"Grow Your Global Markets"
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Use this comprehensive primer to simplify exporting, discover exportable products and services, and determine and select the best target market entry alternative while ensuring that you get paid. See the book on Amazon and learn more at www.raymondhopkins.net.
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"Grow Your Global Markets"
- 1. Grow Your Global Markets Dr. Raymond Hopkins
- 2. Your teams have done well until now, and you realize the environment is fundamentally changed
- 3. You’re here to figure out what you are going to do.
- 4. What worked in the past to make sales isn’t working as well anymore – and you’re feeling the impact
- 5. Change your way of thinking to get breakthrough sales results
- 6. You’d like to find a new way to do things that work.
- 8. You currently follow a 3-step process 1. You study the market using our proprietary set of tools • You build a product or deliver services based on you have learned • You market the product to your target segments
- 9. But the process is not working
- 10. Domestic sales are stagnant or dropping or peaked
- 11. Your products may be staying on the shelf longer
- 12. You may not be able to reach your market through traditional channels
- 13. If you stay on this path, you’ll be out of business
- 14. This is a red flag moment
- 15. The trend is worrisome as you look at it over time
- 16. Step outside your assumptions and grow your global markets
- 17. Assume the market is not stable
- 18. The trends show this will…
- 19. Assume products have shorter lives
- 20. The average life of a product is short lived…
- 21. Research confirms consumers are changing the way they research and buy products.…
- 22. Assume marketing is not working anymore
- 23. Marketers have long been…
- 24. Assume you need a new and different market focus…
- 25. Step back inside to a new way of thinking
- 26. Introducing Growth in Global Markets All those trucks and barges that carry our goods to port are vital connections to the only force which can balance our trade deficit: export. We must keep doing what we do best if we are going to get America out of the red." – Jo Ann Emerson, U.S. Representative Missouri's 8th congressional district.
- 29. Reconsider Where Your Markets Are
- 30. Do You Know Where to Start Your Journey to Growing Global Markets?
- 31. Growth in Global Markets “Fundamentally, I believe that the U.S. can improve its international standing and its national security by expanding trade and strengthening its relationships…" – Richard Neal U.S. Representative for Massachusetts's 2nd congressional district June 16, 2015
- 32. Top 15 Destinations, Jobs Supported by U.S. Goods Export in 2015
- 33. Top 15 Destinations, Jobs Supported by U.S. Services Exports in 2015
- 34. The Benefits of Global Market Growth International Expansion Accelerated Growth Reduce Dependence on Own Resources Global Economic Growth Local Knowledge & Networks Increased Brand Value Global Expansion
- 35. The Benefits of Economic Growth ◦ Higher output and positive economic growth enable a country and its economy to: ◦ Provide consumers and workers with more goods and services, thus a higher standard of living. ◦ Increase rates of employment. ◦ Reduce government borrowing and debt. ◦ Invest in clean technologies. ◦ Reduce rates of poverty. ◦ Increase government income and expenditures to fund superior public services, public transportation, critical research and projects with the potential to further economic development. ◦ Increase and sustain capital investment. ◦ Enhance business confidence of those running their own businesses. ◦ Devote more resources to promoting recycling and the use of renewable resources.
- 36. Environmental Forces That Make International Business Different ◦ Your competition ◦ Distributive forces ◦ Socio-economic forces ◦ Financial forces ◦ Legal forces ◦ Physical forces ◦ Political forces ◦ Socio-cultural forces ◦ Workforce issues ◦ Technological forces ◦ Logistics ◦ Media ◦ Political and governmental forces ◦ International legal forces ◦ Tax considerations
- 37. Determining Your Role in Global Markets ◦ Capital budgeting involving the analysis of investment opportunities, sourcing for raw materials, for production efficiencies and gaining access to local expertise. ◦ Financing of those activities including the currency type and short-term trade finance. ◦ Capital structure – the proportions of debt and equity for global operations. ◦ Cash management – how to optimize cross-border cash flows. ◦ Working capital management - establishing invoicing policies (which currency), pricing strategies (how much) cash flow networks, accelerating cash flow repatriation and funds positioning.
