Discuss about the Strategic International Marketing Springer Science.
An expansion in the marketing activities to the global level and when the same are carried out across the two or more nationalities then it is to be termed as international marketing. These types of marketing transactions are carried out on large scale and are also referred as global marketing. The concept is the mechanism of marketing principles for the countries involved in the transactions and this type of trade occurs when the marketing managers of the company adopt a global plan effectively marketing their products and services on an international basis (Terpstra, Foley and Sarathy, 2012). This concept constitutes the marketing activities co-ordinated and integrated across multiple country markets. It can also be considered as the multinational process of planning and executing the price and promotion of the produced goods, ideas and services for creating and developing an exchange which will satisfy the consumers needs and requirements. The need for global marketing arises when the firm realizes the need for expansion in the business activities to a global level. The advanced communication and transportation has aided the business organizations and also has reduced the distance among the nations across the globe. Due to the emergence in the global markets the status of all the components has also acquired a global status, i.e. global supply and suppliers, global consumers and demand, global market etc. International marketing has also aided the business corporations with the introduction of updated technologies, use of contemporary approaches in the organizational structure such as e-commerce, e-business, Internet marketing etc. The below presented research project has been focused on the principles of international marketing for Vmoto Limited which is leading brand name (Czinkota and Ronkainen, 2013). The company is a manufacturer and distributor of scooters and specializes in electric powered two wheeler vehicles. The report has been focused on the middle class consumers segment in China.
On the basis of a research it has been concluded that approx 76 % of the economy’s urban population will be considered middle class by 2022 (Iskyan. 2016). It has been defined that population from urban household have an earning of US$9,000– US$34,000 on a yearly basis. As per the research in 2000 approx 4% of the urban people were considered under the middle class segment. In 2015 China had approx 730 million people which were considered urban population (Babin and Zikmund, 2015). So even if no change observed in the figure and it is obvious to grow, and an estimate has been concluded that in 2022, over 550 million people in the economy will be considered middle class. And this figure is enough to make China the third-most populous country in the world in the middle class population.
The business activities which is a well blended combination of both tangible i.e. physical goods and intangible i.e. the services provided from business corporations. And under concept the emphasis has been provided on the services as compared to the physical goods. For example lodging, programming or training (Meissner, 2012). It has to be considered as the top most or the first activity for any of the organization is deciding which product to be offered? If the company is offering more than one product or service then it will be aiding them in the issue of diversify risk, target on the different consumer and market segments, and also will help in building the credibility and trustworthiness of an established brand. All as a whole make a contribution towards the sustainability for the business organization. These activities also proves beneficial in balancing the need to be financially stable with fulfilling the social and corporate mission of the business. And this can be done by by targeting simple designs to the subsidy market and more aspirational designs to the full-cost recovery market. Expansion of the product and service mix is a crucial task and needs to be considered carefully. There are a number of relevant and important points which are essentially required to be considered while expanding the mix. For instance, the capacity of the corporation for manufacturing and distributing the new products and services, the economic and technological condition, sales of new offerings should not have any impacts on that of the existing one etc. The below mentioned is the product and service mix that is marketed to the middle class population of China:
Product: The company deals in scooters and the concept has been focused on the middle class people in China, then in this case the company can select the electronic scooter as the product and as mentioned the target market segment constitutes of the middle class people (Cova, Kozinets and Shankar, 2012). The product needs to be designed as per the convenience of this segment.
Price: As the targeted segment is from the middle class group and has limited income sources and also buying patterns and purchasing power is also low. Vmoto need to adopt an economy pricing policy. According to this policy the company will be minimizing the expenses associated with the marketing, promotion and production (Solomon, 2014). And this is done in order to make the prices of the product low.
Place: The company needs to make the products available from where the targeted customers (Middle class consumers) finds it easiest to shop. For instance the company can establish the stores and outlets in the local markets or on the high streets so as for the convenience of the consumers.
Promotion: Advertising, sales and promotion makes the consumers aware about the goods and services offered by the business organization/ Vmoto should adopt the promotional approaches which are the most familiar one to the targeted segment (Wedel and Kamakura, 2012). For instance, ads in newspapers, pamphlets, hoardings, use of social media-Face-book, Twitter etc.
People: Human resource is the most significant one of the business organization as all the operational activities are based and related on them only. Vmoto should have a well skilled, equipped and potential staff which should posses the knowledge of all the operational activities to be carried out within the organizational structure. An efficient staff leads in an increase in the level of productivity of the business corporation.
