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Blackwell Publishing LtdOxford, UKIJCInternational Journal of Consumer Studies1470-6423 2007 The Authors; Journal compilation 2007 Blackwell Publishing

g Ltd? 2007312168173Original Article Reaching the ethnic consumer marketL. Lamb


et al.

International Journal of Consumer Studies ISSN 1470-6431

Missed opportunities? Reaching the ethnic consumer market


Lisa Emslie1, Richard Bent1,2 and Claire Seaman1,2
1

Scottish Centre for Enterprise and Ethnic Business Research, Queen Margaret University, Edinburgh, UK
School of Business and Enterprise, Queen Margaret University, Edinburgh, UK

Keywords
Ethnicity, business, marketing, development
opportunities.
Correspondence
Richard Bent, School of Business and
Enterprise, Queen Margaret University,
Edinburgh, UK.
E-mail: rbent@qmuc.ac.uk
doi: 10.1111/j.1470-6431.2006.00578.x

Abstract
Changing population demographics within the UK have become a source of increased
interest to marketers as companies have realized the importance of targeting their products
and advertising efforts towards minority and ethnic groups. In addition, as the UKs ethnic
minorities grow in both numbers and in terms of prosperity, so does the commercial
significance of this market. A clearer understanding of both the nature of changing markets
and the relative importance of different minority ethnic groups as consumers is imperative
to facilitate both consumer understanding and business development; marketers need to
understand better how to target these people, what they have in common with the mainstream and where the differences lie. This paper seeks to describe current understanding of
ethnic consumers and their impact on the marketplace while highlighting an area where
future research is potentially of considerable benefit.

Introduction
Marketing is a concept defined by Kotler and Armstrong (2001) as
a social and managerial process by which individuals and groups
obtain what they want through creating and exchanging products
and value with others. In multicultural societies, ethnicity plays
an important part within the marketing concept, but this has not
attracted significant amounts of attention in either marketing theory or practice and tends to be dominated by research undertaken
in the US (Burton, 2002). In todays fragmented and increasingly
turbulent markets, multicultural marketing offers a new strategic
focus for product and market development (Nwankwo and Lindridge, 1998).
According to the 2001 Census, there are now 4.5 million people
from ethnic minorities in the UK, taking up 7.9% of the UK
population, an increase of more than 50% since the last census in
1991 (Raheja, 2003). The ethnic population is growing by 2.5% a
year and it is predicted that by 2020, ethnic communities will
account for 10% of the UK population. In addition, the new
migrants coming from countries such as the 10 Accession states
who joined the European Union in 2004 have swelled the ranks
(Accession Monitoring Report, 2006).
There appear to be lots of uncertainty and misunderstanding on
the subject of what is meant by the term ethnic and perceptions
have a tendency to change over time. Defining an minority ethnic
group is an extremely complex and contested area; the term is
open to much debate and causes great confusion (Jamal, 2003).
The common use of the word ethnic refers to a segment or
subculture that can be distinguished from the dominant culture on
168

the basis of (1) cultural background, (2) affinity and (3) genetic
heritage (Jamal, 2003). While estimates vary alongside the debate
that surrounds definitions of an ethnic minority, there is little doubt
that ethnic minorities are financially increasingly powerful (Curtis, 2001). Raheja (2003) argues that in the same way that there is
a pink pound and a grey pound, there is, without a doubt a brown
pound.
The growth of the ethnic population and the value of the ethnic
pound represents significant marketing opportunities for companies in the UK. Benjamin writing in BITC Online (2003) believes
there is a clear financial advantage to marketing to minority
ethnic consumers, they continue to have significant spending and
purchasing power (cited in BITC Online, 2003). Yet, despite these
important facts, UK businesses are, it seems, relatively slow to
target minority ethnic markets with ethnically based strategies, as
only one-fifth of the British businesses are reaching out to ethnic
minority consumers (Curtis, 2001).
Burton (2002) has suggested a number of reasons for the lack of
attention given to the ethnic market. First, negative stereotypical
images of ethnic minorities are held by some sections of the
population. Second, there is an absence of ethnic minority
managers in senior marketing positions. Third, organizations in
Britain are interested in targeting the ethnic market but are
unclear how to go about the task and finally, marketing practitioners have marginalized the ethnic market because it comprises
such a small proportion of the total population and therefore not
worth investing resources to target. A lack of ethnic data and
specific market research (Seligman, 2001), the fear of being racist,
stereotypical, tokenistic and patronizing (Fletcher, 2003), a lack of

