Brands and their products that originate in a country are accepted in other countries as well. Consumers have now many options to choose from the similar products in a market (Papadopoulos & Heslop, 2014). Companies need to ensure that the offered products must be affordable and high quality. In this report, risks, rationale and technical requirements of market selection and market entry consideration, as well as market and positioning statement, are given. In this report, two electric bikes companies are chosen to show the contrast of market selection and market segmentation choices.
Dillenger started its business in the year 2007 by the founders of a small Aussie-based engineering firm. This organisation started to build a custom bike and e-bike was the hobby project of this business (Dillengerelectricbikes.com.au, 2018). Now Dillenger is a registered company in Queensland, Australia and it is selling limited models of e-bikes. Sometimes, the production of the e-bikes takes the back seat when they develop the new engineered models.
GoCycle is an e-bike product manufactured by Karbon Kinetics Limited. GoCycle was established by Richard Thrope in the year 2002 and he once had worked for McLaren (Gocyclecom, 2018). Richard Thrope had knowledge in making lightweight racing car and he used his enthusiasm to make lightweight and excellent e-bikes. The best feature of this e-bike is that the riders can fold up the bicycles and carry in a case. The maximum sales of these e-bikes are done in Europe.
Entry choice decision of an organisation is determined by the market size in which it is going to enter.
Dillenger Australia sells e-bikes in Queensland area and it is going to take exporting as a mode of market entry in the Asia Pacific region. Dillenger Australia is going to take cooperative exporting in this region where e-bikes can take the market. As stated by De Mooji (2015), the organisations need to enter an agreement with another foreign organisation in which the partner company will its distribution network to sell the goods to the exporters.
GoCycle sells its products in the European market and it is going to sell its products in the African market. They can take contract manufacturing as its mode of entry in which they will arrange a local manufacturer to manufacture of the parts. In e-bike industry, GoCycle can have the benefit of cost saving and flexibility of manufacturing and marketing of the products.
Dillenger Australia can take the partner up a strategy for expanding its business in Asia Pacific region as it will provide Dillenger with the protection of best-in Class Company. Relying on partners will help the company to expand the business internationally to understand the target market as well (Samiee, Chabowski & Hult, 2015).
GoCycle is going to take Light Footprint strategy as it is not going to invest hard costs until the foreign operation in African sector is matured. GoCycle will justify the expenses of the company in long-term Return on Investment.
Dillenger Australia is going to take the emerging market of Asia Pacific region as real GDP of this region is expected the growth of 7.7% (Hair & Lukas, 2016). However, the challenges of this region are the poverty and management of natural resources. Dillenger is going to take required medium-term policy responses as e-bikes are needed to provide in cheap prices to increase sell. Malaysia, China, Thailand, India, Philippines and Indonesia will be a good choice.
GoCycle has its market in European and American regions. The organisation is expanding its business in the African region. African region will be a good choice for the organisation as the population are poor and the economy is trying to bring encyclical recovery. This region has been experiencing weakest GDP and financial crisis. However, Nigeria and South Africa would be experiencing growth 2018 (Chaffey & Ellis-Chadwick, 2018).
Dillenger will enter Asia Pacific region and they can target the psychographic segmentation of the customers. Psychographic segmentation is based on customers who prefer to buy selected products based on their choices (Armstrong et al., 2015). Dillenger will try to target the customers based on personality and lifestyle of the customers. In Malaysia, Thailand and China, the customers can spend money on e-bikes as they are environment-friendly and economic conditions of these regions are good. Primary target customers of Dillenger in Asia Pacific region will be customers who have a good lifestyle and who want to keep themselves healthy.
GoCycle will enter African market and they can target the customers based on demographic segmentation. Demographic segmentation of the customers is based on age, gender, occupation and socio-economic group (Morgeson, Sharma & Hult, 2015). GoCycle will target the customers based on the socio-economic condition of the customers as the organisation will target the customers who belong to the high economic class. The price of GoCycle e-bike is higher than the other companies; however, the products belong from premium qualities. GoCycle will have the benefit of prices of the products that they charge and they can provide a discount as well.
The value proposition is the promised value to communicate and deliver to the customers. Dillenger will take the strategy of innovation as Dillenger spends their resources to innovate the products. Their R&D team always tries to provide better and developed products to the customers. Customers in Asia Pacific region can experience and acquired the value of innovation through e-bikes.
GoCycle will provide value through the promise as GoCycle is a big name in e-bike market. They will do the branding through advertisement and they will spread the value through brand adding value to the audiences.
Dillenger and GoCycle both are offering to the target customers e-bikes. E-bikes have integrated electric motors. Dillenger’s e-bikes have rechargeable batteries and it can offer high-powered vehicles as well. Dillenger offers limited variants in the Australian market and it will offer limited variants in Asia Pacific market as well. On the other side, GoCycle will offer Go2 and Go3 (mainly Pedelecs and monopods) variants to the African customers.
