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Marketing and International Consumers Strategies

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1. Introduction

Boost Juice Bar is a young Australian retail company which set up in 2000 by Janine Allis, it is the largest juice and smoothie bar at the Southern Hemisphere and is in more countries than other juice bar in the world. Boost Juice Bar has grown rapidly over last 8 years, now Boost Juice Bar has over 200 stores opened throughout Australia and throughout the rest of the world. It sells fresh, healthy juice, smooth, and yogurt, which are free of preservations, artificial and colors. Boost is planning to enter into Shanghai of China market next year.

2. Market segmentation and targeting

Pride and Ferrell (1983) devised the market segmentation process of dividing a market into several market groups, such as geography, benefits sought and usage rate, but business marketers also use other variables, Such as demographic operating variables. Smith (1956) introduced the concept of market segments, which has become an integral part of modern marketing. A market segment is a group within a market that is clearly identifiable based on certain criteria. Consumers within such a sub-market are assumed to be quite similar in their needs, characteristics and behaviors. The purpose of market segmentation is two-fold: to divide a market into several homogenous sub-markets and to formulate a proper marketing-mix strategy for the sub-market (McCarthy, 1981).

2.1. GEOGRAPHIC SEGMENTATION

Geographic segmentation calls for dividing the market into different geographical units such as countries, states, regions, cities or neighborhoods. The company can operate in one or a few areas, or in all, but pay attention to local variation. (Kotler, 2009)

Geographic segmentation is an important process- particularly for multinational and global business and brands. Geographic segmentation helps Boost juice bar to identify the market and segregate the Shanghai market into units on the basis of language, climatic conditions and lifestyle. As More than 21 million people live in Shanghai which makes it the most densely populated city on the Chinese mainland – with 2,931 people in each square kilometer. (Dong, 2008) This data shows that Shanghai is a huge market with huge population. Based on the different languages, climate condition and lifestyle, Boost juice bar should adjust its service and drinks accordingly to customers in Shanghai.

2.2. DEMOGRAPHIC SEGMENTATION

Traditional deamographic variables, such as gender, age, income, and eduction, can be used to explain the characteristics of the sub-markets and classify the key factors of a market segment. (Kotler and Armstrong, 1999). Webster (1989) studied demographic variables and their relationship to service quality expectations. She found consumer demographics to be highly related to service quality in professional serviees.

In Chinese market, Chinese customers change their demand at different age stages as other customers do. Boost juice bar is most attractive for young customers aged between 15-30 years old. Boost is accept by both male and female, is not restricted by gender, occupation. In China, high school, university students and young officers will be the biggest target market for boost, as the image of Boost is fresh, bright, and fashion. Income segmentation is a longstanding practice in categories such as cars, clothing, cosmetics, financial services and travel. However, income does not always predict the best customers for a given product. In this case, boost is affordable by middle class income group, as the price is above the average of the normal drinks such as bubble milk tea which is most popular drink and the major competitors of Boost. Furthermore, each generation is profoundly influenced by the times in which it grows up.

2.3. PSYCHOGRAPHIC SEGMENTATION

In Psychographic segmentation, buyers are divided into different groups on the basis of psychological/personality traits, lifestyle or values(Kotler, 2009).Based on the differentiation of consumer’s brand preference, consumers has been divided into homogeneous groups using psychographic variable through the classification in VALS2 (values and lifestyles) and LOV (list values) systems. Products are the building blocks of lifestyles (Solomon, 1999). Thus, life style and personality variables are effective segmentation variables for identifying sub-market profiles and targeting consumers. Chinese people life style nowadays is more health then ever before, in 2010, it will be the healthy year. People have rapidly gained the knowledge about health in recent years. Boost is a healthy drink, so it will be easily accepted in China. Also, social class has strong influence on preference in many things too, drink is not an exception.

2.4. BEHAVIORAL SEGMENTATION

In behavioral segmentation, marketers divided buyers into groups on the basis of their knowledge of attitude towards, use of or response to a product. Thompson and Rao (1990) demonstrated that fsur.consumer behauior variables identified from the consumer behavior literature were significantly related to health care plan choice and could be used to segment health care plan customers.

Physician loyalty may have an impact on service quality expectations. Often, with services, the relationship between the consumer and the provider becomes more important than the actual service (Foa and Foa, 1974). Boost has great interaction between the staff and the customers, our staff are frofashional trained,they are all engergtic and young, plus we have the healthiest drink, so the Chinese customers will be attracted by both of our service and product.

2.5 TARGET MARKET

The target market of Boost Juice bar is students and officers aged between 15 to 35 years old in Shanghai, with our core target aimed at the 25 old female who loves life and is looking for a healthy alternative to fast food. Our current customer base ranges in age from 4 years old to 80+, because health knows there are no barriers.

