Marketing Practices Throughout the World
Marketing Practices throughout the World
Most of the contemporary business enterprises use marketing mix when establishing their marketing strategy. The four P’s are: Product, which is cargo and passenger travel in the case, Place, which is worldwide, Price- determined by particular case and Promotion- involves many steps and techniques. The choice of marketing techniques may vary in the marketing of services from the marketing of products, but the basic principles and concepts of marketing are equally important and relevant in both. Basically selling is a micro function which means offering existing products at an agreed price. Often sales people do not control (although they may influence) the production level or quality. Marketing is a macro function, which, in addition to selling, is involved in many other tactical areas, such as: Collecting, storing and analyzing important information regarding markets, competition and future trends. Segmenting the market and identifying specific needs of different customers. Adjusting existing products and creating new products to suit the changing customer needs. Deciding on price levels acceptable to the customers and to the company (ensuring value for money to the customers and ensuring long-term profitability for the company) is another significant task of marketing people. Selecting suitable channels which can be used as ‘pipelines’, either to distribute the products to customers or attract customers to the products/services. In this paper we are going to analyze marketing practices of three different countries of various states of development: developed, developing and underdeveloped. We are going to use Canada, Russia and countries of Latin America as examples for our research.
People in today’s global village are not defined by their ethnic origins any more than by their age or generation Contemporary marketing is, fundamentally, multicultural, as consumers live in a multicultural world. Multicultural marketing concentrates on learning about consumers rather than imposing definitions on them. Gone are the days (if they ever existed) when marketing could rely on sloganistic assumptions such as “generational,” “ethnic” and “life cycle” uniformity. There may be generational, ethnic and life cycle aspects to a marketone may even argue that consideration of these is a necessary part of marketing researchbut one cannot argue that consideration of these aspects alone is sufficient.
Life cycle marketing, in contrast, holds that generations are not unique, that all behavior can be predicated by a person’s age: It does not matter who you are, but merely how old you are. The limitations of both generational and life cycle marketing are most clearly shown when those who argue that the baby boom generation is uniquely defined, turn around and argue that as they age their behavior will follow life cycle patterns similar to those of previous generations. The reality of the marketplace is that consumers are defined by more than their age or the cohort they were born with. The consumer population of Canada has a diversity that is both wide and deep. One dimension of this diversity is ancestry based. Over five million Canadians, 18% of the population, were not born in Canada. Three percent of the population identify themselves as part of the aboriginal population, and 15% identify themselves as being part of a visible minority.
Only 64% of the Canadian population has a single ethnic origin, with 11% of British ethnic origin, 9% of French ethnic origin, and 43% of single ethnic origin other than British or French. Of the 36% of the population with multiple ethnic origins, 27% have at least one ethnic origin that is neither British nor French. Six and a half million people in Canada have some knowledge of languages other than English or French.
At first glance, this ancestry-based diversity may seem to offer support for what is often termed “ethnic” marketing, of approaching consumers as though their consumption patterns were solely defined by their ancestry. As with life cycle or generational marketing, ethnic marketing grossly oversimplifies the factors that determine consumer behavior: people, especially people in the global village, are not defined by their ethnic origins any more than they are defined by their age or their generation. What does determine people’s consumer behavior is their uniqueness in terms of the combination of their heritage, ancestry, age, education, income, life experience and, fundamentally, their valueswhat they believe in. Consumer behavior is culturally defined, where culture means values, interests, life styles, beliefs and aspirations. In effective marketing, it is as important that someone is a vegan as it is that they were born in the 20-year period after the Second World War: that they crave power tools as it is that they were born in Guangzhou; that they are fiscal conservatives as it is that they are 26 years old.
Marketing must not only acknowledge the cultural foundation of consumer behavior, it must also acknowledge that people are multi-, not mono-, cultural. Consumers actively belong to many distinct groups of shared interests, moving fluidly back and forth across the myriad of cultural layers that define contemporary society. At one moment a person’s behavior will be largely influenced by an ancestral context, in another by a peer context, in another by a career context and in another by chance. Today’s consumers comfortably switch from hockey to hoops, hip-hop to classical, dim sum to doughnuts, rap to the Rankin Family, without the need of boundaries or borders.