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L. Lamb et al.

understanding of specific cultures, religions and languages (Considine, 2003) and general nervousness and fear (Curtis, 2001) have
also been cited as contributing factors, although Considine (2003)
stresses that by not tapping into the ethnic markets, companies are
missing out on great opportunities.
In essence, ethnic markets represent a huge untapped potential
and for some mass marketing is a thing of the past, as companies
need to respond to consumer differences with differentiation and
segmentation strategies (Jamal, 2003). Woods (1995) further
argues that:
It is important for marketers to understand ethnic markets
because these groups provide fertile territory for new consumers. Because some products will fall out of favour with the
general population, new markets must be uncovered if the manufacturer is to survive.
Seligman (2001), however, maintains that the race for the
ethnic pound is a very tricky one.
Currently, very little academic attention has been given to segmenting the UK ethnic markets and the development of differentiated marketing strategies and the all important promotional
techniques are likely to be a key area for future business development and research.

Reaching the ethnic consumer market

Studies have revealed that ethnicity has a significant impact on


consumption patterns, shopping orientation, response to promotion, purchase decisions, media usage, brand loyalty and responses
to marketing among ethnic consumers. It is therefore argued that
segmenting the minority markets using ethnicity-related variables
combined with a number of traditional segmentation variables
would be more effective (Burton, 2002; Cui and Choudhury,
2002).

Acculturation

Marketing theory suggests that the concept of market segmentation is based upon the premise that separating a market into distinguishable differences will result in increased customer satisfaction
and competitive advantage (Lindridge, 2003). Segmentation variables are the criteria that are used for dividing a market into
segments, there being an array of options and no single, prescribed
way of segmenting a market (Jobber, 2004). Within this context,
the main issues that marketers have to address are whether ethnic
minorities have different wants and needs from the majority population and thus whether special marketing strategies are required to
effectively target them (Burton, 2003).

One method of segmenting the ethnic market would be to consider


the stages of acculturation (Leach, 2001). Acculturation can be
defined as the process of learning and adopting cultural traits,
different from the ones with which the person was originally
reared (Fletcher, 2003). Burton (2002) further explains that high
levels of acculturation enable minorities to become assimilated
whereby individuals become completely integrated into the host
culture.
The key to identifying and understanding ethnic minority
groups may lie in the degree of acculturation (Nwankwo and
Lindridge, 1998). Nwankwo and Lindridge (1998) develop this
argument by highlighting that acculturation has been presented in
the marketing literature as a potent segmentation variable largely
because it affects a variety of marketing behaviours including
consumption and buying patterns and media usage.
This presents a challenge for companies, especially when determining whether or not individuals from minority groups should be
targeted in different ways than the indigenous population and by
using different marketing strategies (Burton, 2002). Marketers
may need to segment their markets and develop communications
plans for consumers with varying levels of affiliation with their
ethnic heritage. Someone with a low level of ethnic identification
must be targeted differently than someone with a high level of
consumer identification because of their differing responses
(Palumbo and Teich, 2004).

Segmenting the UK ethnic market

Age distribution

As the population and purchasing power of ethnic minority


consumers in the UK continues to grow, understanding of the
importance of subcultural segmentation and targeted marketing to
reach these consumers is growing (Cui and Choudhury, 2002), and
Fletcher (2003) argues that new consumer segments can provide
fresh sources of top line growth with focused new product
development.
However, the ethnic market is often wrongly considered a single
homogeneous subculture, and therefore treated with a one size
fits all strategy, which is consistent with the Melting Pot Theory,
which suggests a process of acculturation, resulting from racial
and cultural contacts between ethnic minority groups and the host
society, eventually results in ethnic minorities becoming more
White-like, thereby melting into the larger host society (Kinra,
1997 in Lee et al., 2002). This provides a grave misconception,
given the variety of different races, cultures and subcultures that
form the UK ethnic population, where no broad-brush strategy to
address these groups as one entity is likely to be adequate, and
clear attempts are required to distinguish by geographical origin or
descent (Leach, 2001).

