International Marketing Issues - Case Study Example

al Affiliation) INTERNATIONAL MARKETING CASE STUDY Question Using country by country as a base for the segmentation of the global mobile phone gambling market offers a strategic advantage in that a firm is able to obtain a very detailed and good understanding about a country, compared to the “clustering” nature of the global segment descriptors. For instance, the country by country approach allows a firm to keep detailed records of each and every country, thereby enabling the firm to be knowledgeable in aspects like economy, security, culture, social problems, and demographics. These aspects can provide a firm that was intending to enter into a particular country with a prior knowledge and mastery of its potential and challenges. For instance, large corporations often take time to study and collect data on different countries so that by the time they decide to launch operations in them they have every important detail on their fingertips. Such good knowledge is only possible when the country by country approach is used. This approach also allows firms to develop great flexibility in terms of adapting to change in any of the discussed aspects, by modifying their approaches and techniques based on demographic, economic, cultural, or social changes. For instance, when a country that used to have a positive balance of trade starts experiencing economic problems and its balance of trade becomes negative, firms operating there will have to adapt their operations to cushion themselves against this. If, say, global market segment descriptors were used, the country’s economic outlook would have been quite generalized into the economic outlook of its economic region. This leaves firms vulnerable to the negative shifts in economic performance. The country by country approach is expensive and very time consuming. This is in terms of firms having to collect data and conduct researches in each and every country, and use resources to keep themselves up to date with economic, social, cultural, and demographic changes in each and every country. Even if it were capable, the exercise would still be very expensive and involving. The country by country approach also blinds firms to the effect of global market on country performances. For example, just because large amounts of data and reports are collected on a country does not mean that it is completely covered. Commodity prices can be cheap in one country but expensive in its neighbors. Not because of internal factors, but global aspects over which it has no control. Therefore, concentrating on the country alone may be deceptive. Global Market Segment Descriptors Unlike the country by country approach, using global market segment descriptors gives firms not only a global understanding of the market, but also how the country outlook as dictated by global factors. It is quite obvious that no country in the world is immune to changes in the global market, and therefore global market segment descriptors provides a more comprehensive and intelligent outlook of economic, demographic, cultural, and social changes in its markets. This approach provides, to be precise, an aerial view of a firm’s markets, therefore enabling it to remain aware of both country and global dynamics. The problem with the use of global market segment descriptors is that they are prone to vagueness and generalizations that, more often than not, mislead firms. For example, a firm that applies this approach can have three global market segments based in Asia, North America, and Latin America. However, within Asia, for example, there can be just two or three countries that are a firm’s biggest markets. The others can be simply playing a supporting role that does not have a consequence on a firm’s sales or revenue. However, just because the approach is based on the use of global descriptors, all the countries in Asia in which a firm operates are put in one basket. The outlooks obtained from this can be deceptive and misleading. Finally, it is important to mention that this approach is just as (if not more) expensive as the country by country approach. Covering entire regions involves the use of significant amounts of human and financial resources in the collection of data and the monitoring of changes on a constant basis. In my opinion, the country by country approach is more effective and better than the use of global market segment descriptors. Although it is costly and time-consuming, it is more accurate and unambiguous compared to its counterpart. If I was in charge of a firm I would definitely recommend it. Question 2 First, it is important to define the criteria for segmenting that WSG should adhere to when developing a global segmentation strategy. These criteria will act as the company’s guiding principle to ensure that whatever global segmentation strategy it comes up with is relevant, realistic, and pragmatic. The criteria for segmentation can be summarized in the following features of a good market segment: a) Large enough to earn profit. b) Useful in selecting the market mix. c) Possible to reach future clients through WSG’s promotion and distribution network. d) Possible to measure. e) Consistently responsive to a specific market stimulus. f) It is internally homogenous, meaning potential clients in the same segment often favor the same product qualities. g) It is stable enough that it does not vaporize after some time. h) It is externally heterogeneous. This means that future customers from different segments have different product preferences. i) It can be reached through