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Market Segmentation

Discuss About The Foreign Considerations Of Emerging Economy?

Business organizations aim towards global expansion, as the home market becomes saturated with increased competition. It is evident that the home market has similar business organizations in the same sector that gives rise to tough competition. As a result, it becomes difficult for the business organizations to increase their business. In order to expand the business by attracting more customers, business organizations prefer international expansion. As commented by Czinkota and Ronkainen (2013), marketing at the international platform is crucial, as this helps in creating a unique image in the eye of the target customers and expanding the business.

This report includes a detailed insight about Australian e-bike manufacturer TEBCO and Indian e-bike importer Palatino. The report investigates the concept of powered bicycles that has endured despite market inertia in Australia and globally. Additionally, the report also highlights the relative change in the national and Australian domestic shifts in consumer sentiment by undertaking a market fit assessment that includes market positioning, segmentation, market selection and entry considerations.

As commented by Wilkinson (2013), market segmentation is important, as this provides an opportunity for the business organizations to reach the customer with particular needs and customers. As a result, the business organization is able to get an accessible market to which they can sell their maximum products and earn a profit. However, a difference between the rationale, risks and technical requirements for business organizations that manufacture their products and business organizations imports the products.

TEBCO is an e-bike manufacturer in the Australian market that needs to segment the market in order to know the specific needs and demands of the customers. Thus, market segmentation for TEBCO is essential, as this will allow the company to know the needs and demands of the customers and fulfill it by launching e-bike with the desired features ("TEBCO | The Original Electric Bicycle Company | Website", 2018). On the other hand, the significance of market segmentation for Palatino differs from that of TEBCO. This is because Palatino is an Indian e-bike importer. Market segmentation for Palatino need to focus to match the needs of the customers better, as importing wrong products will hamper the business drastically ("Welcome to Palatino", 2018).

Market segmentation has potential risks for TEBCO and Palatino that differs distinctively, as one of them is the manufacturer and the other one is the importer. As TEBCO is a manufacturer in the Australian market, the potential risk of market segmentation includes larger inventory needs to be maintained for manufacturing and distributing (Li et al., 2013). However, on the contrary, the risk for market segmentation for Palatino includes loss of investment due to changes in the characteristics of the market segment. 

Positioning Procedures

Effective market segmentation needs to implemented by TEBCO and Palatino for expanding their business and generating revenue. TEBCO needs to ensure that the market segmentation is measurable, as this will ensure in determining the size of the market as well as the purchasing power of the Australian population.  On the other hand, the while segmenting the target market, Palatino needs to be substantial. This will help Palatino to segment the market large and profitable enough to serve the needs of the customers (Li et al., 2013).

As mentioned by Morrison (2013), positioning the product is essential for the business organizations, as this provides an opportunity to determine the best method of communicating with the target customers based on their needs and demands.

TEBCO needs to position their e-bikes in the Australian market effectively, as this provides an opportunity for the company to understand needs of the target customers. Understanding the present need of the customers will help TEBCO to introduce features referred or desired by the customers in the e-bikes. On the other hand, product positioning for Palatino is essential, as this helps the company to weigh the competitive pressure in the market. As Palatino is an e-bike importer in India, weighing the market competitiveness is essential (Grenci, 2013).

Positioning is crucial for TEBCO as failing to create a unique image in the eye of the target customer hampers the company to attract the customers to buy their product when they think about e-bikes.  On the other hand, as Palatino is an importer, the potential risk of market positioning includes over positioning their product. Palatino might import e-bikes with extra special features that eventually make the customer group too small (Babin & Zikmund, 2015).

While positioning the e-bikes, TEBCO needs to know their target customers in the Australian market extremely well. This will help TEBCO to develop a deeper understanding of the needs of the customers and manufacture e-bikes accordingly. However, on the contrary, as Palatino is an e-bike importer, one of the significant features while positioning their product includes telling the customers about the product by providing suitable evidence.

As commented by Eslava et al. (2013), the concept of market selection is defined as the decision taken by the business organizations in the market to invest and pursue the business in future.

Effective marketing selection is essential for TEBCO, as this provides an opportunity to determine the growth potentiality of the market. Being a manufacturer of e-bikes in the Australian, TEBCO needs to select the market that will ensure the maximum growth of the company by increasing the sales. On the other hand, as Palatino is an e-bike importer, the market selection is essential, as this will help in determining the economic factors and the market hub of the Indian market (Dosi et al., 2015).

Market Selection

One of the potential risks that TEBCO might encounter while selecting the market includes misunderstanding the market that will give the maximum growth for their business. Failure in appropriate market selection will hamper the growth of the company in the Australian market. However, on the contrary, the potential risk for Palatino includes failing to screen the preliminary requirements of the target market. As a result, Palatino fails to short list the markets that eventually hamper their importing decisions (Annushkina & Trinca Colonel, 2013).

