Question

You are considering entering a specific, RURAL China market for your line of body wash, where most people earn less than $2 per day. Still, it’s an opportunity that you don’t want to miss.

At first you thought you could offer a truly standardized product (same exact body wash as you offer in the US) at a similar price, but after doing some market research, it appears you may have to make a few adjustments to your marketing mix.

A. What would you suggest the BEST entry mode would be? (Assume they are currently not in THAT COUNTRY at all but want to enter the market). Why?

B. PRODUCT: Would you change the product for that market? If so, What changes would you make? (Hint: don’t forget to think about how it will relate to your pricing strategy; it all ties together).

C. PLACE: What distribution strategy will you rely on and why?

D. PROMOTION: What promotional tactics will you use? Do you think you want to use push, pull or a combination of both? And why?

E. PRICE: What pricing strategy will you utilize and why? (Hint, things to consider are: your general brand positioning, the local/current competition, your manufacturing costs and if you will manufacture locally or import from the USA, etc.). Remember, this is a new product introduction.

F. VALUE: What is your value proposition?

NEWNESS | PERFORMANCE | CUSTOMIZATION | DESIGN | BRAND/STATUS | CONVENIENCE

Select the ones you think make sense and why? Don’t select all to cover yourself!   

G. COMPETITIVE ADVANTAGES: Why should they buy your product over your competition’s product? Please remember to consider your product and the market that’s described. List all of them that you can think of. Please think about this carefully. Remember what competitive advantages are and how core competencies can translate into SUSTAINABLE competitive advantages.

H. SEGMENTATION: Which segmentation method(s) would be best for your product and target market and why? (don’t select all)

GEOGRAPHIC | DEMOGRAPHIC | BENEFIT/BEHAVIORAL | PSYCHOGRAPHIC

I. SEGMENTATION PART 2: Who will be your target market and why (pick as many as you think)?

Answer 1

Answer:

a) The best entry mode would be through joint venture or strategic alliance with the company that is already serving the customers with the products that are related to our business’s services. Since, allied company is already aware of the market situation and that they have developed a sufficient market share in the region, it would be easy for our business to provide our body wash services to them initially. This strategy will make the customers aware about our services and will generate higher revenues for the company.

b) I would change the product slightly. I would provide the product of little inferior quality by minimising the usage of high brand’s complimentary product required for body wash and would use certain low quality of complimentary products to serve to the customers so that they could afford the services.

c) The business would operate from the allied company’s retail or distribution centre so that it could reach maximum numbers of customers.

d) Initially I would be using push strategy as the customers would be unaware of the services of the company. As they become aware over a period of time, I will start using pull strategy so as to attract the customers and sell the products.

e) I would be charging with the price lesser than that of the competitor and would design the services that suits the population of the market. I would conduct production activity locally rather than importing the one from USA as it would increase the cost of providing the services which the customers would not be able to afford.

f) Our value proposition would be customisation. Since the paying capacity of the people is less, business would customise the product so that it could be within the payable range of the customers.

g) Our competitive advantage would be the quality that would be better than the competitor and cost of the product that would be lower than that of the competitor. Cost will be the main thing that would drive the customers to our product rather than that of the competitor as customers will be getting good quality at lesser price.

h) Demographic segmentation strategy would be better as we need to take into consideration the age of the customer and his income range.

i) The target market would be the high income earners and the middle class income earners. Customers who belong to the age group of 20 to 50 will be the target market.