Chapter Ten Local Marketing in Emerging Markets

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Chapter Ten Local Marketing in Emerging Markets
3-1

• 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
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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

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Distribution of Emerging Markets
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Comparative StatisticsSource World Bank 2002
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An Optimal Entry Mode Matrix
Product/Market Situation
Exhibit 6.3
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Three Marketing Environments
Product/Market situation
Exhibit 9.1
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Dominant Marketing Dimensions
Product/Market Situation
Exhibit 9.2
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Dominant Marketing Dimensions
Product/Market Situation
Task Emerging
New Growth
Mature
Marketing strategy
Strategic focus
Market
Participation
Compete for share
development
in growth
Competitive Focus
Lead/follow
Domestic/foreign
Strengths/
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.
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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

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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

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Global Edge Emerging Markets
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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

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Global Marketing from Emerging Markets?
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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

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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 Kongs trading companies
• Importance of establishing personal relationships
  - guanxi
• Market analysis
• Segmentation geographic and urban/rural segments
• Positioning acceptance of global brands,
  localization of names

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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

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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

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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

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Local Brands in India
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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

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India and Bangladesh
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Womens Bank of Bangladesh Video

• What economic statistics are used to portray
  Bangladesh in this video?
• How does the Womens 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
  Womens Bank?

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Womens 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.

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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?

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Chapter Ten Local Marketing in Emerging Markets
3-1

• MKT568
• Global Marketing Management
• Dr. Fred Miller