GSM – 2GSM – 2Assessing Global MarketsAssessing Global Markets

Malin BrännbackMalin Brännback

Understanding global Understanding global competitioncompetition

National competitive advantageNational competitive advantageCompetitive analysis need to focus on a Competitive analysis need to focus on a national levelnational level

The forces influencing an industry should The forces influencing an industry should be examinedbe examined

Competitive positions within an industry Competitive positions within an industry are important are important – strategic groupsstrategic groups

The competitive advantage of individual The competitive advantage of individual companies have to be taken into accountcompanies have to be taken into account

Determinants of national advantageDeterminants of national advantage

Firm strategy,structure, and

rivalry

Factorconditions

Demandconditions

Related andsupportingindustries

Factor conditionsFactor conditions

Human resourcesHuman resources

Physical resourcesPhysical resources

Knowledge resourcesKnowledge resources

Capital resourcesCapital resources

Infrastructure resourcesInfrastructure resources

Demand conditionsDemand conditions

Composition of home demandComposition of home demand– net disposable incomenet disposable income

The size and growth of home The size and growth of home demanddemand

How does a nation’s home demand How does a nation’s home demand pull the nation’s products into foreign pull the nation’s products into foreign marketsmarkets

Related and supporting industries & Related and supporting industries & Firm strategy, structure and rivalryFirm strategy, structure and rivalry

Sub-contractorsSub-contractors

Differences in management styles, Differences in management styles, organizational skillsorganizational skills

Capital markets and attitudes toward Capital markets and attitudes toward investments are importantinvestments are important

Influences on the development of Influences on the development of related and supporting industriesrelated and supporting industries

Firm strategy,structure, and

rivalry

Factorconditions

Demandconditions

Related andsupportingindustries

A group of domestic rivalsencourages the formation ofmore specialized suppliersas well as related industries

Large or growing home demand stimulates thegrowth and deepening ofsupplier industries

Specialized factor poolsare transferable to relatedand supporting industries

Influence on domestic rivalryInfluence on domestic rivalry

Firm strategy,structure, and

rivalry

Factorconditions

Demandconditions

Related andsupportingindustries

world-class users entersupplying indutries

Early productpenetration feeds entry

New entrants emerge fromrelated and supportingindustries

Factor abundanceor specialized factor-creating mechanismsspawn new entrants

The complete systemThe complete system

Firm strategy,structure, and

rivalry

Factorconditions

Demandconditions

Related andsupportingindustries

Chance

Gov’t

The Business System – The Business System – an alternative viewan alternative view

The Core BusinessThe Core Business

The Business System

The Extended Enterprise

Core Business•Core Distributors•Direct Suppliers•Distribution Channels

Extended Business:•direct customers•customers of my customers•suppliers of complementary products and services•suppliers of my suppliers

The Business System:•stakeholders•competing organisations with sharedproduct/service attributes or business processes•gov’t agencies

How would you apply Porter’s How would you apply Porter’s diamonddiamondfor the for the

Finnish forest industryFinnish forest industryFinnish mobile telephone Finnish mobile telephone

market?market?

How would you apply Porter’s How would you apply Porter’s diamond fordiamond for

RomaniaRomaniaEstoniaEstoniaBrazilBrazil

How would you go about How would you go about assessing a global market?assessing a global market?

Global information needsGlobal information needs

Economic and competitive Economic and competitive environmentenvironment

Technological environmentTechnological environment

Political environmentPolitical environment

Regulatory environmentRegulatory environment

Legal environmentLegal environment

Social and cultural environmentSocial and cultural environment

Key pointsKey pointsThe execution of global marketing research may The execution of global marketing research may differ substantially from the process of domestic differ substantially from the process of domestic researchresearch

Global market researchers are faced with broader Global market researchers are faced with broader competition, different variables to be considered, competition, different variables to be considered, and lack of infrastructureand lack of infrastructure

Marketers need to learn about various aspects of Marketers need to learn about various aspects of foreign market environmentsforeign market environments

Underdeveloped communication infrastructure Underdeveloped communication infrastructure can hinder the information collection processcan hinder the information collection process

More key pointsMore key pointsThe global marekt researcher must analyse many The global marekt researcher must analyse many national markets, each of which has unique national markets, each of which has unique characteristic. However, it is important that data characteristic. However, it is important that data have have – the same meaning or interpretationthe same meaning or interpretation– the same level of accuracythe same level of accuracy– precision of measurement,precision of measurement,– and reliabilityand reliability

The need of data compatibility in global The need of data compatibility in global marketing research gives rise to a number of marketing research gives rise to a number of issues dealing withissues dealing with– problem definitionproblem definition– data analysisdata analysis

What kinds of secondary data What kinds of secondary data sources would you use?sources would you use?

