Chapter 20
The West: Positioning
Putting It All Together—Defining a New Target Market Mix and Penetrating Emerging Markets
Therefore, just as water retains no constant shape, so in warfare there are no constant conditions.
—Sun Tzu, The Art of War
Now that we have looked at each of the 5Ps individually and in detail, let's explore how to put all the essential components together in your sales approach for an EM customer or segment. How are you going to position your offer when you know that you are competing with new types of competitors or emerging entrants?
Every customer scenario or sales situation will be different, so apply the concepts discussed in Chapters 14 through 18 and tweak them based on the targeted segment and your in-depth knowledge of your customer, as well as your competitor's strategy. Because all of the P elements are so intertwined, each decision or modification made to one element of your strategy will affect the other elements, producing a unique marketing mix and a specific outcome or result.
The 5Ps of Global Marketing Framework
In order to reinforce the process for formulating your global expansion strategy, let's revisit the 5Ps of Global Marketing framework (Figure 20.1) and review how to apply the 5Ps. As discussed previously, the 5Ps of Global Marketing framework applies new descriptors to each of the traditional 4Ps of Marketing to reflect the evolved role each plays in the evolved global competitive arena.
- Product evolves into solution and innovation, with solution defined as a holistic business offer and innovation entailing examination of different models and approaches, as well as product innovation and creation.
- Price becomes value-add; the key here is to avoid the discounting game by positioning and defending your differentiated value.
- Place emphasizes the importance of partnerships with distributors and channel partners, with your customers, and with governments through public-private collaboration.
- Promotion highlights the indisputable importance of establishing strong customer relationships and the necessity of being knowledgeable about different cultures.
To recap: the two-way curved arrows between each of the 5Ps signify that strategic decisions in any one of the P dimensions affect and influence the others. The emerging competitor is placed at the center of the diagram because these competitors are the new challengers of Western companies and engage somewhat differently—and sometimes more successfully.
Figure 20.1 The 5Ps of Global Marketing Framework
In Appendix B there is a blank template for you to use in drafting your own strategy that considers the 5Ps dimensions as well as the suggestions outlined in the previous chapters. At the end of the chapter there are two case examples of the template being completed.
So, How Do You Compete (in Global Markets with Emerging Entrants)?
The following are some highlights of what you should keep in mind as you formulate your global expansion strategy. Be open to ways in which you can change your game so you can win, in light of new market dynamics with emerging competitors.
What Works
When putting together your global expansion strategy and appraising the tactics and approach of your emerging competitor, consider the following suggestions (many of which have been made in previous chapters).
Be Strategic (Product)
As you scope your strategy, consider applying Art of War principles and philosophy, and keep the following points in mind. First, it is important to increase your understanding of your customer's business. This can be accomplished by applying a deeper consultative approach, which can be a good counter to a market follower's just-say-yes approach. When you can, it is optimal to be on the offensive. This includes defining the customer's needs before your competition does and then setting the agenda for the customer. Be proactive. You can also consider benchmark testing.1
Next, help your customers evaluate competitive offers (this ties back to previous guidance on knowing your competitors). How? You should closely monitor your competitors' trajectories and new product launches.
It is also important to prepare your defense. You might produce your own competitive testing results by establishing in-house test labs, so that you know what you are up against and can anticipate your counterposition. And you can also use these results to advise your customers about what they should look out for when they are evaluating competitors' solutions on their own. Have your staff work on white papers outlining optimal customer-focused solutions based on competitive testing results.
In defining your strategy, another very important element to emphasize is how innovative your solution is versus me-too replicated solutions. Review the innovation models we outlined in Chapter 19 and explore different approaches you might consider taking.
Employ Value-Selling, Introduce TCO Models (Price)
Never compete on price. Instead of becoming defensive about your offer's higher price or competing on the basis of price, articulate why your premium pricing is justified. You should emphasize the unique value that you can bring to customers, all the extra bells and whistles that come as part of the solution, and the less tangible aspects of your offer: In other words, sell the whole offer. That might include years of R&D, experienced support resources, brand equity, and the like. (A longer list of benefits that can be emphasized is provided later in this chapter.)
Another part of your premium positioning is demonstrating your leadership and vision in your industry or field. Customers want to work with vendors who will be around for a while and who will be setting the innovation direction for their product/solution area. These factors protect customers with respect to their investments in vendors' solutions and make vendors look good to their customers.
You also need to move beyond positioning that is based solely on technical advantages; you need to think about what is in it for customers.
Creating TCO (total cost of ownership) models is one way of approaching business drivers, by guiding your customer in understanding all the financial considerations in their decision. (These will differ by region and by customer maturity; for example, a TCO model designed for the U.S. market will not work in many EM countries.)
