Page 74 - GLOBAL STRATEGIC MARKETING

low-cost leadership strategy works best with mass-marketed products
aimed at price-sensitive buyers.

• The differentiation strategy: Companies may also use a
differentiation strategy by designing products to be perceived as
unique. This tends to force a company into a lower market share

position because it involves the perception of exclusivity or as
meeting the needs of only a certain group of buyers. Companies
develop loyal customer bases to offset smaller market shares and

higher costs of producing and marketing a unique product. Products
can be differentiated on the basis of quality, brand image and product

design. Special features differentiate goods and services in the minds
of consumers. Manufacturers combine differentiation factors in
formulating their strategies.

• The focus strategy: A company can focus on the needs of a narrowly
defined market segment by being the low-cost leader, by
differentiating its product, or both, which is called a focus strategy.

Focus strategy is one in which a company focuses on the needs of a
greater product range that leads to the refinement of market

segments. Increasing competition means more products
distinguished by price, quality or design. Some firms serve the needs
of one ethnic or racial group, whereas others focus on a single

geographic area.

If the urge to expand internationally should strike a company, it should first
study local rivals abroad and look for concrete evidence that it can beat

them. The broader point is that if the company does not possess valuable
intangible assets, then, no matter how much money it has, expansion
abroad is unlikely to be profitable and hence should be postponed.

Companies that respect national borders and cultures are more likely to
win back respect from employees, suppliers, customers and national

authorities. No company that desires to be counted as world-class can
afford to ignore developed country markets. It is not true that the big
markets are in the large developing countries (such as Mexico, Brazil,