The 2001 Census indicates that the UKs minority groups have a
much younger age structure than the White population, which is a
clear reflection of migration and fertility patterns. Similarly, the
2006 Accession Monitoring Report also highlights the young age
of the vast majority of workers, 82% of whom are estimated to be
aged between 18 and 34 years.
Research has revealed that ethnic minority people in the age
group of 1634 years are among some of the most optimistic,
ambitious and materialistic people, compared with their White
counterparts (BITC Online, 2003). The younger generations (second and third generation) are brand-conscious, technologically
savvy and proud of their culture. With over 50% of the South
Asian community being under the age of 40 years, this alone
represents a strong consumer base, if targeted appropriately and
through the right media and supporting vehicles (Raheja, 2003).
Ellerton (2001), however, questions how relevant ethnicity is to
the way the under 18-year-olds interact with brands, stating they
dont necessarily want to be classified as Asian or Black they
want to be seen as young people. In general, ethnic minorities
could prove to be a lucrative market segment for some goods and

Traditional market segmentation

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169

Reaching the ethnic consumer market

L. Lamb et al.

services and in part compensate for the declining proportion of


young people within the indigenous population (Burton, 2002).

iour referents in extended family context (Nwankwo and Lindridge, 1998).

Geographical location

Consumption patterns and


product usage

In England, ethnic minority groups make up 9% of the total


population compared with only 3% in both Scotland and Wales
and 1% in Northern Ireland. The ethnic minority populations are
concentrated in large urban centres, with nearly half (45.7%) living in the London region, where they make up 29% of the local
population (IPA Online). In some areas of the UK, minorities are
rapidly becoming the majority population (Curtis, 2001). Two
boroughs of Britain have more Black and Asian people than White
people for the first time ever and nearly half (45%) of ethnic
minorities live in the London region, where they comprised 29%
of all the residents (2001 Census). The migration patterns
described in the 2006 Accession Monitoring Report, however,
appear to be much more diverse in nature.
This poses an important decision for companies wishing to
target the ethnic market: whether an ethnic marketing strategy
should be based upon such a widely geographically distributed
area (which may be unprofitable) or whether efforts should be
focused on the majority ethnic population within a small geographic area, for example, the Bangladeshi Community in
London (Lindridge, 2003 cited in Rugimbana and Nwankwo,
2003, p. 82).

Religion
The introduction of religion to the market segmentation discussion
can be found to be both an opportunity and a confusion, leaving
groups that were hitherto considered as a distinct market segment
concealing important in terms of religion-specific behaviour. For
example, Indians may be followers of Buddhism, Christianity,
Judaism, Jainism, Hinduism and Islam and each of these religions
have their own particular beliefs, rituals and values regarding a
variety of behaviours. Thus, religion poses an important consideration to the market segmentation of ethnic groups, but must be
approached with sensitivity (Lindridge, 2003 cited in Rugimbana
and Nwankwo, 2003).

Family structures and relations


The family structure favoured by different ethnic groups in the
UK varies. In the case of the new migrants, 93% of those
included within the Accession Monitoring Report (2006) stated
that they had no dependents living within the UK, in stark contrast to those established communities described in the 2001
Census. It is clearly important for companies to be aware of
these divergent trends because they have important implications
for advertising and promotional activities directed towards the
various ethnic groups. Unless companies are sensitive to divergences in household form, they could in fact alienate the very
segment that they are attempting to attract (Burton, 2002). Generational influences are also likely to interact with the process of
acculturation (Seligman, 2001). Companies wishing to engage in
ethnic marketing should be aware of the dynamics of buying
decisions, the focus of power and authority to initiate, influence
and/or execute marketing exchanges, and the wide area of behav170

