global marketing management, 5e chapter 7copyright (c) 2009 john wiley & sons, inc. 1 chapter 7...

Global Marketing Management, 5e

Chapter 7Copyright (c) 2009 John Wiley & Sons, Inc.

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Chapter 7

Global Segmentation and Positioning

Chapter Overview

1. Reasons for International Market Segmentation2. International Market Segmentation Approaches3. Segmentation Scenarios4. Bases for Country Segmentation5. International Positioning Strategies6. Global, Foreign, and Local Consumer Culture

PositioningAppendix


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Introduction

Variation in customer needs is the primary motive for market segmentation.

Most companies will identify and target the most attractive market segments that they can effectively serve.

In global marketing, market segmentation becomes especially critical because of wide divergence in cross-border consumer needs and lifestyles.

Once the management has chosen its target segments, management needs to determine a competitive positioning strategy for its products.


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1. Reasons for International Market Segmentation

Segments ideally should possess the following set of properties: Identifiable Sizable Accessible Stable Responsive Actionable


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1. Reasons for International Market Segmentation

Country Screening Global Market Research Entry Decisions Positioning Strategy Resource Allocation (Exhibit 7-1) Marketing Mix Policy

Balance between standardization and customization


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Exhibit 7-1: Market Clustering Approach for Instant Coffee

2. International Market Segmentation Approaches International segmentation procedures:

Country-as-segments or aggregate segmentation(See Exhibits 7-2 and 7-3.)

Disaggregate international consumer segmentation

Two-stage international segmentation Standard country segmentation classifies prospect

countries on a single dimension (e.g., per capita GNP) or on multiple dimensions—cultural, socioeconomic, and political criteria available from secondary data sources.

For numerous country traits, use data reduction such as factor analysis.


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Exhibit 7-2: Nestlé’s Geographic Segmentation of the Americas


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Exhibit 7-3: Macro-Level Country Characteristics

3. Segmentation Scenarios

Universal or global segments Regional segments Unique (diverse) segments


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Exhibit 7-4: Different Segment Scenarios


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4. Bases for Country Segmentation

Demographics Demographic variables are among the most

popular criteria (Exhibit 7-5). Socioeconomic Variables

Caveats in using per capita income as an economic development indicator: Monetization of transactions within a country Gray and Black Market sections of the economy Income disparities

Purchasing Power Parity (PPP) criteria Human development index (HDI) classification Socioeconomic Strata (SES) Analysis (Exhibit 7-

6)


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Exhibit 7-5: Six Types of Chinese Pre-Elders


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Exhibit 7-6: Market Development and Brand Building


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4. Bases for Country Segmentation

Behavior-based segmentation (Exhibit 7-7) Brand loyalty Usage rate Product penetration Benefits


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Exhibit 7-7: Benefit Segments of Toothpaste Market in the U.S.A., China, and Mexico

4. Bases for Country Segmentation Lifestyles

Roper Consulting’s Valuescope Model. 30,000 interviews around the world.AchieversTraditionalsSurvivorsNurturersHedonistsSocial-RationalsSelf-Directeds


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5. International Positioning Strategies The formulation of a positioning strategy (local

or global) includes the following steps:1. Identify the relevant set of competing products or brands.2. Determine current perceptions held by consumers about your product/brand and the competition.3. Develop possible positioning themes.4. Screen the positioning alternatives and select the most appealing one.5. Develop a marketing mix strategy.6. Over time, monitor the effectiveness of your positioning strategy and if needed, conduct an audit.


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5. International Positioning Strategies

Uniform versus Localized Positioning Strategies

Universal Positioning Appeals Positioning themes:

Specific product features/attributes Product benefit, solutions for problems user category user application heritage lifestyle


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Exhibit 7-9: Global Positioning and Segmentation Strategies


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6. Global, Foreign, and Local Consumer Culture Positioning

Global consumer culture positioning (GCCP) Brand as a symbol of a given global consumer

culture Local consumer culture positioning

(LCCP) Brand as an intrinsic part of the local culture.

Foreign consumer culture positioning (FCCP) Brand mystique built around a specific foreign

cultureChapter 7Copyright (c) 2009 John Wiley & Sons, Inc.

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Exhibit 7-10: McDonald’s Promoting Its Local Community Support in New Zealand

Appendix: Segmentation Tools

Segmentation techniques and tools:

Cluster Analysis: Collection of statistical procedures for dividing objects into groups (clusters). The grouping is done in such a manner that members belonging to the same group are very similar to one another but quite distinct from members of other groups.


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Appendix: Segmentation Tools

Regression Analysis: In regression, one assumes that there exists a relationship between a response variable, Y, and one or more so-called predictor variables, X1, X2 and so on.

For each of the parameter estimates, the regression analysis will also produce standard error.

The higher the R2 value, the better the ability of the regression model to predict the data. (See Exhibits 7-11 through 7-13.)


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Exhibit 7-11: Principles of Cluster Analysis

Exhibit 7-12: Plot of Concentration versus Category Growth Chocolate Market


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Exhibit 7-13: Cluster Analysis


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global marketing management, 5e chapter 7copyright (c) 2009 john wiley & sons, inc. 1 chapter 7...

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