
This is an Outline of the major decisions that Master Jay must undergo in making a decision to
Market internationally. For a successful entrepreneur to smoothly enter to a market he must undergo a certain process sequentially making the decisions that will best fit his needs and desires?
The first step is deciding whether to go abroad; the second decision is deciding which markets to enter; the third step is deciding how to enter the market; the fourth step is deciding on the marketing program; the final step is deciding on the marketing organization.
In deciding to go abroad, a company needs to define its marketing objectives and policies. Ayal and Zif have argued that a company should enter fewer countries when there were certain criteria including:
(1) The market entry and market control costs are high;
(2) Product and communication adaptation costs are high;
(3) Population and income size and growth are high in the initial countries chosen; and
(4) Dominant foreign firms can establish high barriers to entry
In the second decision; that is deciding which markets to enter, a company decides to target a particular country; it has to determine the best mode of entry. Each of its market entry strategies involves more commitment, risk, control, and profit potential.
The third step is deciding how to enter the market
The market entry strategies in order from low risk to highest risk are as follows
(From lowest risk to highest risk)
1) Indirect exporting;
2) Direct exporting;
3) Licensing
4) Joint ventures;
5) Direct investment
The fourth step is deciding on the marketing program, this is commenced by the fact of understanding consumer behavior. Master Jay must understand what type of Music the people in the country he has chosen to invade are reminiscent of. The study of consumers helps firms and organizations improve their marketing program and strategies by understanding issues such as how
• The psychology of how consumers think, feel, reason, and select between different alternatives (example brands, products, and retailers);
• The psychology of how the consumer is influenced by his or her environment (example culture, family, signs, media);
• The behavior of consumers while shopping or making other marketing decisions;
• Limitations in consumer knowledge or information processing abilities influence decisions and marketing outcome;
• How consumer motivation and decision strategies differ between products that differ in their level of importance or interest that they entail for the consumer; and
• How marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer.
The final step is deciding on the marketing organization: Marketing Organization involves a marketing structure of an organization in which staff specialists have responsibility for particular markets (rather than for particular products of the organization)
Pearson and Wilson’s five steps to make the management system work better
Management system work well
o Clearly delineate the limits of manager’s role
o Build a strategy
o Development and
o Review process
o Build a strategy
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Economic Environment consists of factors that affect:
Buying power: This means that consumer’ incomes will determine the quantity they can purchase at any fair price. Therefore if the price is within their income range then there is one way or another that those who demand the products will be able to purchase quantities of it.
Consumption pattern: : shifting consumer spending pattern consumers are seeking satisfaction therefore the perfect presentation of factors like consumer financing can make end users to buy larger quantity of products depending on how much of it he or she can consume in a given grace period of credit facility.
Consumer concern for value: value is simply the utility comparable to the price. Utility being the ability of a product to satisfy a want hen there are higher possibilities that despite the economic condition value can sale more if it is satisfactory to the end user, this is just through the right combination of good quality and service at a fair price.
Political Environment consists of legal, agencies, and groups that influence or limit marketing actions, under the legal limitation examples are:
o Increasing legislation regulating business
o Strong government agency enforcement
o Greater emphasis on ethics and socially responsible actions
The cultural environment is makeup of institutions and forces that affect a society's
o Values
o Perceptions
o preferences, and
o behavior
Strategies to use during Marketing His Products:
The marketing mix is probably the most famous marketing term. Its elements are the basic, tactical components of a marketing plan. Also known as the Four P's, the marketing mix elements are price, place, product, and promotion. Read on for more details on the marketing mix.
The concept is simple. Think about another common mix - a cake mix. All cakes contain eggs, milk, flour, and sugar. However, you can alter the final cake by altering the amounts of mix elements contained in it. So for a sweet cake add more sugar!
It is the same with the marketing mix. The offer you make to you customer can be altered by varying the mix elements.
• So for a high profile brand, increase the focus on promotion and desensitize the weight given to price.
• Another way to think about the marketing mix is to use the image of an artist's palette. The marketer mixes the prime colors (mix elements) in different quantities to deliver a particular final color. Every new song produced must be original in some way, as is every marketing mix.
• The best tactic used by every coy is that of observing the consumer behavior and placing the product to the people who are actual users of that product. It's simple! You just need to create a product that a particularly group of people want, put it on sale some place that those same people visit regularly, and price it at a level which matches the value they feel they get out of it; and do all that at a time they want to buy. Then you've got it made!
Generally Marketing strategy is a method of focusing an organization's energies and resources on a course of action which can lead to increased sales and dominance of a targeted market niche. A marketing strategy combines product development, promotion, distribution, pricing, relationship management and other elements; identifies the firm's marketing goals, and explains how they will be achieved, ideally within a stated timeframe. Marketing strategy determines the choice of target market segments, positioning, marketing mix, and allocation of resources. It is most effective when it is an integral component of overall firm strategy, defining how the organization will successfully engage customers, prospects, and competitors in the market arena. Corporate strategies, corporate missions, and corporate goals; as the customer constitutes the source of a company's revenue, marketing strategy is closely linked with sales. A key component of marketing strategy is often to keep marketing in line with a company's overarching mission statement
Basic theory:
1. Target Audience
2. Proposition/Key Element
3. Implementation
there are a lot of solid strategies based on the marketing mix a prepared entrepreneur can secure a good market share for his products the following is a summary of many strategies and the first is:
Product strategies
When an organisation introduces a product into a market they must ask themselves a number of questions.
