applications positioning:
• Positioning a product as having a precise application, thus
differentiating it in the consumers' minds from similar
products with a more general use.
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Positioning the Brand (contd.)
• Product user positioning:
• Focuses on the product user, rather than on the
product, thus associating the product with a certain
segment of the market.
• Product class positioning:
• Differentiating the company as a leader in a
particular product category. Company defines the
product.
• Competitor positioning:
• Comparing the firm's brand with that of
competitors.
Copyright Atomic Dog Publishing, 2008
Chapter Summary
• Addressed international marketing strategy decisions
at the different levels of the international organization
and provide some insights into the international
marketing planning process of selected companies.
• Discussed rationales and requirements for adopting
target marketing strategies in international markets.
• Studies country attractiveness, and bases for
consumer segmentation and company application
examples.
• Discussed different international targeting and
positioning strategies.
Copyright Atomic Dog Publishing, 2008