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Jordan Williams William Copeland Matt Lambert. OVERVIEW-MATURE MARKETS. Market Segmentation More defined market segments Fragmentation provides opportunity Market Positing Need for Product Differentiation Brand Image Country-of-Origin effect . OVERVIEW-MATURE MARKETS.
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OVERVIEW-MATURE MARKETS • Market Segmentation • More defined market segments • Fragmentation provides opportunity • Market Positing • Need for Product Differentiation • Brand Image • Country-of-Origin effect
OVERVIEW-MATURE MARKETS • Marketing Tactics • Product Policy • Full Product line • Specific Niche line • Value-adding features a necessity • Innovation and image integral for higher end products • Lower end of the market only attractive to “large-scale, low-cost producers with standardized products who compete on price.”-Johansson 2009 • NEW products have advantage of no competition and create customer loyalty • i.e. iPod, Kleenex, Schick in Japan (entered before the world leader Gillette) • Customer Satisfaction
OVERVIEW-MATURE MARKETS • Marketing Tactics • Pricing Policy • Base price on target market • Use temporary price cuts to attract users and fight competition while maintaining brand image • Fierce competition leads to price wars • Government Interference • Distribution • Well developed infrastructure • Possibility of expensive distribution channels • Customer Satisfaction
OVERVIEW-MATURE MARKETS • Marketing Tactics • Promotion • Market Share is the criterion of success • Sales Promotion • Advertising • Variety of media available
OVERVIEW-MATURE MARKETS • Customer Satisfaction • Intense Competition leads to a focus on customer satisfaction • Based on product quality and emotional factors • Real Satisfaction is seen from the emotional factors “Value Added Quality” • Customer expectations continue to rise due to intense global competition
Australia- New Zealand • Key Players • Australia • New Zealand
Australia • Appearance • Men wear a conservative dark business suit and tie. • Women may wear a dress, or skirt and blouse, for business. • Informal clothing is appropriate when not attending business functions. • Casual pants are fine for both men and women. • Men should not become physically demonstrative with another man, or wink at a woman. • Behavior • Being punctual is critical. • Maintain good eye contact during meetings and conversations. • A single, male passenger using a taxi should sit in the front seat. • Gift giving is not a common practice in business. • When paying for a round of drinks, do not pick up the tab out of turn, and make sure to pay when it is your turn.
Australia • Communications • English is the spoken language • Shake hands when meeting and when leaving. • Although uncommon, some women may greet each other with a kiss on the cheek. • Exchanging business cards is common among professional workers. • Australians are friendly and open, but directness and brevity are valued. • Opinions are respected, and opinionated discussions are entertaining. • Be an active listener, and ask if you do not understand something in the conversation. • Do not hype yourself, your company or your information. • Sightseeing and sports are good conversational topics • Afternoon tea is about 4:00pm • Tea is between 6:00 - 8:00pm and is an evening meal • Supper is a late night light meal or snack
Australia • Individualism • Monochronic • Low Context • Social Ambiguity • Low Power Distance • Mastery • Emotionally Neutral • Quantity of Life Power Distance Index (PDI) Individualism (IDV). Masculinity (MAS) Uncertainty Avoidance Index (UAI) Long-Term Orientation (LTO)
New Zealand • Appearance • When conducting business in New Zealand, you want to dress conservatively and tending toward a more formal look. • Umbrellas and raincoats are necessary most of the year because of the climate and rainfall. The climate is temperate, not tropical. A medium weight wool gabardine would be a good choice of fabric for your basic wardrobe. • When not involved in business meetings and activities, your wardrobe may be casual. To maintain a professional, though casual look, keep your clothing classic in neutral colors (navy, gray, camel, ivory, and white). Make sure your casual shoes are properly maintained. • Behavior • Always be on time or early for all appointments. Punctuality is part of the culture. "Fashionably late" is not an option in this country as most social events start on time. • Maintain a reserved, formal demeanor, especially when first meeting someone. Take your lead to become more relaxed by following the behavior of your New Zealand hosts.
New Zealand • Behavior Cont. • Talking is minimal while you are eating a meal. The conversation will occur before and after your meal. Dinners are reserved for social interactions only, therefore not business is discussed at these occasions. • Boisterous behavior is always inappropriate, even when you are drinking. Pace yourself to maintain the proper reserved and polite behavior. • Supper is a snack served much later in the evening, • A tip may be refused, as tipping is rare. • Cover your mouth if you must yawn, and do not chew gum or toothpicks in public.
