GLOBAL SEGMENTATION AND POSITIONING

Objectives

Discuss the international market segmentation Discuss the international market segmentation process.process.Analyse the various international market Analyse the various international market segmentation approaches.segmentation approaches.Describe the bases for country segmentation.Describe the bases for country segmentation.Understand the managerial implications of Understand the managerial implications of international positioning strategies.international positioning strategies.

1. Reasons for Global Market Segmentation

Country ScreeningCountry ScreeningGlobal Market ResearchGlobal Market ResearchEntry DecisionsEntry DecisionsPositioning StrategyPositioning StrategyMarketing Mix PolicyMarketing Mix Policy

Requirements for effective market segmentation

Measurable, Measurable, Sizable, Sizable, Accessible, Accessible, Actionable, Actionable, Competitive Intensity, Competitive Intensity, Growth PotentialGrowth Potential

Global segmentation process

1. Identify purpose 2. Select segmentation criteria 3. Collect relevant information4. Segment countries/consumers according to

criteria3. Re-evealuate the fit of the segment after

implementation of the intended program 4. Update/reassign segment membership

International Market Segmentation Approaches

Using a single Using a single dimensiondimensionUsing multiple criteriaUsing multiple criteria

Macro-level segmentation

Classifying countries Classifying countries into distinct segmentsinto distinct segments

Example: segmentation on the basis of quality of life

Cost of livingCost of livingEconomy Economy FreedomFreedomHealthHealthInfrastructureInfrastructureRecreation culture and entertainmentRecreation culture and entertainment

Micro-segmentation

1. Criteria development1. Criteria development2. Preliminary Screening2. Preliminary Screening3. Micro3. Micro--segmentationsegmentation

Different Segment ScenariosDifferent Segment Scenarios

3. Bases for Country Segmentation

DemographicsDemographicsGeographyGeographySocioeconomic VariablesSocioeconomic Variables

stages of economic developmentstages of economic development

3. Bases for Country Segmentation (cont)

caveats in using per capita incomecaveats in using per capita incomeMonetisationMonetisation of transactions within a of transactions within a countrycountryGray and Black Market sections of the Gray and Black Market sections of the countrycountryIncome disparitiesIncome disparities

3. Bases for Country Segmentation (cont)

CultureCulture1. Individualism 1. Individualism vsvs Collectivism (IND)Collectivism (IND)2. Power Distance (PD)2. Power Distance (PD)3. Uncertainty Avoidance (UA)3. Uncertainty Avoidance (UA)4. Masculinity 4. Masculinity -- Feminism (MA)Feminism (MA)

3. Bases for Country Segmentation (cont)

Political ConditionsPolitical Conditionsfree marketfree marketmixed marketmixed marketcentrally plannedcentrally planned

3. Bases for Country Segmentation (cont)

BehaviorBehavior--Based SegmentationBased Segmentationbrand loyaltybrand loyaltyusage rateusage ratepenetrationpenetrationbenefitsbenefits

Based on average sales per capita plus advertising (above average; average; below average)

3. Bases for Country Segmentation (cont)

LifeStyleLifeStylelooks at attitudes, opinions and valueslooks at attitudes, opinions and valuespopular in advertisingpopular in advertisingmany typologiesmany typologies

general /product specificgeneral /product specific

Example

Typology of the European Car Typology of the European Car MarketMarket

International Positioning Strategies

Positioning of beers

Premium quality

Popular price

Light

Heavy

Light

Heavy

Premium quality

Light

Heavy

Premium quality

5

1

6

3

2

4

7

Bud

Carling

Stella

Miller

Fosters

F

G

E

D

7

Possible problems in global positioning

Different maps (positions of brands)Different maps (positions of brands)Different competing brandsDifferent competing brandsDifferent evaluations of what, for example, Different evaluations of what, for example, constitutes premium quality or heavy beer constitutes premium quality or heavy beer Different dimension may be used to Different dimension may be used to evaluate the brand evaluate the brand Different definitions of the product categoryDifferent definitions of the product categoryDifferent segments across countriesDifferent segments across countries

EXAMPLE

Positioning of cars in USA and JapanPositioning of cars in USA and Japan

Global Positioning & Segmentation StrategiesGlobal Positioning & Segmentation Strategies

Competitive analysis

Objectives

How to define global competitive advantageHow to analyse global competition

Why the companies / industries of some countries are more

competitive than that of others?

The Competitive Advantage of Nations (the Diamond Model)

FactorConditions

Firm Strategy, Structure and Rivalry

Demand Conditions

Related &Supporting Industries

The Competitive Advantage of Nations (the Diamond Model)

FactorConditions

Firm Strategy, Structure and Rivalry

Demand Conditions

Related &Supporting Industries

Bases of a firm’s competitive advantage

M. Porter’s Five Forces Model

Industry Competitors

Intensity of Rivalry

Threat ofNew Entrants

BargainingPower of Buyers

BargainingPower of Suppliers

Threat of Substitutes