INTERNATIONAL MARKET

SEGMENTATION

BY GROUP 3 – MARKETING
KAUSTUBH DEKATE - 201116
RAMESH DAWATE - 201115
SNEHA GHAGRE - 201129
NUPUR AGRAWAL - 201102
KALPESH BHOIR - 201108
SAGAR KEDARE - 201145
SHANKAR KEDARE - 201146
SMITA PATIL - 201173
 Market Segmentation
• Dividing a market into distinct groups with
distinct needs, characteristics, or behavior who
might require
separate products or marketing mixes.
• Basis of Segmentation:
• Geographic Segmentation
• Demographic Segmentation
• Psychographic Segmentation
• Behavioral Segmentation
 International Segmentation
Before implementing a global market
segmentation strategy, it’s critical to
understand both local and global issues.
The process of identifying countries and/or
consumers that are similar with regard to
key traits, such as product-related needs
and wants, that would respond well to a
product and related marketing mix.

MUST BE performed at country level AND

at consumer level.
 Critical Equivalencies while
Segmenting International Markets
 Critical Equivalencies while Segmenting
International Markets, continued

1. Construct Equivalence
– Whether the segmentation basis has the same meaning
and is expressed similarly in different countries and
cultures.
• Example: Bicycles in the U.S. are classified under the recreation-
sports industry, whereas in
India and China they are considered a
means of transportation.
Critical Equivalencies while Segmenting
International Markets, continued
2. Scalar Equivalence
– Results from marketing
research should have the
same meaning and
interpretation in different
countries.
• Example: The U.S.
generally uses a 5 or 7
point scale while in France
the most common scale is a
20-point scale.
 Critical Equivalencies while Segmenting
International Markets, continued
3. Measurement Equivalence
– Whether the measures used to
operationalize the segment are
comparable across countries.
• Example: Household income is
difficult to compare across countries
due to differences in tax structure and
the purchasing power.
 Critical Equivalencies while Segmenting
International Markets, continued
4. Sampling Equivalence
– Identifies comparable populations and selects
samples that are representative of other populations
and comparable across countries.
• Example: In the U.S., office supplies are often purchased by
secretaries, while in many
other countries this decision is made by
a middle-level manager or CEO.
 Requirements for Effective
International Segmentation

• Measurability
• Size
• Stability over time
• Accessibility
• Actionability
• Competitive intensity
• Growth potential
 International market segmentation
• International market segmentation
emphasizes four activities:
– Cost efficiencies
– Opportunities to transfer products, ideas, etc.
– Emergence of global customers
– Better links between national marketing
infrastructures
 Implementing International Market
Segmentation
• Six step process
1. Identify the purpose.
2. Select segmentation criteria.
3. Collect relevant information.
4. Segment the countries/consumers according to
criteria.
5. Reevaluate the fit of the segment after
implementation of the intended program.
6. Update/reassign segment membership.
 International Macro-Segmentation

• Market potential – indicators:

 Gross domestic product (GDP) per capita
 Industrial and agricultural sector statistics
 Market size and potential
 Consumer buying power
 Investment figures (FDI, other trade statistics)
 International Macro-Segmentation,
continued
• Political, legal and financial environment of
country
 Ethnic conflict
 History of war engagement
 Antiforeigner sentiment
 Recent nationalization activities
 Legal ambiguity
 Trade barriers
 Exchange rate controls
 International Macro-Segmentation,
continued
• Marketing support infrastructure
 Availability and reliability of distribution and logistics
providers
 Availability of competent partners for strategic
alliances
 Quality of telecommunication and transportation
infrastructure
 Availability of other service providers:
- Marketing research firms
- Financial firms
- Management consulting firms…
 International Macro-Segmentation,
continued

• Strength of brand – brand franchise

• Degree of market fit with company
policies, goals, and resources
 Micro-Segmentation
• Basis for Segmentation
 Demographic
- Age
- Occupation
- Education
- Income
- Ethnicity
- Race
- Nationality
- Life-cycle stage
- Social class
- Urbanization
Micro-Segmentation, continued
• Basis for Segmentation
 Psychographic: lifestyles, values, attitudes, interests,
opinions
- Hofstede dimensions:
• Power-distance
• Masculinity-femininity
• Uncertainty avoidance
• Individualism-collectivism
- Global segments:
• Global teenagers
• Global elite
 Benefit Segmentation
 Geographic
Micro-Segmentation, continued
• Basis for Segmentation
 Usage
- Nonusers
- Occasional users
- Medium users
- Heavy users
 User Status
- User of competitors’ products
- Ex-users
- Potential users
- First-time users
- Regular users
 Country Screening and Selection

• Assign importance score to each country

screening criteria
• Evaluate country performance on each of
the screening criteria
• Calculate country attractiveness score
 Think Globally, Act Locally
• Segmentation allows international marketers to take
advantage of standardization while addressing the needs
and expectations of a specific target group.
• To be successful, International Market Segmentation
needs to achieve a balance between the local and global
concerns of the customers.