International Marketing & Operations

Global Segmentation & Positioning

Sandy De Mel (Mainly From Kotabe & Helsen)
Adapted by Tariku Atomsa (PhD)
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Lesson Overview
Reasons for International Market Segmentation
International Market Segmentation Approaches
Segmentation Scenarios
Bases for Country Segmentation
International Positioning Strategies
Global, Foreign & Local Consumer Culture
Positioning
Appendix Segmentation Tools
Question: Explain market segmentation & positioning?

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Introduction
Variation in customer needs is the primary motive for
market segmentation.
Most companies will identify & target the most attractive
market segments that they can effectively serve.
In global marketing, market segmentation becomes
especially critical because of wide divergence in crossborder consumer needs & lifestyles.
Once the management has chosen its target segments,
it needs to determine a competitive positioning
strategy for its products

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
The process of market segmentation
Country Screening
Global Market Research
Entry Decisions
Positioning Strategy
Resource Allocation
Marketing Mix Policy
Balance b/n standardization & customization
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1. Reasons for International Market

Segmentation

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1. Reasons for International Market

Segmentation

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2. International Market Segmentation

Approaches

International segmentation procedures:

Country-ad-segments or aggregate segmentation
Disaggregate international consumer segmentation
Two-stage international segmentation
The standard country segmentation procedure
classifies prospect countries on a:
single dimension (e.g., per capita GNP) or
set of multiple socio-economic, political &
cultural criteria available from secondary data
sources.
When there are numerous country traits, use smaller
set of dimensions using data reduction techniques such
as factor analysis.
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2. International Market Segmentation

Approaches

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3. Segmentation Scenarios

Universal or global segments

Regional segments
Unique (diverse) segments

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4. Bases for Country Segmentation

Demographics
Demographic variables are among the most
popular criteria.
Socioeconomic Variables
Caveats in using per capita income as an
economic development indicator :
Monetization of transactions within a country
Gray & Black Market sections of the economy
Income disparities
Purchasing Power Parity (PPP) criteria
Socioeconomic Strata (SES) Analysis
Human development index (HDI)
classification
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4. Bases for Country Segmentation

Purchasing Power Parity (PPP)
PPP is one of the most fundamental determinants of
the exchange rate .
Formula for PPP:
(1 + Infl. Britain)
Rt = R0 * _____________
(1 + Infl. U.S.)
Where
R=
the exchange rate quoted in a
currency
Infl. = Inflation rate
t=
time period
The Economist publishes a PPP study (Big Mac Index)
every year based on McDonalds Big Mac hamburger
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4. Bases for Country Segmentation

Behavior-Based Segmentation
Lifestyles
Global Values Segments the survey
investigated 1000 consumers in 35 countries
(source: Robert Starch Worldwide):
Strivers (23 percent)
Devotes (22 percent)
Altruists (18 percent)
Intimates (15 percent)
Fun Seekers (12 percent)
Creatives (10 percent)
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4. Bases for Country Segmentation

Strivers are:
trendy & fun loving
motivated by achievement
concerned about the opinions & approval of others
Devotes are those who express devotion
Altruists are those who choose to align their wellbeing with others

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4. Bases for Country Segmentation

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4. Bases for Country Segmentation

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4. Bases for Country Segmentation

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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 ) & the competition.
3. Develop possible positioning themes.
4. Screen the positioning alternatives & select the
most appealing one.
5. Develop a marketing mix strategy.
6. Over time, monitor the effectiveness of your
positioning strategy & if needed, conduct an audit.

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5. International Positioning
Strategies

Uniform vs. 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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5. International Positioning
Strategies

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6. Global, Foreign & 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

culture.
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7. Appendix: Segmentation Tools

Segmentation techniques & 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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7. Appendix: Segmentation Tools

Regression Analysis:
In regression, one assumes that there exists a
r/ship b/n a response variable (Y) & one or
more so-called predictor variables (X1, X2, )
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.
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7. Appendix: Segmentation Tools

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7. Appendix: Segmentation Tools

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7. Appendix: Segmentation Tools

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7. Appendix: Segmentation Tools

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