The Competitive Market

there is a limit to the products that can be supported in a market

the competitive market is the specific products in a category as well as companies that produce them

market share is the percentage that a product takes of the total dollars spent within a particular category

market segments are narrower categories

The Competitive Market

One of the big issues becomes, how does a company increase its market share?

1.Take sales away from its competitors

2.Increase the size of the market

One of the big ways to increase the size of the market is….

International Marketing

Starbucks moves into India!

The Wall Street Journal – October 10, 2011

• Starbucks sets out to perk up sales by making a long-awaited entry into one of the world’s fastest-growing markets (deal to be closed soon…)

• Within the next 3 months, announce partnership with Tata Coffee Ltd. to open stores in India.

• Starbucks outlets are likely to be located in retail stores and hotels, associated with Tata group.

• Traditionally drinkers of tea, Indians have of been taking to order espressos, etc at quick service cafes as a growing middle class increasingly adapts to Western tastes

• India's restrictive foreign-ownership laws could prove to be a challenge for Starbucks. Local foreign-investment rules limit a foreign single-brand retailer to holding 51% of its joint venture with a local partner.

HSBC – “The World’s Local Bank”

HSBC prides itself on understanding customers and business at a local level around the world – this is their USP

Their tag-line (slogan) “The World’s Local Bank” shows how important this concept is to them

Let’s look at some of their advertising…

HSBC Television Advertising

Local Customs http://www.youtube.com/watch?v=JK_NinOmFW

wGolf in Japan

http://www.youtube.com/watch?v=GHuO6qmiSggThe Wrong Flower

http://www.youtube.com/watch?v=8jrbu0lCWjk

International Marketing

Use same methods in international marketing Marketing Mix (4 P’s) Target Market Consumer Profiling & Segmentation Competitive Advantage Unique Selling Proposition

BUT, it needs to suit the local market Research and local knowledge is critical

Marketing Mix

Product Packaging needs to be in the right language Regulations must be followed Understand competitors there, size of product Design (make up colour, cars)

Price Need to factor in transportation costs, tariffs, tax impacts,

insurance, exchange rates, etc. Tariffs: tax placed on good being imported into a country Must calculate “landed cost” – the total, end cost to go into

that country Consider the type of currency used

Marketing Mix cont’d

Promotion Portrayal of women’s roles Forbidden products and regulations What channels are most effective? Language

Placement Channels of distribution Ethical issues, customs, and regulations Wholesale, retail, need to be assessed Understand the impact of the “black market” Consider your options for distribution

3 Approaches to International Marketing

1. Global strategy - minimal changes for new markets

McDonalds or Coke Very few pure global companies - Pringles

2. Adaptation strategy - making changes in product or promotion to meet target's needs/wants/culture

Nike - clothing, sizes, climate, cultural sports; Nestle – Milo drink in South Africa (soccer theme)

3. Customized strategy - developing a totally new product to meet specific market needs

Coke in China (herbal flavours)

Marketing Strategy Depends on…

1. Geographical Factors - high population areas, climate, land type; product, price (costs), place

2. Economic Factors - money, how developed the country is, employment rates; price, place, product, promotion

3. Political Factors - role of government, trade barriers; place, product, price

4. Legal Factors - laws that govern the country; product, promotion

5. Cultural Factors – Name some examples…

What Can Happen if this Approach is Not Used?

Coors put its slogan “Turn it Loose” into Spanish, where it was read as “suffer from diarrhea”

Clairol introduced the “Mist Stick”, a curling iron, into German only to find out that “mist” is slang for manure

Scandinavian vacuum manufacturer Electrolux used the following in an American campaign: “Nothing sucks like an Electrolux”

In Chinese, the Kentucky Fried Chicken slogan “finger-lickin' good” came out as “eat your fingers off”

More Global Marketing Bloopers

The Coca-Cola name in China was first read as “Ke-kou-ke-la”, meaning “Bite the wax tadpole” or “female horse stuffed with wax”, depending on the dialect. Coke then researched 40,000 characters to find a phonetic equivalent “ko-kou-ko-le”, translating into “happiness in the mouth”

Pepsi's “Come alive with the Pepsi Generation” translated into “Pepsi brings your ancestors back from the grave”, in Chinese

In Italy, a campaign for Schweppes Tonic Water translated the name into “Schweppes Toilet Water”

Globalization

Customization

Product Adaptation

Promotional Adaptation