LINKING GLOBAL MARKET SEGMENTATION DECISIONS

WITH STRATEGIC POSITIONING OPTIONS

Salah S. Hassan
School of Business, The George Washington University, Washington, DC, USA, and
Stephen H. Craft
Birmingham-Southern College, Birmingham, Alabama, USA

Submitted to:
Ms. Sunanda Sharma

Submitted by:
Group 4
Samikshya Bhandari (19304)
Yukta Gurung (19311)
Sanim Maharjan (19318)
Utshav Rayamajhi (19325)
Ritesh Shakya (19332)

May 28, 2019

Globalization is at its peak. In this regards, Hassan and Craft have explained the relationship
between positioning strategies and bases of segmentation in international markets. They have
described about the “proletarianization” of global markets where everyone everywhere wants to
have world brands. Therefore, there is existence of similar market segments and consumers in
different countries No one should expect single universal marketing strategy to be effective on a
worldwide basis. So, they thought that the existence of these intra-market segments might create
important opportunities and challenges for firms seeking to establish brand positions in multiple
markets.

Hassan and Craft on the bases for global market segmentation challenge the traditional concept
whereby segmentation efforts were based on macro considerations that included factors such as
economic, cultural, geographic and technological. So, they emphasize on the fact that these pre-
determined country bases are inadequate for segmentation when considered without behavioral
bases. Due to the current research they suggests a hybrid approach that considers both country
bases as well as buyer response bases is found to be more realistic, which segments the world
markets based on: similar purchase patterns exhibited in multiple countries and allowing
countries to belong to different clusters.

The hybrid system also known as integrated approach consists of major facets like integrating
country variables with behavior patterns, not assuming total homogeneity of the country segment
and acknowledging the existence of a degree of similarity across national boundaries and also
considering the base of segmentation to be dynamic in nature and lastly defining market
globalization as a matter of degree.

Hassan and Craft set this system in a 2*2 grid representing four generic strategies – focused,
geo-centric, optimized and localized. Each, taken in isolation, is valid for a given set of
circumstances. It is the task of a marketer to identify the specific circumstances for a particular
brand. Thus, the positioning of the brand becomes a vital element that has to link with the
identification of target market segments.

Hassan and Craft argue that strategic positioning decisions needs to be based on an
understanding of market segmentation. Therefore, four strategies are presented with an example
for each as; The Body Shop developed a uniform position for its cosmetic lines among
environmentally conscious consumers. This uniformed strategy helped the firm to leverage its
image internationally among consumers with similar attitudes and usage patterns, Miele (German
appliance manufacturer) are marketing identical products with different positioning appeals to
enhance global competitive advantage through supply-side economics. Similarly, Gillette use
geo-centric strategy by that provided a worldwide appeal based on stimulating primary market
demand for shaving through providing a host of products for different segments. And lastly,
Nestle use localization strategy for targeting different market segments with different strategic
positions.

The study identified various macro level segment bases and micro level segment bases, among
which three underlying macro level segmentation bases include macroeconomics, geo-
demographics, and macro-cultural factors. In addition, there appear to be four underlying micro-
level segment bases include demographics, attitude and usage, micro-culture, and brand loyalty.
The analysis showed that there is a clear relationship between the choice of positioning strategy
and the market segmentation bases. Whereby, regression analysis was used to examine the effect
of each of the segmentation bases on the different strategic positioning options used by
segmentation managers.

This study suggests four different approaches for global segmentation i.e. Identifying clusters of
countries that demand similar products, targeting different segments in different countries with
the same product, identifying segments present in many or most countries and lastly, focusing on
similar segments that demand similar products. Among these segmentation approaches, the two
diverse approaches have the merit of taking into consideration difference among countries & of
introducing adaptations to accommodate these differences or focusing their marketing offerings
to excel in a specific segment. But the last strategy could exhibit disadvantages of either high
cost of differentiation or limited economies of scale. Therefore, the hybrid approach (third) that
integrates country level and behavioral characteristics is viewed as the preferred segmentation
strategy.

The research study suggests that the inter market segmentation is identified and targeted through
the integration of macro and micro segment bases described in the framework. And the
implications of these inter market segmentation are: cost efficiencies, opportunities to transfer
products, brands, and ideas across subsidiaries in different countries or world regions, expansion
opportunities and development of more effective brand management decisions.
At last, the study suggests the combined use of both macro- and micro-bases (hybrid approach)
of segmentation in order to leverage similar strategic positioning across global markets. But, for
the differential positioning strategies, micro-bases of segmentation are suggested. Therefore, it is
vital that we understand them and appreciate how they can be used to extend product reach.
Effective segmentation methods ultimately must integrate country based factors with buyer
based variables. And also, many people may live in diverse regions characterized by very
different value systems, but similarities should dominate comparisons of segment members.