- 38. Consider Profit Potential of International Expansion
- 39. Consider the Profit Potential of International Expansion Step 1. Estimate Future Revenue Step 2. Estimate Your Variable Costs
- 40. Consider the Profit Potential of International Expansion Step 3. Estimate Your Fixed Costs Step 4 Calculate Your Gross Profit Margin
- 41. Rules and Regulations to Consider Before Getting Started Exporting ◦ Products can potentially have military use or dual use (commercial [civilian] and military) ◦ The Bureau of Industry and Security lists countries for which there are product export restrictions ◦ Export sales to some purchasers may be restricted. Contracts for the Sale of Goods ◦ Payment Mechanisms ◦ Currency Exchange Risk ◦ Terms of Sale ◦ Dispute Resolution
- 42. Global Growth Plans and Strategies ◦ Exporting ◦ Turn-key Projects ◦ Licensing ◦ Accessories ◦ Apparel ◦ Consumer Electronics ◦ Footwear ◦ Furniture and Home Furnishings ◦ Gifts/Novelties ◦ Health and Beauty Products ◦ Infant Products ◦ Pet Products ◦ Sporting Goods ◦ Toys and Games ◦ Video Games and Software ◦ Trademarks/Brands ◦ Franchising ◦ Contract Manufacturing ◦ Joint Venture ◦ Wholly-owned Subsidiary
- 43. Global Growth and Organization Design
- 45. Understanding Types of Markets ◦ Market - a group of potential customers with similar needs that are willing to purchase goods and services to satisfy those needs, lies outside of the firm. ◦ Product markets -the set of products/services that can be substituted for each other within specific use situations where similar benefits are sought and the customers for whom such usages ◦ Product specificity - define a broad product definition other than your firm’s current product market. Focus on: ◦ Product type ◦ Customer need ◦ Location of customer segments ◦ Countries in which the customers having these needs are located.
- 46. Identifying Your Target Market
- 47. Global Marketing: Leveraging Product Development Strategy ◦ Product/Service ◦ Pricing - most critical element of the marketing mix ◦ Promotion ◦ Advertising ◦ Public Relations ◦ Personal Selling ◦ Direct Marketing ◦ Positioning ◦ Place - each target market has a distribution structure
- 48. Domestic Marketing Plan vs Global Marketing Plan? ◦ Marketing background –the information base from which the marketing plan is developed. ◦ Marketing plan – direction for execution in the marketplace. ◦ Marketing execution – the actual interaction with the target market. ◦ Marketing evaluation – measurement of the level of success of the plan’s execution.
- 49. Your Global Market Entry Plan Domestic 9Tactical Marketing Mix Tools Product Product differentiators or competitive advantage Packaging Support Services Promotion Major message thrust Advertising—media mix, reach, costs Sales Promotion—forms, objectives, and costs Personal Selling Miscellaneous promotional methods Place (Distribution) Macro Place (Distribution) Micro Warehousing Needs Retailers—Type of retail stores, scale of operation and markup Wholesalers—Type of wholesalers, scale of operation and markups Pricing Marketing Plan Budget and Calendar Annual profit and loss statement (first and fifth years) Execution Evaluation 1Executive Summary 2Introduction 3The Business Review 4Problems/Opportunities 5Sales Objectives 6Target Markets and Marketing Objectives Target market (specific description of the market) Expected market share or market penetration rate Expected sales in dollar volume 6Competitive Analysis 7Plan Strategies - Positioning & Marketing 8Communication Goals
- 50. Your Global Market Entry Plan Global 1Executive Summary 2Introduction 3The Business Review 4Problems/Opportunities 5Sales Objectives 6Target Markets and Marketing Objectives Target market (specific description of the market) Cultural Analysis Expected market share or market penetration rate Expected sales in dollar volume 6Competitive Analysis 7Plan Strategies - Positioning & Marketing 8Communication Goals 9Tactical Marketing Mix Tools Product Product differentiators or competitive advantage Packaging Support Services Promotion Major message thrust Advertising—media mix, reach, costs Sales Promotion—forms, objectives, and costs Personal Selling Miscellaneous promotional methods Place (Distribution) Macro Port Selection Origin Port Destination Port Mode Selection—(Railroad, Air carrier, Ocean carrier, Motor carrier) Documentation Required Bill of Lading Dock Receipt or Air Bill Commercial Invoice Shipper’s export declaration Statement of Origin Place (Distribution) Micro Warehousing Needs Retailers—Type of retail stores, scale of operation and markup Wholesalers—Type of wholesalers, scale of operation and markups Import/Export Agents Pricing Handling Expenses (pier charges, wharfage fees, loading/unloading charges) Customs duties Import taxes Wholesale and Retail Markups Company’s gross margin Retail price Methods of Payment Government Participation 10Marketing Plan Budget and Calendar Annual profit and loss statement (first and fifth years) 11Execution 12Evaluation