Research by the Institute of Practitioners of Advertising (IPA)


reveals that British Asians, the countrys largest ethnic minority
group, are more technically adept than their White counterparts.
About 74% of British Asians have a mobile phone against a
national average of 69%; 57% have home Internet access compared with 47% of the whole population (IPA, 2004).
On the whole, ethnic minorities own a similar range of goods to
the White population (Burton, 2002). Pakistani and Bangladeshi
consumers have lower levels of ownership of freezers, tumble
driers and CD players than other groups. By contrast, Indians and
African Asians have higher levels of ownership of particular technological items such as microwaves, video recorders and home
computers (Burton, 2002). As well, ethnic minorities own more
mobiles than average for the UK population, use their mobiles
more and are heavier users of text messaging services (Carter,
2001). As Burton (2002) states,
these findings indicate that the stereotype of the penniless ethnic
minority consumer unable to afford a significant range of consumer durables or participate in the consumer society is simply
incorrect.
The Asian population are recognized as early adopters of
technology and are extremely brand-conscious (Considine, 2003).
Pursuit of status and conspicuous consumption are key traits of
this group, which presents a significant opportunity for brands
(Fletcher, 2003). Curtis (2001) states:
Marketers are missing a great opportunity because brands are
extremely important to ethnic minority consumers. When you
live in a society that questions your value, brands are a way of
demonstrating your worth through what you buy.

Marketing strategies
Increasing marketplace diversity and a realization that minority
ethnic groups might represent significant market segments has
motivated a number of companies to pursue ethnic consumer segments with targeted marketing. Recent development in this area
has brought into the spotlight the costs and benefits associated
with ethnic segmentation and differentiated marketing strategies
(Cui and Choudhury, 2002). Marketing theory suggests there are
four generic target marketing strategies from which to choose:
undifferentiated marketing, differentiated marketing, focused marketing and customized marketing (Kotler and Armstrong, 2001,
p. 216; Jobber, 2004). Yet, in terms of marketing to the ethnic
market, Dixon (2002) states:
With a rapidly changing marketplace, traditional marketing
strategies will no longer work. Merely tweaking a general
market approach to speak to a diverse customer base will not
only insult the customers you are trying to reach, but will be
ineffective, since this approach lacks cultural insight and
relevancy.
Within this context, Cui and Choudhury (2002) have developed
an approach based on three differentiated marketing strategies
organizations can utilize to reach the ethnic consumer market: a

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L. Lamb et al.

cross-cultural marketing strategy, a multicultural marketing strategy or an ethnic niche marketing strategy. The choice of which
strategy to use depends on the nature of the product and the
diversity of the market place. Nwankwo and Lindridge (1998)
maintain that ethnic marketing cannot be successful unless it is
strategically driven.
In the UK market place, a major challenge facing companies is
whether to standardize or customize their marketing strategies
across cultures. Another factor that companies should consider is
whether ethnically tailored programmes foster greater brand loyalty or whether any advantage is outweighed by the risks of misreading the target market and causing greater offence (Clegg,
1996). Clegg (1996) maintains ethnic marketing is a legitimate
tool but only as part of an overall marketing strategy, not if it is just
a cynical attempt to boost sales.
The costs associated with differentiated marketing strategies
are also a factor; many mainstream companies have been slow to
target the UKs burgeoning ethnic minorities and multicultural
communities in their marketing strategies (Khan, 2001), although
the competitive advantage can make sense of the extra expense
(Fletcher, 2003). Figure III illustrates the Nested Approach to
Market Segmentation which provides a framework for market
segmentation, in terms of costs and responsiveness (Chabria,
2003). Ethnic segmentation and differentiated marketing can be
cost-effective and make a significant contribution to a companys
growth, performance and competitive position (Cui and
Choudhury, 2002).

Market research
Research is the best place to start for any organization seriously
looking at developing a multicultural marketing strategy and
Chabria (2003) stresses that research is the key to any campaign,
but its vital to multicultural efforts. Unfortunately, however, ethnic data are extremely limited and there is very little conventional
industry research covering ethnic minority consumers, which
makes it hard for companies to plan campaigns with confidence
(Curtis, 2001; Seligman, 2001).
While doubts remain as to whether ethnic origin is a justifiable
targeting criterion for mainstream consumer products (Clegg,
1996), further research in this field and consultation with ethnic
minorities will be key to further understanding of this area. There
is also a potential distinction to be drawn between short-term and
medium-to-long-term benefit; as Leach (2001) argues, more
brands should undertake ethnic minority market research because
it offers a route map to how the UK will look and think in the
future (cited in Gray, 2004). Notably, in 2002 West Bromwich
Building Society conducted local research and subsequently
launched a mortgage specifically for Muslim consumers. They
also offered Punjabi language training for those already proficient
in an Asian language and branches were sent promotional material
in the predominant language of the local community (Gray, 2004).
Similarly, supermarket giant Tesco is currently targeting the growing Polish market in a number of stores (FT.com, 2006).
Notably, also, new migrant groups are very different both from
the average European and from distinct, established minority
ethnic communities. Marketing researchers and planners should
simply begin by understanding the culture and adapting their
marketing efforts to their varied cultures. Be it local, regional or

