Based on which segmentation criteria should VR/AOL choose new markets for their future international expansion? How should they position their offering on the new markets?

Answer

1. Based on which segmentation criteria should VR/AOL choose new markets for their future international expansion? How should they position their offering on the new markets?

VR/AOL should consider using the psychographic market segmentation strategy in their future endeavor’s in international expansion. This method will be the most as they will be able to study the interest, opinions and activities of their customers. They will do this as a result of the consideration of their customer’s leisure activities, which will enable them to understand them so as to provide the necessary services their customers like.

 The VR/AOL should initiate strategies that have positive impressions on the new market they are targeting. This is best done by the marketing communication strategies that the company does to its target market. Therefore, the company’s marketers should strive to paint an interesting and positive image that appeals to the target market in order for them to capture their attention (Hollensen, 2004). Once they know about the services offered by the company they will want to try the services to experience it for themselves. A positive image of the services of the company will also be instrumental in positioning the company well as the target market will be able to understand important facts about the company. Such facts include what the company is offering, their goals and the value they are providing. This will better the chances of the success of the company in the new markets.

2. What are the internal and external factors that should affect
   VR/AOL choice of a market to enter?

The internal factors that should affect the company’s choice of market are such as the firm size and the international experience they have. A big firm like VR/AOL, which has a lot of financial resources, would use acquisition as the form of entering the new market. This is due to the fact that they have the financial might to invest heavily in setting up the new market until they are able to break even. International experience is another factor that would affect the choice of the market. VR/AOL is a company with a lot of international experience (Hollensen, 2004). This is seen as they have ventured and succeeded to develop markets in developed countries such as the US, the UK, Japan and Germany. This illustrates their much experience in the international markets, which makes them have a higher chance of succeeding in establishing a new market in a different country. 

External factors that would affect the company’s choice of a new market are such as the economic conditions and the market size in a particular country. The economy of a country tells a lot about the country. The company should assess the economic conditions prevailing in a particular country as well as learning the economic trends in that country in order to establish whether they can establish their businesses there. Macroeconomic factors in the country as well as the GDP growth are positive indicators that would make the company want to establish their new market there (Hollensen, 2004). The market size is also another top consideration that the company should take in choosing the market to enter. Extensive research about a place by the company can be able to determine the market size they of the market they want to enter. Once they establish the market size they can be able to know the market share they can be able to get. After the research they should analyze the results so as to be able to make a decision about whether to establish the new market or not in that particular place.