A competitive advantage is when a product has something that is superior to the competition, a benefit that differentiates this product from the rest. This is a very important thing marketers and businesses have to have in mind, find that special thing that differentiates the product or service from the competitors, something that makes them unique when compared to the rest.
The book says that if a product cannot find something that differentiates it from the rest a company must be able to lower their costs, a strategy marketers use to do so is called Economies of scale. This means that a great number of products are produced lowering the price of each unit, increasing productivity is another strategy that can be used. Another competitive advantage strategy that can help a business to avoid competitors if done successfully is to focus on a single market within one country.
Financial resources are a very important thing for every business, you can have the best idea in the world but if you don’t have the financial resourses to support and develop this idea you have nothing. Big companies have this problem solved but for small companies this is a challenge. A strategy that is very successful is the development of micro-loans, a very small loan, of around $100 that allows entrepreneurs to start a business and make some money.
As we all know, understanding our marketing environment is the key element to a successful marketing plan, understand our customers, supply and distribution networks and competitive products. One of the most important marketing resources is the distribution channel, which consists of the companies and individuals who participate in the exchange of goods or services. Knowing how to distribute the products is essential when marketing a product or a service on a foreign country. U.S firms have found it difficult to enter the tight social networks of Japan for example.
There are two types of competitors direct and indirect. Direct competitors are the ones that work within the same industry and indirect competition comes from the sale of products that gives similar benefits.
A product market the name given to a product in a single market. When a company decides to expand to new markets they determine if they want to stay in that market or if they want to expand to a different one. After deciding whether to stay or to move to a different market they chose a large number of different options and the screen the process down until they find the best product-market based on the market factors.
Tuesday, August 25, 2009
Children advertising
Argue for or against a ban on advertising to children. Consider both the pros and the cons of such a policy. Which side outweighs the other? Write a persuasive argumentation to convince the others of your opinion!
As an advertiser I think that there’s nothing wrong in advertising products to children, they are a big segment of our market and a lot of products are targeted to them. If we don’t advertise products directly to them how are we going to sell them? The final decision is normally made by the parents but how would they know what to buy and not to buy? I think it is impossible not to advertise to children since they will be the final users of the product. One thing that we have to have in mind though is that they are children, very naïve and easily persuaded and use this as a caution tool instead of taking advantage of it.
Pros
· Highly effective since children are easy to influence with popular cartoons or catchy toons, just look at all merchandising Disney sells!
· An average child in the United States sees about 40,000 commercials a year just while watching television.
· With more than 40 million kids online daily, and growing, perhaps no tool has become more important to marketers than the Internet.
· In a household, children are always put first, specially with the way economy is now a days.
Cons
· Exposing children to massive advertisement more or less makes them consumers without purchase power, with this they simply look to make the children influence the decision making of the parents.
· Children do not have the capacity to decide what to buy or not
Sources
http://www2.ljworld.com/news/2009/may/22/advertising-messages-bombard-children/
http://www.nytimes.com/2009/03/17/business/media/17adco.html
As an advertiser I think that there’s nothing wrong in advertising products to children, they are a big segment of our market and a lot of products are targeted to them. If we don’t advertise products directly to them how are we going to sell them? The final decision is normally made by the parents but how would they know what to buy and not to buy? I think it is impossible not to advertise to children since they will be the final users of the product. One thing that we have to have in mind though is that they are children, very naïve and easily persuaded and use this as a caution tool instead of taking advantage of it.
Pros
· Highly effective since children are easy to influence with popular cartoons or catchy toons, just look at all merchandising Disney sells!
· An average child in the United States sees about 40,000 commercials a year just while watching television.
· With more than 40 million kids online daily, and growing, perhaps no tool has become more important to marketers than the Internet.
· In a household, children are always put first, specially with the way economy is now a days.
Cons
· Exposing children to massive advertisement more or less makes them consumers without purchase power, with this they simply look to make the children influence the decision making of the parents.
· Children do not have the capacity to decide what to buy or not
Sources
http://www2.ljworld.com/news/2009/may/22/advertising-messages-bombard-children/
http://www.nytimes.com/2009/03/17/business/media/17adco.html
Thursday, August 20, 2009
Chapter 5
Chapter five starts by describing what is market segment and the importance of it. A market segment, the fist step in developing a marketing strategy, is a group of people or organizations with similar characteristics and interests. As a marketer, we have to clearly understand that every products have different market segmentations, what is popular here in America might not be popular in Germany for example, like the four-legged desks -Winning Strategies article.