Reaching the ethnic consumer market

national marketing, market research should be the next step once


the culture is understood. Learning the needs, wants and demands
along with the composition of each immigrant population is what
will determine how the rich seam of the ethnic markets can be
effectively mined (Palumbo and Teich, 2004).

Reaching the ethnic market


With strong market research and an understanding of the target
market segments represented by minority ethnic communities in
the UK, a number of methods are likely to be useful in the development and implementation of a strategy by which consumers
may be targeted.

Advertising
Jobber (2004) defines advertising as any paid form of nonpersonal communication or ideas or products in the prime media,
i.e. television, press, posters, cinema and radio. Targeting advertising towards minority ethnic groups in the UK is an area where
considerable controversy has developed regarding the most appropriate approaches; Cozens (2003) has argued that advertisers
waste substantial amounts of money trying to reach ethnic minorities using campaigns featuring Black and Asian characters, which
are disliked and not generally successful. While the representation
of ethnic minorities has improved dramatically in the past decade,
advertisers are still failing to connect with Black and Asian communities (Cozens, 2003). Fletcher (2003) continues this theme,
maintaining that pressure on advertisers may mean that they pursue established strategies rather than trying to reach a new and
relatively hard-to-target group of consumers.
Kirna (1997) established product only advertisements might
well be the best answer to targeting ethnic as well as White
viewers as integrated advertising incorporating both ethnic and
White appeals in the same advertising copy format does not evoke
significantly more positive feelings among ethnic or White viewers in comparison with all ethnic copy which would be more
effective in targeting ethnic groups because it provides a cultural
framework with greater staying power in terms of its visual, nonverbal presentation. This view accords with that of Lee et al.
(2002) who discovered that using ethnic minority models raised
the attitudes and purchase intentions of the same ethnicity without
decreasing the attitudes and purchased intentions of the majority
ethnic group. A similar study also revealed that Black adolescents
identify more strongly with Black character advertisements, and
that White adolescents, despite their ethnic identity, find Black
character advertisements with varying degrees of Black cultural
cues as appealing as similar White character advertisements
(Appiah, 2001).
These findings clearly indicate that ethnic minorities respond
to advertisements which feature ethnic minority actors/models
and that White individuals find Black characters advertisement
as appealing as White character advertisement. Currently, 9% of
advertisements feature ethnic minorities and 11% in sole/major
positions (Fletcher, 2003) and it is suggested that varying the
ethnicity of the models featured in promotional materials to
improve rapport with target minority groups while retaining
position with the ethnic majority group is key (Lee et al.,
2002).

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Reaching the ethnic consumer market

they claim you have to find where your customers interests lie
and get to them (Curtis, 2001).

Ethnic media
Ethnic media is an increasingly powerful and necessary voice for
the diverse communities, and one that the target market listens to
(Considine, 2003). Raheja (2003) explains there is no doubt that
Asian and Black consumers are tuned into mainstream media,
but they are also reading, listening and watching targeted media,
which speaks to them within the social frameworks of their
culture.
The last 10 years have seen an enormous growth in ethnic
minority media, targeting not only first-generation communities
but also second and third generations. This suggests that the communities and younger generations, rather than fully integrating or
assimilating, have found a new identity for themselves that
combines the best of their cultures and heritage. With that new
found identity comes a need to create media that understands the
social and cultural compromises that have been made and can talk
to them in a language they understand and with a cultural empathy
that mainstream media may not be able to or want to (Media
Moguls cited in IPA Online, 2003).
Current estimates indicate that there are more than 200 titles,
60 television channels, 20 radio stations and various web sites
targeting ethnic audiences with more currently being developed.
Four reasons have been identified to account for the growth of
ethnic media in the UK: self-recognition for the audience, balanced images, ethnic communities feel proprietarily towards ethnic media as the true voice of the community and finally,
foreign language press adds a deeper level of specialist. One
example of a mainstream company utilizing ethnic media to promote their products and services is Western Union, the global
leader in money transfer and message services. Western Union
have targeted specific ethnic communities in the UK using titles
such as New Nation and Caribbean Times to reach the AfroCaribbean market, and stations such as Sunrise Radio and Zee
TV to reach the large UK Asian market. They believe by not
tapping into ethnic markets, companies are missing out on great
opportunities (Considine, 2003). Recently, however, local newspapers have begun to see the value and influence of the extended
ethnic community, notably the Reading Chronicle (Guardian,
2006).