- 51. Complying with the Law at Home and Abroad ◦ Export Administration Regulations ◦ International Traffic in Arms Regulations (ITAR), ◦ Anti-diversion Clause ◦ Anti-boycott Regulations ◦ Foreign Corrupt Practices Act
- 52. Selecting Foreign Representation ◦ Agent - someone who acts under your direction and control. ◦ Not authorized to enter into binding agreements on your behalf without your prior permission. ◦ Distributor - someone who purchases your goods from you for resale to others. ◦ Consignee - like an agent: a consignee never owns the goods.
- 53. Selecting Foreign Representation Representation Agreement ◦ Whether the representative is an agent, distributor or consignee. ◦ Whether the representative may assign or delegate any duties. ◦ Whether the representation is exclusive or non-exclusive. ◦ Period of agreement ◦ The scope/size of the representative’s sales territory. ◦ Products – description and catalog. ◦ Sales performance targets, minimum orders and sales reports. ◦ Who is authorized to submit a proposal and the extent of authorization to submit a proposal. ◦ Who may approve an order with specifics addressing delivery time timing, pricing, terms of payment, and all other sales terms and conditions. ◦ Who will deliver and install the goods, if they require installation. ◦ Who has title to the goods and when title to the goods passes. ◦ How much and what type of security will assure your and his performance. ◦ Training and technical support ◦ Advertising and promotion costs. ◦ Compensation rate, the currency in which is paid and impact of exchange rates. ◦ Arbitration – country of location, rules and form. ◦ Controlling law of the agreement, preferably U.S. law or that of a mutually favorable neutral country. ◦ Where disputes will be resolved, the manner of resolution, which country’s law (preferably U.S. law) and what language will be used. ◦ Termination of agreement/early termination for breach of agreement ◦ Communication costs – each party to cover its own costs ◦ Compliance with U.S. foreign trade laws, e.g., the Foreign Corrupt Practices Act. ◦ Non-disclosure
- 54. Global Growth and Organization Design
- 55. Look at Global Marketing
- 57. Governments, After Sales Service, and Foreign Travel
- 58. Understanding Types of Markets
- 59. Identifying Your Target Market
- 60. Researching Global Markets 1. Statement of background or problem/opportunity definition 2. You identify the background, objective and develop a research design, the plan, and structure required to obtain answers to research questions. 3. Research Method. You select: ◦ The sample - who and how many respondents to include. ◦ Data collection method - whether you use secondary data, a mail or telephone survey or personal interview. ◦ Design element, i.e., what are the respondents going to be exposed to. Is a survey or experimental design most appropriate? 4. You determine your information needs relating to: ◦ Measuring content, i.e., what should be measured? ◦ Measurement technique, i.e., how should it be measured? 5. You collect the data ◦ Primary ◦ Secondary 6. You analyze the data and interpret the results 7. You report and present research findings and act on the conclusions.
- 62. ◦ Pricing Your Products and Services ◦ Promoting Your Products and Services ◦ Advertising ◦ Public Relations ◦ Personal Selling ◦ Direct Marketing ◦ Positioning
- 63. Making Export Contacts and Finding Customers
- 65. State and Local Government Contacts
- 67. It is Time to Grow Your Global Markets
- 68. Keys to Becoming a Successful Exporter
- 71. Doing Business Around the World
- 72. What Makes Global Negotiations Different
- 73. Develop Cultural Awareness before Negotiating
- 74. Communicating in the Global Marketplace
- 75. Have You Protected Your Intellectual Property?
