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CBI Centre For the Promotion of Imports from developing countries. Industrial Expro Seminar The Hague November 2013 By : Jan Oude Elferink JOE (Global)Automotive Support B.V. Segmentation/Product-Market combination & Distribution Channels. By: Jan Oude Elferink

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Cbi centre for the promotion of imports from developing countries

CBICentre For the Promotion of Imports from developing countries

Industrial Expro Seminar

The Hague

November 2013

By: Jan Oude Elferink

JOE (Global)Automotive Support B.V.


Segmentation product market combination distribution channels
Segmentation/Product-Market combination & Distribution Channels

By: Jan Oude Elferink

JOE (Global)Automotive Support B.V.


Product Market Combinations Channels

Explained in a simple way,

Product Market Combinations (PMC)

is the concept of matching products with markets!


Product Market Combinations PMC Channels

Formulating PMC’s push you to make an explicit choice as to...

  • what you want to sell

  • Where you want to sell the product

  • And to whom you want to sell the product


Product Market Combinations Channels

There are different ways of going about this:

  • Using market research to find/identify markets/buyers for your existing products (Product Marketing approach)

    Or...

  • Using market research to identify what kind of products are demanded by your target market and then developing products for that market (Market Oriented approach)


PMC e.g. Channels

Here are examples of PMCs developed by companies that manufacture motorbike engine parts:


PMC e.g. 1: Channels

  • Our company make high standard components

  • We want to sell these to the Italian, UK & German Motorbike manufacturers



Exceptions
Exceptions Channels

Some companies do notalways have anown product

Whattheysell is know-how & technology

It is difficultto get information on volumes etc. The

majority of the activities is project(s)linked

In 98 % they deal with the OEM’sdirectly (B2B)

Product Market Combination

1st. The competition of the existing customer base (in the automotivef.e. Volvo-Scania-MB/ Honda-Toyota-GM

The system/1st.tier suppliersfrom the OEM’s

New Product Market Combination

2nd. Large OEM’sfromother market segments ( f.e. Philips Medical Equipment, Canon Copiers)

The vendor base from these OEM’s


Distribution channels
Distribution Channels Channels

Go to the website: www.cbi.eu

Click Market Intelligence and select Aumotive Parts & Components

Select Module Chaneels and Segments

Download Pdf file “CBI Market Channels and Segments Automotive Parts and Components

Open the document


15:00 Channels

Product Market Combinations

Individual Assignment:

For your own enterprise : what product can be sold to what type of client, in what segment (geographical or customer type)

TIP:

  • The more detailed/elaborate your product and market description, the easier it becomes to develop an effective Market Entry Strategy.

  • Different PMCs may demand different Market Entry Strategies e.g. in regards to Promotion, Communication etc.


Product Market Combinations Channels

What is your Market definition?

  • Your potential buyer?

    (Importer/Wholesaler or Retailer?)

    Or....

  • Your potential end-user?


Key results you are looking for... Channels

  • Market segment (define!!!!)

  • Product preferences

  • Pricing

  • Potential trade channels

  • Potential trade volumes

  • Competition


Then to your product... Channels

  • Why would he buy your product?

  • What is so special about your product? (USP)

  • How does your product compete with other similar products in that market in terms of Quality? Price? Availability?

  • What added value does your product have?

  • Are you able to meet the potential trade volumes? (your production capacities)


Formulating your market entry strategy
Formulating Channelsyour Market Entry Strategy

- Where do I want to sell my product? (Country region)

- Where do I position my product? (Market segment?)

- What should be my pricing strategy?

- How do I sell my product? (Distribution channel)

- How do I have to promote my product?

- What information do I have to provide?

- What other services do I have to offer?


Formulating SMART Export Objectives Channels

As part of your Market Entry Strategy, you will need to formulate SMART Export Objectives

  • How much of your product will you sell?(sales target)

  • In which market? (country, region)

  • In which market segment (low, mid, high)

  • Through which Distribution channel? (Wholesaler, Retailer)

    - In what period of time?


Formulating SMART Export Objectives Channels

SMART in this context stands for:

S - Specific

M - Measurable

A - Attainable

R - Relevant

T - Time bound


Back to the motor engine parts example: Channels

  • Export Objective for our parts in Italy, UK & Germany:

  • It is our objective to sell at least for Euro 150.000 in these markets by the end of 2014, Euro 300.000 in 2015 and > Euro 500.000 in 2016

  • To achieve this, we will undertake 4direct marketing trip per year to visit and present our product to our potential clients.

  • Export Objective for new markets:

  • It is our objective to sell at least for Euro 150.000 in the garden- &

  • forest equipment industry by the end of 2015, Euro 300.000 in 2016 and

  • > Euro 500.00 in 2017.

  • To achieve this we will participate to 2 international fairs per year and we will undertake 4 direct marketing trips per year


Conclusions Channels

- With time, you will develop the skills and capacities to identify the different preferences of different markets

  • A lot of this will come from the interaction with your first buyers. They will help you to better understand the sometimes subtle but essential differences in different countries, market segments etc.

  • Don’t forget that you can use the CBI website as a useful resource! www.cbi.eu


Conclusions Channels

  • developing a PMC is an important exercise that forces you to take a closer look at your target market.

  • It helps you take more informed strategic decisions!

    - It makes you better prepared for Market Entry

    - And helps you to be more realistic about the opportunities for your products on the target market.


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