Secondary data sourcesSecondary data sources

Can be used with minimal effort and costCan be used with minimal effort and cost– However, pay attention to how old that data is!However, pay attention to how old that data is!

Major sources are governments, Major sources are governments, international organizations, trade international organizations, trade associations, directories, and electronic associations, directories, and electronic databasesdatabases

Criteria for using secondary data sources Criteria for using secondary data sources areare– accuracy, availability, timeliness, costs, and accuracy, availability, timeliness, costs, and

comparabilitycomparability

How would you go about primary How would you go about primary research in global marketing?research in global marketing?

State-of-the-artState-of-the-art

Identify the research problemIdentify the research problem– Identify the market opportunityIdentify the market opportunity

Develop a research planDevelop a research plan– What do you have to consider?What do you have to consider?

Information worth in €,$, or Information worth in €,$, or ¥¥

What will we gain with this data?What will we gain with this data?

What’s the cost of not getting this dataWhat’s the cost of not getting this data

IT IS NECESSARY TO DO A COST-BENEFIT IT IS NECESSARY TO DO A COST-BENEFIT ANALYSIS!!ANALYSIS!!

State-of-the-artState-of-the-artCollecting dataCollecting data– survey or interviews or whatsurvey or interviews or what

SamplingSamplingAnalysisAnalysis– demand pattern analysisdemand pattern analysis– income elasticity measurementincome elasticity measurement– market estimation by analogymarket estimation by analogy– cluster analysiscluster analysis

FindingsFindings

TerminologyTerminology

MARKET The set of all actual and potential buyers of a product

POTENTIAL MARKET

The set of consumers who profess a sufficient level of interest in the market offer

AVAILABLE MARKET

The set of consumers who have interest, income, and access to a particular market offer

TARGET MARKET

The part of the available market the company decides to pursue

MARKET DEMAND

The total volume of a product that would be purchased by a defined customer group in a defined geographical area in a defined time period in a defined marketing environment under a defined marketing program

Segmentation, targeting, and Segmentation, targeting, and positioningpositioning

What’s segmentation?What’s segmentation?

Assessing the US: Geographic Assessing the US: Geographic VariablesVariables

Region

City ormetro size

Climate

Density

Pacific, Mountain, West North Central, West South Central, East North Central, East South Central, South Atlantic, Middle Atlantic, New EnglandUnder 4,999; 5,000-19,999; 20,000-49,999 . . .1,000,000-3,999,999; 4,000,000 and over

Northern, southern

Urban, rural, suburban

Psychographic segmentationPsychographic segmentation

Based on attitudes, values, and lifestyleBased on attitudes, values, and lifestyle– activities, interests, and opinionsactivities, interests, and opinions

Porche: Porche: – Top Guns, 27% - driven and ambitious, care about Top Guns, 27% - driven and ambitious, care about

power and control, expect to be noticed power and control, expect to be noticed – Elitists, 24% - old money; a car – even an Elitists, 24% - old money; a car – even an

expensive one – not an extension of ones expensive one – not an extension of ones personalitypersonality

– Proud patrons, 23% - ownership counts – a Proud patrons, 23% - ownership counts – a trophy, reward for working hard trophy, reward for working hard

– Bon vivants, Cosmopolitan jet setter, thrill seekersBon vivants, Cosmopolitan jet setter, thrill seekers– Fantasists, 9% - car represents an escape, don’t Fantasists, 9% - car represents an escape, don’t

care about impressing others – even a feeling of care about impressing others – even a feeling of guiltguilt

Young&Rubicam’s cross-cultural consumer Young&Rubicam’s cross-cultural consumer characterizationcharacterization

Attitudes Work Lifestyle Purchase Behaviour-------------------------------------------------------------------------------------------Resigned PoorUnhappy Labour Shut-in StapleDistrustful Unskilled Television Price