- 76. Are You Product Ready for Exporting?
- 77. What about Going Global with Services?
- 78. Making the Sale, Pricing and Quotations
- 81. Making Shipments
- 82. Trade Finance
- 84. World, National and Your Economics
- 85. The U.S. Economic Outlook 2017
- 86. Britain’s Exit from the EU (Brexit), Global Trade and SMEs
- 87. The Real Shape of Entrepreneurs and Small Business
- 88. Export Strategies for Surviving a Strong U.S. Dollar
- 89. It’s Time to Grow Your Global Markets
Editor's Notes
- The Pros and Cons of Countertrade PROS Barter involving socialist economies Countertrade’s main attraction is that it can give a firm a way to finance an export deal when other means are not available. If a firm is unwilling to enter a countertrade agreement, it may lose an export opportunity to a competitor that is willing to make a countertrade agreement. In some cases, a countertrade arrangement may be required by the government of a country to which a firm is exporting goods or services. The drawbacks of countertrade are substantial. Countertrade contracts may involve the exchange of unusable or poor-quality goods that the firm cannot dispose of profitably. Countertrade is most attractive to large, diverse multinational enterprises that can use their worldwide network of contacts to dispose of goods acquired in countertrading.
- Does growing your global markets sound intimidating and possibly overwhelming? It does not have to be. Global market expansion offers numerous opportunities for companies large and small to boost their revenues and profits by introducing new, innovative products and services to the global marketplace. To get started, let’s back up a bit and take a look at how well U.S. small- and medium-sized enterprises (SMEs: those organizations employing fewer than 500 employees) like yours have done growing their global markets. According to the U.S. Small Business administration, small- to medium-sized businesses produce nearly 50% of the non-farm GDP and account for 60% of the net new jobs. As of May 2017, SMEs are still optimistic about their economic prospects, but they have yet to see the impressive levels of hiring and spending anticipated in welcoming a Republican administration to the nation’s capital. Hmm… Is that how you are finding the U.S. business environment in 2017?
- America cannot grow its economy, foster entrepreneurship, or lift the wages and incomes of its workforce unless small and medium-size businesses reach beyond U.S. borders and sell products and services to the vast marketplace that lives outside the United States. Despite complaints about trade imbalances, effects on domestic economies, currency upheavals, and loss of jobs, the reality of goods and services continually crossing borders will not go away. International trade will continue to be the engine that runs most nations. Just as it always has during earlier cycles of growth and recession, exporting of goods and services is a vital contributor to the U.S. economy. In March 2017 export of goods and services totaled $191 billion, a $71.2 billion increase over the 2006 total of $119.8 billion—a great improvement over the last eleven years. March 2017 figures reported by the U.S. Department of Commerce Bureau of Economic Analysis (BEA) show export good surpluses with selected countries, in billions of dollars, with Hong Kong ($2.9), South and Central America ($2.6), Singapore ($0.5), United Kingdom ($0.5), and Brazil ($0.2). Goods export deficits were recorded, in billions of dollars with China ($31.4), European Union ($10.0), Mexico ($6.5), Japan ($6.5), Germany ($5.0), South Korea ($2.5), Italy ($2.1), Canada ($1.9), India ($1.7), OPEC ($1.6), Taiwan ($1.1), Saudi Arabia ($0.8), and France ($0.1).
- In 2015, jobs supported by exports totaled an estimated 9.8 million with goods exports supporting an estimated 6.7 million jobs and services exports supporting 3.1 million jobs. Goods exports to Canada supported the greatest number of U.S. jobs followed by Mexico, China, Japan and the United Kingdom (UK). The fifteen destinations for U.S. goods exports that supported the greatest number of jobs supported almost 4.9 million jobs in the aggregate. The fifteen goods export destinations that supported the greatest number of jobs are presented in Figure 1-1. In April 2016, the International Trade Administration reported an estimated 11.5 million jobs were supported by exports.
