GLOBAL SEGMENTATION AND POSITIONING Chapter Seven John Wiley

GLOBAL SEGMENTATION AND POSITIONING Chapter Seven John Wiley & Sons, Inc c 1998 1

7. Global Segmentation and Positioning • • Overview 1. Reasons for International Market Segmentation 2. International Market Segmentation Approaches 3. Bases for Country Segmentation 4. Country Segmentation Tools 5. Issues in International Market Segmentation 6. International Positioning Strategies John Wiley & Sons, Inc c 1998 2

Overview John Wiley & Sons, Inc c 1998 3

1. Reasons for International Market Segmentation • properties – Measurable, Sizable, Accessible, Actionable, Competitive Intensity, Growth Potential • • • Country Screening Global Market Research Entry Decisions Positioning Strategy Marketing Mix Policy – Exhibit 7 -1 “Think” and “Feel” Country Clusters John Wiley & Sons, Inc c 1998 4

2. International Market Segmentation Approaches • • Exhibit 7 -2 Macro-Level Country Approaches Exhibit Two- and Three- Segment Solutions Exhibit 7 -4 Different Segment Scenarios Target Market Strategies – – Universal Segment Diverse Segment Mixture of Universal and Diverse Segments Exhibit 7 -5 What Matters to Young Europeans John Wiley & Sons, Inc c 1998 5

3. Bases for Country Segmentation • Demographics • Socioeconomic Variables – stages of economic development 1. Traditional Societies 2. Preconditions for take-off 3. The take off 4. The drive to maturity 5. High mass-consumption John Wiley & Sons, Inc c 1998 6

3. Bases for Country Segmentation (cont) • caveats in using per capita income • Monetization of transactions within a country • Gray and Black Market sections of the country • Income disparities • Exhibit 7 -6 Latin-American Markets: Many Latin Households have Lots of Spending Money John Wiley & Sons, Inc c 1998 7

3. Bases for Country Segmentation (cont) • Culture – 1. Individualism vs Collectivism (IND) – 2. Power Distance (PD) – 3. Uncertainty Avoidance (UA) – 4. Masculinity - Feminism (MA) • Exhibit 7 -7 Culture Based Clustering of Euroconsumers • Political Conditions John Wiley & Sons, Inc c 1998 8

3. Bases for Country Segmentation (cont) • Behavior-Based Segmentation – Exhibit 7 -8 European Market Classification as of December 31, 1994 – Exhibit 7 -9 Segment Assignments Based on New Product Penetration Patterns • Life Style – Exhibit 7 -10 Frame 2 International Typology John Wiley & Sons, Inc c 1998 9

4. Country Segmentation Tools • Cluster Analysis – Exhibit 7 -11 Principles of Cluster Analysis – Exhibit 7 -12 Plot of Concentration Versus Category Growth: Chocolate Industry – Exhibit 7 -13 Cluster Analysis - Two Cluster Solution, Three Cluster Solution • Regression John Wiley & Sons, Inc c 1998 10

5. Issues in International Market Segmentation • Technical Issues – Poor Quality Data – “Noisy” Variables – Presence of Outliers • Managerial Issues – Stability of Segments Over Time – Managerial Usefulness John Wiley & Sons, Inc c 1998 11

6. International Positioning Strategies • Exhibit 7 -14 Global Positioning and Segmentation Strategies – Universal Segment / Uniform Positioning Theme – Universal Segment / Different Positioning Themes – Different Segment / Different Positioning Themes John Wiley & Sons, Inc c 1998 12

Summary 1. Keep things simple. 2. Consider several levels of aggregation, not just one. 3. Two ways to fine tune an existing segmentation scheme. 4. Pursue “creative” ways to segment your market. John Wiley & Sons, Inc c 1998 13