1. Who is the product aimed at?
2. What benefit will they expect?
3. How do they plan to position the product within the market?
4. What differential advantage will the product offer over their competitors?
We must remember that Marketing is fundamentally about providing the correct bundle of benefits to the end user, hence the saying ‘Marketing is not about providing products or services it is essentially about providing changing benefits to the changing needs and demands of the customer’ (P.Tailor 7/00)
Philip Kotler in Principles of Marketing devised a very interesting concept of benefit building with a product
For a more detailed analysis please refer to Principles of Marketing by P. Kotler.
Kotler suggested that a product should be viewed in three levels.
Level 1: Core Product. What is the core benefit your product offers?. Customers who purchase a camera are buying more then just a camera they are purchasing memories.
Level 2 Actual Product: All cameras capture memories. The aim is to ensure that your potential customers purchase your one. The strategy at this level involves organisations branding, adding features and benefits to ensure that their product offers a differential advantage from their competitors.
Level 3: Augmented product: What additional non-tangible benefits can you offer? Competition at this level is based around after sales service, warranties, delivery and so on. John Lewis a retail departmental store offers free five year guarantee on purchases of their Television sets, this gives their `customers the additional benefit of peace of mind over the five years should their purchase develop a fault.
Product Decisions
When placing a product within a market many factors and decisions have to be taken into consideration. These include:
Product design – Will the design be the selling point for the organization as we have seen with the iMAC, the new Volkswagen Beetle or the Dyson vacuum cleaner.
Product quality: Quality has to consistent with other elements of the marketing mix. A premium based pricing strategy has to reflect the quality a product offers
Product features: What features will you add that may increase the benefit offered to your target market? Will the organization use a discriminatory pricing policy for offering these additional benefits?
Branding: One of the most important decisions a marketing manager can make is about branding. The value of brands in today’s environment is phenomenal. Brands have the power of instant sales; they convey a message of confidence, quality and reliability to their target market.
Brands have to be managed well, as some brands can be cash cows for organizations. In many organizations they are represented by brand managers, who have huge resources to ensure their success within the market.
A brand is a tool which is used by an organization to differentiate itself from competitors. Ask yourself what is the value of a pair of Nike trainers without the brand or the logo? How does your perception change?
Increasingly brand managers are becoming annoyed by ‘copycat’ strategies being employed by supermarket food retail stores particular within the UK . Coca-Cola threatened legal action against UK retailer Sainsbury after introducing their Classic Cola, which displayed similar designs and fonts on their cans.
For Master Jay it would appropriate for his music to have a certain brand (brand name) on how it can be known something like slogans or specified voiceovers. This has been implemented by other producers like Akon Uses the word “Konvict Music” in all his productions.
Other Product strategies include:
Porter generic strategies - strategy on the dimensions of strategic scope and strategic strength. Strategic scope refers to the market penetration while strategic strength refers to the firm’s sustainable competitive advantage. The generic strategy framework (porter 1984) comprises two alternatives each with two alternative scopes. These are Differentiation and low-cost leadership each with a dimension of Focus-broad or narrow.
Product differentiation: also known simply as "differentiation" it’s the process of distinguishing a product or offering from others, to make it more attractive to a particular target market. This involves differentiating it from competitors' products as well as a firm's own product offerings. There are three types of product differentiation:
Simple: based on a variety of characteristics
Horizontal: based on a single characteristic but consumers are not clear on quality
Vertical : based on a single characteristic and consumers are clear on its quality
Cost leadership: Cost leadership is a concept developed by Michael Porter, used in business strategy. It describes a way to establish the competitive advantage. Cost leadership, in basic words, means the lowest cost of operation in the industry.[1] The cost leadership is often driven by company efficiency, size, scale, scope and cumulative experience (learning curve). A cost leadership strategy aims to exploit scale of production, well defined scope and other economies (e.g. a good purchasing approach), producing highly standardized products, using high technology.
Market segmentation: Market segmentation is a concept in economics and marketing. A market segment is a sub-set of a market made up of people or organizations with one or more characteristics that cause them to demand similar product and/or services based on qualities of those products such as price or function. A true market segment meets all of the following criteria: it is distinct from other segments (different segments have different needs), it is homogeneous within the segment (exhibits common needs); it responds similarly to a market stimulus, and it can be reached by a market intervention. The term is also used when consumers with identical product and/or service needs are divided up into groups so they can be charged different amounts. The people in a given segment are supposed to be similar in terms of criteria by which they are segmented and different from other segments in terms of these criteria. These can broadly be viewed as 'positive' and 'negative' applications of the same idea, splitting up the market into smaller groups.
