final examination topic selecting target markets and target market strategies

UEH UNIVERSITY INTERNATIONAL BUSINESS & MARKETING FINAL EXAMINATION Topic: Selecting Target Markets and Target-Market Strategies Course: Principles Of Marketing Lecturer: Đinh Tiên Minh Class Code: 21C1MAR50312001 Student: Nguyễn Bá Thiên Kim Class: K47 – FTC01 Student’s ID: 31211020200 Ho Chi Minh City, 11/12/2021 TABLE OF CONTENTS No 1.1 1.2 2.1 2.2 3.1 3.1 3.1 3.2 3.2 3.2 Contents Examine before deciding to target a market Definition of Target Market Characteristics of an ideal market which a company need to research Segmenting strategies Overview about segmenting strategies The broadest and the narrowest segmenting strategy Producing low-cost products for developing country and then exporting to America Advantages For the investors For the invested nations Disadvantages For the investors For the invested nations Reference Page 3 7 12 14 14 14 16 17 17 18 20 SELEGTING TARGET MARKETS AND TARGET-MARKET STRATEGIES EXAMINE BEFORE DECIDING TO TARGET A MARKET 1.1 Definition of a target market Target market means the segment of the market consists of groups or organizations of people who can potentially become the company’s clients or people who are most likely to buy or use a company’s products and services.Choosing a target market brings many advantages for the company since they have the detail goals, know who they are going to convince to become their customers When a firm has their target, they will definitely have a better preparation in creating products and choosing the ideal strategy Target market is the best way to perfect the products Once the Target Market is defined in detail, you can identify the specific needs and future of customers From there, develop their products in that direction to satisfy the needs of customers, the product will constantly develop and improve Target market makes it much easier and more accurate for companies to meet the demand of their customers This will bring huge benefits to traders Firstly, the firm can limit the situation that customers have expectations with the product that are way far from reality Secondly, the company can attract a loyal customer base This is an extremely important target of businesses Advertising efficiency can be increased by the help of the target market When a company gets information about the target market, it means they either understand customer behaviour Understanding what they want, what are their buying habits like or what they care about? And most important, what is the main factor that drives them to make a purchase decision? Due to the result of target market research, companies can completely create an appropriate advertising message and easily leave an impression on that market The importance of the target market is immense, it will determine the success or failure of that company or business So what characteristics a company need to research before choosing a target market? 1.2 Characteristics of an ideal market which a company need to research The criteria for assessing the attractiveness of a market include : - Size Growth The pressure of competition Reachable/Realistic Company's capabilities Consistent with the goal, the vision and the mission of the business First of all, about the size an effective, attractive market segment must be large enough to offset the company or the marketing efforts It has to be large enough to create enough profits to pay for the employees and other resources but still have a portion left to contribute to the company capital If a market is not big enough, it is a waste of money, time and resources when choosing it as a target market For example, many companies choose China as their target market It is reasonable since China has the largest population in the world with 1.446.122.038 people which account for 18,5% of the world’s population (11/12/2021 according to the latest data Source : danso.org from the United Nations) Staying on top of the population chart, China became one of the most potential markets because of its enormous size of the market Secondly, a market is attractive not only because of its size in the present but it also has to be big enough for the future Therefore, an ideal market is when it has the potential of growing in the future Enterprises should choose the market segments with growth rates which are suitable to the potential of the business Large enterprises should target large-scale and high-growth market segments, while small businesses choose a smaller market but still have high growth potential in the future The market size must continue to expand for the business to develop Choose a market with potential for growth to avoid the situation where the market stops developing and has no customers During the covid-19 pandemic, people can see the important of medical device which make this become more potential than ever Particularly, according to data from the Ministry of Health, the total investment capital in the Vietnamese medical equipment and supplies market has a strong growth rate Total investment capital in medical equipment in Vietnam in 2010 was estimated at 515 million USD, in 2016 the total investment capital was 950 million USD and in 2017 this figure increased to 1.1 billion USD Mr Etienne Szivo, Executive Vice Vietnam's medical equipment market remains potential Photo: British Business Group Vietnam President of Siemens Healthcare Asia-Pacific, called Vietnam's medical equipment market a growing market with a lot of potential: Vietnam has barely produced medical equipment medical equipment as well as high-tech healthcare solutions, which now import more than 90% In addition, investment in health from public and private budgets is increasing rapidly Next, about the pressure of competition A market segment has a large scale and high growth, but if the level of competition is too fierce or the bargaining power from customers and other forces is too great, it cannot be called an attractive market segment When a market has too many competitors and products, which means company can be threatened by substitute products The selling price and profit will be limited by the price and profit of the substitute product With high substitutability, prices and profits tend to decrease A company should only choose to target a market only when there are not many available competitors or they can find a way to distinguish themselves from other companies The market of drink, especially the milktea market in Vietnam, is more competitive than ever This market thrives in big cities like Ho Chi Minh city, Ha Noi, Hai Phong, Da Nang,… The Vietnamese milk tea market is developing very strongly and it is a new trend of the Vietnamese beverage industry According to market research on Source: 24h Q&me milk tea, the frequency of using this