Page 243 - GLOBAL STRATEGIC MARKETING

Unit 11 – International Niche Strategies for small to medium enterprises (SME’s)

Market development

This involves taking existing products into new market segments and new
geographical markets or new specific segments of customers. An example

of this geographical expansion is that of Coca Cola and its Dasani brand
of bottled water (already established in the US market) into the UK and

European market. This strategy is known as market development. Also,
existing products can be targeted to new segments within the market
through finding new uses for these existing products. For example,

Johnson’s baby oil is not just targeted at babies but also to mothers as a
body moisturizer as market research revealed that mothers were using it

as well as for their children.

Diversification

Diversification strategy is the most costly and also the most risky as it
involves taking new products into new markets. This is what is known as

diversification. However, if this strategy works it can be extremely
rewarding in terms of financial returns. Organisations such as Easy group
and Virgin relentlessly pursue this strategy and are extremely successful

in stretching the brand into new industries. The above framework is useful
in identifying different growth strategies. What strategies are adopted

depends upon the capabilities and assets of the organisation and using
this to penetrate or expand its business in relation to the potential market
opportunities; especially through technology and e-commerce.

11.4 E-commerce

Direct marketing and e-commerce offers the benefits of not using

intermediaries and helps to keep costs down as a more direct channel of
distribution is formed. Intermediaries such as importers, agents,

distributors, wholesalers and retailers can be avoided and the use of post,
telephone, television, catalogues and the Internet replaces the traditional
intermediary. The advantage of this is that smaller organisations can avoid

traditional barriers to entry and avoid competing directly with larger
organisations. Other benefits include (Doole and Lowe, 2008, p. 159):

• Creating new opportunities