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Export Marketing
Market Selection: Definition and Strategies
Introduction
This chapter describes the many alternatives for marketing internationally. A number of the examples given regard export marketing, but also apply to other methods of market penetration. The marketer has a key role in the strategic planning process: many planning tools depend upon concepts of market share, market definition, segmentation, positioning, product life cycles and customer relationship management (CRM). Key steps in formulating an international marketing strategy are: Export market selection: determining the markets in which to compete, and the sequence of entries. Export market direction: determining whether to build, hold or divest in markets being served.
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Introduction
External analysis focused on the characteristics of the targeted markets, and their fit with company products. Internal analysis focused on the resources of the company available for supporting increased complexity and differences in foreign markets. The need to recognize that each country is unique, so countryspecific plans are required. The need to develop realistic expectations.
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Market segmentation: a breakdown into segments of customers for particular products in particular countries. Market segmentation is a crucial and complex function: Need to consider countries, channels, customer segments etc. Unique customer groups may be based on countries or consumer types across countries. It is critical that there be careful analysis prior to commitment to international expansion.
serving
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Bases of Segmentation
A study of consumers in 20 countries proposed bases for international segmentation regarding luxury products.
A study of 15,000 adults in 14 countries showed some global similarities. Consumer segments may also be based on ethical beliefs.
Bases of Segmentation
List of Values (LOV) Segmentation
Sense of Belonging Fun & Enjoyment Warm Relationships Self Fulfillment Being Well Respected Sense of Accomplishment Security Self Respect
Bases of Segmentation
Teenagers may provide a global market segment across a number of countries. Business-to-business markets as well as consumer markets can sometimes be segmented.
Bases of Segmentation
activities
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Reactive; responding to inquiries; very common, especially for small or new exporters. Proactive; formal or informal search.
The factors discussed in the text may help to provide initial indications concerning some possible markets to enter and markets to avoid.
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Expansive: working outward from core; to nearest neighbor (nearest in distance or similarities); may adapt products and/or segment markets or neither. Temperature Gradient Approach Super Hot, Hot, Moderate or Cold Contractible: reducing large number of possible candidates looking at general market indicators and specific product indicator. Knock-out factors have to be decided upon and stipulated: as noted
Prohibitive product characteristics in obvious conflict with cultural, religious or other factors. Prohibitive market factors such as prohibitions, boycotts, very high Customs duties or other barriers.
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TBases
Market concentration: high levels of effort in a few markets; slow/gradual expansion over time. Market spreading: resources spread over many markets; fast rate of growth in the number of markets served.
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power of specialization, scale and market penetration; greater market knowledge; higher degree of control; learning of the export process and the experience curve.
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Differing customer segments for different products in a country may cause a company to set up more than one type of entry method. Any model needs to be supplemented with in-depth information regarding product factors, environmental factors, export marketing factors, political risk assessment etc.
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