Dillenger is going to take price skimming strategy as this company will offer the e-bikes with relatively high price in the beginning. In China and Malaysia, the demands of these types of e-bikes are high. In price skimming, the marketers set the price of the products high in the initial stage and then lower the price after sometimes (Hoegele, Schmidt & Torgler, 2016). It will help Dillenger to recover the cost of the products.
On the other side, GoCycle can take low-pricing strategy as African customers cannot afford extra price. E-bikes are not popular among African, therefore, in order to make popular of e-bikes, the company needs to take low-pricing strategy. GoCycle can make the competition null through price leadership strategy.
Dillenger is going to place the products in Asia Pacific region and GoCycle is going to place the products in the African region. Dillenger is going to export the products from Australia and they will take the strategy of single distribution line. They will employ intermediaries in order to distribute the products on time. GoCycle will take the strategy of contract manufacturing in Africa and they will employ the direct distribution. They will recruit new employees for expanding the distribution channel.
Dillenger is a small organisation in Australia; therefore, they may not be able to do expensive promotion in Asia Pacific region. They can take social media strategy as it is cost-effective medium. This social media strategy will be helpful for the organisation to advertising using Facebook, Twitter and YouTube to reach large numbers of the customers. On the other side, GoCycle organisation will take the strategy of sales promotions and advertising using newspapers and hoardings. GoCycle can spend money on advertising and they will provide advertisement using out-of-home promotion.
Demographic segmentation is the market segmentation based on race, age, gender, religion, education and home and income group of the customers. Demographics can be segregated into several markets that help the organisation to meet the targets of customers accurately (Fishman & Cherry, 2016). GoCycle and Dillenger can target the customers in demographic segmentation basis. Demographic segmentation provides the advantage of getting the information that is available for them. GoCycle and Dillenger will target the customers on economic condition basis.
Measurable: Characteristics of customers in Asia Pacific region that they are poor, they show their preference based on prices and upper middle class can purchase the products if those are necessary. Size of the market is large as Asia Pacific region is a populated area. In case of the African region, it is also populated and if lower prices products are offered, people can purchase their products.
Accessible: The targets of the customers are reachable through advertisements.
Actionable: It will provide business opportunity by increasing target customers. Good customer base can help to increase the numbers of customers (Fyhri & Fearnley, 2015).
The organisations need to identify the lifestyle subgroups according to their choices. The customers are given with their services and products and the customers choose the brands to which they are loyal. The customers’ needs meet their brand name and company. Lifestyle segmentation is the symbiotic relationship which can benefit the customers and companies (Akaka, Vargo & Lusch, 2013). GoCycle and Dillenger Australia can choose the lifestyle of the customers and both rich section of the Asia Pacific and African regions, people love to stay healthy.
Measurable: Dellinger Australia is targeting customers in Asia Pacific region where lifestyles of the upper middle-class people are based money and preferences. Size of the upper middle-class people is large in China and Malaysia. GoCycle is targeting to African region where the demand for e-bikes is not high and lifestyles of the rich customers can create the demand.
Accessible: The target customers of the organisation can be accessed through advertisements.
Actionable: Profitable business opportunities can be gained through the targeting the customers who need the e-bikes and creates demand through this.
Conclusion
It has been noticed that both organisations might take different strategies in order to enter the international market. Cultural differences, logistics, economic conditions and political risks are there as international marketing factors. Dellinger Australia targets Asia Pacific market and GoCycle targets African market and they will take different strategies to enter. They will also take different customer segmentation strategies in order to meet the objectives.
Reference List
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Chaffey, D., & Ellis-Chadwick, F. (2018). Digital marketing. Prentice Hall.
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Dillenger Australia (2018). Retrieved 4 February 2018, from https://dillengerelectricbikes.com.au/
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Fyhri, A., & Fearnley, N. (2015). Effects of e-bikes on bicycle use and mode share. Transportation Research Part D: Transport and Environment, 36, 45-52.
GoCycle (2018). Gocycle. Retrieved 4 February 2018, from https://gocycle.com/about/
Hair Jr, J. F., & Lukas, B. (2016). Marketing research (Vol. 2). McGraw-Hill Education Australia.
Hoegele, D., Schmidt, S. L., & Torgler, B. (2016). The importance of key celebrity characteristics for customer segmentation by age and gender: Does beauty matter in professional football?. Review of Managerial Science, 10(3), 601-627.
Morgeson III, F. V., Sharma, P. N., & Hult, G. T. M. (2015). Cross-national differences in consumer satisfaction: mobile services in emerging and developed markets. Journal of International Marketing, 23(2), 1-24.
Papadopoulos, N., & Heslop, L. A. (2014). Product-country images: Impact and role in international marketing. Routledge.
Samiee, S., Chabowski, B. R., & Hult, G. T. M. (2015). International relationship marketing: Intellectual foundations and avenues for further research. Journal of International Marketing, 23(4), 1-21.
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