Processes: The processes are the services offered, the manufacturing, customers services provided by the executives. After utilizing the product the this mix increases the satisfaction level of the consumers (Gunter and Furnham, 2014).
Physical Evidence: All the services offered by the company have some physical evidence. For this case the stores, outlets and the showrooms constitutes of physical evidence. The stores and the outlets should be well maintained and arranged in a manner that it makes more and more customers attracted.
Nature: The term nature constitutes the income level, buying habits, purchasing power, standard of living, livelihood pattern, consumption patterns etc. As the report has been focused on the middle class segment of the consumers. 70% of the urban population to 200 million people, according to an authoritative survey which was carried out on approx 40,000 households conducted in August 2015. This consumers is well educated and qualified and is the most fastest growing segment of the Chinese population. They are also well-traveled and informed, and tech savvy—all factors that should make them proponents of political change (Pei. 2016). Moreover An estimate was made that their earnings were between US$9,000 and US$16,000 per year (Iskyan. 2016). But there is an expectation of change in their income level by 2022 due to the employment provided by the growing number of higher-paying high-tech and service industry, Moreover an approx 54% will be classified as “upper middle” class – meaning they earn between US$16,000 and US$34,000 a year. Meanwhile, a growth of 9% a year through 2020 is expected in Chinese consumption (the amount of stuff people buy).
Size: As per the survey carried out in 2012 an approx 54% of China’s urban households were considered “mass middle” class. according to the Boston Consulting Group. Overall, the consumer economy is forecasted to grow by 55 percent, to US$6.5 trillion (Solomon, Russell-Bennett and Previte, 2012). That’s an increase of US$2.3 trillion – which is like adding a new consumer market 1.3 times larger than the current consumer markets of Germany or the U.K. And that’s assuming that China’s GDP will grow by 5.5 percent a year, which is lower than the projected growth of 6.5 to 7 percent a year.
Scope: This constitutes of the future developments and enhancements in the literacy, income level, buying habits, standard of living and lifestyle the This will be done by the emergence of the high-tech industries, the job opportunities provided by the business corporations. This has brought a change in the standard level of this segment which directly or indirectly has impacts on the purchasing power, buying habits and lifestyle.
The concept is all about having proper data and knowledge about the type of consumers the company is targeting, and the tracks used to approach the same. This step is the key for focusing the marketing efforts done by the marketing team of the organization on the groups or the segments of the consumers. This step provides a better view to develop an approach for the development of the goods as per the needs of the consumers. It also aids the company with an increase in the sales (Schütte and Ciarlante, 2016). The below mentioned is the analysis carried out on the market segment of China :
Demographics: This is one of the most effective parameter which can be used in segmenting the target market (Pestle analysis. 2015). This constitutes age, gender, race location, educational background and more. The company should think about the type of consumers. For instance, scooters comes under those vehicles which can be used by any age group, easy to handled and can be use for any location.
Psycho-graphics: In this category of segment the personality traits of the customers such as their values, beliefs, perceptions, interests, attitudes, opinion and behavior (Baker, 2014). This data will help the corporation in building and developing a clearer persona for each of targeted segments or the groups.
Research: The company can carry out additional and detailed research so as to get direct and quick feedbacks from the targeted consumers and markets. And this is also done for examining the customers’ behaviors. This provides the corporation regarding the needs and retirements their perceptions and beliefs and also buying habits and patterns so as to develop better products in order to provide a greater level of satisfaction (Pei. 2016). For instance Vmoto needs to execute the research report in order to make the necessary developments and up-gradations in the features of the scooters, this can be done by considering the feedbacks of the consumers.
Strategy: The last step in the process of analysis of market segment is the planning and developing strategies and tacts for tackling the rivals and remaining sustainable in the Once the company have a clear view about the segmented target market an also a clear idea about the differences between the same then Vmoto can make use of this data in development of marketing strategies and plans. The strategies should be developed on the needs and perceptions of the consumers, the company should consider their feedbacks so as to provide the customers a good and quality products which will aid in making their lives better (Armstrong and et al, Anitsal, M.M., 2012). The research executed should clear and solve the issues and the problems of the customers and clients and after that only the company will be able to incorporate the findings into an effective marketing plan.