Australia-New Zealand • Barriers to Entry • Tariffs- historically high • Currently 6-7 percent • Non-Tariffs- Medium • Brand Loyalty, Differentiation between products • Strong brand names • Natural Barriers- Medium • Artificial Barriers-Medium-High • Recent trend of protectionist policy • Free floating exchange rate encourages FDI
Australia- New Zealand • Market Environment • Large in land area but limited population ~25 million • New opportunity in Wine production • Foreign Trade Agreements • Membership in British Commonwealth • APEC • ARF • ANZCERTA • Competition • Competition lesser than other mature markets • High wage rates make competition with other countries for production tough
Australia- New Zealand • Market Segmentation • Younger consumers drawn to American things, while the older generation seems more sympathetic to British ways • Pioneer Spirit • Product Positioning • Strong Pro-home product preference • Fosters and Kiwifruit use this in advertising abroad as well
Australia- New Zealand • Marketing Tactics • Product Policy • Global products tend to need no modification • Pricing • Trend to the high side due to distribution costs, high labor costs, and historically high tariff rates • Distribution • Surprisingly efficient due to proximity of population centers (near the ocean) • Promotion • No isolated by distance, very well connected • Must segment promotions to older and younger generation;
WESTERN EUROPE Key Players • France • Germany • United Kingdom
Western Europe- France • Appearance • The French are very conscientious of their appearance. • Dress conservative and invest in well-tailored clothing. • Patterned fabrics and dark colors are most acceptable, but avoid bright colors. • French businessmen do not loosen their ties or take off their jackets in the office. • Women should also dress conservatively. Avoiding bright or gaudy colors is recommended. • Women should also avoid any glitzy or overpowering objects, such as flashy jewelry. • Communications • If you do not speak French, it is very important that you apologize for your lack of knowledge. • Most individuals in business speak English. • The French have a great appreciation for the art of conversation. • The French frequently interrupt each other, as the argument is a form of entertainment. • The French often complain that North Americans lecture rather than converse. • Be sensitive to the volume of your voice. Americans are known to offend everyone in a restaurant, meeting, or on the street with their loud voices and braying laughter. • Eye contact is frequent and intense, and can often be intimidating to North Americans.
Western Europe- France • Behavior • Punctuality is treated very casually in France. • The French handshake is brief, and is accompanied by a short span of eye contact. • Always shake hands when meeting someone, as well as when leaving. French handshakes are not as firm as in the United States. • The French have a great respect for privacy. Knock and wait before entering into a room. Additionally, do not "drop in" unannounced. Always give notice before your arrival. • Business can be conducted during any meal, but lunch is best. • Avoid drinking hard liquor before meals or smoking cigars between courses. The French believe this permeates the taste buds, compromising the taste of the meal.
Western Europe- France • Extended family • Polychronic • High Context • Social Certainty • High power Distance • Adaptation • Emotionally Expressive • Quality of life Power Distance Index (PDI) Individualism (IDV). Masculinity (MAS) Uncertainty Avoidance Index (UAI) Long-Term Orientation (LTO)
Western Europe- Germany • Appearance • Business dress in Germany is very conservative. dark suits; solid, conservative ties, and white shirts. • Women also dress conservatively, in dark suits and white blouses. • Don't be surprised if occasionally you see a fashion statement with white socks being worn with a dark suit. • Communications • Germans love to talk on the telephone. While important business decisions are not made over the phone, expect many follow up calls or faxes. • Germans guard their private life, so do not phone a German executive at home without permission. • Titles are very important to Germans. Do your best to address people by their full, correct title, no matter how extraordinarily long that title may seem to foreigners. This is also true when addressing a letter.
Western Europe- Germany • Behavior • The German thought process is extremely thorough, with each aspect of a project being examined in great detail. This process is often times very time-intensive. However, once the planning is over, a project will move very quickly and deadlines are expected to be honored. • Germans do not like surprises. Sudden changes in business transactions, even if they may improve the outcome, are unwelcome. • German citizens do not need or expect to be complimented. In Germany, it is assumed that everything is satisfactory unless the person hears otherwise. • Punctuality is necessity in Germany. Arrive on time for every appointment, whether for business or social. Being late, even if it is only by a few minutes, is very insulting to a German executive. • Business is viewed as being very serious, and Germans do not appreciate humor in a business context. • In business meetings, age takes precedence over youth. If you are in a group setting, the eldest person enters first. • Germans are able to consume large quantities of beer in one evening, but public drunkenness is not acceptable. It is best to know your limits, especially in Bavaria where two liters of beer is an ordinary evening. Pace yourself and eat plenty of food.