TEBCO needs to select the parameters of market selection for the Australian market in order to increase the sales of e-bikes. Selecting the parameters effectively provides an opportunity for TEBCO to understand the market demands and requirements before launching their products for the market. On the other hand, as Palatino is an e-bike importer, it is essential for the company to evaluate the market and test their marketing strategies (Bartelsman, Haltiwanger & Scarpetta, 2013).

According to Maqsoom et al. (2014), the market entry strategy is the key feature that determines the successful business expansion. The nature of the product or service highly influences the market entry strategy used by the business organizations for entering the host country and establishes business successfully.

For international marketing, the market entry strategy is significant, as this will help TEBCO to define the market they aim to sale the e-bike. Selecting the appropriate market entry strategy will help in setting clear goals by conducting a thorough market research. However, on the contrary, selecting appropriate marketing entry is essential for Palatino, as this will help the company to study the competition in the market (Kotabe, et al., 2014).

While going international, the business organizations encounter potential risks. For TEBCO, the potential risk for deciding the market entry strategy includes selecting the inappropriate market entry strategy thereby, establishing the unsuccessful business at the international market. However, on the contrary, the potential risk for Palatino while selecting market entry strategy is the unavailability of essential information about the host market.

In order to ensure effective market entry strategy, TEBCO needs to consider the target market in the host country. Considering the target market by conducting a thorough market research will help TEBCO in determining the most effective market entry strategy. On the other hand, Palatino needs to consider the financial capability of the company while selecting the market entry strategy. This will help the company to invest accordingly while entering the international market (Holtbrugge & Baron, 2013).

Entry Considerations

Conclusion

In this report, it can be concluded that international marketing is crucial for the business organizations in order to sustain in the competitive market. With time, the market of the home country is saturated with similar business organizations thereby, giving rise to tough competition. As a result, it becomes difficult for the business organizations to grow their business by attracting more customers. Thus, the international expansion provides an opportunity for the business organizations to attract new customers and ensure business growth by penetrating a new market. Thus, while establishing internationally, the business organizations need to market them and their product effectively and appropriately for maximizing the sales.

Both TEBCO and Palatino are e-bike manufacturers and importers in the Australian and Indian market respectively. While establishing their business internationally, both TEBCO and Palatino needs to ensure successful market segmentation, product positioning, market selection and market entry strategies. There are potential risks involved in market segmentation, product positioning, market selection and market entry strategies that TEBCO and Palatino need to address and mitigate issues for conducting business successfully.

References

Annushkina, O. E., & Trinca Colonel, R. (2013). Foreign market selection by Russian MNEs–beyond a binary approach?. Critical perspectives on international business, 9(1/2), 58-87.

Babin, B. J., & Zikmund, W. G. (2015). Exploring marketing research. Cengage Learning.

Bartelsman, E., Haltiwanger, J., & Scarpetta, S. (2013). Cross-country differences in productivity: The role of allocation and selection. American Economic Review, 103(1), 305-34.

Covin, J. G., & Miller, D. (2014). International entrepreneurial orientation: Conceptual considerations, research themes, measurement issues, and future research directions. Entrepreneurship Theory and Practice, 38(1), 11-44.

Czinkota, M. R., & Ronkainen, I. A. (2013). International marketing. Cengage Learning.

Dosi, G., Moschella, D., Pugliese, E., & Tamagni, F. (2015). Productivity, market selection, and corporate growth: comparative evidence across US and Europe. Small Business Economics, 45(3), 643-672.

Eslava, M., Haltiwanger, J., Kugler, A., & Kugler, M. (2013). Trade and market selection: Evidence from manufacturing plants in Colombia. Review of Economic Dynamics, 16(1), 135-158.

Grenci, R. T. (2013). Positioning computer literacy as a value-added business core course.

Holtbrügge, D., & Baron, A. (2013). Market entry strategies in emerging markets: An institutional study in the BRIC countries. Thunderbird International Business Review, 55(3), 237-252.

Kotabe, M., Marshall, A., Ang, S., Griffiths, K., Voola, R., Robert, R., & Helsen, K. (2014). Logistics: sourcing and distribution.

Li, X. R., Meng, F., Uysal, M., & Mihalik, B. (2013). Understanding China's long-haul outbound travel market: An overlapped segmentation approach. Journal of Business Research, 66(6), 786-793.

Li, Z., Wang, W., Yang, C., & Ragland, D. R. (2013). Bicycle commuting market analysis using attitudinal market segmentation approach. Transportation Research Part A: Policy and Practice, 47, 56-68.

Maqsoom, A., Charoenngam, C., Masood, R., & Awais, M. (2014). Foreign market entry considerations of emerging economy firms: An example of Pakistani contractors. Procedia Engineering, 77, 222-228.

Morrison, A. M. (2013). Marketing and managing tourism destinations. Routledge.

TEBCO | The Original Electric Bicycle Company | Website. (2018). Electric Bicycle. Retrieved 29 January 2018, from https://www.electricbicycle.com.au

Welcome to Palatino. (2018). Palatino.in. Retrieved 29 January 2018, from https://www.palatino.in/about_us.aspx

Wilkinson, F. (Ed.). (2013). The dynamics of labour market segmentation. Elsevier.

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