- The Bureau of Economic Analysis’ (BEA) most recent data indicates the United States exported services to over 70 countries in 2015 with exports to the United Kingdom outnumbering those to Canada, China, Japan and Ireland. BEA 2015 data indicates these top 15 destinations supported 3.1 million American jobs or 65 % of the total as presented in Figure 1-2. Clearly, on the basis of this government data, American exporting is important and demonstrates a need to improve. As our economy recovers from the Great Recession, U.S. businesses can rely on exporting to realize their growth potential. The U.S. Department of Commerce International Trade Administration (ITA) has many programs supporting small- and medium-sized enterprises in developing that potential. Its programs include business counseling offered at home through a network of over 100 U.S. Export Assistance Centers and overseas through commercial officers based in more than 50 U.S. embassies. The ITA also has offices that campaign for U.S. commercial policy interests in bilateral and multilateral settings. These office handle business regulation and product standards in addition to protecting and enforcing intellectual property rights and issues that affect U.S. exports. The challenges that now lie ahead for U.S. businesses selling in the world market—from slowing markets to regulatory and other barriers—make international trade (i.e., growing our global markets) more crucial than ever to ensuring future international business success.
- Now more than ever it is time to grow our global markets, drive economic growth, and improve our standard of living. So what is economic growth? Long ago a country’s natural resources determined the level of economic development it would meet. Today national economic growth is not so dependent on natural resources. It's more dependent on a country’s use of its productive resources – physical, human and natural capital. Theoretically, then, economists use gross national product (GNP) per capita or gross domestic product (GDP) per capita as statistical indicators of how well a country uses its resources. GNP/GDP takes into account all goods and services produced for sale, whether they are sold domestically or sold overseas.
- Should a country grow its economy extensively using more resources or intensively use the same amount of resources more productively? Specifically, higher output and positive economic growth enable a country and its economy to: For these reasons, all countries strive for positive economic growth. This is equally true of the people that inhabit them - the extreme poor, the vulnerable, the middle class, and the rich. The extreme poor, earning about $1.90 per day per person, are those that strive to provide themselves with most basic of human needs - food, safe drinking water, sanitation facilities, health, shelter, education, and information. A society’s vulnerable are those unable to anticipate, cope with, resist and recover from the impacts of natural hazards - children, pregnant women, elderly people, the malnourished and the sick. The middle class, however, is another matter entirely, especially from the standpoint of any business marketing to consumers across the globe. For the small- to medium-sized business seeking new customers, the people comprising the global middle class, by the standards used by any country, includes those earning between US $10 and US $100 per day in purchasing power parity (PPP) terms, the kind of disposable income that has made cars, televisions and other consumer goods affordable in the West and today is expanding in the East. This income group, forecast to increase rapidly over the next 20 years, includes business people, managers, doctors, lawyers, and teachers. Lastly, the rich are that small social group earning more than US $110 per day that can afford any standard consumer good.
- As a small- to mid-size business owner/person competing in a domestic marketplace you are accustomed to managing internal forces – capital, raw material and people that you manage and face many uncontrollable forces that include, among other things: Should you expand your business to foreign markets you subject your firm to still another set of uncontrollable forces that are the same in all environments, both foreign and international. Shockingly, these occur and operate differently, are driven by different values, and can be difficult to assess. In operating in foreign markets your firm will meet new issues requiring a change of your business strategies and practices to adapt to the new environmental realities that emerge. These include: As one can see from this list, the small- to mid-size business owner/person and senior management, marketing to a foreign market must face multiple hurdles to be successful. Expanding one’s business into foreign markets can be done by mastering these forces and monitoring environmental change by trusted in-country representation and/or regular marketing visits, in addition to consultation with qualified legal counsel and tax specialists.