beverage is very high and extremely high Milk tea shops today are located close to each other, full on major roads More and more famous brands from abroad such as Singapore and Taiwan are integrating into Vietnam, making this market more stressful and competitive than ever We can easily name famous names such as Gong cha, KOI, Ding Tea, The Coffee House, Tocotoco, Bobapop Due to the huge growth of this market, this does not seem like a suitable market for small brands that have not yet made any mark in this field There are many milk tea shops that have had to close before generating any revenue and many people have to stop this lucrative business Instead of choosing a highly competitive market, companies can aim for a less competitive field combined with distinct brand accents to easily reach customers For example, the market of hotpot restaurants is not new to Viet Nam, however, not many branded hotpot restaurant chains have been developed in Vietnam and Vietnamese people are also used to local restaurants, so very few large hotpot restaurants have been developed Until the Haidilao hotpot restaurant chain integrated into Vietnam, the situation completely changed when Haidilao was extremely successful in Vietnam and expanded to many new branches in a short time This hot pot restaurant is always fully booked and customers always have to wait in long lines for an empty table Haidilao's special feature that attracts customers is its dedicated service and many free services or gifts like free manicure, free dessert,…for customers when dining at the restaurant Haidilao was very wise when choosing this market in Vietnam as well as choosing strategies and their brand highlights The fourth factor that a firm needs to consider when choosing to aim for a market is it has to be reachable and reality Usually, there are many barriers for a business before entering a market such as political, social, geographic accessibility, legal and law,… A company has to research carefully about the barriers before choosing a market whether they have the ability to overcome it or not Moreover, the target has to be realistic and achievable, businesses should avoid aiming at a far-fetched goal H&M is a really famous fashion brand in the world The head office of H&m is located in Stockholm, Sweden When first entering the Asian market, H&M's biggest barrier is geographic Since the head office is very far from Asia, they have decided to open many large production factories in some Asian countries like China At the same time, hiring workers in developing countries is also cheap, so they can overcome geographical barriers and at the same time reduce the costs of production and labor Company's capability and resources are also factors that businesses have to consider when deciding to target a market The attractive market segment can also be ignored if it is beyond the company’s capacity or asks for a massive amount of resources for the business Enterprise resources including: Finance, technology, human resources, Marketing, funds are used to exploit the market but must be considered in the state of change and the relationship with competitors A business enterprise is successful if it is able to deploy its marketing efforts to outperform its competitors Therefore, the target market selected by enterprises must be compatible with the capabilities of enterprises as well as their resources For example, virtual social media and technology is a really new market that has never been exploited because there are not yet any businesses that have enough technology and resources to research this market Although it's new and sounds unrealistic, in the current situation where social networks and smartphones are saturated, this is the next future of the internet that technology companies are looking for Because of the Source: International Business Times new nature of this market, very few businesses can access it However, large corporations like Facebook are fully capable of resources, capital and technology to conquer this new market Recently Facebook changed their name to Metaverse to show their ambition about this market in the future According to Mr Le Manh Cuong, CEO of Mytheria, in addition to entertainment value, metaverse also brings benefits to both users and developers Here, participants are not limited by borders, distances and pioneers will have many advantages in the stub market It is reasonable why Facebook dares to target a new market that still contains many risks since it is a really big market with no competitors Facebook believed that they have the foundation in technology as well as the social network brand they have made throughout the decade to achieve this new market Finally, companies should aim for a market that is consistent with the goal or the vision of the business An attractive market segment can also be ignored if it does not align with the long-term goals or the mission of the business Enterprises may decide to pursue some shortterm goals when faced with business opportunities, but it must still ensure the long-term strategic goals of the business Vingroup is one of the largest corporations in Vietnam in many fields such as real estate, shopping centers, supermarkets, hospitals, schools, hotels, amusement parks, Vingroup aims to develop into a leading Technology – Industry – Services group in the region Their mission is “to create a better life for people” They always aim for markets with community value and as well as markets that help improve people’s living standard like private universities, schools or hospitals Recently, vingroup is targeting the car market in Vietnam and because there is no car brand bearing the Vietnamese brand So Vinfast, the first Vietnamese car brand, was established to provide for not only Vietnamese people but also for other countries the modern, safe and environmentally friendly car models Vinfast is also known for its modern electric vehicle models to reduce the amount of smoke and fuel waste released into the environment which help limit air pollution In conclusion, there are six factors that a firm has to research before choosing a target market which are : size, growth, competitors, the ability to achieve, company’s resource or capability and the compatibility with the business mission or goal SEGMENTING STRATEGIES 2.1 Overview about segmenting strategies After selecting the target market, the business must determine the strategies to serve the market There are segmenting strategies mentioned in this section which are : Multisegment Marketing, Concentrated Marketing, Niche Marketing and Micromarketing These strategies can be called differentiated strategies This type of strategy is for enterprises that participate in many market segments and build many separate marketing programs for each market segment, providing