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MARKETING ASSIGNMENT

1. What is international market segmentation? What challenges does it pose to Bentley?

International market segmentation consists in dividing the market into segments; in other words, it consists
in forming segments of consumers who have similar needs and buying behaviors even if they are located in
different areas of the worlds.
Companies that are big enough to expand in other countries markets, can choose to segment international
markets using different variables or factors:

Geographic location
Economic factors
Political and legal factors
Cultural factors

If the company is willing to segment international market through geographic location it means that they
assumes that countries close to one other have many common traits and behaviors, because, using this kind
of factor, they are going to divide the target countries in groups, such as Western Europe, Africa, and so on.
Another way to segment international market is using economic factors, such as population income levels or
level of nations economic development or GDP. Those last 2 economic factors are actually the ones that
Bentley Motors used during the first period of the company life (during all the 80s); this kind of market
segmentation brought them to have very positive results in countries like United States and Europe, which
before where characterized by high income consumers, but now not. The situation is changed and together
with it, also Bentleys international segmentation factors are different. Countries can also be segmented by
political and legal factors, such as governments stability, monetary regulations, receptivity to foreign firms
and so on; and by cultural factors, so something like languages, religions, values , traditions, and behavioral
patterns.

Regarding the second question, we must point out that this international market segmentation poses a
challenge to Bentley as the company experienced a sudden huge decrease of sales in 2008, mainly because of
the global financial crisis.
This forces Bentley to find new market, new positioning of their cars and their ways of reaching targeted
segments with their products and develop new marketing strategies and programs. Bentley uses different
kinds of market segmentation to segment their international market. As we said before, the company used
variables like nations economic development and gross domestic product, so markets like United States, UK
and Europe were the most important in Bentleys traditional market strategy.
But, when sales drop down in 2008, Bentley began to realize that their use of variables for market
segmentation like age, education, and gender is not how the market behave. They started to notice and study
the increasing buying power of the rich from BRIC (Brazil, Russia, India, China). This force them to
segment market based on new economic factors such as number of sales in that market and not based on
developed or developing nations like they used to.
2. Using the full spectrum of segmentation variables, describe how Bentley segments and
targets the international luxury car market.

Segmentation is based on four factor:

Geographical
Psychographic
Demographic
Behavioral segmentation.

Geographical segmentation refers to grouping markets geographically such as nations, states or cities. Now
Bentley is segmenting countries in this way: on one side we can find BRIC developing countries and on the
other one the traditional markets that are United States, UK, and Europe.
Psychographic segmentation consists in dividing the buyers into groups based on lifestyle or social
class/status.
Demographic segmentation uses factors like age, gender, and occupation to separate markets into groups.
Bentley is using also this kind of segmentation factors; it is grouping its buyers in old high-educated
consumers from the traditional markets and young low- educated in its new developing markets.
Behavioral segmentation divides buyer into groups by their knowledge about particular goods, their usage of
the goods such as if they are regular user or one-time user and their responses towards the product. Here,
Bentley is conscious that they are working on two completely opposite kind of consumers with two
completely opposite desires. On one side there are the buyers from developed markets that are used to this
kind of luxury product so they are just looking for more luxury, more performance and more exclusivity;
while on the other side we have the consumers from developing countries whom are looking for the top
products from Western countries, looking for that Western style that is basically the only factor that can
attract them to buy Bentleys product at double of the price of other same-qualitys product of other brands.
Bentley knows about this, thats why it is positioning itself pointing out its new slogan Britishness.

In such a way to check if the segmentations are effective, we need to use the following 5 criteria:

Substantial
Measurable
Accessible
Differentiable
Actionable.

Substantial means that we have to take into account the importance, size and worth of the market, and try to
find out if there will be enough demand or needs from the market to sustain the business. Measurable means
that each facto that we use in our considerations must be measurable, such as purchasing power, segmented
size and characteristic. Accessible means that marketers need to ensure that goods, product or services can
access that particular area to be segmented, for example, if a company decided to advertise a certain product
in the area through its social media, but the area has no stable internet connection, that is inaccessible.
Differentiable means that the segments are conceptually distinguishable and react differently to different
products or services.
At the end, actionable means that the program must be designed to attract and serve the segments.
3. Has Bentley differentiated and positioned its brand effectively? Explain.

As sales drop again in 2008, Bentley began to realize that their use of variables for market segmentation like
age, education, and gender is not how the market behave, with the increasing buying power of the rich from
BRIC (Brazil, Russia, India, China). This force them to segment market based on number of sales in that
market and not based on developed or developing nations like they used to. This results in targeting market
that are growing, despite those market have low per capita income, but the buying power of consumers in
those market is the greatest. Young consumers in economically growing nations are being targeted.

As they are young and less educated, they would like to possess branded things as a sign of their social class
and since Bentley is a strong brand which comes along with luxury design and innovative technology, there
is no doubt that there will be sales in those newly recognized market. I would say Bentley has differentiated
and positioned its brand effectively. The company carefully defined those well to do groups in each of its
market. In its traditional market, Bentley regularly host golf tournament and invites customers to join,
usually for primary male, highly educated and high earning customers and the winner will be crowned with
the Bentley Continental cup. This kind of event results in refreshing and reinforcing its image.

Meanwhile for the new market, they offer exclusive goods under their brand name by partnering with several
other exclusive companies. By doing so, Bentley recovered itself from the sales slump they encountered in
2009. United States is now being replaced by China as the biggest market. There is a delivery of 1664 cars to
Chinese customer in 2011 alone continue with 84% sales growth by the first quarter of 2012. Bentley is also
the best selling luxury car brand in Russia in 2011 where sales increased by 45%.

4. Given the economic downturn in developed economies and the slowdown in emerging
economies such as China, will Bentley continue to grow? Why or why not?

Given the economic downturn in developed and slow down in emerging economies such as China, I do think
Bentley will continue to grow. Bentley has announced that the global deliveries to customers have grown by
9 percent in 2013 compared to the first six month of 2012. Meanwhile in China, there is a delivery of 817
cars, which is 23 percent decrease from last year. In my opinion, if they continue to attract young,
uneducated or not so highly educated individuals, sales would be easier as youth would not think twice
before buying an expensive luxury car like Bentley for the sake of pride and class along with comfort. Since
China have such huge population, I believe the market there could maintain or continue growing for another
few years before it starts to become steady or decline again as Bentley had, we can say, just started targeting
China as their market. However Bentley Motors could start to look more to the new emerging economies
such as Vietnam, Cambodia, Kazakhstan, and Philippines, where the new rich are already starting to
appreciate and buy their products.
At the end, in my opinion, they moved strongly in the developing countries too late! But, now, there is a new
opportunity for them with these new emerging economies and if they will jump into down immediately they
will face a good increase in sales.

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