- Your financial team's sound analysis of start-up costs will determine the success of your firm’s entry into a new foreign market. U.S. companies, especially those new to global expansion, tend to overlook certain important factors during the due-diligence phase of international expansion. An expansion strategy’s consideration of market research and planning, the competition, government and legal requirements, cultural habits, and risk will impact the financial analysis. The financial plan should gauge returns on minimal risk where the cost of market entry fits the target budget without being so rigid that responding to market changes is difficult, if not impossible. You should also determine the impact of currency fluctuation if you plan to reap and return profits generated outside the country. Should the target foreign market’s laws and regulations prohibit or complicate repatriation, you and your team may choose to reinvest revenues there. Companies must understand the target market’s unique requirements as well as the form of market entry, from tax laws to employment contracts to local business customs in order to truly understand the cost ramifications. To do otherwise makes the task of accurately estimating the cost of establishing and operating in a new market is impossible. There is no substitute for a comprehensive cost-benefit analysis that possibly involves decisions regarding: If you are going to “go global,” make sure you invest sufficient time and effort to identifying all the costs of operating in your target market to ensure you avoid unexpected expense.
- Revenue - Start by calculating the profits you anticipate in the new market. Begin by determining the size of the market. ABC Industries anticipates the following pricing and demand for its products (see Figure 2-1): Fighter Aircraft: Sale price of $350,000 per plane; projected demand of 100 units this year Commercial Aircraft: Sale price of $200,000 per box car; projected demand of 50 units this year. Helicopters: Sale price of $15,000 per car; projected demand of 1,000 units this year. Variable Costs are those monthly costs to you of the goods or services you'll sell as part of achieving your sales estimate. They're called variable, or sometimes incremental, because they go up or down depending on the volume of products or services you produce or sell (see Figure 2-2). They commonly include: Direct materials – charges to expense when the associated products are sold. Sales Commissions – charges an international representative earns when sales transactions are completed. Billable labor - charges to expense when the associated sales transactions are completed. Labor – costs incurred for employee labor based on the number of units produced. Tariffs – costs charged by a foreign government applied to imported goods Packing - costs incurred to ensure delivery arrives in tact for customer use. Shipping – depending on the Incoterms of sale you negotiate with your customer for costs incurred by freight forwarders and actual transportation expense incurred in delivering the product.
- Fixed costs are business expenses which do not depend on the level of goods and services you offer. Initial operating costs distinguish international versus domestic markets. Researching the market will consume staff time, if you don’t outsource market research. Research costs include those costs you will incur in uncovering regulatory/legal issues, cultural behavior, translation, and finding the in-country assistance you might require such as representation. If you elect to produce product in-country, you’ll need to also estimate and include the cost of assets and their operation associated with that effort (see Figure 2-3). It's also useful to know your gross profit margin. Gross profit margin measures the difference between the costs of producing a product or providing a service and what you're selling it for. In short, it lets you know how profitable your products and services are. To get your profit margin, divide your estimated average monthly gross profit by your estimated monthly sales. Generating this calculation is beyond the scope of this illustration. What's a good profit margin? The answer varies across industries and your own requirements. Without looking at the costs of a company's overhead, such as marketing and administration, profit margins don't give the whole picture of a company's profitability. So it is worth examining this aspect of profitability as well. Of course, the above figures are fictitious, but they do depict the type of analysis you and your firm need to thoroughly conduct before launching into foreign markets. Given the above, one might question whether or not your firm should expand to international markets. Realize expanding into international markets can mean positive growth for your company and a hedge against economic downturns in your home marketplace, providing your market research warrants the effort and expense involved in taking that step.
- U.S. small- to medium-size companies weighing the merits of expanding globally must take into account a number of issues they must face, should they venture into international trade. Exporting, or selling products made in one’s own country for use or resale in other countries, is normally subject to few restrictions for exports of most ordinary trade goods when they are exported under a U.S. Department of Commerce "general export license," however, some goods are subject to export restrictions especially when: Products can potentially have military use or dual use (commercial [civilian] and military). Confer with The Bureau of Industry and Security of the U.S. Department of Commerce to whether or not your product is exportable to eliminate any uncertainty. The Bureau of Industry and Security of the U.S. Department of Commerce website “Where are you Exporting” lists countries for which there are product export restrictions. You may violate export restrictions by selling a product to a buyer that you know, or should know, intends to re-export the product to a country to which direct exports from the U.S. are prohibited. The following issues, among others, should be considered in international contracts for the sale or purchase of goods: Payment Mechanisms Currency Exchange Risk Terms of Sale Dispute Resolution
- U.S. small- to medium-size companies weighing the merits of expanding globally must take into account a number of issues they must face, should they venture into international trade.
