Fundamentals Of Global Strategy A Business Model Approach - Case Study Example

Target Market and Competitive Analysis By Insert Name Institution Instructor Date Target market and competitive analysis Introduction The Brazilian market has been described variously as an upcoming market. Even so, market researchers describe it as being one among the most lucrative markets, especially considering the economic empowerment of the average consumer in the country. The average market consumer is influenced by the trends of changing technology. The mobile services industry is one that is mainly subject to the changes in technology (Hill & Jain 2007, p. 67). As internet access becomes a basic requirement to the average youth, all organizations entering the Brazilian market target the age bracket that is 16 to 34. The youthful population is one that relies heavily on communications, especially through the mobile phones and through the internet, on social media and through the email features. It is worth mentioning that Virgin Mobile, in entering the Brazilian market, must recognize the actuality that there are already well established firms, especially Claro and Vivo, which have had the chance to establish customer loyalty. This means that the organization will have to come up with the most effectual market penetration strategy. It is quite essential to compare and contrast the competitors with virgin mobile. This section of the paper majorly concerns itself with target market and competitive analysis as well as the development of applicable market entry strategy as well as the international market mix strategies for product or market. Identification of target market In penetrating the Brazilian market, the virgin mobile corporation has to have a clear understanding of the target market for various reasons, key among them being to be relevant and steadfast in increasing their sales towards gaining a fair share of the market. As mentioned earlier, the target market of the organization will be the youthful section f the Brazilian population. The definition of youth in this context is the people between the ages of 16 and 34. Such people have been identified as the most appropriate target market, since they are the age bracket that consumes most of the services offered by virgin mobile as well as other providers of mobile phone communication and broadband services. There are many reasons why this bracket has been selected, and the main reason is that the consumption of the modem services among them is highest considering that the youth of the contemporary world are getting obsessed with the internet, thanks to social media such as twitter (Segal-Horn & Faulkner 2008, p. 98). The situation is quite competitive especially considering that there exist well established organizations such as Claro and Vivo. The organization may not find it easy to penetrate the market, as the two have already established roots among the consumers, and established consumer loyalty. Vivo, arguably the most established organization in the market enjoys the widest network coverage, and has a considerably bigger market share. The situation, with the two major players in the market is in such a way that entry is difficult. However, the completion among the existing players makes the bargaining power of the customer become more powerful (De Kluyver 2010, p. 112). On the other hand, the organizations maintain substantial control of the market conditions including price due to the fact that they are few in the industry. The target market is not gender sensitive as it constitutes of both male and female people in the defined category – 16 to 34 years of age. The target market identification procedure relies upon the following factors. For the purposes of virgin mobile, the target market borrows from all the factors shown in the figure. Target market segmentation conditions The identified target market is in such a way that the people can be divided along other lines, for instance, the target market can be further segmented along the lines of gender, age and geographical region. The most appropriate segmentation would be along the line of location. Important to note is the reality that the urban population of Brazil is significantly different from the rural population (Quelch & Deshpande 2004, p. 90). The convenience that the two segments gain from using the services provided by mobile operators varies significantly especially due to the network coverage discrepancies. What this means is that the market may have to be segmented in such a manner that the broadband services for instance can be sold to the urban population. A research by Teleco in the main urban centers revealed that the average price of a modem was on the low in most areas. The graph below indicates the trend of the modem price in most urban areas in Brazil. Source: Huawei White Paper pp. 52 In segmenting the target market, the organization would have to identify the coverage of the broadband services. As a matter of common knowledge, such segmentation is not done as a way of practicing price discrimination, but rather as a way of trying to be relevant in targeting the specific segments with the relevant products. The products are in such a manner that they appeal to the people differently. For instance, the broadband will more useful to the people, especially the youth in the urban areas. Further, the target market will be segmented along lines of gender. Mobile phones are among the key products to be offered by the virgin mobile. Virgin mobile, will be handling such mobile devices as Smartphone. This will prompt the organization to further segment the market along lines of income. This means that they will be targeting the high income brackets with the most expensive Smartphone. The demand potential of the various segments varies significantly. It is imperative to mention that demand is determined by various factors, purchasing power being the most common and significant. Demand is created by marketing efforts as well. This means that in an effort to enhance demand, Virgin Mobile will have to carry out research on the ability of the various segments to respond to advertisements, promotions and other marketing efforts. According to the production concept as a marketing management strategy, supply should at all times endeavor to create its demand. This means that the organization itself will endeavor to stimulate demand. This is one among the most important purposes of segmentation. The habits of the consumers will as well be among the primary conditions for market segmentation. Habits refer to the consumption tendencies and other preferences (Morschett et al 2010, p.34). Habits as well extend to the tastes such as the taste of mobile phone in terms of features such as color size and so on. Key competitors Vivo and claro are the key competitors in the Brazilian market. The two organizations have been the key players for a considerably long time offering services and mobile products that are significantly similar to the ones that virgin mobile intends to offer in the Brazilian market. The key competitors enjoy large market shares for different products. What this means is that the competitors lead in different products. Notably, Claro is the undisputed market leader in mobile broadband access via data terminals. This player is closely followed by vivo which also controls a significant section of the market in offering the mobile broadband access through the data terminals. It is critical to mention that the difference is brought about by differences in the prices and the speeds of the various products. The above explanations are illustrated in the graph below. Source: Teleco Pp. 28 Speaking of the Smartphone services of broadband access, vivo is the market leader as it offers the best 3G internet for the smart phones. Such is the case in all 5565 Brazilian cities. The organization has strong network connections and Smartphone application signals. The results of the survey carried out by Teleco are in the table below. Source: Teleco and Anatel Product comparison Virgin Mobile offers the following services: Prepaid wireless voice services: 1. 