different products separately for each market segment Differentiated strategies help better meet the diverse needs and desires of the market Moreover, this strategy can diversify products and marketing efforts which help businesses penetrate deep into many market segments, increasing sales However, enterprises have to face an increase in production costs, warehousing costs, marketing costs ie increasing business costs - Multisegment Marketing A marketing strategy when a company tries to gain customers from more than one type of market for similar products and uses, so that type of advertising can be expensive Also known as multisegment marketing Businesses can respond to the demographic shifts and other market trends if they choose a multisegment marketing strategy Because these companies don't risk everything to invest in a single market, they are less likely to lose out when competing with other companies As a result, multi-segment marketing is the process of segmenting a target market into many segments in order to target each segment with a unique message or product Companies use segmented marketing to offer the same product to multiple segments, tailoring language and content to their individual wants and needs Multisegment marketing is a technique used by companies who sell many products to separate their marketing tactics and efforts in order to appeal to different target audiences for each product line This strategy also helps businesses withstand economic crisis by allowing customers to change the exchange of products or services with the business (increase or decrease) Furthermore, multi-segmentation strategy helps companies solve product or brand lifecycle problems Each product / brand has a certain life cycle, when customers no longer love it, or those products become obsolete, it will lead to bankruptcy of a business But if businesses target more than one market, build many segments for many different markets and customers, they will still have other products to compete in the market For example, Nike is a business operating in multiple market segments Nike has different segments in basketball shoes suitable for many different styles of basketball : air jordan, force and flight  Air jordan: aim for people who have the same style of playing basketball like Michael Jordan It is also aimed at young people who love fashion since Nike not only focuses on the quality of foot protection, but also invests in the appearance of the shoes  Force: basketball shoes which are more stable and more suitable for people who have the aggressive, muscular style like David Robinson and Charles Barkley – former professional American basketball players  Flight: more flexibility and lighter weight, suitable with teenager or younger basketball player Or Nike shoes used for soccer have segments : elite, pro,academy and club  Elite (Top-end) : manufactured with the highest quality materials and technology to serve professional players Professional tournaments will often use the Elite version of Nike The highest quality materials plus the most advanced technologies make the price of the ELITE segment the most expensive  Pro (Mid-end) : Is the mid-range segment of Nike Football The Pro segment has a lot of technology, not inferior to the Elite segment The upper is made of synthetic leather and the Flyknit upper is treated for a softer, more comfortable feel The shoe weight is also minimized to the lightest level Still keeping the form of slim shoes and hugging the feet, suitable for attacking positions, using speed and technique, wingers  Academy (Mid-end) : use for artificial turf and natural grass 7-11 people With the AG nail surface structure, which is designed higher than the TF nail, it will create better grip, players can rest assured when playing on the rain field surface without worrying about slipping The Academy segment uses simpler materials and cuts some technology but is always popular thanks to its reasonable price  Club ( Low-end) : the entry-level segment of Nike soccer cleats The material and design of shoes in this segment is quite simple, but it will be suitable for many customers who want to find a pair of cheap genuine shoes Use for for 5-7 people artificial turf field In general, all segments will be suitable for many different clients, from the low to upper classes, from fastidious to easygoing, from professional to beginner Thanks to multisegment strategy, Nike dominates the footwear Source: Business Insider industry in the world especially USA when they have income from many different market segments - Concentrated Marketing Using concentrated marketing means the company focuses all its efforts on a segment of the market that it considers the most important and takes the best position in that segment There are many advantages in using this strategy When firms focus all their efforts on one market segment so that they can gain a strong position in that segment Example: Creating a monopoly in a market segment, designing and supplying products with a special reputation in that market segment Besides, enterprises can exploit the advantages of specializing in production, distribution and sales promotion activities In case the target market segment meets the criteria of "efficient segment", the business can achieve high profit margins However, the segment may not exist or the general needs of customers may suddenly change If powerful competitors enter the market, companies may have to face high pressure competition and many disadvantages.This means, choosing concentrated marketing, company will focus all investments on a single segment, with no other options or market backup in case of an incident happens This strategy is only suitable for small and medium enterprises or enterprises with the goal of "covering the market" in the initial stage when entering the large market To illustrate, Moonlust Jewelry store is using concentrated segmentation strategy They only concentrate on selling silver jewelry for young girls who aiming for stylish jewelry which are 10 durable but still affordable and worth the money Instead of making silver products with traditional form or attach with expensive stone, Moonlust chooses to create products that are stylish and fashionable but using colorful stone to not only make it more attractive but also reduce the price of the jewelry Due to the concentrated marketing strategy, Moonlust has more time to research what type of jewelry would attract teenagers Until now, Moonlust is one of the most popular jewelry brands for girls, especially among students At first, they mainly sold jewelry on web sites like Instagram or Facebook, but thanks to their success, they are now opening their own store base in district 1, in the center of Ho Chi Minh City - Niche Marketing Niche market is understood as a very