Global Marketing Management

Masaaki Kotabe & Kristiaan Helsen

Third Edition
John Wiley & Sons, Inc., 2004
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Management, Third Edition, 2004
 Chapter 7

Global Segmentation and

Positioning

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 Chapter Overview

1. Reasons for International Market

Segmentation
2. International Market Segmentation
Approaches
3. Segmentation Scenarios
4. Bases for Country Segmentation
5. International Positioning Strategies

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 Chapter Overview (contd.)

6. Global, Foreign, and Local Consumer

Culture Positioning
7. Appendix

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 Introduction
 Variation in customer needs is the primary motive
for market segmentation.
 Most companies will identify and target the most
attractive market segments that they can
effectively serve.
 In global marketing, market segmentation
becomes especially critical because of wide
divergence in cross-border consumer needs and
lifestyles.

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 Introduction (contd.)

 Once the management has chosen its target

segments, management needs to determine a
competitive positioning strategy for its products.

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 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 (contd.)
 Country Screening
 Global Market Research
 Entry Decisions
 Positioning Strategy
 Resource Allocation
 Marketing Mix Policy
– Balance between standardization and
customization

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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

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 2. International Market Segmentation
Approaches (contd.)
(e.g., per capita GNP) or on a set of multiple
socioeconomic, political, and 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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 3. Segmentation Scenarios

 Universal or global segments

 Regional segments
 Unique (diverse) segments

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 4. Bases for Country Segmentation

 Demographics
– Demographics 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

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 4. Bases for Country Segmentation
(contd.)
» Gray and Black Market sections of the
economy
» Income disparities
– Purchasing Power Parity (PPP) criteria
– Socioeconomic Strata (SES) Analysis
– Human development index (HDI) classification
 Behavior-Based Segmentation

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 4. Bases for Country Segmentation
(contd.)
 Lifestyles
– Global Values Segments; the survey investigated
1000 consumers in 35 countries (source: Robert
Starch Worldwide):
» Strivers (23 percent)
» Devouts (22 percent)
» Altruists (18 percent)
» Intimates (15 percent)
» Fun Seekers (12 percent)
» Creatives (10 percent)
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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 and the
competition.
3. Develop possible positioning themes.
4. Screen the positioning alternatives and select
the most appealing one.

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 5. International Positioning Strategies
(contd.)
5. Develop a marketing mix strategy.
6. Over time, monitor the effectiveness of your
positioning strategy and if needed, conduct an
audit.
 Uniform vs. Localized Positioning Strategies
 Universal Positioning Appeals
– Positioning themes:
» Specific product features/attributes
» Product benefit, solutions for problems
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 5. International Positioning Strategies
(contd.)
» User application
» Lifestyles

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6. Global, Foreign, and 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 techniques and 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.
– Regression Analysis: In regression, one
assumes that there exists a relationship between
a response variable, Y, and one or more so-
called predictor variables, X1, X2 and so on.
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 7. Appendix (contd.)

– 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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 Copyright © John Wiley & Sons, Inc. 2004

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