Lesson 5: Global Market and Consumer Behavior

International Market

Companies survive by creating and selling products consumers will buy.

 Distribution of products and development of consumer awareness are major tasks of marketing.

 Marketing is not only for products/services but also for places (tourism marketing) like Bermuda, Jamaica,Mexico, etc.
 These places use ads (TV, magazines, internet)to attract tourists.
 Tourism marketing helps increase visitor numbers and demand for local goods/services.

Market

Refers to the likely customers of a good or service in a certain geographic location. Are commonly divided into two categories consumer markets and organizational markets.

Consumer Markets

A consumer market consists of individuals and households who are the final users of goods and services. You are part of the consumer market when you buy food, clothing, transportation, health care, and recreational products. Exist in every country of the world.However, buying habits vary because of factors such as climate,culture, political environment, values, tradition, and religious beliefs.

Organizational markets

Not all goods and services are sold to end users. An organizational market, also called a commercial market or business-to-business

(B2B) marketing,consists of buyers who purchase items for resale or additional production.

 These buyersinclude manufacturers, stores, schools, hotels, hospitals, and governments. Items commonly purchased in commercial markets are raw materials, machines, machine parts,warehouses,computers, office space, office supplies, and Internet services.

Global Marketing Opportunities

Most businesses need to develop new markets in order to maintain and expand profits. Quite often new customers are found in other countries. Opportunities for international marketing are influenced by five globaltrends. These trends include expanded communications,technology, changing politicalsituations, increased competition, and changing demographics.

Expanded Communications

Computer networks make it possible to communicate quickly with customers all over the world. The Internet, video teleconferencing, fax machines, and other electronic communications allow companies to respond to requests from customers within minutes.

Five Global Trends

Expanded Communications

Technology

Changing political Situations

Increased Competition

Changing Demographics

Technology

Automated production systems have made it easier for companies to set up manufacturing plants in other countries. Also improved product distribution. Companies are able to ship goodsfrom one location to destinations around the world within a matter of days or even hours.

Changing Political Situations

Countries that desire economic growth are cooperating with new trading partners. Several nations that were formerly governed by communism now have a more cooperative economic attitude toward international business. Many global companies now dobusiness in various eastern European countries in which trade was previously restricted.

Increased Competition

As more companies get involved in exporting and foreign investement, business firms look for new markets in other countries. A more competitive environment requires companies to be more creative and more efficient when selling around the world.

Changing demographics

The traits of a country’s population (such as birthrate, age distribution, marriage rate, gender distribution, income distribution, education level, and housing situation) are its demographics. Demographic trens create different marketing opportunities.

 Identifying business opportunities is the start of the marketing process.When a business finds a new use forits products or finds a new group of customers, an opportunity to expand marketing occurs.

Consumer Behavior

Think about why you made a recent purchase. The item may have been something you needed for school. Also, it could have been something that you simply enjoy. Most consumer purchases involve several factors. Multiply this by the many buying decisions made in the world each day, and you can see that consumer behavioris quite complex.

Factors Affecting Consumer Behavior

1. Physical needs

2. Emotional Needs

3. Geographic Factors

4. Demographic Factors

5. Personality and Pyschological Factors

6. Social and Cultural Factors

Physical needs

Every person requires basic physical needs such as air, water, food, shelter, clothing, and healthcare.

 These needs vary between industrialized and less developed countries.

Geographic Factors

Location influences consumer buying habits.

 Climate affects needsfor housing,clothing, and food.

 Terrain influencestransportation and product choices.

Demographic Factors

Age, gender, and family situation affect spending behavior.

 Population data (birthrate, income, education, etc.) influences marketing decisions. Changes in population (e.g. aging,) affect demand for products and services.

Personality and Psychographic Factors

Attitudes influence consumer behavior.
Experiences and Information shape attitudes and beliefs. Personality determines buying decisions. Personality traits include attitudes toward risk, change, convenience, and competition. Marketers use personality traits to attract customers.

Social and Cultural Factors

Families, friends, business organizations, community activities, and religious affiliation can affect buying behavior.
 An understanding ofsuch culturalfactors as social structure and religion is critical for nternational marketing decisions to be successful.

Selecting a Target Market

Marketers use consumer buying factors to divide customers into subsets that have similar needs. After segmenting the market, marketers must determine which subgroup to serve.

Market Segments

A distinct subgroup of customers who share certain personal or behavioral characteristics.

 High-income individuals, for example, purchase certain items that lower income people would not be able to afford.

 Market segments can be based on characteristics such as demographics, psychographics, buying behavior, or product benefits. Social and economic factors cause changes in market segments.

Target Market

Is the particular market segment that a company plans to serve. After identifying the ________, a company attemptst o meet the specific needs of those customers. For international business may be selected on the basis of geography.

Consumer markets

Are divided into market segments based on personal characteristics, attitudes, activities, and buying preferences.

Traditionalists

Consumers who resist change and prefer familiar.

Achievers

Used to refer to successful, upper income people. Strivers could be describe young, hardworking people.