small market segment compared to the entire market This is a place formed by the neglect of the major investors in the market for a need for a product or service, which they consider too small to fulfill To illustrate, fashion is a large market that includes many smaller markets The smaller markets when segmented out include women's fashion, men's fashion The smaller segment is fashion for girls, students, middleaged people, office people Then continue the segment to have a small niche like vintage fashion for office people This is the niche of the fashion market Niche marketing concentrated on niche markets, which means the company focuses on more specific target clients instead of advertising to anyone who might be interested in the product or service When approaching a niche market, businesses hope to attract a large number of customers in a small and fixed market instead of attracting a small number of customers in a large market By identifying a unique group of people, brands can connect on a deeper level than with broad marketing strategies Niche marketing can differentiate your brand from your competitors and build brand equity Using a niche marketing strategy will help small businesses avoid having to compete with large businesses The niche market does not bring too much profit, it is not worth much compared to the large market out there The more specific a user's needs are, the lower the number of businesses that can satisfy them So this can be an extremely suitable market for small businesses, start-ups with limited potential and weak competitiveness Serving a small audience means marketers have more time to understand their customers' habits, preferences, behaviors, and desires Understanding customers is the basis for businesses to improve the quality of products and services, making customers' love for the brand increase Moreover, when dealing in specific products, with few competitors, businesses have more freedom in price decisions without being influenced by external factors Consumers in the niche themselves are also willing to pay a higher fee for companies that meet their needs Finally, niche marketing can take advantage of word of mouth marketing Word of mouth marketing is often more popular in niche markets when customers often have to rely on each other to make purchasing decisions in the face of scarcity of information about products, services, suppliers, etc Many local brands in Vietnam use the niche marketing strategy, especially those local brands which focus on fashion Usually, local brand owners not have a big amount of funds to invest in many segments Sometimes, local brand owners are people who are first launching their start-up, they don’t have enough experience and knowledge to go for a huge target, so they should choose a niche market to make sure that they can handle that business That is why a niche marketing strategy is suitable with them Local brands aim at teenagers or young 11 customers who did not go to work or just started working and not have high income These types of clothes are too ditches and a little informal,often pursues street style or vintage, so they are only suitable with teenagers Local brand clothes also come with many colorful products so middle-age people or elderly are not going to like these types of fashion Besides, these kinds of clothes are very cheap so they are not suitable for businessmen since businessmen need something to show their qualifications and income to make their customers feel trustworthy However, due to its low cost and fashionable look, students and teenagers prefer buying local brand clothes For example, “ Tiệm mềm” - a really famous local brand store which sales girl clothes Their majors are crop tops with only one size These clothes sizes can only be worn by girls who are really thin (under 50 kilogram) since their sizes are crazy small These clothes will fit the body perfectly and show the modest curves of girls who are really thin and small Not many clothes brands sell clothes with a really small size that are for teenagers or adults whose bodies are really small.So it is hard for them to choose clothes that fit their bodies perfectly Besides, usually fashion brands come with clothes that have many sizes for many people but only suitable with the common body weight (50-80 kilogram) So because of choosing a really special and different market “Tiệm mềm” is a perfect place for girl who are really thin They are also the only fashion store until now selling small size clothes After 1-2 years , “Tiệm mềm” store became really famous among girls especially girls with low weight because “Tiệm mềm” ‘s clothes can hide the flaws and show off the delicate features of small girls In conclusion, economists believe that niche marketing will be the trend of the future, especially in the era of technology 4.0 In the age of technology, when consumers' demand for "my own" featured products is increasing, the potential for growth of the niche is certainly not going to stop - Micromarketing Micromarketing is an advertising strategy that tends to target a specific group of people in a niche Which means, company products will only be suitable for some specific customers or only some can afford these products With Micromarketing, products or services are marketed directly to a target group of customers To use micromarketing techniques, a company must narrow down its audience to a specific trait, such as gender, employment, age or geographic area, and then create campaigns that are targeted to that particular target group Micromarketing can be more expensive than other marketing methods due to customization and lack of economies of scale In addition, implementing Micromarketing can also be expensive due to the inability to scale With Micromarketing, a business tries to measure the size of the target market for a good or service and figure out how their product can be made available to this group of consumers Hermes is one of the brands that aim for the 12 micro market Their main prod people can afford a bag from Hermes Especially the Birkin bag, a professional bag maker needs up to 48 hours to create a Birkin bag, so the number of Birkin bags created are limited A speciality about these bags is that their value will continue to increase based on the season, even when it has already been used, the prices will continue to rise up So when people buy the Birkin bag, they can sell it to other people and make profits However, buying a Birkin bag is not an easy thing, when normal women want to own a Birkin bag, it seems impossible Women who want to buy Birkin bags not only have to be extremely rich but also they have to pre-order the bag and wait for a really long time, sometimes they need up to years to receive a Birkin bag Hermes aims at the super -rich women and women who have