market intervention in a cost-effective way. There are two main segmentation strategies adopted by marketing companies, and which WSG can use to develop its global segmentation strategy. These are: (a) a concentration strategy and (b) a multi-segment strategy. In the concentration strategy a firm opts to focus on just one market segment, and only one marketing mix is developed. This strategy is good because it allows a firm to analyze the needs and wants of only one segment and the concentrate all its efforts on that segment. The biggest disadvantage of this strategy is that when demand in the segment falls, a firm’s financial position will also decline. In the multi-segment strategy, a firm concentrates its marketing efforts on two or more unique market segments. It does so by developing a different marketing mix for every segment. After that it develops marketing programs suited for each of the segments. This strategy is good because it can grow overall sales since more marketing programs are directed at more customers. The con is the higher costs emanating from the need for multiple marketing initiatives. From the discussion of the two market segmentation strategies, it is apparent that WSG should choose the multi-segment strategy. Apart from its obvious advantages, this strategy is appropriate for the company because it is focusing on a global market. It is difficult to achieve success in a global market with the concentration strategy because the number of market segments available (even before they are created) is numerous. Common sense will dictate that this should be turned into an advantage by creating as may market segments as possible so as to represent the global coverage of the company. In addition, it is worth noting that most people mistakenly think that the number of products or services a company provides should dictate its segmentation strategy. This is common, and flawed. A firm (like WSG for instance) can have one product but its market coverage is very wide. There is no way it would benefit from adopting the concentration strategy in a global market onslaught Segmenting Methods WSG can employ a number of segmenting methods to define its target consumer base. These include: Geographic Segmentation This involves the use of geographic criteria (countries, states, regions, cities, neighborhoods, or zip codes) to define the market segment. The geo-cluster method combines geographic and demographic data to develop a more relevant profile of specific consumers. For instance, in Arab nations and conservative societies, WSG can redesign and modify its products and services so that it is still able to do business in such areas without the nature of those countries seriously affecting its operations or ability to operate. Demographic Segmentation This involves partitioning the market into groups based on variables like occupation, race, gender, income, age, religion, education, family size, and nationality. Demographic segmentation variables are among the most common bases for segmenting consumer groups because customer needs are closely linked to variables like age and income and because there is a tome of demographic data available. Psychographic Segmentation This method involves categorizing consumers based on their lifestyle, values, social class, and personality. Foreigners in the same demographic group can have very different psychographic profiles. Behavioral Segmentation Customers are categorized into groups based on their attitude toward, use of, knowledge of, or response to WSG’s products and services. It is often based on consumer behavior. Occasions WSG can segment the global market based on frequency of use, such as whether the product is being purchased for personal use or as a present, or whether it will be used alone or in a group. Benefits WSG can segment the market based on benefits sought by its consumers. Question 3 The dynamic changes in the global marketplace coupled with technological developments in data collection, analysis, and dissemination mean that the company will need to expand its capabilities in order to create, implement, and interpret research in the mobile gambling industry. As research activities are orientated to match with markets of the highest potential, the company will need to develop the skills and capabilities to design and conduct research in these settings. New tools using the latest technology will need to be mastered and creative ways of understanding behavior in different cultural settings in the mobile gambling industry developed. The ability to interpret and apply complex data from multiple sources and environments will also be vital in order to provide realistic recommendations for the company’s global marketing strategy. Matching Research Effort and Capabilities with Market Growth Potential The first priority is to direct research capabilities and efforts at markets with future growth potential. Marketing research expenditures are heavily concentrated in the developed nations of Europe, North America and Japan. This indicates the current attractiveness and size of these markets, but the countries with the biggest growth potential are the emerging market economies in Latin America, Asia, Eastern Europe, or countries that were formerly part of the Soviet Union. If WSG wants to succeed in the 21st century global mobile gambling market it will have to pay more attention to researching markets in these world regions, and acquiring or developing the capabilities to carry out research in such markets. Successfully conducting research in regions having medium and low levels of