Public relations/publicity
Sponsorship comes under the umbrella of publicity and public
relations. Marketing theory suggests there are five principal objectives of sponsorship including gaining publicity; creating entertainment opportunities; fostering favourable brand and company
associations; improving community relations and creating promotional opportunities (Jobber, 2004). However, sponsorship is
expensive in terms of time, money and people. To benefit fully, an
organization must clearly know what it is trying to achieve
(Adcock et al., 2001).
A number of mainstream brands have used sponsorship in order
to forge closer links with ethnic minorities. O2, the mobile phone
operator, became the first mainstream brand to sponsor the UKs
six largest Mela, providing direct access to 370 000 Asian people,
as well as many more who watched them on Asian media. Similarly, Coca-Cola have used sponsorship as a way of targeting their
ethnic consumers; by sponsoring a cricket project in Birmingham
172

L. Lamb et al.

Sales promotion
Baker (1999) defines sales promotion as marketing activities usually specific to a time period, place or customer group, which
encourages a direct response from consumers. Sales promotions
enhance image and provide a short sharp shock to sales (Jobber,
2004). Forms of sales promotion include: premium offers of all
kinds; reduced price and free offers; the distribution of vouchers,
coupons and samples; personality promotions; charity-linked promotions and prize promotions (Adcock et al., 2001).
A number of companies and brands have used sales promotion
as method of enticing the ethnic consumer market. In 2003, BT cut
their international calls to China, the Caribbean and the Indian
subcontinent (Hill, 2003). Tilda wanted to increase consumption
of its American long grain rice among first- and second-generation
Bangladeshis in the UK, who consume on average 45 kg of rice
per household per month. As part of their strategy, Tilda distributed 5-kg bags of rice within the Tower Hamlets area of London,
together with 2 off vouchers for the next purchase in order to gain
information about the target audience (Bhimjiani, 2001).

Conclusion
Greater understanding of minority ethnic consumers within the
UK has huge potential advantages to a wide variety of marketers,
working within organizations as diverse as businesses, consumer
support groups and the public sector. A number of factors suggest
that the ethnic minority market should be taken more seriously.
First, the ethnic market is growing; second, ethnic consumers are
estimated to spend in excess of 15 billion per year. Yet, UK
businesses it appears are way off pace when it comes to targeting
this crucial market.
When segmenting the ethnic market, it has been established that
a number of ethnically oriented variables should be considered as
well as the choice of effective marketing strategies.
A distinct marketing mix strategy is likely to be required, particularly in relation to the promotional mix and especially in terms
of advertising, which has received a large amount of attention in
recent years. Ethnic specialist media it seems makes targeting
easier, as this speaks to ethnic minorities within the social frameworks of their culture. A number of advertisers are using this
channel; however, others are being cautious because many titles
are not formally audited.
One reason so many companies have been slow to recognize the
opportunities for marketing to ethnic minorities is the lack of
market research. This study has presented a number of fields in
which further research is both necessary and overdue. Within
business it is commonly perceived that while the advantage of
using an ethnically driven strategy is competitive edge, the associated disadvantages would include higher costs. A useful initial
goal would be the development of research that clearly identifies
whether there are ways of adapting current marketing strategies to
take in more minority ethnic groups within mainstream marketing
campaigns, alongside work to consider specific marketing strategies for different minority groups. Ethnic minorities in the UK
present a huge untapped market potential and it is extremely

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L. Lamb et al.

important that companies understand the market, the potential


barriers and the strategies by which those barriers might be overcome (Considine, 2003).

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