Keys to internationalisation
Keys to internationalisation > International marketing > Positioning in international markets
The results of your research of a specific market offers very favourable prospects. You see opportunities in the market, you believe your company has competitive advantages that will deliver successful results, you have observed that there are spaces in the market that are not covered and that all the environmental conditions are favourable to your interests.
It's time to stop, analyse all the factors, and make decisions that will affect the entire internationalisation strategy.
- What segment of the market will you be targeting?
- What strategy are you going to follow to reach it?
- How will your potential customers perceive you?
Segmentation
The market is composed of groups of people with needs to satisfy. The type of product or service you offer will determine which segment of the market you focus on. Except in very specific cases, market segmentation always occurs. Two manufacturers of the same product may have completely different profit margins, distribution networks, or advertising campaigns. Why? Because the consumers they are targeting are completely different, belonging to different market segments.
After having analysed the market as well as the internal and external factors that will affect the internationalisation of your company, you must identify your target consumers, in other words, your positioning. Domestic and international positioning will not necessarily be the same. Cultural differences, consumption patterns, the standard of living, etc. may require a given product to be aimed at different segments in distinct markets.
Identifying the segment you will be targeting is not a task with isolated consequences. The optimisation of the communications campaign and the selection of the appropriate distribution channel or pricing strategy are factors that are closely tied to the public you are targeting.
You must not forget that the internationalisation strategy is a whole comprised of different parts. Its success depends on all those parts (price, image, product, point of sale, etc.) being coordinated and coherent with one another. It would be strange to sell luxury items in a supermarket, wouldn't it? The coherence of international strategy and marketing is vital.
Positioning
Positioning is the image that the company or its products evoke in the mind of the consumer. Just because a company has a given positioning in its home country does not mean that it will automatically have a similar positioning in the target country. Environmental factors, brand recognition, the image of the country of origin, and the perception of the competition all affect positioning.
Once you have identified the market segment to target, you may try to influence your own positioning with a communications campaign. The first thing you have to do is identify:
- who is the prospective consumer. In other words, who uses the product.
- who makes the purchasing decision. This may not be the same person who consumes the product.
- who actually makes the purchase. The two preceding factors do not necessarily determine who makes the purchase.
In order to run an effective advertising campaign you will try to involve these three factors, or at least identify which of the three is more important in the purchasing decision.
But an advertising campaign is not the only way to determine positioning. The entire internationalisation strategy should make it clear what positioning is being sought. If the company intends to be perceived as a producer of luxury items, this must be reflected in the pricing policy, the type of advertising campaign used, the establishments where the product is sold, and the quality of the product itself.
Penetration
After having determined the market segment to target, the company will have to look for a way to reach it, both physically and in terms of promoting the product.
The penetration strategy depends on the segment that the company is targeting. A single product aimed at two different market segments will not employ the same distribution channel or type of advertising for each segment. The market segment and positioning sought will therefore determine which penetration strategy is chosen. The same is true of image penetration. In order to position yourself in a high segment of the market, your communications campaign must be focused specifically on that group. If you want to sell high-end fountain pens, for instance, the distribution channel will have to place your products in distinguished outlets and your communications will focus on business magazines or advertising in the outlet itself.
The important thing is to maintain coherence
