The core elements involved in the Strategic Business Unit (SBU) are consistent, namely, the combination of customers, products (including pricing) and channels (4P combination), that is: “market” = customer x channel x product
The market life cycle is the whole process from the emergence to the demise of the market, which can generally be divided into four different stages: rise, growth, maturity, and decline. Because the core elements of the market include customers, channels and products, customers, channels and products also have a “life cycle” (which will be explained in the following chapters). The goal of market strategy planning is to find the optimal market strategy to enter the target market.
Enterprises should adopt different market strategies when entering at different stages of the market life. Try to use the following function to represent the optimal market strategy:
Optimal market strategy function = f[(customer x channel x product), the life stage of the target market]
This function currently has only qualitative significance, that is, in a specific market, there is always an optimal entry strategy, which is determined by the market characteristics composed of target customers, entry channels, and products, as well as the life cycle of this market. In other words, the optimal market strategy needs to consider 4 variables. The purpose of defining this function is not to complicate the problem, but to give CMOs of cross-border e-commerce companies a simple way of thinking. This function has the following practical significance.
(1) The optimal market strategy can be considered from two dimensions: the market life cycle dimension and the market core element dimension. Companies can first define the “market” based on the three core elements.
(2) The three elements of the market are a whole (a product relationship). If one of the three elements is missing (one of the three elements is 0), the market equation does not hold. Therefore, this function believes that “selling combs to monks” is not an excellent market strategy, but rather a trick that violates the “business ethics” and is not worth studying. If one element in the function changes, it will become another market. For example, a cross-border e-commerce company sells product A to target customers through Amazon Japan. If it uses AliExpress to sell the same product A to the same target customers, then we believe that this is a completely different “market”. The successful experience accumulated on Amazon Japan cannot be copied to AliExpress, but rather the relevant rules and characteristics of AliExpress should be deeply analyzed. Propose targeted strategies.
(3) In practice, the four variables are always constrained, which simplifies the function. Planning is the process of first determining the variables in order, and then selecting and continuously refining the corresponding market strategies. For example, when an integrated industrial and trade enterprise on Alibaba International Station tries to expand its brand overseas, the products are basically determined, and the channel has also been selected as Alibaba International Station. Next, it can use the market consultant, product consultant and other tools provided by Alibaba International Station to analyze the competitive products and competitors on Alibaba International Station, determine the life cycle of this market, and then analyze the characteristics of the target buyers, and determine the optimal market strategy by segmenting the buyer characteristics.
It can be seen that the so-called optimal market strategy function is the core elements that constitute the market: products, customers and channels must be matched, and the core elements of the market must also match the market life cycle. Perfect matching is optimal. However, this function cannot find a definite solution, and it still requires the senior management of cross-border e-commerce companies to make qualitative decisions.