Now that we know what a market segment is, we need to understand the importance of the three characteristics of a qualified market: Need or desire of a product, the ability to purchase the product, and the authority to do so. We as marketers can spend all the money in the world promoting a product on a foreign country but as the book said an American kid might be able to buy a canned coke while a kid in Cuba might not.
Chapter 5 describes the three typical strategies used by international marketers. Undifferentiated segmentation strategy is used when a company looks at all customers as one market. It is normally used when a market is too small to be profitable to target, or when there's a small group the the majority of the product. Concentrated segmentation strategy, is used when a company has one clearly defined market, small market with few potential competitors. And a differentiated segmentation, is used when a company target two or more segments with unique strategies, pursue different segments of the market or market multiple products.
Consumer Market profiles are made up of different variables that describe your target market like demographics, cultural, geographic, and product usage characteristics. Demographics are characteristics such as age, gender, race, income, and education. Cultural Segmentation, also known as lifestyle characteristics are made u of values, activities, interests and opinions. Geographic Segmentation, describes where consumers are located. This is a very strong criteria for some products. For my Business to consumers Marketing plan I am promoting a bathing suit line. If I decide to Globalize this brand and sell it on a foreign country one of the most important criteria I have to keep in mind is the geographic segmentation because my product as profitable in The Alps as it is in the French Riviera for example. Product Usage, describes how much a product is used.
Chapter 5 also mentions that you don't need to find a foreign country to find international markets which I think find very interesting. Being hispanic myself I completely agree, I moved to this country 6 years ago and all though I understand and respect the American culture in my household we still live a Colombian lifestyle, we still value our family ties and strong religion affiliations and adapt them to our life here in America. For a marketer this thigs are very important and vital, specially here in America where the population is so diverse.
It is important to pursue new market opportunities because as the book says, new market and businesses help business grow. Now a days things change so fast, and there are so many things and businesses out there that if you are not constantly innovating and introducing new products into an existing market, for example the store net to you will and by ding this they will take your clients. The book says that a company can pursue four basic strategies, pursue no new products or markets, introduce new products into an existing market, introduce existing products in a new market and introduce a new product into new markets.
A portfoilio of marketers is a collection of different products in different market locations. The more products you have the lower the business risks is, and it's also important to know that not having new products or markets can increase the risk.
Screening is the process of finding potential market opportunities to pursue, you should first start with a long ist and shortly screen this list to a smaller number. There's a four-step process for this. Identifying a market, find the market that the business should chose. Identify competitive advantages, identify the competitors and the competitive products for each potential market. Estimate industry sales, include all of the sales within a business category. Estimate share of market, the percentage of a market that a business could capture.
The last portion of this chapter talks about market research. Market research is the systematic process of gathering information to help make marketing decisions. There are four steps in the marketing research process. Define the problem, identify the area that needs to be researched. Analyze secondary data, data that has been previously collected. Collect primary data, information that has not been collected before. It involves two processes, designing a data collection plan and ten collecting the data. And the last step is to perform data and decision making. Once you've analyzed everything very carefully managers must use everything to make a decision.
Tuesday, August 4, 2009
The International Political Economy -Chapter 4
The first part of chapter four talks about the importance of demographics when marketing a product internationally. The book says that there are three things that we have to take into consideration to find out if the international market is right for a product. The first thing is to find out is if the country is right for the product, it would be very difficult to try to open a The North Face store in St. Maarten for example. The second step is to make sure that the potential customers are able to pay for the product. And the last step is to make sure that the Market is large enough.
There are three categories used to describe a country, developed countries, like USA for example, are countries that have a strong economy and high standard of living. Newly Industrialized countries have a high level of industrialization but sometimes they might not have a high income or the road and rail network that a develop country has. And the developing countries, also known as third world countries, which have a low personal income.
Chapter four also talks about the importance of education and how it influences a countries economy. The book estates that most developed countries require citizens to have a high level of education. A high-developed country requires 12 to 13 years of education (I didn't know that), while a less-developed country requires only from 6 to 9... that's half!! This is an important thing for a marketer to have in mind because one, the more educated a country is the easier it is for a company to develop. And two, the more educated a customer is, the more identified he/she is going to feel with the product.
Population is also a very important fact to have in mind when marketing a product internationally. Developed countries are strong in very aspects but when it comes to population, developing countries beat them. Why? Developing countries have a much larger population of younger people, innovators who are always looking for the next new thing and can actually afford it because they have a higher disposable income. Developed countries on the other hand, are declining. The average age is increasing, the tax burden is rising, lessening the ability to buy a product.