2.6 POSITIONING

Boost juice bar positions itself as a middle-to-high end intimate apparel brand in the markets. Boost juice bar positions itself as the wellbeing industry. Boost juice is a healthy alternative to fast food. We are in the love life industry, where you come to a boost and leave with a smile.

3. MARKETING OBJECTIVES

Marketing objectives for Boost juice bar enter into China market should be SMART (specific, measurable, attainable, relevant and time-based). We set 3 years term objectives. In these three year, Boost juice bar should settle down its shop in Shanghai, Boost should be has been known by most people in Shanghai after the first year, let most people aware its image and products. Based on geographic segmentation, Boost should be has adjusted its product to the demand of new market completely. In the first year, Boost juice bar’s sales need to increase by 25% monthly and get 10 new listing each month. Gain a new client each week.

4. MARKET MIX STRATEGIES-4 P

ENTRY MODES

Franchising

In order to achieve its market objectives, Boost choose franchising as its entry mode. Franchising is basically a specialized form of licensing in which the franchisor not only sells intangible property to the franchises which is normally trademark, but also insists the franchisee agree to abide by strict rules as to how it does business. The main advantage of franchising is that it has low risk investment and also low costs. The main disadvantage is that the quality control is hard and hard to manage too. The entry mode for Boost is a franchising, as boost is stable company in form of franchising, it can benefit from franchising, as franchising company already has own reputation, image, and license, franchiser has right to control its product, the decoration style of the shop, which can lower the possibilities damages to its brand .

(I) PRODUCT STRATEGY

A product is anything that can be offered to a market to satisfy a want or need, including physical goods, services, experiences, events, persons, places, properties, organisations, information, and ideas. (koter, 2009)

According to Kotler, there are five levels of product, which are core benefit, basic product, expected product, augmented product and potential product. Boost is augmented product in the market, boost juice is also a non-duariable goods, but it can be intangible goods such as its service, as boost staff professionally serve customers. It is convinece goods which is immediately and with a minimum of effort.

Branding also plays a important role in product strategy, Boost juice prides itslef on a brand and culture that has been built upon positive attitudes. under this brand, boost produce different types of drink, such as juice, smoothie, yogurt, etc. Boost does not use other brand as it is franchising mode, the new store in Shanghai can not change its brand or sell any other brands in Boost.

(II) PRICING STRATEGY

Strategic pricing management means establishing a process for systematically setting and incorporating a uniform pricing policy for new product families or new technology, handling continuity, and resetting prices for a revision-type product change. It is clear that prices can mean more to consumers than just a monetary reaction to a price is an important determinant of the overall response to the price (Kamen and Toman, 1970; Monroe, 1973). Consumers’ receptions and inferences about prices are significant components of consumers’ valuations of and responses to the prices that marketers set (Monroe and Petroshius, 1981). Thus, it is critical for marketers to understand how consumers are likely to perceive a given price.

We set our price according to the cost of the product, demand of the customers, product life cycle and variation of buying situation. The target market of Boost is middle-high class group people, and it is a franchising company, the company has set the fix price for the products. However, as in different countries, the expenditure and lifestyle are different; the price can be slightly adjusted according to the new customers spending in the new market.

(III) DISTRIBUTION STRATEGY

Distribution is, like pricing, a weak area in international marketing literature. Research covering international channels of distribution topics as well as international physical distribution topics is limited (Cavusgil and Nevin, 1981). The geographic structure and dispersion of the target market affects the choice of a distribution channel (Rabino, 1982; Stock and Lambert, 1983; Toyne and Walters, 1989). A geographically-concentrated customer base (e.g., customers in urban areas) as compared to a more difused customer base (e.g., customers in rural areas) usually requires fewer intermediaries.

Our business is focus on retailing. Retailing is the activities selling goods ro services directly to final customers for personal, non-business. There are many types of retialer, Boost is specialty store because Boost only sell one brand product. As China market new to Boost, so we will launch our business followed the traditionl way. Boost choose locaiton in the center of shopping center, or location with a lot of people flow, our store located in the high trafiic areas too. Boost has its own private lable, it has its own cup the bright green cup which is easily seen on the street.

(IV) PROMOTION STRATEGY

Promotion is one of the key 4Ps in the marketing mix (Dibb et al., 1994) and as such has a key role to play in market success. Promotion is concerned with ensuring that customers are aware of the products that the organization makes available to those customers. More specifically, the objectives of any promotional strategy will be drawn from an appropriate mixture of the following roles of promotion to increase sales; maintain or improve market share; create or improve brand recognition; create a favorable climate for future sales; inform and educate the market; create a competitive advantage, relative to competitor’s products or market position; and improve promotional efficiency.

Our omission of advertising in this stage aims to create brand awareness and knowledge of Boost. Because we are new to Shanghai market, also we will also launch other media such as magazine, newspapers outdoor billboard display, we will launch promotion with the Wiggles, with limited-edition cups. Our company prides itself on the promotion of a healthy and active lifestyle, customers may see our staff dancing, juggling and singing behind the counters. We have great interactions with our customers, as we have promotion to win big prize regularly, such as peel the banana to win over $700000 worth of prizes. .