high positions like A-list celebrities in Hollywood like Beyonce, Victoria Beckham, Besides Alist stars , only women who became the VIP customers of Hermes can buy the Birkin bag without waiting for pre-order However, to become a VIP customer, it is not an easy task People have to pay for others Hermes small products up to hundred thousand of dollars to become a VIP According to a statistic, only 1% of women in the world can afford and qualify enough to buy a Hermes bag In fact, Hermes does not need to advertise the value of Birkin bags since only A-list celebrities or some really powerful women can afford them In this case, the market is really small, however, the profit of Hermes is a lot since each Birkin bag costs up to 500,000$ In conclusion, Hermes uses Micromarketing in the products of Birkin bags Their market is only 1% of women in the world who are crazy rich and have a really high position In fact, micromarketing encompasses both local and individual marketing In local marketing, brands and promotions are tailored to the specific needs and interests of local client groups—cities, regions, and even single stores Walmart, for example, customizes its merchandise by location to satisfy the needs of local customers The format of each new store is developed by the retailer's store designers relying on the neighborhood's characteristics— stores near office parks, for illustration, have prominent islands carrying ready-made meals for busy workers Walmart tailors individual store items with similar precision by leveraging a lot of customer data on daily sales in every store It uses more than 200 precisely tailored planograms (shelf plans) to match soup assortments to demand patterns in each store, for example Micromarketing can become individual branding when products and marketing campaigns are tailored to the needs and preferences of specific clients One-to-one marketing, mass customization, and markets-of-one marketing are all different ways to define individual marketing 2.2 The broadest and the narrowest segmenting strategy From the segmenting strategies that this section mentions about, base on the definition of each strategies lead to the conclusion that the broadest segmenting strategy is MULTISEGMENT MARKETING In contrast, the narrowest segmenting strategy is MICROMARKETING 13 According to the definition, only multisegment strategy aims at more than one type of customers That is the reason why they call them “multi” since they aiming many clients at a times They have separate segment for each types of customers Moreover, than can also have more than one product or brand name for each segment So companies using the multi segment strategy still target the entire market but they divide different segments or products for each kind of customer They can produce one product with different features, colors, styles, qualities,… The reason they this is that anyone can use their products, they not need to research specifically since they Source: IEduNote make different types of products so they will meet some people's demand somehow For example, a brand have different section for different customers like women clothes, men clothes and children clothes or highend, middle-end and low-end clothes The three other types of strategies : concentrated, niche and micro are only concentrated on one single segment Concentrated marketing is a strategy in which a company devotes every one of its efforts and resources on manufacturing and making a sale for a single sector of the target market This method is especially beneficial to small firms since it allows them to establish a strong presence in a single marketing area For example clothes company only aim at selling clothes for women Niche is smaller than concentrated because niche marketing is included in concentrated marketing Niche marketing is described as focusing all marketing efforts to a single, well-defined market One thing to keep in mind is that the term "niche" does not exist; rather, it is formed by using clever marketing strategies and determining what the client wants Concentrated aim at one segment like women clothes while niche aim at a single market too but more specific, more well defined, for example a fashion store target selling women clothes but in vintage style This means, micromarketing is the narrowest strategy since based on micromarketing definition, they divide niche markets into smaller segments, more specific types of customers Micromarketing only targets one specific type of customer, more segmenting than a niche, which means there are only a few people who will use this product or a very few people can afford it In the case of fashion stores that sell clothes, micromarketing means that stores only sell women's clothes in vintage styles and only aim at and are suitable with people in Ho Chi Minh city So this means, micromarketing becomes the narrowest segmenting strategy when this strategy only aims at some specific customers, only a few people can use that kind of product 14 In conclusion, Multisegment Marketing is the broadest segmenting strategy and Micromarketing is the narrowest segmenting strategy that is mentioned in the section Since Multisegment Marketing chooses more than one target market, they aim at people of different ages, different genders and different lifestyles Multisegment produces more than one brand and one product to meet the demand of different customers In contrast, micromarketing targets a really specific group of people, the customers are not many or not many people suitable with their product Firms that use micromarketing strategy only produce one type of product at a time and only advertise for people who will definitely buy the product instead of advertising it to one PRODUCING LOW-COST PRODUCTS FOR DEVELOPING COUNTRIES THEN EXPORTING TO USA Nowadays, many companies choose to export their products to developing countries to sell them or sometimes, firms can put their factories in other countries for many more benefits When exporting or investing in some products for developing countries, both sides will receive advantages That is the reason why many firms desire to invest in developing countries and those countries usually welcome these investments since they get the advantages either However, in some factors, both the investors and the invested countries can be harmed or faced with some disadvantages of this method 3.1 Advantages of the case This method definitely has many benefits for both the investor and the invested countries The development of the import-export and foreign trade industry has proved it Only when this brings a lot of benefits, everyone is ready to open the door for this business 3.1.1 For the investors Investors are the people who have the most advantages When choosing a developing country to create low-cost products