The most prime task for a business organization is of deciding which products should be offered (Marsh. 2017). The company will be aided from the risk of diversity if they opt to offer more than one product or service, target various market segments, and also bring development in the credibility of an existing and established brand and this will also aids in making the business organization more sustainable (Patidar. 2015). The concept of expansion of product mix has to be considered at priority and carefully. While taking decisions regarding the expansion activities of the mix, the organization should consider the resources that are to be required by the new products or service (Wedel and Kamakura, 2012). The following are some of the points which are required to be considered as significant one while expansing the product or service mix, the organizations capacity and capability to produce and distribute the goods, technologically upgraded and updated, economical stability, impacts of the sales of new offerings on that of the existing one and also fulfilling the needs and requirements of the consumers.
The concept of strategic management is concerned with the management of the contemporary which constitutes of development of goals and instituting programs which assists in the fulfillment of these goals. Environmental scanning has to be considered as one of the significant component of strategic management and through which the managers and superiors can execute the study over various political, economical, socio-cultural, technological, legal and environmental factors. This scanning aids the organization with the identification of the untapped markets and avoid the expensive mistakes (Wilkinson, 2013). PESTLE analysis has to be considered as the strategic management tools that will also help the managers brainstorming and organize the ideas during the process of environmental scanning.
PESTLE is an acronym for Political, Economical, Social, Technological, Legal and Environmental. The prime objective of this analysis is the identification of all the various external components which are capable in influencing the the business activities of an organization. This analysis aids the managers with the identification of the risks and make this information available in a form so as to be utilized in the process of decision making. For instance the change in the legal aspects will be known by Vmoto by executing and making use of the legal factors from this analysis (Loveridge and Mok, 2012). This will help the company in development and building the decisions regarding the legal issues and the other related concerns with the factor. The below mentioned are the macro factors of Australian middle class population:
Political: The commonwealth of Australia is a federal constitutional monarchy under parliamentary democracy. This factor refers to the various government policies which are imposed by the governing or the local authorities of the concerning economy (Yüksel, 2012). There are number of policies which have great impacts on the middle class population in the economy. For instance, there are many policies related to economic liberalization, Anti-union, free trade, rural and agriculture etc. These all the policies are very much capable in influencing the middle class group of the population. For example the policies on rural and agriculture will have an impact on the agricultural products which will indirectly effect the consumption of vegetables and fruits for middle class population (Weinstein and Cahill, 2014).
Economical: The country have an enviable, strong economy with a per capita GDP on par with the four dominant west European economies. Australia have a copious and diverse natural resources which has developed a high level of attraction for foreign investment and also have an comprehensive reserves of coal, iron ore, copper, gold, uranium, natural gas and other renewable natural resources. As the economic condition of the country is stable and hence there are lot of employment opportunities for the middle class population. This makes them financially stable.
Social: English is the most common language to be spoken in Australia, approx 80% of population make use of this language (McDonald, 2012). The GDP of Australia contributes an approx figure of 4.5% for education purpose, also 99% of the Adults are literate. This factor also constitutes of the diverse religions, traditions and languages spoken in the country.
Technological: A growth has been observed in the household access to the Internet from 1.1 million in 1998 to 4.7 million in 2005-06. The expenditure on research and development was also more, it showed a growth of approx 15.7 billion Australian dollar in 2004-05 and it was 19% more than that compared to that of previous two years. There had been many innovations in the industrial sector which developed and generated a number of job opportunities for the middle class people in the economy.
Environmental: As Australia is a large island continent and is also from the top most countries who have a diversity in biological factors. 5% of the Australian land is occupied by the national parks and that provides an excellent places such as deserts, coral reefs, rain-forests, and also the animals ad the plants that inhabit them (Frederiksen, Solomon and Brehony, 2013). These all the aspects have direct or indirect impacts on the middle class population in the economy.
Legal: The legal system in Australia is totally base on the the fundamental belief in the rule of law, justice, independence of the judiciary. There is a sense of equality in the economy and this has been carried out before the laws and safeguards were imposed (Verbeke, 2013). The legal factor constitutes of the tax and tariffs, the laws and the regulations and the changes in the same will impose many impacts on the middle class group.
Conclusion
From the above executed analysis it can be inferred that Vmoto Limited is an multinational corporation and is a manufacture and distributor of scooters. The research report has been focused on the analysis which has been carried out for Middle class consumer segment of China. The company also wants to launch a new product i.e. electrical scooters for the same consumer segment. A brief discussion has been presented for the nature, size and scope of the mentioned market segment. Further an analysis of product and service mix has been done for the new product in the markets of China, also a justification has been provided for the same. Moreover the process of market segmentation process has been discussed and at last the macro- environmental factors for the Middle class population of Australia.
References
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