International Marketing – Session 4 (International Segmentation, Positioning & Branding)

The Segmentation – Targeting – Positioning Process

International Market Segmentation

Components of a market segment

 It must be identifiable
 It must be economically reachable
 It is more homogeneous in its characteristics than the market as a whole
 It is large enough to be profitable

Advantages of segmentation

 Firms can offer products which better meet the needs of the identified group
 Increase brand equity and loyalty
 Decrease marketing expenditure by creating segment specific marketing plans

Global market segmentation: Identifying specific segments, with homogenous attributes who
are likely to respond to a company’s product/brand in a similar manner

In international marketing:
 Firms are faced with multiple contexts and diverse consumer bases
 Groups which display similar behaviour or characteristics may be prevalent
across multiple countries

Criteria in identifying effective segments

 Measurability
 Accessibility
 Substantiality
 Actionability

Issues related to the implementation of market segmentation

 Difficulties in measuring proceeds
 Difficulties in identifying segments
 Contraction in sales volume stemming from specialised focus on a segment

Markets are more dynamic in parallel consumer need and preferences continually change, this
causes inconsistencies in segmentation
Segments structure and content is influenced by:
• Changes in customer behaviour and needs
 International Marketing – Session 4 (International Segmentation, Positioning & Branding)

The Factors Influencing International Segmentation

Demographic Segmentation: A company may segment
on the basis of income and focus on the global elite,
defining the target segment as affluent customers who
have the means to spend money on exclusive products.
Examples: Louis Vuitton bags, ipads and Porsche cars.
Example: female customers

Aged Based Segmentation

Observed in products focused on children's formula
products; Appeal to teens…MTV and Diesel.
Use characteristics of global youth…music preferences,
style or clothing help global segmentation

Demographic segmentation requires careful marketing (example)

Psychographic Segmentation- Social class, lifestyle, personality.

Behavioural Segmentation- Identifying segments on the basis of a consumer’s relation to a

given product.
• Which consumers buy the product?
• Why they need the product?
• How often the use it?
• Which benefits they value?
• What is the consumers approach to different brands and their loyalty to brands should
also be considered?
Examples

• What’s important?
• Examine buyer readiness in behavioural seg.
• If consumers lack information or knowledge, marketing needs to be geared towards
providing that information and education.

Market Targeting

When a company does business in more than one country there are 3 approaches to the
market. Target markets can be identified as:
• All consumers within the borders of a country
• Different segments in each country market – group of customers who are most suitable
for their product/brand and then adopt their strategies to that groups behaviour.
• Global market segments- all consumers with the same needs/wants in groups of
country market.

Market targeting- growth potential and stability and present size of market segment.
• International targeting- cultural influences, institutional structures and regulations in
different markets.
• Can help decide the adaptations that need to be made and whether they are justifiable
and financially feasible.
 International Marketing – Session 4 (International Segmentation, Positioning & Branding)

• What about the industry conditions? Competitors within the segment?

The Basis of International Marketing Targeting

Examples

Positioning refers to a firm’s strategy in creating a unique perception of their product in the
customers minds.

 To be effective, a firm’s positioning strategy must be meaningful to the consumers

 The firm must enforce its position over time, emphasising its main message
 Firms need to be careful in communicating the position clearly
 Mismatch between positioning and actual product or consumer perception can be
disastrous

To make positioning decisions, firms:

 Identify the existing offerings to different segments within the market

 Distinguish their own competitive advantages which can enable them to create a
position in the market

Product positioning - Tailoring the marketing elements to meet the needs of the consumer
segment that the company has decided to target

Perceptual Maps Positioning for Different Cars

 Perceptual maps showing positioning for different cars.

 In making decisions on product positioning, perceptual maps can be useful.
 Designed to display consumers opinions on competing products.
 Help to identify areas with less competition and highlight opportunities in a given
market.
 May also help to identify the consumer criteria for decision making for given products.
 International Marketing – Session 4 (International Segmentation, Positioning & Branding)

 Marketers can then emphasise the attributes of the product which are valued by the
consumers.

Examples

Example Renault

International Positioning Strategies

In international positioning decisions firm need to examine, whether:

 The same product attributes are valued across cultures

 The product or the brand is perceived in the same manner
 The competitive structure differs

In international positioning, marketers need to decide:

 Whether they will use a uniform positioning strategy or to what extent

they will modify the positioning strategy for different markets

Relevant considerations

 Identification of determinants of competitive advantage

 Construction of generalisable and effective positioning strategies
 Influence of country and entry-mode selection on positioning decisions

Categories of positioning strategies

 Local consumer-culture positioning- Product/Brand associated with local cultural

values
 Foreign consumer-culture positioning-Product/Brand associated with a firms
culture. National origin of product is highlighted. Budweiser's use of small American
towns in their marketing. What about Perfume and cosmetics association with
France?
 Global consumer-culture positioning-relevance of a firm to a global culture or
segment is emphasised for products that are influenced by globalisation. May not
always be effective.