for them, companies will have a whole new market Usually, developing countries have a dense population, which makes them a big market For example, China and India, these are two developing countries that have the largest and the second largest population in the world Depending on the development situation, developing countries have more and more middle class As a result, they were able to afford to pay for ready-made items Developing countries also create opportunities for foreign businesses when most of them are open to foreign businesses for investment or export In addition, developing countries will also be able to reduce a part of the tax rate, so when exporting products to developing countries, businesses will not have to worry too much about tax issues and procedures Moreover, because of the cheap price combined with the brand from abroad, they will feel it is a bargain, which leads to more and more people buying those products Investment companies will be able to generate huge profits if they can capture the psychology of users in developing countries If they know how to take advantage of the moment, they can completely monopolize that market because in developing countries, very few brands can afford the experience, capital as well as technology to produce High quality domestic products to compete with Therefore, if a foreign brand penetrates into a market that offers high-value products at low prices, it will certainly be very easy to dominate the market Many brands target large markets in developing countries such as China, India, Brazil,… and recently, Vietnam If they seize the right opportunity, there will be very few competitors and 15 the market will still be very new Many brands have successfully monopolized foreign markets After successfully monopolizing the market, they can build factories in developing countries to take advantage of their many cheap resources Usually, in developing countries, factory workers can be hired at a very cheap price That's why many brands hire workers from countries like China and Vietnam to reduce production costs The reduction in production costs will reduce the selling price of the product The lower the price, the more people will buy it and know about it, leading to businesses being able to generate huge profits At the same time, building factories in developed countries can help companies take advantage of resources in other countries To illustrate, many famous brands chose to manufacture lowcost products for developing countries and actually became very famous and successful In Vietnam, Coca Cola or Acecook are examples of this case When researching the market, Coca-Cola found that 80% of Vietnamese people live in low-income rural areas For that reason, instead of Source: Slide Share using a high product pricing strategy to filter the market, Coca-Cola businesses choose a relatively low new product pricing strategy to penetrate the market, in the hope that it will generate revenue attract a large number of customers and gain a large market share With prices suitable for the Vietnamese market, Coca-Cola has met the needs of customers and convinced them to use its products instead of competitors' products At the same time, at the time Coca-Cola entered the Vietnamese market, there were very few bottled water brands in operation Of course, as a foreign brand with low-priced products, they will easily monopolize the market Up to now, Coca-Cola products are still being loved and used throughout Vietnam Coca-Cola is one of the most famous beverage and beverage brands in Vietnam To attract customers and increase brand awareness, Coca-Cola has built a marketing strategy as well as implemented extremely effective advertising campaigns In the process of trading low-cost products in developing countries, retailers can take advantage of that market to test products In developing countries, they will have more time to build and upgrade the company's product It also costs less to test low-cost products in 16 developing countries At the same time, businesses will also have more opportunities and time to develop products before focusing on tight, highly competitive markets like the US Developed countries will have stricter requirements on the quality, origin of ingredients as well as the cost of products Businesses also face tax and procedural issues regarding the production and origin and quality of products To penetrate the US market is not easy, so companies need to prepare carefully and carefully before deciding to bring a new product into the market of developed countries, especially America Moreover, big countries will also have a lot of competitors with more experience and advantages, so testing the company's products in developing countries will be a stepping stone to prepare for the future enter the market of major countries For example, Acecook is one of the major instant noodle companies in Japan In the early 90s, Acecook brought advanced production technologies from the "mother" country of instant noodles to Vietnam and established the Vina Acecook brand After 20 years of establishment and development, with development efforts in a country that is densely populated and fastidious in receiving novel products of the culinary industry like Vietnam, Vina Acecook is now known as a The leading brand in the instant noodle industry with more than 50% market share and nearly 100% market coverage with delicious, high-quality, flavorful, and diverse products Putting in the cart nearly thirty brands of instant products with different flavors, Vina Acecook has built its own identities to make an impression in the hearts of consumers Many Acecook products have been developed and launched in the Vietnam market, and have achieved great success such as Hao Hao noodles, Nho noodles, etc After that, these products have been exported to developed countries in the world such as the European market 3.1.2 For the invested nations Not only the investors have benefits in this business but also the developing countries can have many advantages too Importing cheap goods from abroad will make people have more choices in shopping Developing countries will not have to worry about the lack of product supply as well as models In addition, overseas products will be of higher quality and more diverse so that everyone can choose the right product for themselves Moreover, selling cheap products to developing countries is completely suitable for people's income, when the product quality is good but the price is reasonable High production technologies will also be integrated into developing countries Because developing countries are still in the way of development, scientific technology is still very poor Thanks to the integration of foreign products, it will help developing countries integrate scientific and technical