Social class is another important piece of information that we as marketers should have in mind because it varies in every country. Here, in USA for example, if you work hard and have a good credit ( or credit cards) you can buy anything you want, a big house in Great Falls, a BMW or a First Class ticket to travel around the world. No matter what social class you are part of you are allowed to have this type of life if you can afford it. In Colombia that is not possible, individuals from lower, middle class would never be able to drive a BMW or buy a house in a city like Great Falls, because they don’t have the social status to do it.
As a marketer, if you want to target a product in a different country this is something you have to have in mind all the time because people from a higher class for example think different and are used to a different life, full of expensive things and never concerned about how much money they are going to spend. Lower social classes, on the other hand, do take this into consideration; they are more conservative when it comes to money and normally live on a budget.
The second part of the chapter talks about the Economic Environment and the effect this has in a country.
The economic system is what controls the production, distribution and usage of the goods and services of a product. There are 4 types of economic systems marketers have to have in mind when marketing a product. The sales strategies used, should be based on the type of economic system the country has. Market economy is when a free market determines which products are produced, marketed and priced. Mixed economy merges a market economy characteristic with different levels of government control. Planned economy, is very straightforward, they plan the products manufactured and decides where they can be sold and how much to charge. And the last one is Traditional economy, conventional economic systems; traditions, religions beliefs and historical events determine how questions should be answered.
The last part of the chapter talks about the Political and Legal Environments. There are a few types of political systems around the world, the book talks about four. Democracy, allows direct elections by a country’s citizen. Republic, citizens’ chose a representative who is in charge of voting on laws. One party state, agrees to have only one political party. Theocracy, religion or faith plays a leading role.
The legal environment creates, interprets and enforces the laws of a country. There are to main types of legal systems Statutory law –sets every legal issue possible into a law and Case law –allows statutes to specify situations.
There are three categories used to describe a country, developed countries, like USA for example, are countries that have a strong economy and high standard of living. Newly Industrialized countries have a high level of industrialization but sometimes they might not have a high income or the road and rail network that a develop country has. And the developing countries, also known as third world countries, which have a low personal income.
Chapter four also talks about the importance of education and how it influences a countries economy. The book estates that most developed countries require citizens to have a high level of education. A high-developed country requires 12 to 13 years of education (I didn't know that), while a less-developed country requires only from 6 to 9... that's half!! This is an important thing for a marketer to have in mind because one, the more educated a country is the easier it is for a company to develop. And two, the more educated a customer is, the more identified he/she is going to feel with the product.
Population is also a very important fact to have in mind when marketing a product internationally. Developed countries are strong in very aspects but when it comes to population, developing countries beat them. Why? Developing countries have a much larger population of younger people, innovators who are always looking for the next new thing and can actually afford it because they have a higher disposable income. Developed countries on the other hand, are declining. The average age is increasing, the tax burden is rising, lessening the ability to buy a product.
Social class is another important piece of information that we as marketers should have in mind because it varies in every country. Here, in USA for example, if you work hard and have a good credit ( or credit cards) you can buy anything you want, a big house in Great Falls, a BMW or a First Class ticket to travel around the world. No matter what social class you are part of you are allowed to have this type of life if you can afford it. In Colombia that is not possible, individuals from lower, middle class would never be able to drive a BMW or buy a house in a city like Great Falls, because they don’t have the social status to do it.
As a marketer, if you want to target a product in a different country this is something you have to have in mind all the time because people from a higher class for example think different and are used to a different life, full of expensive things and never concerned about how much money they are going to spend. Lower social classes, on the other hand, do take this into consideration; they are more conservative when it comes to money and normally live on a budget.
The second part of the chapter talks about the Economic Environment and the effect this has in a country.
The economic system is what controls the production, distribution and usage of the goods and services of a product. There are 4 types of economic systems marketers have to have in mind when marketing a product. The sales strategies used, should be based on the type of economic system the country has. Market economy is when a free market determines which products are produced, marketed and priced. Mixed economy merges a market economy characteristic with different levels of government control. Planned economy, is very straightforward, they plan the products manufactured and decides where they can be sold and how much to charge. And the last one is Traditional economy, conventional economic systems; traditions, religions beliefs and historical events determine how questions should be answered.
The last part of the chapter talks about the Political and Legal Environments. There are a few types of political systems around the world, the book talks about four. Democracy, allows direct elections by a country’s citizen. Republic, citizens’ chose a representative who is in charge of voting on laws. One party state, agrees to have only one political party. Theocracy, religion or faith plays a leading role.
The legal environment creates, interprets and enforces the laws of a country. There are to main types of legal systems Statutory law –sets every legal issue possible into a law and Case law –allows statutes to specify situations.
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