Just as marketing was starting to be taken seriously across the financial-services sector, a dramatic shift in what constitutes marketing is underway. The marketing that banks had accepted and endorsed has changed. A straightforward application of the traditional “marketing mix,” with the well-known “4Ps” – Product, Price, Place and Promotionis no longer sufficient in the financial marketplace of the 2000s. Instead, a new set of ideas has emerged, along with a new set of terms: individualized marketing, interactive marketing, relationship marketing and internal marketing. Banks can no longer be marketing-oriented; they must become market-oriented. To be marketing-oriented implies using a bag of promotional tricks to capture the bank consumer. To be market-oriented, on the other hand, banks must engage in dialogue with existing and potential customers. This requires bank services and approaches to be designed through close contact with the market.
It’s estimated that the average consumer is bombarded with up to 3,000 advertising messages each day, and that they remember only 2-3% of these advertisements without prompting. All this competition and noise means that banks have to rethink their advertising strategies. One recent trend has been a shift to more print advertising. Although television remains important, as financial services have grown more complex, banks have been forced to use magazines and particularly newspapers to explain the details of their services.
Changing consumer demographics and lifestyles are another reason for the decline in the traditional marketing approach. Financial consumers no longer fall into neat, visible target groups. A rise in the number of women in the work force, more single-person households and the growing seniors population have caused significant marketing change. Today banks must cater to smaller and smaller market niches, and all these changes make mass marketing inappropriate. Associated with lifestyle is the availability of the most valued of all commodities: time. For most consumers, time seems to be continually shrinking. Bank customers want to be able to access their accounts through ABMs and phones, and use new mini-branches, drive-through tellers and boutique branches. This may in turn lead to saturation of the distribution channels.
To help address these changes and the move to relationship marketing, some experts argue that any future marketing strategy should draw on the base of knowledge and experience that already exists within a company, or in our case a bank. In other words, before attempting to develop an image and market position, a bank must look first to its strengths, its customers and its marketplace. Allied to knowledge-based marketing is experience-based marketing. This requires a bank to get close to the customer (an idea promoted by Peters and Waterman 10 years ago in In Search of Excellence). Close feedback about customer needs, competitors, and technology and marketplace characteristics keeps the marketing effort on target. When a bank has a firm handle on knowledge-based and experience-based marketing, it can develop its strategy and position its services in the market. Most important of all, however, is that bank marketing is no longer restricted to marketing specialists. It involves everyone within the bank.
Much of the mystery is now gone and this report is about a changed and a changing Russia. Our impressions of the Former Soviet Union and the Russian Federation were formed over 40+ years of the Cold War. These impressions are generally not very favorable, but we should not allow ourselves to remain influenced by them. Rather, we should now look at a country and a marketplace that is certain to have a profound effect on international business in the decade ahead. Spanning 11 time zones, Russia is the largest country on earth. With an area of 6.6 million square miles (almost twice the size of the United States) and 150 million people, Russia possesses the population base, the natural resources and the potential overall productivity to become an economy almost equivalent to the European Community.
In Russia, however, you will not see A-B split run testing, sophisticated mailing lists, fulfillment reports and analyses, direct response television, database and interactive marketing. Not yet. But you will see emerging forms of direct marketing to include elemental telemarketing, print and broadcast media planning, vertical positioning and back-end promotions. Russians are learning. They call it Bizness- Russians do not ordinarily make references to direct marketing. They have not yet had the time, the formal exposure, the training or competitive requirement to focus on the components of Bizness in which direct marketing applications have become so interwoven. That time is fast approaching, however, as direct marketing “sneaks up” on Russia- and the value added is recognized in fact and for what direct marketing can do.
It can be termed “stealth direct marketing” in that the Russians are currently practicing direct response advertising, without direct intention, in a form and a scope that will soon coalesce into more purposeful applications. Direct marketing will be upon Russia before they know it. It is happening now and applications are increasing rapidly. Most print and broadcast ads in Russia now carry or feature telephone numbers, encouraging the public to call them and to check on their product line and prices. The use of direct response is more prevalent both to accelerate feedback, as well as to improve and emphasize convenience. Russia’s size, its widely scattered population centers and its rapid growth provide the necessary linkage for direct marketing. It is not simply a new Western concept- it is communications, efficiency, cost-effectiveness and marketing penetration and it is a necessity.
Direct marketing in Russia has not reached the point where there are esoteric discussions about predictability, media concentration, personalization or immediacy, but there is talk about reaching customers, response rates, acquisition costs and customer service. Marketing is a new (though not fully understood or appreciated) force in a new market. The marketplace that is Russia is clearly one of the biggest in the world with a dramatic and unfulfilled demand for consumer products and services. And direct marketing, as it is evolving, will help to propel the Russian economy forward.