Educate Your Channel Partners (Place)
It is important to provide your channel partners with the marketing and sales tools to adequately represent your company's offer to prospective customers. Channel partners usually have other options to sell as well, including your competitor's solutions, so it is important to help them understand why your product offer is better than your competitor's. However, remember that a delicate balance must be maintained between sharing with your partners and ensuring that your competitive positioning strategy does not get into the hands of your competitors. Trust and good judgment are very helpful in this situation.
Build Strong Customer Relationships (Promotion)
While the importance of building relationships at all levels has been stressed throughout the book, the importance of building strong customer relationships cannot be emphasized enough. Remember that each functional area will need a different messaging approach. Take the time to create a plan and schedule for which customers you will connect with, when the meetings will take place, and what the message will be. Educate the engineers and product experts on the technical or functional merits of your offer. Convince business decision makers of the financial returns of your solution. Executives at the chief officer level are the ultimate decision makers, so it is important to focus on the big picture and demonstrate how your offer will fit into and optimize their business strategy.
Regular regional visits by corporate executives and corporate representatives go a long way. Visiting key officials and customers in different regions provides a sense of importance and prestige to the customer (and to your regional employees).
Remember to adapt to customer requests and market pressures, and consider codeveloping solutions for key customers. When appropriate, partner with customers. Your customers want to be market leaders as well, so you can help them be successful by being creative about joint business models (business model innovation) and by exploring financing or funding options.
It is helpful if all pertinent functional areas in your company or even the entire company is involved throughout the sales process, and that this involvement begins this early in the process. Use high-touch customer engagement when you can and when the customer warrants it to create a positive outcome. Spend time with your customer just being social and personable—don't just pitch your offer.
Always deliver and do not overcommit. Time-to-market is key to success—commit and pursue your goal with 100-percent effort. Do all it takes to succeed, even if it entails operating outside of your usual strategic comfort zone. Be good at what you do.
Communicate with intention. This applies to communicating information about the product with the goal of generating a positive customer response. You can achieve that positive response by knowing both your internal and external audiences and crafting a message with optimal impact. Ensure that your value propositions are unique and customized or localized to your region or target segment. Generic value propositions about your differentiators are less effective and less convincing. And they are also easier to copy by competitors.
Leverage Influence (Politics)
Put simply, learn how to play politics: both internally in your organization and externally with governments. Both will accelerate your market expansion success and overall strategic goals.
What Does Not Work
Approaches that are less successful in EMs or should be avoided:
- Competing on price.
- Comparing boxes versus solutions.
- Criticizing the credibility and reliability of the competitor up front, using weak arguments.
- Giving up when the competitor is overdiscounting or dumping.
- Neglecting cultural understanding specific to the EM customer and competitor.
- Lacking thorough knowledge of your competitor, including your competitor's solutions.
Value-Selling
Value-selling is such a loaded term and such a big topic that it often raises many questions, including what is meant by value and whether everyone's perception of value is the same.
In the context of this book, we are defining value-selling as a means to:
- Protect your premium brand.
- Defend yourself from the discounting game.
- Create a differentiated, competitive position that is sustainable as you do business in EMs and as you compete with emerging entrants.
You will have analyzed and determined your approach for each of the 5Ps as you went through the previous chapters. So, you have
- Selected your target segment(s).
- Identified and prioritized customers.
- Performed research to know your customers' wants/needs.
- Performed research to know your competitors' differentiators, and spelled out your own differentiators.
- Applied your 5Ps strategy and created a new marketing mix.
Now you have the all the right components to create a crisp, unique, and differentiated value proposition, also known as a positioning statement. This statement essentially tells prospective buyers why they should want your offer and why yours is the best company to give it to them—that is, why they should buy from you. (See Appendix B for a sample template.)
Examples of value-selling differentiators might include:
- Years of experience—of the company and of employees.
- Processes and tools—case tracking, structure, and the like.
- Outstanding support—responsiveness, geographic reach, expertise.
- Dedicated, experienced personnel (e.g., support engineers) handling pre-sales and post-sales activities.
- Deep understanding of a particular customer base.
- Comprehensive portfolio of services that cater to solution life cycle.
- Sharing best practices with customer (knowledge transfer).
- Customer testimonials (and lack thereof for the competitor).
- Superior training and knowledge transfer.
- Simplified solution purchasing process.
- Investment protection.2
- Contributions to standards bodies and patent applications are focused and about quality, not quantity, of submissions, as well as authenticity of ideas. Contrast with competitors trying too hard to establish innovation credibility.
Get Started!
Use the following template to get started on evaluating and scoping your own global expansion strategy. The template can be used to initiate the analysis, perhaps using a group or workshop approach. It facilitates a quick start to getting your strategy together. By looking at the 5Ps marketing mix quickly and comprehensively, you may be more likely to discover some obvious gaps sooner rather than later.
The following is an example of the template being used to map out a case study featuring a large defense contractor and an Israeli competitor. The mapping was done using a workshop format, thus the quick sketch. (As noted earlier, a blank version of the template can be found in Appendix B.)
The following is another real-life case study which is analyzed using the same framework.