Major Problem/Opportunity
How Can We Use Our Knowledge on Segmentation and Positioning
in Developing an Effective Global Marketing Strategy?
These are key concepts in marketing

Segmentation and Positioning
Segmentation - grouping customers, regions, countries in a meaningful way - we use criteria called “bases” for segmentation
Segmentation is important in developing a focused market approach with economical use of resources

Positioning- how is your product, brand, company perceived in comparison to those of your competitors? E.g. quality brand, value brand, traditional company with local roots

How has Kellogg’s grouped customers, regions, countries in a meaningful way
    - we use criteria called “bases” for segmentation
What do customers is certain areas need?  Are their needs different?
Are their ways of meeting the same need different from our company’s traditional way of meeting those needs?

How is your product, brand, company perceived in comparison to those of your competitors?
How are Chocolate Brands perceived around the world?  What is a high quality chocolate?
Condensed vs. Dry soups? (Campbell vs. Knorr)

Reasons for Global Market Segmentation
Properties:  Measurable, Sizable, Accessible, Actionable, Competitive Intensity, Growth Potential

Suppose that we had a product that could meet the needs of consumers having lower standards of living
    - perhaps a food product or simple home appliance

Suppose that we specialize in products for the elderly?  What are life expectancies in various countries?

Country Screening
Go pile vs. No-go pile
We try to identify constructs and items that are meaningful indicators

AGE: Elderly: what is life expectancy
AGE: Children’s market:  infant mortality rate
EDUCATION:  Reading/computer products: literacy rate

How can we obtain such information?
Use UN Infonation site - gives segmentation info

Existing Secondary Research can Provide Clues
Global Market Research are there studies that can give you some insight? Your text gives several illustrations
Entry Decisions*  - may complicate your segmentation ideas - suppose that there are restrictions or demands made by your destination country
Marketing Mix Policy
Exhibit 7-1 “Think” and “Feel” Country Clusters

Segmentation by Country Approaches
Exhibit 7-2 Macro-Level Country Approaches - pick one key criterion across countries
Exhibit Two- and Three- Segment Solutions
Exhibit 7-4 Different Segment Scenarios - segments within countries

What about Cross-Border Segments?
    E.g families with young children throughout South America
    - market for Gerber baby foods

Target Market Strategies
Universal Segment - there are elderly in every country - what does it mean to be elderly? What is the life expectancy in Country X?  Are the elderly active in society? Are they cared for by social institutions?
Diverse Segment - different needs in different countries, mothers in US need convenience of formula
vs. mothers in LDCs need nutrition in formula, HIV
Mixture of Universal and Diverse Segments; all mothers need to feed their babies
LDC mothers live with malnutrition
China’s Three Generations
Asian Values - E.g. Jetro study

Bases for Country Segmentation
Demographics - objective and measurable charaacteristics of a group

Socioeconomic Variables
Rostow’s Basic stages of economic development
1. Traditional Societies
2. Preconditions for take-off
3. The take off
4. The drive to maturity
5. High mass-consumption
Be careful since many countries do not fit into these categories as neatly as defined:  e.g. NICs

Caveats in using per capita income
Monetization of transactions within a country - what does the currency actually buy? Are goods also traded?
Gray and Black Market sections of the country/ “Dual economy” - look at South Africa
Income disparities
Exhibit 7-6 Latin-American Markets: Many Latin Households have Lots of Spending Money

More Bases for Country Segmentation
1. Individualism vs Collectivism (IND)
2. Power Distance (PD) how are inequalities handled?
3. Uncertainty Avoidance (UA)
4. Masculinity - Feminism (MA)

Can these cultural characteristics be related to products? To advertising strategies?
E.g. Suppose we are developing software products for collectivist cultures - would our ads stress achievement?

Even More Bases for Country Segmentation
Behavior-Based Segmentation:  what are they looking for in a product? What products are desired in each country?  What are necessities? What are luxuries?  What activities do people value?  E.g. small appliances, detergents which clean plus are environmentally safe
Life Style Segmentation - What are the activities, interests, and opinions? Psychographic method?  Is environmentalism important?  How are products related to lifestyles and values?
What else do people do who could use your product?

Country Segmentation Tools

Issues in International Market Segmentation
Technical Issues
Poor Quality Data - recency, accuracy, bias?
“Noisy” Variables
Presence of Outliers
Managerial Issues
Stability of Segments Over Time
Managerial Usefulness

International Positioning Strategies
Global Positioning and Segmentation Strategies

1. Keep things simple.
2. Consider several levels of aggregation, not just one.
3. Two ways to fine tune an existing segmentation scheme.
4. Pursue “creative” ways to segment your market.

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