5. Implement strategy and measurement tools

We use radio extensively for both tactical and strategic campaigns, and we find it to be very effective in reaching our audience. We also use television and billboards for branding campaign during the healthy suckers’ promotion in the first year. Aside from this, various local marketing initiatives have also utilized different media including regional and TV, newspapers and other publications. By using these medias to achieve the target.

We absolutely learning from our customers, listening to them and hearing about their experience, so we can continue to develop ways of improving. The measurement tools can be survey by questionnaire, drop-in interview. Or we can hire professional researcher to do a marketing report for Boost. Also we will check the sales every week at the first 3 months and check the sales quarterly in the next half year, in order to measure the sales of boost shop. If the sales can not achieve the target that we set, then we will find out the reasons, and try to solve the problems, and work out with better strategies.

APPENDIXES —

OPPORTUNITIES AND PROBLEMS

.The opportunities and problems of food and beverage industry in China are that economics such as scale of the business, foreign exchange rate difference; technology, cultural shock, language difference, expenditure differences, and political barriers, local existing competitors and local customers’ preferences.

The weakness of Boost juice is that it is subject to seasonal restrictions. Sales could decline during colder seasons; as boost juice bar only produce cold drinks, consumers would seek for hot drinks during cold weather rather than have cold drinks and cold yogurt. This would be the big comparative disadvantage with other competitors who serve hot drinks dominating the market. In order to offset some restrictions and augment their business, Viva Juice has been acquired by Boost Juice in 2004, with more than 20 stores being added to the company’s retail network through acquisition.

Reference:

Webster, G. (1989), “Can Consumers be Segmented on the Basis of Their Service Quality Expectations”, Journal of Services Marketing, Vol. 3 No. 2, Spring, pp. 35-53.

Thompson, A. and Rao, C.P. (1990), “Who is Likely to Join a Prepaid Health Care Plan? A Behavioral Approach to Identification”, Journal of Health Care Marketing, Vol. 10 No. 1, March, pp. 16-25.

Foa, U. and Foa, E. (1974), Societal Structures of the Mind, Chas. C. Thomas, Springfield, IL.

Kotler, P, Armstrong, G. (1999), Principles of Marketing, 8th ed, Prentice-Hall International, Englewood Cliffs, NJ.

Kotler, P., Keller, K.N., (2009), Marketing Management, 12th ed, Prentice-Hall international, Pearson Education Australia.

Smith, W (1956), “Product differentiation and market segmentation as alternative marketing strategies”, Journal of Marketing, Vol. 21 pp.3-8.

Loudon, D.L, Della Bitta, A.J (1993), Consumer Behavior, 4th ed, McGraw-Hill Inc, Singapore,, pp.99-107.

Pride, W.M, Ferrell, Q.C (1983), Marketing Basic, Concepts, and Decision, 3rd ed., Houghton Mifflin, Boston, MA.

Solomon, M.R (1999), Consumer Behavior, 4th ed, Prentice-Hall International, Englewood Cliffs, NJ,, pp.175-6.

Kahle, L.R (1986), “The nine nations of north America and the value basis of geographic segmentation”, Journal of Marketing, Vol. 50 pp. 37-47.

Hui, D, (2008), “Census will update population record”, www.shanghaidaily.com/sp/article/2008/200810/20081031/article_378935.htm

Kamen, J., Toman, R. (1970), “Psychophysics of prices”, Journal of Marketing Research, Vol. 7 pp.27-35.

Monroe, K, Petroshius, S (1981), “Buyers’ perceptions of price: an update of the evidence”, in Robertson, T, Kassarjian, H. (Eds), Perspectives in Consumer Behavior,, 3rd ed, Scott Foresman, Glenview, IL, pp.23-42.

Rabino, S. (1982), “International Marketing Mix”, in Walter, I. (Ed.), Handbook of International Business, John Wiley & Sons, New York, NY, Section 32, pp. 3-26.

Stock, J.R. and Lambert, D.M. (1983), “Physical Distribution Management in International Marketing”, International Marketing Review, Vol. 1 No. 1, Autumn, pp. 28-44.

Toyne, B. and Walters, P.G.P. (1989), Global Marketing Management: A Strategic Perspective, Allyn and Bacon, Boston, MA.

Cavusgil, S.T. and Nevin, J.R. (1981), “State-of-the-Art in International Marketing: An Assessment”, in Enis, B.E. and Roering, J.K. (Eds), Review of Marketing 1981, American Marketing Association, Chicago, IL, pp. 195-216.

Dibb, S., Simkin, L., Pride, W. and Ferrell, O. (1994), Marketing: Concepts and Strategies, 2nd European ed, Houghton Mifflin, Boston, MA and London

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