Struggling PoorUnhappy Labour Sports PriceDissatisfied Craftsmen Television Discount stores

MainstreamersHappy Craftsmen Family HabitBelong Teaching Gardening Brand Loyal

AspirersUnhappy Sales Trendy sports Conspicuous consumptionAmbitious White collar Fashion magazine Credit

SucceederHappy Managerial Travel LuxuryIndustrious Professional Dining out Quality

TransitionalsRebellious Student Arts/crafts ImpulseLiberal Health field Special interest Unique products

magazinesReformersInner growth Professional Reading EcologyImprove world Entrepreneur Cultural events Home-made/grown

Why is lifestyle data, on its own Why is lifestyle data, on its own or in combination with other or in combination with other

information such as geographic information such as geographic patterns so important to patterns so important to

consumer goods companies?consumer goods companies?

Which steps are involved in Which steps are involved in developing buyer typologies developing buyer typologies

based on empirical data?based on empirical data?Compile a list of tasks required.Compile a list of tasks required.

Global market segmentationGlobal market segmentationGeographicGeographic– Let’s take Southeast AsiaLet’s take Southeast Asia

JapanJapan

South KoreaSouth Korea

ChinaChina

IndonesiaIndonesia

MalaysiaMalaysia

VietnamVietnam

– In what ways are these countries different? In what ways are these countries different? What are the implications for segmentation?What are the implications for segmentation?

demographic, psychographic, behaviourdemographic, psychographic, behaviour

Global TargetingGlobal Targeting

Criteria for targetingCriteria for targeting

Basically the same as for a single Basically the same as for a single countrycountry– current size of the segmentcurrent size of the segment– anticipated growth potentialanticipated growth potential– competitioncompetition– compatibility and feasibilitycompatibility and feasibility

Key points for global targetingKey points for global targeting

After defining potential global target After defining potential global target groups it needs to decide which groups it needs to decide which group to targetgroup to target– remember the recipe for failure is to try remember the recipe for failure is to try

and please everyoneand please everyone

Which is then the most suitable Which is then the most suitable marketing strategy?marketing strategy?

Global PositioningGlobal Positioning

Positioning - a NounPositioning - a NounFirst and foremost First and foremost a nouna noun, not a verb, not a verb

An attributeAn attribute associated with a company or a associated with a company or a brand - not marketing contortions that brand - not marketing contortions that people go through to set up that associationpeople go through to set up that association

The single largest influence on the buying The single largest influence on the buying decisiondecision

Shapes the final choice and the way the Shapes the final choice and the way the buyer evaluates alternatives leading to their buyer evaluates alternatives leading to their choice. Evaluations are simply choice. Evaluations are simply rationalisations of prerationalisations of pre--established established positioningpositioning

Positioning - a NounPositioning - a NounExists in people’s Exists in people’s headsheads, not in your words, not in your words

If you want to talk intelligently about If you want to talk intelligently about positioning, you must frame a position in positioning, you must frame a position in words that are likely to actually exist in words that are likely to actually exist in other people’s heads, and not in words that other people’s heads, and not in words that come straight out of hot ad copycome straight out of hot ad copy

Positioning - a NounPositioning - a NounPeople are highly conservative about People are highly conservative about entertaining changes in positioningentertaining changes in positioning

people don’t like you messing with stuff that people don’t like you messing with stuff that is inside their heads. The most effective is inside their heads. The most effective positioning strategies are those demanding positioning strategies are those demanding the least amount of changethe least amount of change

Positioning - the VerbPositioning - the Verb

A set of activities designed to bring A set of activities designed to bring about positioning as a nounabout positioning as a noun– NOT:NOT: how to make their product easier how to make their product easier

to sellto sell– BUT:BUT: make the product easier to buy make the product easier to buy– Not: Not: ‘..If you throw a lot of mud on the ‘..If you throw a lot of mud on the

wall some of it is bound to stick..’wall some of it is bound to stick..’