Western Europe- Germany • Individualism • Monochronic • Low Context • Social Ambiguity • Low Power Distance • Mastery • Emotionally Neutral • Quantity of Life Power Distance Index (PDI) Individualism (IDV). Masculinity (MAS) Uncertainty Avoidance Index (UAI) Long-Term Orientation (LTO)
Western Europe- United Kingdom • Appearance • Business attire rules are somewhat relaxed in England, but conservative dress is still very important for both men and women. • Men wear laced shoes, not loafers. • Businesswomen are not as limited to colors and styles as men are, though it is still important to maintain a conservative image. • Behavior • Always be punctual in England. Arriving a few minutes early for safety is acceptable. • Decision-making is slower in England than in the United States; therefore it is unwise to rush the English into making a decision. • To signal that something is to be kept confidential or secret, tap your nose. • Personal space is important in England, and one should maintain a wide physical space when conversing. Furthermore, it is considered inappropriate to touch others in public. • A business lunch will often be conducted in a pub and will consist of a light meal and perhaps a pint of ale. • When socializing after work hours, do not bring up the subject of work. • When dining out, it is not considered polite to toast those who are older than yourself.
Western Europe- United Kingdom • Communications • "America and Britain are two nations divided by a common language" George Bernard was once quoted as saying. • In England, English is the official language, but it should be noted that Queen’s English and American English are very different. • Loud talking and disruptive behavior should be avoided.
Western Europe- United Kingdom • Individualism • Monochronic • Low Context • Social Ambiguity • Low Power Distance • Mastery • Emotionally Neutral • Quantity of Life Power Distance Index (PDI) Individualism (IDV). Masculinity (MAS) Uncertainty Avoidance Index (UAI) Long-Term Orientation (LTO)
Western Europe • Barriers to Entry • Tariffs- Low • Non-Tariffs- Medium • Natural Barriers- Medium • Brand Loyalty, Differentiation between products • Strong competition • Strong brand names • Artificial Barriers-Medium-High • Government regulations • Number of days to start a business:22 (2007); 29 (2005)
Western Europe • Market Environment • The EU created an unified market • Tariffs barriers and customs duties are nonexistent • Foreign Trade Agreements • The EU acts as the primary trade negotiating entity for it’s members • Competition • Intense Competition • The threat from foreign entrants has led to firms creating larger and stronger companies.
Western Europe • Market Segmentation • Products are design to have the same synergistic positioning in each country. • Product Positioning • Products have to be more focused towards the consumer. The image needs to be consistent among all Western Europe.
Western Europe • Marketing Tactics • Product Policy • European products focus on uniformity • Same product with varying brand names • Pricing • European product’s pricing has become more competitive due to a common currency • Distribution • Companies are becoming more uniform and widespread • Promotion • Promotions are becoming more uniform across countries
NORTH AMERICA Key Players • United States • Canada
North America- Canada • Appearance • New or trendy clothing is a poor choice. Older, classic clothing that is clean and neat is more valued. • Rural areas are less formal, but stay conservative in your wardrobe. • Casual attire is appropriate when you are not working. The weather and activity will dictate what you will be wearing. Build a casual wardrobe using the classic colors (camel is additional color for casual). You will look professional, even though relaxed. • Communications • Use a firm handshake with good eye contact when meeting and leaving. Both French and English areas use and expect a firm handshake. • Men will wait for a woman to extend her hand for a handshake. • French Canadians will shake hands more frequently, even with a subsequent encounter the same day. Others may just nod or smile at a subsequent encounter on the same day. • Be open and friendly in your conversation. If you are naturally reserved in your behavior, you will appear confident and credible. If your natural tendency is large sweeping arm gestures, restrain yourself when meeting and talking with Canadians • French Canadians stand closer and are more demonstrative when talking. • For French Canadians, print all material in French and English. • Don't be boastful, and don't overstate your product or service's capabilities. You could implicate your company in a legal situation.