Examples:
Gender
Price
Interests
While there may be theoretically 'ideal' market segments, in reality every organization engaged in a market will develop different ways of imagining market segments, and create Product differentiation strategies to exploit these segments. The market segmentation and corresponding product differentiation strategy can give a firm a temporary commercial advantage.
Pricing Strategies
An organization can adopt a number of pricing strategies. The pricing strategies are based much on what objectives the company has set itself to achieve.
Penetration pricing: Where the organization sets a low price to increase sales and market share.
Skimming pricing: The organization sets an initial high price and then slowly lowers the price to make the product available to a wider market. The objective is to skim profits of the market layer by layer.
Competition pricing: Setting a price in comparison with competitors.
Product Line Pricing: Pricing different products within the same product range at different price points. An example would be a video manufacturer offering different video recorders with different features at different prices. The greater the features and the benefit obtained the greater the consumer will pay. This form of price discrimination assists the company in maximizing turnover and profits.
Bundle Pricing: The organization bundles a group of products at a reduced price.
Psychological pricing: The seller here will consider the psychology of price and the positioning of price within the market place. The seller will therefore charge 99p instead £1 or $199 instead of $200
Premium pricing: The price set is high to reflect the exclusiveness of the product. An example of products using this strategy would be Harrods, first class airline services, Porsche etc.
Optional pricing: The organization sells optional extras along with the product to maximise its turnover. This strategy is used commonly within the car industry.
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Promotion Strategies
A successful product or service means nothing unless the benefit of such a service can be communicated clearly to the target market. An organisations promotional strategy can consist of:
Advertising: Is any non personal paid form of communication using any form of mass media.
Public relations: Involves developing positive relationships with the organisation media public. The art of good public relations is not only to obtain favorable publicity within the media, but it is also involves being able to handle successfully negative attention.
Sales promotion: Commonly used to obtain an increase in sales short term. Could involve using money off coupons or special offers.
Personal selling: Selling a product service one to one.
Direct Mail: Is the sending of publicity material to a named person within an organisation. There has been a massive growth in direct mail campaigns over the last 5 years. Spending on direct mail now amounts to £18 bn a year representing 11.8% of advertising expenditure . Organisations can pay thousands of pounds for databases, which contain names and addresses of potential customers.
Direct mail allows an organization to use their resources more effectively by allowing them to send publicity material to a named person within their target segment. By personalizing advertising, response rates increase thus increasing the chance of improving sales. Listed below are links to organization who's business involves direct mail.
Place strategies
This refers to how an organization will distribute the product or service they are offering to the end user. The organisation must distribute the product to the user at the right place at the right time. Efficient and effective distribution is important if the organisation is to meet its overall marketing objectives. If an organisation underestimatea demand and customers cannot purchase products because of it, profitability will be affected.
What channel of distribution will they use?
Two types of channel of distribution methods are available. Indirect distribution involves distributing your product by the use of an intermediary for example a manufacturer selling to a wholesaler and then on to the retailer.. Direct distribution involves distributing direct from a manufacturer to the consumer For example Dell Computers providing directly to its target custmers. The advantage of direct distribution is that it gives a manufacturer complete control over their product.
Above indirect distribution (left) and direct distribution (right)
Distribution Strategies
Depending on the type of product being distributed there are three common distribution strategies available:
1. Intensive distribution: Used commonly to distribute low priced or impulse purchase products eg chocolates, soft drinks.
2. Exclusive distribution: Involves limiting distribution to a single outlet. The product is usually highly priced, and requires the intermediary to place much detail in its sell. An example of would be the sale of vehicles through exclusive dealers.
3. Selective Distribution: A small number of retail outlets are chosen to distribute the product. Selective distribution is common with products such as computers, televisions household appliances, where consumers are willing to shop around and where manufacturers want a large geographical spread.
If a manufacturer decides to adopt an exclusive or selective strategy they should select a intermediary which has experience of handling similar products, credible and is known by the target audience.
CONCLUSION
Because of its factors and the ability of Master Jay to penetrate a global market as an global marketer I would advise him to use Porter generic strategies because a combination of these and a good promotional mix they are the best for him economically and even by the fact that his music can be varied differently depending on different genres to different gender for example the you would prefer HIP HOP genre while old people would like hear the soft oldies. Also the other fact why I would best recommend this strategy is because of the overall fit of different virtues depending on different culture example the invasion of Japan as a country must be segmented differently from the incursion of the American Market. That is why Zif and Ayal (in the first sub question) recommended that when invading the international market a few countries should be receipted first.
REFERENCE:
Books;
Principles of Marketing by Philip Kotler
Principles of Marketing by Frances Brassington and Stephen Pettitt
Manuals;
1. (Kotler, P. and Singh, R. (1981) "Marketing warfare in the 1980s", Journal of Business Strategy, winter 1981, pp. 30-41
2. (Quinn, J. (1980) Strategies for change | Strategies for change: Logical Incrementalism, Irwin, Homewood Il
Websites:
http://www.wikianswers.com
http://www.books.com
http://www.marketline.co.uk
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