3G web and data services 2. Content downloads 3. Messaging and email services 4. Mobile broadband services Products: a. Top-up cards b. Handset c. Mobile phone accessories Similarly, vivo and Claro offer the same products and services. The services offered by the two organizations only differ from those to be offered by Virgin mobile in pricing and quality as well as the priority offered to the products. While Virgin Mobile seeks to prioritize data and social networking, vivo prioritizes the calling rates and daily plans. The strategy to be adopted by virgin mobile will overwhelm the market because, as much as the organizations offer the same products, the new organization entering the market intends to adopt a different approach to the way in which such products are offered to the target market. Target market entry strategy Entering a new market is arguably one among the most difficult phases of establishing roots in a new market. The Brazilian market, much like many other South American markets, is one among the most volatile in terms of competition. One thing that is characteristic of the new emergent markets is that, because of globalization, they tend to attract organizations from across the world (Koch 2007, p. 89). This creates stiff competition in an emergent market, as all seek to establish customer loyalty. It is critical to mention that the Brazilian market, in the case of Virgin Mobile is seen in terms of the youthful population. Having recognized the youth (age 16 to 34) as the target market, it is a matter of logic that the entry strategy will mainly focus on the youth. The entry strategy will focus on the youthful population because, as is the trend, not only in Brazil but the world over, the youthful population is shifting from the traditional way of viewing the service providers as people in charge of text messaging and voice calls, to a new way of viewing such providers as organizations that facilitate data services and make possible the access to the social networks such as twitter and face book (Crum & Palmatier 2003, p.12). In straightforward terms, the youthful population is moving from the voice calls to online communications which are associated with globalism. Globalism entails communications across the world. The organization will endeavor to appear appealing to the youth through including the social networks in their adverts. Advertisement will be one of the most potent ways of reaching the target markets. This may mean that in their adverts, the organization will feature twitter and other social networks such as linked in. Apart from the strategy being characterized by intensive advertising offline, the company may have to consider the online marketing option. This will mean that the organization will advertise through social networks and other websites that are often associated with the youth. These include you tube and others that may appear lucrative, judging from Search Engine Optimization (SEO). Search engine optimization will be one among the most important ways of arriving at the Brazilian market via the internet. What most businesses do not take into consideration is the fact that a site that s universally popular may not be the most appropriate for the advertisement of product plans intended for particular markets such as the Brazilian market. It is more relevant for a business to use those sites that are somewhat dedicated to the local markets (Gouvea 2004, p. 174). The combination of online and offline advertising will create awareness of the new organization in the market, especially among the youth and other online users. As a way of differentiating itself from the current players in the market, Virgin Mobile will adopt a culture of offering simple and transparent plans, which are consumer oriented. Consumer oriented product plans will likely make the consumer create an impression that they are in control of the market conditions. Making the consumer feel empowered is one unique strategy as it makes the market quickly embrace the incoming organization together with its new products (Arlbjørn & Haas 2011, p. 89). Transparency is one important factor, especially considering that most organizations have been deemed less transparent in terms of how they charge the rates, both postpaid and prepaid plans. As a matter of common knowledge, the timing and charges made on calls may not be so well known to the caller, who is the customer. Similarly, a person using the broadband may not be in a position to tell what volumes of data they have consumed. By coming up with a transparent plan and consumer oriented culture, the organization will probably penetrate the market with much ease. Conclusion In conclusion, it is clear from the foregoing that the target market for the case of Virgin mobile is the youthful population ranging from 16 years to 34 years of age. This is justified by the actuality that the organization acknowledges the fact that the youthful population is fast shifting from the voice calls to the online forms of communication such as social media and email. The market segmentation conditions revolve around geographical region and gender as well as the financial strength, which interprets the purchasing power. The key competitors identified in the Brazilian market are Claro and Vivo, which enjoy significant stability in broadband and mobile call services. Comparing the products indicates the differences in prices and corresponding product quantity and quality. Having had a clear analysis of the Brazilian market, the most potent entry strategy will entail focus on the youth and intensive advertising efforts, especially on the online and offline modes. Reference list Arlbjørn, J. S., & Haas, H. D. 2011. Supply Chain Management: Brazil As An Emergent Economy. Syddansk Universitetsforlag. Crum, C., & Palmatier, G. E. 2003, Demand Management Best Practices Process, Principles, And Collaboration. Boca Raton, Fla, J. Ross Pub. De Kluyver, C. A. 2010, Fundamentals Of Global Strategy A Business Model Approach. [New York, N.Y.] (222 East 46th Street, New York, Ny 10017), Business Expert Press. Doole, I., & Lowe, R. 2008, International Marketing Strategy: Analysis, Development And Implementation. London, Cengage Learning. Gouvea, R. 2004. Doing Business In Brazil: A Strategic Approach. Thunderbird International Business Review, 46(2), 165-189. 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