achievements in their own country If foreign companies decide to locate factories in developing countries, many jobs will be created, the problem of job shortage will be solved At the same time, when foreign companies invest in building factories, the economies of developing countries will be improved, rapidly increasing the total gpa per capita, and reducing the poverty of many people without jobs Having many products and services integrated into the country helps people's lives to be improved when life is more convenient People will not have to spend too much money to order the products they need from abroad but can buy them in the country because by the time more countries invest in, the products will be very diverse for everyone to choose from And when there is a lot of surplus goods, all items will be spread throughout the regions, including the countryside, so they will not have to go to the center to 17 buy goods but local stores will still have them enough variety of essential consumer goods with many designs.And when there is a lot of surplus goods, all items will be spread throughout the regions, including the countryside, so they will not have to go to the center to buy goods but at local stores will still have them enough variety of essential consumer goods with many designs In the past, people living in the suburbs used to spend a weekend going into the city to buy things because in the suburbs very few shops were open for business At the same time, domestic goods are not abundant enough to be distributed equally to suburban areas, but often concentrated in the city center Therefore, when people in the suburbs need to buy something such as high-quality household appliances, they need to go to the big shopping centers in the city center to search This is a waste of time, effort and money After developing countries opened their doors to foreign goods integration, the supply volume was more and met the needs of domestic consumers Because of the development of the economy, more and more corporations are gradually opening large shopping centers to the suburbs, bringing products closer to consumers When the suburbs are developed, people will not have to travel long distances to buy low-cost but good-quality goods This has improved the living standard of people in developing countries greatly Overall, this business brings huge benefits to investors and the developing countries that are invested in by other companies This is the reason why the import and export industry and international business are so developed at the moment and will continue to grow stronger in the future Because of that, more and more developing countries are willing to open their doors to foreign brands to invest in their markets 3.2 Disadvantages of the case Sometimes, producing low-cost products for developing countries brings some risks for either the people in the countries and the investors.The products might be hard to export back to big markets like the USA 3.2.1 For the investors When exporting products to other countries, they have to face many different problems like different cultures, new markets, different laws and politics Before approaching a market, they have to research carefully when they aim to that market In fact, they have to research every market they aim at not only in the developing countries but also when they aim at the market of developed countries Sometimes, producing products for other countries means companies have to research more than one market, which means it takes much more effort to complete a product that fits both the developing countries and developed countries like China and USA have different demand so it is hard to balance both countries Furthermore, approaching a market means enterprises have to respect the developing countries' culture However, usually there are a lot of differences in cultures in the developing countries and the developed countries (to be more specific Western culture and Asian culture have lots of differences) So maybe after the products are launched in developing countries, they can not fit in with the USA market since different countries have different demand Moreover, the production of cheap products for export to developing countries without proper investigation will easily lead to political problems When it comes to sensitive issues such as politics or 18 culture, companies are difficult to fix, leading to boycotts and bans from trading in other countries An example of this problem is that a world-famous fashion company H&M has been involved in scandals when speaking about the political issues of the East Sea of Vietnam and China At the moment, this political issue is really sensitive to mention so no brand wants to talk about it since they know they can get in trouble In order to attract Chinese users, H&M supported the untrue statements of the Chinese side, which made the Vietnamese people angry and decided to boycott the products of this brand An equivalent story with the H&M brand, they complained that the cotton in China's Xinjiang was not good enough for their products That's why they used a different type of cotton for their garments This has sparked a wave of boycotts in China A social media post by the Communist Youth League of China appears to have sparked the latest fury "Just announced a boycott of Xinjiang cotton, and want to make money in China? Dreaming!" The article was posted on Weibo on the morning of 2021 March 24 The post drew much criticism against H&M from users in China, including the hashtag "I support Xinjiang cotton" becoming the most trending topic on Weibo with more than 1.8 billion views "H&M's clothes are rags, not worthy of our Xinjiang cotton!" - a Weibo user comments and gets many likes Chinese e-commerce giants like Alibaba (BABA) and JD.com even removed all H&M products from their platforms after the backlash Another disadvantage happens when Another disadvantage that companies face when selling their products to developing countries, especially in the current situation of the covid-19 epidemic, is that companies will be heavily dependent on the current situation inside developing countries Many countries have had to close because of the Covid-19 pandemic to ensure people's health as well as control the number of infections because this is a very dangerous disease and up to now there is no cure the point More and more new variants cause economic delays and supply chain disruptions Up to the present time, remember with the advent of vaccines that many countries have been able to "normalize" and start living with the epidemic However, that is only possible in developed countries with advanced scientific technology In some developing countries, vaccine shortages are still present in some countries, causing shutdowns and economic delays Because of this