Seen by many multinationals as a massive market with unrivalled scope for development, Latin America’s potential can only be realized if economic uncertainties and piracy problems can be overcome. The mantra has been heard at trade shows, boardroom meetings and executive paw-wows for years: ‘Keep watching Latin America. Keep watching Latin America.’ The watch-and-wait attitude is now, by and large, over. Latin America is very much at the front of the multinationals’ collective mind these days, thanks to robust sales, keen possibilities of crossover success both within and without the territory, and the feeling that the best is yet to come.
A regional economy is merging in the western hemisphere, and old stereotypes of poverty-stricken Latin Americans are out of date. Central and South American consumers are relatively sophisticated, and their culture remains different from the United States. Businesses can get on the right track by crossing national boundaries, targeting specific Latin groups, and taking their place in the New World’s new order. Does your product have a money-back guarantee? In the United States, this is a tried-and-true way to get a customer’s attention. But south of the Rio Grande, people simply don’t believe such claims. Once they part with their money, they don’t expect to get it back. Latin Americans are more likely than U.S. residents to believe celebrity endorsements, according to Roper Starch Worldwide. They are also more likely to believe the words “new and improved.” They respond more positively to products labeled “the official” choice of a sports team, and they even like the old hidden camera trick. But only an average of 27 percent of consumers in the urban areas of Mexico, Brazil, Venezuela, and Argentina believe money-back guarantees, compared with 49 percent in the United States.
As novelists Gabriel Garcia Marquez and Isabel Allende have written, people in Latin cultures believe that life is much more complex than it appears at first glance. This is an important lesson for U.S. marketers to learn in the 2000s. Trade policy, corporate economies of scale, immigration, and popular culture are pushing North America, Central America, and South America toward one big hemispheric marketplace. In the 2000s, the Monroe Doctrine has been replaced by Wal-Mart, the Internet, and MTV. The sometimes simplistic perceptions Norteamericanos have of Latin America obscure a complex reality. Yes, Latin America is home to the exotic landscapes and ancient civilizations of the Andes and the Amazon. But it is also home to the enormous and bustling cities of Mexico City, Sao Paulo, Rio de Janeiro, Caracas, and Buenos Aires. Latin Americans enjoy a dynamic consumer economy that is being reshaped by new technologies and media- just as it is in the United States.
Marketers who want to expand into Latin America will have to learn new rules for a different world. While the United States is dominated by a bulging middle class, Latin America is an economic pyramid. Ten percent of the Latin population is in our top ranking of socioeconomic status. Thirty-five percent are in the middle, which is somewhat poorer than the middle class of the United States. And most Latin households are truly poor, especially by North-American standards. Look closer, however, and you will find many similarities between north and south. Latin America, like the United States, is struggling to integrate traditional values with new ideas and attitudes. Even the family, the traditional bulwark of this Catholic-dominated region, is not immune. Only half of Latin Americans surveyed are optimistic about the institution of marriage and family, which is similar to the response in the United States. Despite this pessimism, Latin Americans and North Americans both like to spend time with their families. It is the most popular leisure-time activity, cited by at least three-quarters of those surveyed in all countries.
Among those who don’t stand by their brands, however, United States and Latin-American consumers diverge. In the United States, shoppers who are not brand-loyal typically choose from among two or three favorite brands. In Latin America, they are equally likely to look around for what seems to be the best deal at the moment. For example, 28 percent of United States consumers choose from two or three favorite brands of shampoo, while 22 percent look around for what seems best at the moment. In Brazil, however, 33 percent of urban shoppers go with what looks best at the moment, while only 17 percent buy from a standard list of favorites. These shopping patterns indicate that consumers’ brand “menus” are less developed in Latin America. Northern marketers may have opportunities to add their brands to Latin Americans’ shopping lists.
Consequently we see a common trend in marketing, which is leading marketing practices towards more national approaches. Each nation needs its particular marketing approach as we see it from the abovementioned three countries. There is no doubt that there are still some global influences and commonly accepted marketing strategies like for example direct marketing, that do touch and will in the closer future all places of the world, but there will always be necessary some adjustments according to the origins of the place the strategy is being applied to. All in all, in reality, there is no similarity in consumer behavior between a 54-year-old wine-loving heterosexual herbalist from Halifax and a 37-year-old gay vegan oil-patch worker from Hinton, Alta., yet both are supposedly part of the same baby-boom market. A 20-year generational cohort is far, far too wide to draw any practical conclusions about market behavior.
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