North America- Canada • Behavior • Be punctual for meetings and appointments, as promptness is valued. In French areas, time is more relaxed. • Always maintain a reserved demeanor, and follow good rules of etiquette. Traditions and gracious manners are part of the culture, even in more rural areas. If you travel to different cities or areas, pay attention to local customs. • Do not eat while walking in public. Plan your time so you can stop in a café or restaurant to enjoy your snack. • Taking a business associate to a nice meal or an evening sporting event, play, or symphony is always a nice gesture. • Invitations to private homes are rare. Occasionally, in the western provinces, you may be invited to someone's home. If you are invited, you may take candy, flowers, or liquor to the host or hostess. • Wait for your host to start a business conversation during or following a meal. Traditionally, business is not discussed during dinner; however, this is slowly changing. • Personal space and body movement or gestures differ between the English and the French provinces and cities. In English areas, body movement is minimal, there is rarely touching other than handshakes, and personal space - how close someone stands - is about two feet. In French areas, people stand closer together, people will frequently touch, and gestures are more expressive.
North America- Canada • Individualism • Monochronic • Low Context • Social Ambiguity • Low Power Distance • Mastery • Emotionally Neutral • Quantity of Life Power Distance Index (PDI) Individualism (IDV). Masculinity (MAS) Uncertainty Avoidance Index (UAI) Long-Term Orientation (LTO)
North America- United States • Appearance • Rural areas and areas with extremely warm summers have more informal wardrobe requirements. • Women may wear a business dress, or skirt and blouse, in rural areas. • Men may conduct business without wearing a jacket and/or tie in rural areas. • Casual clothing is appropriate when not attending a work related meeting/dinner. Building a casual wardrobe using classic lines and colors (navy, gray, camel, ivory and white) will give you a look that is stylish and professional even when you are relaxing. • Clothing, whether formal or casual, should be clean and neat in appearance. • Men may generally wear jeans or khaki pants with a shirt for casual attire. • Women may wear comfortably fitting slacks with a casual shirt. • Behavior • Business conversation may take place during meals. However, many times you will find more social conversation taking place during the actual meal. • Business meetings may be arranged as breakfast meetings, luncheon meetings, or dinner meetings depending on time schedules and necessity. Generally a dinner, even though for business purposes, is treated as a social meal and a time to build rapport. • An invitation for a meal or a modest gift is usually acceptable. • If you are someplace with a line or queue, go to the end and wait your turn.
North America- United States • Communications • Offer a firm handshake, lasting 1-2 seconds, upon greeting and leaving. Maintain good eye contact during your handshake. If you are meeting several people at once, maintain eye contact with the person you are shaking hands with, until you are moving on the next person. • Good eye contact during business and social conversations shows interest, sincerity and confidence. • Good friends may briefly embrace, although the larger the city, usually the more formal the behavior. • Introductions include one's title if appropriate, or Mr., Ms, Mrs. and the full name. • Business cards are generally exchanged during introductions. However, they may be exchanged when one party is leaving. • A smile is a sign of friendliness, and in rural areas you may be greeted with a "hello" rather than a handshake. • Ask permission to smoke before lighting a cigarette or cigar. Due to health concerns, you may or may not be given permission.
North America- United States • Individualism • Monochronic • Low Context • Social Ambiguity • Low Power Distance • Mastery • Emotionally Neutral • Quantity of Life Power Distance Index (PDI) Individualism (IDV). Masculinity (MAS) Uncertainty Avoidance Index (UAI) Long-Term Orientation (LTO)
North America • Barriers to Entry • Tariffs- Low • Non-Tariffs- Medium • Natural Barriers- Medium • Brand Loyalty, Differentiation between products • Strong competition • Strong brand names • Artificial Barriers-Medium-High • Government regulations • US: days to start a business: 6 • Canada: days to start a business: 3
North America • Market Environment • Ethnic Diversity; • Religion; the government cannot impose any restrictions on individuals nor enterprises utilizing religion as a rationale. • Diffused Economic Activity; opposed to other mature markets North America has a degree of independence from a federal center • Local Market Regulations; potential headache to foreign companies due to the many different regulatory differences between central and regional government. • Foreign Trade Agreements • North American Free Trade Area (NAFTA) • Most foreign companies enter the U.S. Market through Canada • Competition • Intense Competition • Strong showing of the world’s strongest multinational companies due to low trade barriers in many industries.
