Download Market Segmentation, Positioning

UNIT 3 - GLOBAL SEGMENTATION AND POSITIONING
STRATEGIES
A.
Introduction
S-T-P Framework: segmentation-targeting-positioning
Segmentation: identify possible segmentation variables (demographics, lifestyle, buying
behavior)
Targeting: decide which segment(s) to select
Positioning: decide what image to invoke and call for development of a marketing mix strategy
B.
Standardization vs. adaptation
Standardization:
+

lower prices - economies of scale in manufacturing, distribution and promotion costs

fund new product development programs to enhance competitive position

transfer of know-how and best practices

develop a global corporate and brand image

savings on global communication campaigns

lower prices that ‘trade-off’ cultural influences will foster the development of
globalization of markets

easier to coordinate and control the international operations via uniform standards
Adaptation

Differences in customers patterns and buying behavior

Differences in competitive environment

Differences in Government relations and standard

Media and distribution channels varies
Need product modification: diff. customer preference; diff. usage conditions; diff. standards
and regulations; linguistic difference and calibration systems.
Adjustment in communication strategy: diff. in media infrastructure; variations in reach,
media availability, media regulations or costs

The question is NOT whether or not to standardize, is the matter of DEGREE

Need the balance off the benefits of “degree of modification” vs. the “adaptation costs”

Standardization or customization are not mutually exclusive strategies –
middle-of-the-road approach
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C.
Reasons for international market segmentation
Customers differ in their needs, wants, preferences, perceptions and/or buying attitudes
Most companies will segment their market and pick the segment that look most

attractive
6 Principles from perspective of international marketer:
1. Measurable :
lack of reliable, accurate info.
2. Sizeable :
segment is consolidated across countries, become large enough
3. Accessible :
media and distribution infrastructure
4. Actionable
5. Differentiable
6. Competition :
if have been pre-empted by competition in one country
might still be up for grabs in other countries
D.
International market segmentation approaches
1.
Marco-level
 Based on buyer behavior: buying power, education, lifestyle, demographics etc.
 Rarely useful for international marketers : not clear which variables to include /
ignore
 Unstable grouping : diff. groupings as a result of diff. variables included
2.
Criteria development – preliminary screening – micro-segmentation
 Set criteria, thresholds on certain variables, examine the countries by screening the
thresholds, then do micro-segmentation
 Focus on consumers in individual countries, know the commonalities and dissimilarities
across countries
International market segmentation scenarios
Universal segments

Segments transcend national boundaries

Global teenager, global elites and ethnic groups
Regional segments

Similarity in customer needs and preferences arise at regional level

Need to decide the extent you want to differentiate your marketing mix strategies:

Undifferentiated marketing strategy - economies of scale, suit high-tech companies

tailor-made marketing strategies - cope with minor variations in local market
conditions
Diverse segments
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
substantial gaps in customers needs between countries – hard to derive cross-border
segments

need to be localized

e.g. food industry : intrinsic taste preferences
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E.
Bases for global market segmentation
Major segmentation variables:

Demographics: teenagers – a global customer group

Socioeconomic variables

Lifestyle and behavior-based variables
F.
Global positioning strategies
Kotler - positioning : ‘act of designing the company’s offer and image so that it occupies a
distinct and valued place in the target customer’s minds’
Global marketer – what extent a uniform positioning strategy could be used
Uniform positioning strategy : target customer are very similar in shared values and buying
patterns worldwide
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