human development (MHD and LHD) requires not just sensitivity but also understanding of differences in the mobile gambling market. In addition, the firm must develop a capacity to cope with the lack of a well-developed market research tools. When designing research instruments, caution must be exercised in the direct transposition of stimuli or research designs often adopted in developed countries. In lieu of this, WSG’s researchers should think creatively and innovatively in designing tools that easily understood and clearly interpreted, and as far as possible, free of cultural prejudice. In particular, design of tools that apply visual and verbal stimuli and exist in a realistic and familiar setting rather than needing abstract cognitive skills will be much more effective. Conducting and coordinating research in diverse environments The growing diversity of the economic and sociocultural environment in which market research is being conducted shows that WSG’s international marketing researchers will have to develop the ability to conduct and coordinate research across a wide range of environmental settings and research questions. Essentially, the company will have to be capable of tailoring research questions, and apply research instruments and administration techniques to different settings, as well as to analyze or generalize results at a global level. This goes beyond geographic management of multi-country researches, translation and designing of multilingual research instruments or questionnaires requires skills in developing multi-site researches that convey a common purpose and core, while at the same time dealing with country-specific issues. Using a team composed of people from diverse cultural backgrounds and sites facilitates the striking of a balance between equivalence across sites adaptation to and local input from local site environments with the need for equivalence and compatibility. At a higher level, capabilities and skills in developing and coordinating a research program which cuts across multiple, diverse settings are likely to become increasingly vital. A research program can, for instance, cover the mobile gambling industry worldwide. The ability to define relevant research issues in every setting, and to manage and coordinate the different researches will be vital in providing sensible input for the development of WSG’s long-run strategy in the global mobile gambling industry. Developing and using new tools In addition to developing the capacity to conduct research across diverse settings, WSG’s researchers need to develop and make innovative and thoughtful use of new techniques to understand the changing mobile gambling industry. As qualitative research techniques develop and mature, they provide increasing potential as a means of analyzing and understanding the consumption and purchase setting and the underlying influencers of behavior, as well as a way of forecasting future trends and interpreting the results of quantitative research. Incorporating technological advances into research design and methodology WSG’s researchers will need to apply the latest technological advancements in data collection and dissemination in the research design. This will allow the company to significantly reduce the time needed to collect data across geographic distances in addition to dramatically improving and enhancing the type of stimuli that can be employed in collecting data from the global mobile gambling industry. It is, however, important to note that the use of sophisticated technological methods is subject to certain constraints in global markets. This is as a result of either the advancement of technological infrastructure or the technological sophistication of the mobile gambling industry. Advancements in internet technologies offer the potential to significantly alter the way in which much international marketing research is carried out, both in providing a new way of collecting primary data, and in providing access to secondary data. Instead of visiting traditional research libraries, WSG can have almost instant access to data from web sources and traditional sources. The internet can also be exploited in the collection of primary data by either tracking traffic to a website, or administering electronic questionnaires on the web. Since websites are increasingly likely to be accessed by consumers worldwide, data on an international sample can be collected. Behavior at the site can be tracked and interest on the company’s products and services as well as feedback on promotional offers or material can be revealed. WSG must find creative techniques of harnessing new technologies to enable the conduct of research on the global mobile gambling industry and enhance its value to customers. On the same breadth, WSG must begin to develop the ability to carry out marketing research in developed and developing worlds, emerging and established markets. Since the company is targeting the global market, it must use research to create and sell a global image for its products and services in an increasingly diverse and dynamic world. Relevant and timely marketing research will become even more vital as WSG competes in 21st century international markets. References Binmore, K. 1992, Fun and Games: A Text on Game Theory, D.C Heath & Co., Lexington. Bowen, C, & Holloway, W 1994, Perpetual Enterprise Machine, Oxford Press. Collis, David J.; Montgomery, Cynthia A. 1995, "Competing on resources: strategy in the 1990s", Harvard Business Review, v73, n4. Daniels, J. D., & Radebaugh, L. 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