problem, it also causes many difficulties for companies that supply goods or materials from abroad, causing the supply chain to be interrupted, and businesses cannot sell goods when people cannot go out shopping as well as shipping companies had to suspend operations 3.2.2 For the invested nations Besides the benefits that foreign brands bring when exporting goods, this deal also brings many disadvantages Firstly, for domestic brands, having many brands accessing this new market will easily lead to monopolization of the market, and domestic enterprises will find it difficult to compete Especially for businesses that have just started their business, not have much experience and ways to catch the market, but they have to clash with many big brands with famous brands and receive trust from customers New companies will be easily rejected Although importing a lot of goods from abroad will bring benefits in terms of convenience and economic advantages, it makes developing countries more dependent on foreign brands Too few domestic companies can compete with foreign countries, leading to the loss of opportunities for developing countries to create jobs for their own people as well 19 as create a solid foundation for economic self-development for the country If the supply chain is broken and there is no domestic brand that can be replaced, it is easy to lead to a lack of supply If the phenomenon of demand exceeds supply is common, the price will be raised many times not in accordance with the true value of the product, so that very few consumers can buy the necessary items for themselves To better understand this issue, an example from Vietnam about Vietnamese brands being eliminated when competing with brands in the world Before the entry of Acecook into Vietnam and the establishment of Vina Acecook, the Miliket instant noodles from Colusa Food and Food Joint Stock Company – Miliket Revenue of instant noodle businesses in 2016-2019 was a Vietnamese Source: Vietnambiz instant noodle product that was dominating the Vietnamese market However, after the arrival of Acecook in Vietnam, the situation changed People believed that foreign brands would bring higher quality and safer products At that time Acecook also released many kinds of delicious instant noodles at extremely low prices that made everyone feel pleased to try This made people change from using Miliket noodles to using Acecook noodles Despite selling at a very cheap price, Miliket was unable to compete with Acecook and was gradually eliminated from the Vietnamese market Up to now, Acecook's instant noodles are still one of the "big three" dominating the Vietnamese instant noodle market with Masan Consumer Goods Joint Stock Company and Asia Food Joint Stock Company Meanwhile, Miliket instant noodles are still active and still launching their products but still cannot return to the heyday like in the 1980s In conclusion, although the advantages are somewhat outweighed by the disadvantages, before choosing to build a cheap product in developing countries and then export it to large countries like the US, they should find out the truth market carefully as well as appropriate product criteria to be able to balance with different criteria of many countries On the other hand, the governments of developing countries should support domestic enterprises to be able to stand firm in their own markets to avoid over-dependence on foreign enterprises 20 REFERENCE Dân Số Trung Quốc (năm 2021 ước tính lịch sử); (2021 December 16th) from: https://danso.org/trung-quoc/ Thị trường thiết bị y tế Việt Nam : Quy mô tỷ đô, tăng trưởng 18% năm from : https://vietcommed.com/thi-truong-thiet-bi-y-te-viet-nam-quy-mo-ty-do-tang-truong-18moi-nam/ Vietnamnet Global News ;Vietnam medical equipment market grows 18-20% in 20162020; (2019 August 14th); from https://vietnamnet.vn/en/business/vietnam-medicalequipment-market-grows-18-20-in-2016-2020-558871.html Khương Nha ;VNEXPRESS News; Metaverse gì?; (2021 November 16th) from: https://vnexpress.net/metaverse-la-gi-4385645.html 24h Q&me Survey; Nhu cầu trà sữa Việt Nam ; from : https://qandme.net/vi/baibaocao/nhu-cau-tra-sua-o-viet-nam.html Vingroup Website; About us; from : https://tuyendung.vingroup.net/content/About-Us/? locale=en_US Sureshot; What is multi-segment marketing and why you add it to your mix? ; (2020 October 26th); from : https://sureshot.io/blog/marketing-operations/what-is-multisegment-marketing/ Felix Richter; International Business Times; Infographic: Facebook inc dominates the social media landscape; (2019 April 10th 8:65am) ; from : https://www.ibtimes.com/infographic-facebook-inc-dominates-social-media-landscape2839771 Skye Gould and Ashley Lutz; Business Insider; See how Nike dominates the shoe industry in one chart; (2015 May 22nd 9:08pm); form: https://www.businessinsider.com/see-how-nike-dominates-the-shoe-industry-in-onechart-2015-5 10 Phương Loan; Niche market gì? Cách xác định thị trường ngách; from: https://tophuongloan.com/niche-marketing-la-gi/ 11 Tomorrow marketers; Marketing thị trường ngách: xu hướng tương lai; ( 2018 September 4th); from: https://blog.tomorrowmarketers.org/marketing-thi-truong-ngachxu-huong-cua-tuong-lai/ 12 Vietnambiz; Micromarketing gì? Cách thực Micromarketing; (2019 October 3rd); from : https://vietnambiz.vn/micromarketing-la-gi-cach-thuc-hien-micromarketing20191003152049685.htm 21 13 The Economic Times; Definition of “Niche Marketing”; from: https://economictimes.indiatimes.com/definition/niche-marketing 14 IEduNote; Market Segmentation Levels; from : https://www.iedunote.com/marketsegmentation-levels 15 Bag Hunter; Updated Hermes Birkin Values Research Study; (2017 July 11st); from : https://baghunter.com/pages/hermes-birkin-values-research-study-june-2017-update 16 Khôi Chương ;Pháp Luật News; Báo động sóng tẩy chay thương hiệu phương Tây Trung Quốc; (2021 March 26th); from: https://plo.vn/quoc-te/su-kien/bao-dong-lan-songtay-chay-thuong-hieu-phuong-tay-o-trung-quoc-974949.html 17 Vietnambiz; Đại chiến mì gói thời “bình thường mới’; (2021 November 14th) ; from : https://vietnambiz.vn/dai-chien-mi-goi-thoi-binh-thuong-moi-2020110309593829.htm 18 Philip Kotler and Gary Amstrong ; Principles of Marketing; Pearson Publisher; (2013) 22 ... 18 20 SELEGTING TARGET MARKETS AND TARGET- MARKET STRATEGIES EXAMINE BEFORE DECIDING TO TARGET A MARKET 1.1 Definition of a target market Target market means the segment of the market consists... to target a market Definition of Target Market Characteristics of an ideal market which a company need to research Segmenting strategies Overview about segmenting strategies The broadest and. .. for markets with community value and as well as markets that help improve people’s living standard like private universities, schools or hospitals Recently, vingroup is targeting the car market