Introduction:
A dramatic change can be witnessed in recent times in the Asian region, more specifically in China and India, two of the major global economic power houses. This change can be recognized as a drastic shift in culture, in what can be seen as a takeover of Western influences, primarily through media. The media has started to influence the growing population in both China and India, which are also known for their amazingly fast population growth rate; China is ranked #1 and India is ranked #2 in total population count. This gives rise to an entirely new conundrum for marketers; since these Western influences are making their mark in these regions, what effect will it have on the youth market, and what opportunities can be sought from this situation.
In order to assess the situation, four factors will be looked upon and discussed; Micro and Macro environmental factors, products that appeal most to this fast emerging segment, opportunities and strategies.
Micro and Macro environmental factors on marketing
The microenvironment and macro environment must be taken into due account when discussing this market segment. Microenvironment can be defined as all the factors close to the company that affects its marketing operation e.g. suppliers, customers, competitors; whereas the macro environment consists of broader societal factors, such as demographics, political situations, etc.
For an in-depth look into what segment is being targeted, we will focus on one factor from each category; customers (micro) and demographics (macro), and how these factors are influenced by media (Kotler and Keller, 2013).
Customers and Demographics
The main target market is the youth market. However, before going any further, demographics of the segment mentioned above must be assessed.
The modern age youth is more diversified in culture and mindset, as well as more aware and well educated, as compared to their predecessors. They are more knowledgeable as to the trends that are popular globally, especially in the Western world. This is due primarily to the fact, that in recent years, electronic and social media has seen a rapid incline. The youth residing in economically developed countries such as India and China, are more connected to the global community due to social networking sites such as Facebook and Twitter. Hence, a connection can be derived from this relationship.
Products that appeal most to this segment
Smart Devices
Smart devices, specifically, smartphones, have started to becoming increasingly prevalent around the world. Since 2008, smart phone consumption in particular has quadrupled; currently, half of those who do not own a smart phone, are thinking of switching and purchasing one (Shiraishi et al, 2007).. It is believed that smartphone consumption will increase exponentially over the years.
In India and China, sales of local smartphone companies Karbonn and Xiaomi, respectively, has increased to the point where both companies are amongst the top five smartphone companies in their respective countries (Shiraishi et al, 2007). This is caused due to the youth market finding these products increasingly attractive and they see it as a necessity now, rather than a luxury.
Fashion
The same can be said about Fashion. The youth have become more brand conscious as to what clothes they are wearing and their appearances. This has, surprisingly, started to occur at the same rate for boys as it has for the females. Therefore, American clothing brands can look towards this prospective market as well.
Miscellaneous
There are a number of other products that certain industries can look towards. In India there is an increase in football interest amongst the youth, so brands like Nike and Reebok recognized that want and expanded in the country. The same scenario is set for China, the youth has found its interest in table tennis, and hence brands such as Donic and Butterfly can look towards expanding their market share over there (Akaya, n.d).
Opportunities
As can be seen by the aforementioned analysis, US companies have an abundance of opportunity in both Asian countries. The electronic media, i.e. television and the internet plays an integral part in the development of this new market; it has advertised the Western culture, in these countries, so much so, that the young mind has adopted this said culture into their lifestyle. Hence several American industries, such as the clothing industry, sporting goods, electronic industry, etc, can without hesitation expand their total market share by starting business venture in these countries.
Strategies
When expanding into new regions, multinational companies often have to face a wide array of issues, the primary one being the difference in cultural and lifestyle. When Mcdonalds started in India, they were faced with the problem of sale of their burgers; majority of the Indian population comprises of Hindus, who believe the cow to be a sacred animal, hence do not consume beef. The fast food chain had to then change its menu completely in order to suit the local needs. Buyer behavior and market performances, all vary from region to region. There are two to three steps a firm must follow in order to expand into foreign markets. First, it must not only recognize the segment it is targeting, it must also do ample research on the performance of the local industries in the country. Second, a firm must consider its ratio of international to total sales that it intends on achieving, whether the firm should plan on expanding in the entire country or in just a few selected provinces or cities. Then, employment of marketing strategies has to be decided; what strategies to use (differentiation, low cost, etc), and how to employ them
Conclusion
Answering the question as to what can be predicted for the marketers, it can be said that once the marketing department of a company is able to tap into this ever expanding market for either of the true countries, then expansion is quite simple; this is because another factor that comes into play, is the fact that today’s youth is greatly affected by opinion leaders, and show a quick reaction in following trends. Ergo, not only American, but other Asian as well as European companies can also look towards expanding into the Indian and Chinese youth markets.
Bibliography
Akkaya, M.F., n.d Global Marketing Strategies Undersecretariat of Foreign Trade Expert. Available at http://www.docstoc.com/docs/142339765/Global-Marketing-Strategies accessed 28/4/2013
Kotler, P., and Keller, K.L., 2013. “Marketing Management: A South Asian Perspective”,14th ed Pearson Education
Lopez, M. H. and Marcelo, K.B., 2006. “Youth Demographics”, THE CENTER FOR INFORMATION & RESEARCH ON CIVIC LEARNING AND ENGAGEMENT. Available at http://www.civicyouth.org/ResearchTopics/research-topics/youth-demographics/page/2/ accessed 28/4/2013
Shiraishi, Y., et. al, 2011. Smartphone Trend and Evolution in Japan, Mobile Computing Promotion Consortium, Smartphone Committee
