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Chapter Ten Local Marketing in Emerging Markets

3-1. Chapter Ten Local Marketing in Emerging Markets. MKT568 Global Marketing Management Dr. Fred Miller. Scenario.

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Chapter Ten Local Marketing in Emerging Markets

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  1. 3-1 Chapter Ten Local Marketing in Emerging Markets MKT568 Global Marketing Management Dr. Fred Miller

  2. Scenario Castillo Tools SA is an Spanish manufacturer of small electrical hand tools (drills, small saws, screwdrivers, etc.) . The firms offers several types of products with multiple models in each line. Each line includes wired and cordless tools as well as sets of tools using the same battery recharging system. Separate promotional efforts focus on professional and do-it-yourself markets, but both convey product durability, reliabilty and the benefits 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 Euope through hardware stores, hypermarkets and online retailers. In international markets the firm wishes to exploit its patent-protected produces by reaching new customers in new markets

  3. Global Marketing Decisions in this Chapter • What social and market conditions are dominant in emerging markets? What marketing research tools, strategy and tactics are most appropriate? • What general marketing approaches are most effective in emerging markets? • How should these strategies be adapted to: • China • India

  4. Distribution of Emerging Markets

  5. Comparative StatisticsSource: World Bank 2002

  6. An Optimal Entry Mode Matrix Product/Market Situation Exhibit 6.3

  7. Three Marketing Environments Product/Market situation Exhibit 9.1

  8. Dominant Marketing Dimensions Product/Market Situation Exhibit 9.2

  9. Dominant Marketing Dimensions Product/Market Situation Task Emerging New Growth Mature Marketing strategy: Strategic focus Market Participation Compete for share development in growth Lead/follow Domestic/foreign Strengths/ Competitive Focus weaknesses Low end Limited Wide Product line Basic Advanced Adapted Product design Rare Selective Fast New product intro Affordable Status Value Pricing Awareness Image Value-added Advertising Build-up Penetrate Convenience Distribution Awareness Trial Value Promotion Extra Desired Required Service Exhibit 9.2 cont.

  10. Global Marketing Decisions in this Chapter • What social and market conditions are dominant in emerging markets? What marketing research tools, strategy and tactics are most appropriate? • What general marketing approaches are most effective in emerging markets? • How should these strategies be adapted to: • China • India

  11. Local Marketing in Emerging Markets • Market analysis • marketing infrastructure, income levels, currency convertibility • Product strategy • simplified, low-cost line; some high-end opportunities • Pricing • balance between skimming and penetration, innovation required • Promotion • limited media, less clutter, importance of visual images • Distribution and Service • key factor, imagination required, personal service available

  12. Global Edge Emerging Markets

  13. Emerging Markets: Success Strategies • Seek compatible objectives • Help develop local industry • Be sensitive to local cultures and values • Provide training across functional areas • Contribute to social development • Document contributions • Adopt long term perspective

  14. Costa Rican Gourmet Coffee Direct from Grower World Art From Novica Chinese Jade Seller: From eBay to seller’s site Global Marketing from Emerging Markets?

  15. Global Marketing Decisions in this Chapter • What social and market conditions are dominant in emerging markets? What marketing research tools, strategy and tactics are most appropriate? • What general marketing approaches are most effective in emerging markets? • How should these strategies be adapted to: • China • India

  16. Marketing in China • Market trends • Huge market potential tied to economic development • Barriers - import licenses, tariffs, currency controls, trading companies • Joint venture, Special Economic Zone opportunities • Role of Hong Kong’s trading companies • Importance of establishing personal relationships - guanxi • Market analysis • Segmentation: geographic and urban/rural segments • Positioning: acceptance of global brands, localization of names

  17. Marketing in China • Marketing strategy • Product: positive view of well known, foreign brands, 4 big things • Price: high price sensitivity, but imports commonly higher • Distribution: weak national infrastructure, regional rollouts, many intermediaries state-owned • Promotion: government control, limited media penetration, authenticity

  18. Global Marketing Decisions in this Chapter • What social and market conditions are dominant in emerging markets? What marketing research tools, strategy and tactics are most appropriate? • What general marketing approaches are most effective in emerging markets? • How should these strategies be adapted to: • China • India

  19. Marketing in India • Market trends • Huge market potential tied to development of middle class • Socialist era (1950-80) of market control • Liberalization (1980-present), political risk • Dual market, large emerging middle class • Resurgence of domestic brands • Market analysis • Segmentation: urban middle class, poor rural population • Positioning: growing acceptance of global brands, more demanding

  20. Local Brands in India

  21. Marketing in India • Marketing strategy • Product: full product line, significant first move effects • Price: value orientation in middle class, especially for unknown brands • Distribution: weak infrastructure, requires greater attention/investment • Promotion: linguistic/cultural localization, no direct attacks

  22. India and Bangladesh

  23. Women’s Bank of Bangladesh Video • What economic statistics are used to portray Bangladesh in this video? • How does the Women’s Bank initiative respond to these conditions? What elements of controversy does it generate? How does the bank address them? • What lessons might a brewer exporting to Bangladesh learn from the strategies of the Women’s Bank?

  24. Women’s Bank of Bangladesh Video Update: • Mohammed Yunus and Grameen Bank shared the 2006 Nobel Peace Prize, • Grameen now has 6 million borrowers worldwide • Microlending and microfranchising have been widely adopted by other organizations.

  25. Chinese Management & Modern China Videos • Explain the role of the following in traditional Chinese management style and practices • Family relationships and quanxi • Harmony and loyalty • Span of control and operational responsibility • Respect for superiors and creativity • How are these values related to the traditions covered in the Legacy of China video? • How are these values related to Hofstede indices for China? • High Power Distance, Low Uncertainty Avoidance • Collective, Masculine • How have state-owned enterprises, rural populations and private enterprises been affected by economic reform?

  26. 3-1 Chapter Ten Local Marketing in Emerging Markets MKT568 Global Marketing Management Dr. Fred Miller

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