Market Segmentation and Product Positioning
Discuss the potential rationale, risks and requirements while conducting market segmentation, product positioning, market selection and market entry strategy while international marketing for the mentioned e-bike companies.
With time, the market of the home country is saturated due to increasing number of similar organizations. As a result, the business organizations encounter challenges and issues in conducting business successfully in the home market due to increasing competition. Thus, sustaining in the competitive home market becomes difficult for the business organizations. The only way for running the business successfully and generating revenue for the company is by international expansion. International expansion for the business organizations provides an opportunity for them to attract new customers by penetrating new markets in the host country. According to Czinkota and Ronkainen (2013), marketing in the case of international expansion is crucial as the business organizations ventures into a completely new market. Thus, the marketing strategy used by the business organizations needs to be well planned and innovative so that they are able to create a unique image in the eye of the target customers and strengthen their position.
In this report, the international marketing of TEBCO, the Australian e-bike manufacturer and Palatino, the Indian e-bike importers are considered. The report discusses the potential rationale, risks and requirements while conducting market segmentation, product positioning, market selection and market entry strategy while international marketing for the mentioned e-bike companies.
According to Wilkinson (2013), the concept of market segmentation highlights the opportunity the business organizations get to reach the potential customers thereby, making it easy for the business organizations to know needs and demands. Thus, successful market segmentation allows the business organizations to get hold of the accessible market to which they can sell their product and generates profit. However, the rationale, risks and requirements for the manufacturers and the importers differs largely.
The significance of market segmentation for Palatino and TEBCO differs, as Palatino is an e-bike importer whereas TEBCO is an e-bike manufacturer. Successful market segmentation is important for Palatino, as this allows the company to emphasize to match the demands and expectations of the target customers. This is because importing the product with undesired features in the e-bike for Palatino affects the business drastically ("Welcome to Palatino", 2018). On the other hand, market segmentation for TEBCO is essential, as this will allow the company develops a better understanding about the needs and demands of the target customers and manufacturer e-bike accordingly ("TEBCO | The Original Electric Bicycle Company | Website", 2018).
Market Selection and Market Entry Strategy
The risks involved for Palatino for market segmentation includes huge financial loss, as the characteristics of the target market might change suddenly thereby, restricting the sales of the e-bikes completely. However, on the other hand, the potential risks for TEBCO while segmenting the market include excessive use of financial resources for conducting a thorough market research and developing a deeper understanding about the target customers and manufacturing e-bikes by considering the gathered information (Li et al., 2013).
Both Palatino and TEBCO need to implement market segmentation strategy effectively for getting the access to the target market. The market segmentation strategy by Palatino needs to be substantial, as this will provide an opportunity for the company to segment the market by considering the profit thereby, serving the needs of the target customers. On the other hand, market segmentation by TEBCO needs to be measurable as this will help the company to determine the size of the Australian market and predict the purchasing power of the market thereby, developing pricing strategy (Li et al., 2013).
According to Morrison (2013), the concept of product positioning highlights the strategy of positioning the product in the eye of the target customers based on the allocated price. As a result, the business organizations are able to communicate their product with the target customers, so that they return to the particular organization when the customers think of buying the product.
Positioning the e-bikes for the target customers is significant for Palatino, as this will provide an opportunity for the company to determine the weight of the competitive market and the sustaining pressure. Thus, determining the weight and the competitiveness of the Indian market is essential for Palatino. However, on the contrary, positioning their product is crucial for TEBCO, as the Australian market has several e-bike manufacturers. Therefore, TEBCO needs to ensure that whenever the customers think of e-bikes, they come to TEBCO for purchasing (Grenci, 2013).
Over positioning, is one of the significant risks for Palatino, as they might import e-bikes with such high tech features that are not desired by the target customers thereby, narrowing down the target customers largely. However, on the other hand, the risk that TEBCO might face while positioning their e-bikes includes failing to create a unique image in the eye of the target customers. As the Australian market has similar companies, it might be difficult for TEBCO to position their product (Babin & Zikmund, 2015).
In order to ensure product positioning effectively, Palatino needs to inform the target customers about their e-bike by providing them suitable knowledge about the e-bike. However, on the other hand, as TEBCO is the e-bike manufacturer, the company needs to develop in-depth insight of the needs of target customers for manufacturing the e-bikes.
According to Eslava et al. (2013), the concept of market selection highlights the decision and aim of the business organizations to invest in the market and conduct business in the future.
Effective market selection by Palatino will help in considering the economic factors of the Indian market, as Palatino is an e-bike manufacturer. Considering the economic factors while selecting the market will help Palatino to invest the inventory accordingly. On the other hand, appropriate market selection by TEBCO will help in predicting the growth potentiality of the Australian market. Based on the future potentiality of the market, TEBCO can manufacture the e-bikes (Dosi et al., 2015).
As Palatino is an importer of the e-bikes in the Indian market, the potential risks involved while market selection includes failure to screen the initial requirements of the target market. This leads to the failure in the selection of markets thereby, hampering the import decisions by the company. On the contrary, misunderstanding the maximum growth of the Australian market is one of the risks that TEBCO might encounter while selecting the market (Annushkina & Trinca Colonel, 2013).
In order to ensure effective market selection, Palatino needs to analyze the selected market and test the marketing strategies the company is planning to implement to advertise their product. On the other hand, parameter selection is crucial for TEBCO, as this will provide an opportunity for the company to maximize the sales in the Australian market. As a result, TEBCO will be able to manufacture the e-bike that will consider the needs of the target customers in the Australian market (Bartelsman, Haltiwanger & Scarpetta, 2013).
As mentioned by Maqsoom et al. (2014), the concept of market entry highlights the strategy and planning developed by the business organizations to establish successful global expansion. The mode of the entry selected by the business organizations determines the success of the international venture. Thus, appropriate selection of entry mode influences the success of the international venture.
Considering the market entry strategy is important for Palatino, as this will provide an opportunity for the company to use the knowledge and understanding of the locals and establish them successfully in the host country. On the other hand, selecting appropriate market entry strategy for TEBCO is significant, as the company will be able to establish a successful partnership with the local companies in the host country and expand the business.
Establishing business internationally possesses potential risks for Palatino, as the goals and objectives of Palatino might not be clear to the host companies thereby, hampering the international expansion. On the other hand, the potential risk for TEBCO for ensuring successful market entry considerations includes collaborating with the incorrect host company. This will result in loss of resources for TEBCO thereby, hampering international venture (Covin & Miller, 2014).
Palatino can achieve effective market entry strategy if they consider their economic capability. As a result, Palatino will be able to use their financial resources wisely and enter the market of the host country. On the other hand, thorough and sincere market research is essential for TEBCO while determining their market entry strategy (Holtbrugge & Baron, 2013).
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 the 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.
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