- Having determined international expansion is worthwhile and achievable, international expansion will eventually impact business operations. Should there be no international sales, you will not need to change your organization’s design structure. However, should you modestly engage in direct exporting and the volume of exports disrupts normal operations significant, you may be driven to establish an “Export Department,” even an international division should the volume of international business requires it, to oversee international operations, marketing products, processing orders, working with foreign distributors, and arranging customer financing.
- The term “mass market” refers to a large (even global), undifferentiated group of businesses and consumers with widely diverse backgrounds. Products and services needed by almost every business and consumer are suited for the mass market. Marketers can advertise through a variety of media and sell items such as, food, electric and gas utilities, soap, paper towels and gasoline to mass markets, making these items mass market goods. In the case of food products, grocery stores, restaurants, and farming cooperatives satisfy the mass market’s need for food. In essence, the wherewithal of production capacity supersedes product. These business entities are able to effectively operate and market on a massive scale. They effectively target their customer having generated a combination of the marketing mix that generate the sale of goods and services to very specific target markets. Ineffective marketing focuses on the product in defining markets, leading to missed sales opportunities and questionable customer satisfaction. Both types of marketing, effective and ineffective, lead to the conclusion that a market, a group of potential customers with similar needs that are willing to purchase goods and services to satisfy those needs, lies outside of the firm. In segmenting the mass market, think of product markets versus mass markets. Product markets are “the set of products/services that can be substituted for each other within specific use situations where similar benefits are sought and the customers for whom such usages are relevant.” For example, some users of computer programs, applications, and IT hardware only use computing products with specific computing capabilities. Only a limited number computer companies can compete for this market because only their specific computer products/services satisfy that consumer group’s computing needs. Product specificity, like a computer company’s exact computer programs and/or hardware model(s), enables a firm, like yours, to focus on a specific customer demographic within the larger product market and to direct marketing effort at that niche enabling that limited number of providers to dominate most, if not all of that market segment. In targeting prospect countries as markets for your products and services, work to define a broad product definition than your firm’s current product market, but not one so broad that your firm could not handle the demand if you were to generate it. In identifying your product’s target market segment, focus your product marketing effort on product type, the customer need it meets, the location of specific customer segments and the countries in which the customers having these needs are located. Once you have defined your product markets, you are ready to continue the segmentation process to identify potential target markets.
- Product/Service Pricing - Company costs set the floor in your pricing decisions. So, you want to set a price that will at least cover all relevant costs for manufacturing, marketing and distributing your products. Promotion - the collection of short-term incentive tools that lead to quicker and/or larger sales of a particular product by consumers or the trade, with the objective of stimulating consumer trial and cementing a long-term relationship with a retailer in the target market. Advertising Public Relations Personal Selling Direct Marketing Positioning Distribution - it is important to understand that distribution includes the physical flow of storage-warehousing and movement of your product, the passage of title (ownership) and importantly the buying and selection negotiations that take place between your firm and its middlemen and between middlemen and your ultimate customers. Recognize each target market has a distribution structure composed of middlemen, you channel partners and their competition, that include the agents, distributors, wholesalers, retailers, and direct sales forces that will deliver your product and associated services.
- Typical domestic marketing plan items: Marketing background –the information base from which the marketing plan is developed. Marketing plan – direction for execution in the marketplace. Marketing execution – the actual interaction with the target market. Marketing evaluation – measurement of the level of success of the plan’s execution.
- oing into global business puts you and your firm in the position of having to comply with a number of legal considerations that affect how you acquire business, contract and deliver products and services to your global customer. Many legal considerations have to do with U.S. export regulations and some with foreign government import regulations. Complying with U.S. export-related regulations is paramount for U.S. firms. U.S. export-related regulations come from several key sources that include the Export Administration Regulations, International Traffic in Arms Regulations (ITAR), the Anti-diversion Clause, Anti-boycott Regulations, and the Foreign Corrupt Practices Act. At first glance, you might think complying with the law is an overwhelming global business requirement, but not really and essential to generating a foreign income stream.