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Chapter Nine Local Marketing in New Growth Markets : 

Chapter Nine Local Marketing in New Growth Markets MKT568 Global Marketing Management Dr. Fred Miller 3-1

Scenario : 

Scenario Krutsch SA is a Swiss manufacturer of small electrical kitchen appliances (blenders, coffee makers, food processors etc). The firms offers several types of appliances with multiple models in each line. These differ in styling and features to serve diverse segments based on patterns of kitchen use. Promotion builds each brands image and focuses on the value of 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 Europe through department stores, mass merchandisers, hardware stores, online retailers and its own eBusiness Web store. In international markets the firm must maintain its brand image by managing its manufacturing and marketing processes very tightly.

An Optimal Entry Mode Matrix : 

An Optimal Entry Mode Matrix Exhibit 6.3 Product/Market Situation

Global Marketing Decisions in this Chapter : 

Global Marketing Decisions in this Chapter What social and market conditions are dominant in new growth markets? What marketing research tools, strategy and tactics are most appropriate? What general marketing approaches are most effective in new growth markets? How should these strategies be adapted to: Latin America Asia

Three Marketing Environments : 

Three Marketing Environments Product/Market situation Exhibit 9.1

Porter’s DiamondCompetitive Advantage for Countries : 

Porter’s DiamondCompetitive Advantage for Countries Firm strategy, structure and rivalry Related and supporting industries Demandconditions Factorconditions 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

Dominant Marketing Dimensions : 

Dominant Marketing Dimensions Product/Market Situation Exhibit 9.2

Dominant Marketing Dimensions : 

Dominant Marketing Dimensions Marketing strategy: Strategic focus 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 Exhibit 9.2 cont. Mature Task Emerging New Growth Product/Market Situation

Comparative StatisticsSource: World Bank 2002 : 

Comparative StatisticsSource: World Bank 2002

Distribution of New Growth Markets : 

Distribution of New Growth Markets

Global Marketing Decisions in this Chapter : 

Global Marketing Decisions in this Chapter What social and market conditions are dominant in new growth markets? What marketing research tools, strategy and tactics are most appropriate? What general marketing approaches are most effective in new growth markets? How should these strategies be adapted to: Latin America Asia

Local Marketing in New Growth Markets : 

Local Marketing in New Growth Markets Raw materials (authoritarian) vs FDI (capitalistic) markets Market analysis trade blocs, introduction/growth stage of PLC, emerging middle class segments favorable view of foreign products Product strategy localization required, adaptation optional, brand support, foreign origin

Local Marketing in New Growth Markets : 

Local Marketing in New Growth Markets Pricing status pricing, tempered with need to build loyalty in low income markets Promotion build brand image for long term potential, intellectual property problems Distribution nurture relationships, invest in channel structure

Global Marketing Decisions in this Chapter : 

Global Marketing Decisions in this Chapter What social and market conditions are dominant in new growth markets? What marketing research tools, strategy and tactics are most appropriate? What general marketing approaches are most effective in new growth markets? How should these strategies be adapted to: Latin America Asia

Latin American Countries and Population : 

Latin American Countries and Population

Marketing in Latin America : 

Marketing in Latin America Market trends Concentration of wealth, common linguistic/religious influences Importance of regional trade groups – NAFTA, LAIA, Mercosur (Argentina, Brazil, Venezuela, Uruguay, Paraguay) 5 associate members Major markets are Argentina, Brazil, Mexico, Chile Pan-regional marketing strategies Market analysis Segmentation: urban/rural and age are major dimensions Positioning: urban similar to mature markets (80% of purchasing power), rural very difficult

Marketing in Latin America : 

Marketing in Latin America Marketing strategy Product: language/packaging localization, limited adaptation Price: premium for elite, value for emerging middle class Distribution: weak infrastructure, emerging integrated intermediaries (hypermarkets) Promotion: detailed information, family orientation

Global Marketing Decisions in this Chapter : 

Global Marketing Decisions in this Chapter What social and market conditions are dominant in new growth markets? What marketing research tools, strategy and tactics are most appropriate? What general marketing approaches are most effective in new growth markets? How should these strategies be adapted to: Latin America Asia

Asian Countries and Population : 

Asian Countries and Population

Marketing in Asian New Growth Markets : 

Marketing in Asian New Growth Markets Market trends Variations in size and ethnic composition Ambivalence toward Japan Recovery from economic crisis reversing trend of rapid economic growth Major markets are South Korea, Taiwan, Hong Kong Pan-regional marketing strategies possible, but risky Leading markets for emerging economies Market analysis Segmentation: urban/rural, ethnic, religious dimensions Positioning: global identification of consumers, especially in emerging middle class

Marketing in Asian New Growth Markets : 

Marketing in Asian New Growth Markets Marketing strategy Product: small packages, full lines for “harmonious whole” Price: entry strategy crucial, sensitivity to changes, gray trade risk Distribution: weak rural infrastructure, strong retail sector in urban areas Promotion: message extension, language/culture localization

When You Say Bud video : 

When You Say Bud video What firm-specific advantages are at issue here for Anheuser Busch? for Budejovice Budvar? What entry method did Anheuser Busch attempt to employ in this situation? Why did the firm select this approach? How did Budejovice Budvar respond to this effort? Why?

When You Say Bud video : 

When You Say Bud video Cyprus France, Germany, USA

Chapter Nine Local Marketing in New Growth Markets : 

Chapter Nine Local Marketing in New Growth Markets MKT568 Global Marketing Management Dr. Fred Miller 3-1