Global Marketing Management A European Perspective Global Segmentation

Global Marketing Management A European Perspective Global Segmentation, Targeting and Positioning Warren J. Keegan Bodo B. Schlegelmilch

Overview z Global Market Segmentation ycriteria: geographic, demographic, psychographic, behaviour, and benefit segmentation z Global Targeting z Selecting a Global Target Market Strategy z Global Product Positioning y. High-Tech or High-Touch Positioning z Summary Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 7 / 2

Learning Objectives z To understand the objectives and usefulness of global market segmentation z To know the approaches to global market segmentation using different segmentation criteria to define target groups z To learn different ways of positioning products in global markets Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 7 / 3

Global Market Segmentation. . . is the process of dividing the world market into distinct subsets of customers that have similar needs (eg country groups or individual interest groups). Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 7 / 4

Criteria for Global Market Segmentation z Geographic segmentation ygeographic subsets z Demographic segmentation yeg age, gender, income, occupation z Psychographic segmentation z Behaviour segmentation z Benefit segmentation Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 7 / 5

Psychographic Segmentation z. . . is based on attitudes, values and lifestyle z. . . is measured through extensive item batteries which cover activities, interests and opinions (AIO -studies) z lifestyle surveys, eg by ythe Research Institute of Social Change (RISC) ythe Centre de Communication Avancé (CCA) and ythe Values and Life Styles (VALS) by SRI International Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 7 / 6

Psychographic Profiles of Porsche’s American Customers Category % of all owners Top Guns 27% Elitists 24% Proud Patrons 23% Bon Vivants 17% Fantasists 9% Description Driven and ambitious; care about power and control; expect to be noticed Old money; a car—even an expensive one—is just a car, not an extension of one’s personality Ownership is what counts; a car is a trophy, a reward for working hard; being noticed doesn’t matter Cosmopolitan jet setters and thrill seekers; car heightens excitement Car represents a form of escape; don’t care about impressing others; may even feel guilty about owning car Source: ALEX III Taylor, „Porsche Slices up its Buyers“, Fortune, 16 January 1995, p. 24 Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 7 / 7

Backer Spielvogel & Bates’ Global Scan (BSB Global Scan ) z. . . encompasses 18 countries, mostly in the Triad z The researchers studied yconsumer attitudes and values, ymedia viewership/readership, ybuying patterns, yproduct use. z 5 global psychographic segments represent 95% of the adult populations in the countries surveyed. Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 7 / 8

The Target Groups of BSB’s Global Scan Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 7 / 9

D’arcy Massius Benton & Bowles’ Euroconsumer Study z. . . focuses on Europe z. . . identified four lifestyle groups: y. The first two groups represent the elite, ythe latter two mainstream European consumers. · · Successful idealists Affluent materialists Comfortable belongers Disaffected survivors Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 7 / 10

Europanel’s Eurostyles Source: adapted from Josef Mazanec, “Exporting Eurostyles to the USA, ” International Journal of Contemporary Hospitality Management, 5, 4 (1993): p. 4 Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 7 / 11

Behaviour and Benefit Segmentation z Behaviour segmentation Focus on whether and how much people buy or use a product; eg usage rates: heavy , medium, and light users, and nonusers eg user status: potential users, nonusers, ex-users, regulars, first timers, and users of competitors’ products z Benefit segmentation Today, consumers basic needs are fulfilled. Therefore, consumers seek additional value from purchase decisions; eg cars: in addition to movement buyers seek personal safety, image, superior engine power (speed) etc. Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 7 / 12

Global Targeting After markets have been segmented, targeting aims at evaluating and comparing the indentified segments in order to select one or more as prospect(s) with the highest potential. Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 7 / 13

Criteria for Targeting As in single-country targeting, the most important criteria are: z Current size of the segment and anticipated growth potential z Competitive intensity and potential competition z Compatibility with the company’s overall objectives and the feasibility of successfully reaching a designated target Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 7 / 14

Selecting a Global Target Market Strategy z standardised global marketing yi. e. mass marketing, the same marketing mix for a broad market of potential buyers; e. g. Revlon z concentrated global marketing ytargeted at a single segment of the global market, e. g. Winterhalter (German dishwashers for hotels) z differentiated global marketing y 2 or more different segments; e. g. VW (cars for various target groups: Porsche, Skoda, VW Golf etc. ) Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 7 / 15

Global Product Positioning z is the location of a product in the mind of the consumer z is partly controlled by the marketer (marketing mix) and partly not! z is visualised by a “positioning map” y 2 dimensions yor multidimensional (MDS) Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 7 / 16

Positioning Map of American Fast-Food. Restaurants in the Mind of Consumers Source: adapted from James H. Myers, Segmentation and Positioning for Strategic Marketing Decisions (American Marketing Association, Chicago, 1996), S. 187 Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 7 / 17

High-Tech Positioning z Positioning stragtegy for products which are purchased on concrete product features; buyers typically already possess or wish to acquire considerable technical information z Suitable for ytechnical products, such as computers or chemicals, yspecial-interest products, such as sporting goods, yproducts that can be demonstrated easily. ; eg polaroid cameras Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 7 / 18

High-Touch Positioning z The emphasis lies more on the product’s image; specialised information appears of minor relevance z Suitable for yproducts that solve a common problem; e. g. , soft drinks yglobal village products, such as cosmetics or fashion yproducts that use universal themes; e. g. „heroism“ in Levis ads (jeans) Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 7 / 19

Summary z Before a company expands to foreign markets it must analyse the global environment. z Global market segmentation aims at identifying similarities and differences of potential customers. z Global targeting: The market segments are evaluated and compared an appropriate targeting strategy is developed. z To reach the targeted market segment(s) a positioning strategy must be chosen; in a global context high-tech or high-touch positioning are promising. Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 7 / 20