MARKETING ASSIGNMENT
1. What is international market segmentation? segmentation? What challenges does it pose to entle!?
International market segmentation consists in dividing the market into segments; in other words, it consists in forming segments of consumers who have similar needs and buying behaviors even if they are located in different areas of the worlds. Companies that are big enough to expand in other countries markets, can choose to segment international markets using different variables or factors: • • • •
Geographic location conomic factors !olitical and legal factors Cultural factors
If the company is willing to segment international market through geographic location it means that they assumes that countries close to one other have many common traits and behaviors, because, using this kind of factor, they are going to divide the target countries in groups, such as "e "estern stern urope, #frica, and so on. #nother way to segment international market is using economic factors, such as population income levels or level of nation$s economic development or G%!. &hose last ' economic factors are actually the ones that (entley )otors used during the first period of the co mpany life *during all the +$s-; this kind of market segmentation brought them to have very positive results in countries like nited /tates and urope, which before where characteri0ed by high income income consumers, but now not. &he &he situation is changed and together with it, also (entley$s international segmentation factors are different. Countries can also be segmented by political and legal factors, such as government$s government$s stability, monetary regulations, receptivity to foreign foreign firms and so on; and by cultural factors, so something like languages, religions, values , traditions, and behavioral patterns. 1egarding the second 2uestion, we must point out that this international market segmentation poses a challenge to (entley as the company experienced a sudden huge decrease of sales in '+, mainly because of the global financial crisis. &his forces (entley to find new market, new positioning of their cars and their wa ys of reaching targeted segments with their products and develop new marketing marketing strategies and programs. (entley uses different different kinds of market segmentation to segment their international market. #s we said before, the company used variables like nation$s economic economic development and gross domestic product, so markets like nited /tates, 3 and urope were the most important in (entley$s traditional market strategy. (ut, when sales drop down in '+, (entley began to reali0e that their use of variables for market segmentation like age, education, and gender is not how the market behave. &hey started to notice and study the increasing buying power of the rich from (1IC *(ra0il, 1ussia, India, China-. &his force them to segment market based on new economic factors such as number of sales in that market and not based on developed or developing nations like they used to.
". #sing the $%ll spectr%m o$ segmentation &aria'les( descri'e ho) entle! segments and targets the international l%*%r! car market.
/egmentation is based on four factor: • • • •
Geographical !sychographic %emographic (ehavioral segmentation.
Geographical segmentation refers to grouping markets geographically such as nations, states or cities. 4ow (entley is segmenting countries in this way: on one side we can find (1IC developing countries and on the other one the traditional markets that are nited /tates, 3, and urope. !sychographic segmentation consists in dividing the buyers into groups based on lifestyle or social class5status. %emographic segmentation uses factors like age, gender, and occupation to separate markets into groups. (entley is using also this kind of segmentation factors; it is grouping its buyers in old high6educated consumers from the traditional markets and young low6 educated in its new developing markets. (ehavioral segmentation divides buyer into groups b y their knowledge about particular goods, their usage of the goods such as if they are regular user or one6time user and their responses towards the product. 7ere, (entley is conscious that they are working on two completely opposite kind of consumers with two completely opposite desires. 8n one side there are the buyers from developed markets that are used to this kind of luxury product so the y are 9ust looking for more luxury, more performance and more exclusivity; while on the other side we have the consumers from developing countries whom are looking for the top products from "estern countries, looking for that "estern style that is basically the only factor that can attract them to buy (entley$s product at double of the price of other same62uality$s product of other brands. (entley knows about this, that$s why it is positioning itself pointing out its new slogan (ritishness. In such a way to check if the segmentations are effective, we need to use the following < criteria: • • • • •
/ubstantial )easurable #ccessible %ifferentiable #ctionable.
/ubstantial means that we have to take into account the i mportance, si0e and worth of the market, and try to find out if there will be enough demand or needs from the market to sustain the business. )easurable means that each facto that we use in our considerations must be measurable, such as purchasing power, segmented si0e and characteristic. #ccessible means that marketers need to ensure that goods, product or services can access that particular area to be segmented, for example, if a company decided to advertise a certain product in the area through its social media, but the area has no s table internet connection, that is inaccessible. %ifferentiable means that the segments are conceptually distinguishable and react differently to different products or services. #t the end, actionable means that the program must be designed to attract and serve t he segments.
+. ,as entle! di$$erentiated and positioned its 'rand e$$ecti&el!? E*plain.
#s sales drop again in '+, (entley began to reali0e that their use of variables for market segmentation like age, education, and gender is not how the market behave, with the increasing buying power of the rich from (1IC *(ra0il, 1ussia, India, China-. &his force them to segment market based on number of sales in that market and not based on developed or developing nations like they used to. &his results in targeting market that are growing, despite those market have low per capita income, but the buying power of consumers in those market is the greatest. =oung consumers in economically growing nations are being targeted. #s they are young and less educated, they would like to possess branded things as a sign of their social class and since (entley is a strong brand which comes along with luxury design and innovative technology, there is no doubt that there will be sales in those newly recogni0ed market. I would say (entley has differentiated and positioned its brand effectively. &he company carefully defined those well to do groups in each of its market. In its traditional market, (entley regularly host golf tournament and invites customers to 9oin, usually for primary male, highly educated and high earning customers and the winner will be crowned with the (entley Continental cup. &his kind of event results in refreshing and reinforcing its image. )eanwhile for the new market, they offer exclusive goods under their brand name by partnering with several other exclusive companies. (y doing so, (entley recovered itself from the sales slump they encountered in '>. nited /tates is now being replaced by China as the biggest market. &here is a deliver y of ?@@A cars to Chinese customer in '?? alone continue with +AB sales growth by the first 2uarter of '?'. (entley is also the best selling luxury car brand in 1ussia in '?? where sales increased by A
-. Gi&en the economic do)nt%rn in de&eloped economies and the slo)do)n in emerging economies s%ch as hina( )ill entle! contin%e to gro)? Wh! or )h! not? Given the economic downturn in developed and slow down in emerging economies such as China, I do think (entley will continue to grow. (entley has announced that the global deliveries to customers have grown by > percent in '? compared to the first six month of '?'. )eanwhile in China, there is a deliver y of +?D cars, which is ' percent decrease from last year. In my opinion, if they continue to attract young, uneducated or not so highly educated individuals, sales would be easier as youth would not think twice before buying an expensive luxury car like (entley for the sake of pride and class along with comfort. /ince China have such huge population, I believe the market there could maintain or continue growing for another few years before it starts to become steady or decline again as (entley had, we can say, 9ust started targeting China as their market. 7owever (entley )otors could start to look more to the new emerging economies such as Eietnam, Cambodia, 3a0akhstan, and !hilippines, where the new rich are already starting to appreciate and buy their products. #t the end, in my opinion, they moved strongly in the developing countries too lateF (ut, now, there is a new opportunity for them with these new emerging economies and if they will 9ump into down immediately they will face a good increase in sales.