Positioning - the VerbPositioning - the Verb

Create a space inside the target Create a space inside the target customer’s head calledcustomer’s head called– Best buy for this type of situationBest buy for this type of situation

– Keep that space undisputedly occupiedKeep that space undisputedly occupied

– The space is a function of who is the The space is a function of who is the target customertarget customer

High tech positioningHigh tech positioningTechnical productsTechnical products– are there differences in how technical are there differences in how technical

specifications should be made in different specifications should be made in different countries – YEScountries – YES

Special interest productSpecial interest product– less technical more leisure or recreation less technical more leisure or recreation

orientedorientedcommon language and symbolscommon language and symbols

Products that demonstrate wellProducts that demonstrate well– speak for themselvesspeak for themselves

High touch positioningHigh touch positioning

Products that solove a common Products that solove a common problemproblem

Global village productsGlobal village products– fragrance, designer fashion, mineral fragrance, designer fashion, mineral

water, pizzawater, pizza

Products that use universal themesProducts that use universal themes

New products and services inNew products and services inglobal marketingglobal marketing

Key questions to askKey questions to askHow big is the market for this How big is the market for this product at various prices?product at various prices?What are the likely competitive What are the likely competitive moves in response to our activity moves in response to our activity with this product+with this product+Can we market the product through Can we market the product through existing structures? If not what existing structures? If not what changes and what costs will be changes and what costs will be required to make the changes?required to make the changes?

Key questions to askKey questions to askGiven estimates of potential demand for this Given estimates of potential demand for this product at specified prices with estimated levels product at specified prices with estimated levels of competition, can we source the product at a of competition, can we source the product at a cost that will yield an adequate profit?cost that will yield an adequate profit?Does this product fir our strategic development Does this product fir our strategic development plan?plan?– Is the product consistent with our overall goals?Is the product consistent with our overall goals?– Is the product consitent with our available resources?Is the product consitent with our available resources?– Is the product consistent with our management Is the product consistent with our management

structures?structures?– Does the product have adequate global potential?Does the product have adequate global potential?

Key pointsKey points

New products and services can be:New products and services can be:– New to the consumer New to the consumer andand new to the new to the

company (product innovation)company (product innovation)– New to the consumer but not to the New to the consumer but not to the

company (product line extention)company (product line extention)– Not new to the consumer but new to the Not new to the consumer but new to the

company (new product duplication)company (new product duplication)

Four critical steps to NPDFour critical steps to NPD

Permanent identification of new ideasPermanent identification of new ideas– How could new ideas be identified?How could new ideas be identified?

Screening of these ideas and Screening of these ideas and identification of promisin candidates identification of promisin candidates for further investigationfor further investigation

Stringenth investigation and analysis Stringenth investigation and analysis of the selected new product ideasof the selected new product ideas

Organization of sufficient resourcesOrganization of sufficient resources

Discovery to Market ProcessDiscovery to Market Process(as viewed by an bio-entrepreneur)(as viewed by an bio-entrepreneur)

AdvancedIntermediateEarlyNewMedicineProposal Target

Validation

LeadIdentification

LeadDevelopment

LeadOptimization

EIHEnabling

EarlyClinicalSafety

DevelopmentPortfolioPreparation

EarlyClinicalEfficacy

PhaseII

PhaseIII

Launched

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TargetValidation

ClinicalCandidateSelected

StartPhase III

NDA

Discovery Development MarketM

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Drug discovery phaseDrug discovery phase

Target proteinidentificationand validation

8 - 24 months

Selection oflead molecule

12 - 24 months

Lead moleculeoptimisation

18 - 36 months

Selection ofdrug candidate,

preclin. dev.

12 - 24 months

• Genomics

• Proteomics

• Transgenic animals

• Biochemistry

• Cell biology/ in vitro pharmacology

• HTS

• Molecule libraries

• Combinatorial chemistry

• Bioinformatics

• Targeted molecule libraries

• Molecular modeling

• Secondary screening

• Synthetic chemistry

• In vivo pharmacology

• ADME/tox. screening

• Pharmacological profile

• Toxicology

• ADME

• Bioanalytics

• Preformulation

• Scale up of API

Clinicaldevelopment

To test a product or service under To test a product or service under actual market conditions before actual market conditions before

proceeding with full-scale proceeding with full-scale introduction is, in global markets, introduction is, in global markets, even more important than in local even more important than in local

or national marketsor national markets

What criteria should global What criteria should global marketers consider when making marketers consider when making

product or service decision product or service decision choices?choices?

Identify several global brands. Identify several global brands. What are some of the reasons for What are some of the reasons for the global success of the brands the global success of the brands

you choose?you choose?