North America • Market Segmentation • Segmentation is a “natural” • Cultural Identity can serve as a useful criterion • Product Positioning • Diversity has kept the American culture “low context” and “young” • Premium is placed on direct and straight forward explanations • Communicate the positioning in concrete terms • In contrast to the hard sell of the American culture the Canadian culture tends to use a more soft sale approach
North America • Marketing Tactics • Product Policy • The Wide ranges of market size, affluences and diversities have led to a dizzying array of choices and services • Pricing • Freedom from restraints on trade affects prices in several ways • Competition is encouraged between brands and intrabrand. • Distribution • Distribution in the United States is very efficient • Distribution Channels carry more clot in the United States • Promotion • The use of advertising and commercials is greater in North America than in the media elsewhere. (United States has the largest advertising per capita than any other nation)
Japan • Appearance • Those who dress according to their status or position impress the Japanese. Dress to impress. • Shoes should be easy to remove, as you will do so often. • Women should not wear pants in a business situation. Japanese men tend to find it offensive. • Avoid using large hand gestures, unusual facial expressions and any dramatic movements. The Japanese do not talk with their hands and to do so could distract your host • The Japanese are not uncomfortable with silence. They use it to their advantage in many situations. Allow your host to sit in silence. • Behavior • Most business entertaining is done in restaurants or bars after business hours. Often in karaoke bars. • Let the host order the meal and pay. Business may be discussed at dinner during these events. • Japanese rarely entertain in the home. If you are invited to the home of your Japanese host, consider it a great honor and display a tremendous amount of appreciation. • Key phrases to learn are "itadakimasu" at the beginning of dinner, and "gochisou-sama-deshita" at the end. It is polite use these phrase and it will show you host that you have enjoyed the meal. • It is perfectly acceptable to slurp your noodles. • Good gift ideas include top choice beef, fruit and alcohol such as brandy, quality whiskey and Bourbon along with excellent wines.
Japan • Communications • In Japan, business cards are called meishi. Japanese give and receive meishi with both hands. It should be printed in your home language on one side and Japanese on the other. Present the card with the Japanese language side up. • In a business situation, business cannot begin until the meishi exchange process is complete. • The customary greeting is the bow. However, some Japanese may greet you with a handshake, albeit a weak one. Do not misinterpret a weak handshake as an indication of character. • If you are greeted with a bow, return with a bow as low as the one you received. How low you bow determines the status of the relationship between you and the other individual. When you bow keep your eyes low and your palms flat next to your thighs. • In introductions use the person’s last name plus the word san which means Mr. or Ms. The Japanese prefer to use last names. • Understand that the Japanese prefer not to use the word no. If you ask a question they may simply respond with a yes but clearly mean no. Understanding this is critical in the negotiation process.
Japan • Community • Polychronic • Low Context • Social Certainty • High Power Distance • Adaptation • Emotionally Neutral • Quality of Life Power Distance Index (PDI) Individualism (IDV). Masculinity (MAS) Uncertainty Avoidance Index (UAI) Long-Term Orientation (LTO)
Japan Barriers to Entry • Tariff (low) • Average rate for all incoming goods is 1.8% (very low) • Non Tariff (medium – low) • Can be expensive to get products from the ports to distribution channels • Artificial Barriers (medium) • Good access to technology • Distribution can be fragmented and expensive • Government regulations (price controls, etc.) • Natural Entry Barriers (medium – high) • Strong competition • Strong brand names
Japan • Market Environment • 120M people in an area the size of California • Domestic suppliers were traditionally used • Economy has been in a downturn since the 1990’s • Per capita income is very high (still a market for luxury goods) • Even with the downturn, Japan is still the second largest market in the world • Foreign Trade Agreements • Have practiced isolation for much of their history (few developed countries close to them) • Not a part of a trading bloc • Originally used high tariffs to protect their domestic market, but no longer do this as their economy is strong enough to not need artificial protection
Japan Competition • Competition between the same brands across retailers is very low (government price controls) • Competition between different brands is extremely fierce • Stems from historical “warrior mentality” • Customers do not care about price, just things like design and brand image (in the past) • However, with deregulation and elimination of trade barriers, category killers have been able to come in and win customers over with lower prices since the economy is in a downturn Market Segmentation • Are becoming more similar to “western” consumers • There are 3 main segments • Upscale • Middle of the roaders • Price conscious Product Positioning • Are becoming more value conscious • Still demand the highest quality
Japan Marketing Tactics • Product policies • Must be high quality • Must be packages flawlessly (color, defects, etc. will be examined) • Pricing • Consumers are much more price sensitive now (due to increased imports) • Distribution • Is very fragmented… This can lead to higher distribution expenses. • Close relationships with “middlemen” can make it hard to get foreign goods in. • Promotion • Advertisements are more like art. Word of mouth and knowledgeable clerks play a large role in promotion. • However, for more mundane goods, there are shifts toward “fun” and “flashy” advertisements as consumers are looking for a reason to buy a more expensive good over a less expensive good. (Because of harder economic times)