Chapter Eight Local Marketing in Mature Markets

1. 3-1 Chapter EightLocal Marketing in Mature Markets MKT568 Global Marketing Management Dr. Fred Miller

2. Marketing Environments and Tasks • Emerging markets - build infrastructure • New growth markets - market development • Mature markets - build market share • Analysis and strategy focus by market type

3. Global Marketing Decisions in this Chapter • What social and market conditions are dominant in mature markets? What marketing research tools, strategy and tactics are most appropriate? • What general marketing approaches are most effective in mature markets? • How should these strategies be adapted to: • Europe and the EU • Japan • Australia and New Zealand • North America

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

5. Porter’s DiamondCompetitive Advantage for Countries Firm strategy, structure and rivalry Factorconditions Demandconditions Related and supporting industries Source: Adapted and reprinted with the permission of the Free Press, a division of Simon and Schuster, from The Competitive Advantage of Nations, by Michael E. Porter. Copyright © 1990 by Michael E. Porter

6. Three Marketing Environments Product/Market situation Exhibit 9.1

7. Dominant Marketing Dimensions Product/Market Situation Exhibit 9.2

8. 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.

9. Distribution of Mature Markets

10. Global Marketing Decisions in this Chapter • What social and market conditions are dominant in mature markets? What marketing research tools, strategy and tactics are most appropriate? • What general marketing approaches are most effective in mature markets? • How should these strategies be adapted to: • Europe and the EU • Japan • Australia and New Zealand • North America

11. Local Marketing in Mature Markets • Market analysis • market segmentation, positioning, brand image, country of origin • Product strategy • wide line, differentiated, first mover (leaders); me-too (followers) • Pricing • range of options, relative to product position • Promotion • brand image, sales promotion for support, differentiated position • Distribution • solid infrastructure, full channels, slotting fees, piggybacking • Customer satisfaction • quality, technical vs emotional quality, surprise

12. CS and Two Kinds of Quality High Autobytel Survey reported in USA Weekend, Nov 2002 Almost one third of potential new car buyers would switch cars if dissatisfied with cup holders. Emotional quality Level of satisfaction High Low Functional quality Low Level of quality exhibit 9.3

13. Global Marketing Decisions in this Chapter • What social and market conditions are dominant in mature markets? What marketing research tools, strategy and tactics are most appropriate? • What general marketing approaches are most effective in mature markets? • How should these strategies be adapted to: • Europe and the EU • Japan • Australia and New Zealand • North America

14. Pan-European Marketing • Market trends • Reduction of NTB’s (1992 initiative), growth of EU • economic, financial, political integration, • Constitution rejected by France and Denmark, June 2005 • Market analysis • Segmentation: pan-European, regional or local markets • Positioning: market retreat, pan-European competition, niche position • Marketing strategy • Product: euro-brands, wide lines for diverse segments • Price: Euro currency (€), price sensitivity and transparency • Distribution: trend toward large, integrated units • Promotion: pan-European reach, visual emphasis with voiceovers

15. Enlargement in 2004 & 2007 Florida 27th state 1845, 69 yrs after DoI Newest Members2004, Euro 2007-10 Czech Republic Estonia Cyprus Latvia Lithuania Hungary Malta Poland Slovenia Slovakia 2007, 50 years after ToR Bulgaria Romania No date specified Turkey

16. Currency Introduction in 2002 • Common banknotes, Common/country coin design • Currency issued 1 Jan 2002 • Thirteen member countries as of January 2007 (Slovenia), about 315 million people • Objectives: transparency, efficiency, reserve currency

17. Euro Notes and Coins

18. Dual Pricing in a Sample Ad

19. Global Marketing Decisions in this Chapter • What social and market conditions are dominant in mature markets? What marketing research tools, strategy and tactics are most appropriate? • What general marketing approaches are most effective in mature markets? • How should these strategies be adapted to: • Europe and the EU • Japan • Australia and New Zealand • North America

20. Marketing in Japan • Market trends • More penetration, import competition, value consciousness • Market analysis • Segmentation: more diverse segments, richer markets • Positioning: traditional market=quality, emerging=value • Marketing strategy • Product: broader lines, multiple price points, function without fault • Price: more price sensitivity, intrabrand competition, value analysis • Distribution: complex, difficult, emerging larger intermediaries • Traditonal: fragmented, based on relationships with intermediaries • Promotion: indirect, subtle, image based

21. Insider Japan Video • How does the geisha ceremony for food oil executives illustrate traditional Japanese culture and business practices. • In what ways is Sosha Honda’s approach to business consistent with the traditional Japanese approach?In what ways does it represent a new trend? • In your opinion, what factors in the video are keys to success in modern Japan.

22. 3-1 Chapter EightLocal Marketing in Mature Markets MKT568 Global Marketing Management Dr. Fred Miller