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Segmentation, Targeting and Positioning

Chapter 7 International Marketing

Antje Faustmann

on 23 August 2010

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Transcript of Segmentation, Targeting and Positioning

Segmentation, Targeting and Positioning 1.) Global Market Segmentation What is global market
segmentation? Forms of Segmentation Demographic Segmentation Income and Population Age Segmentation Gender Segmentation Behavior Segmentation Benefit Segmentation Ethnic Segmentation 2.) Assessing Market Potential and choosing Target Markets or Segments Current Segment Size and Growth Potential Potential Competition Feasibility and Compatibility 3.) Product - Market Decisions 4.) Target Market Strategy Standardized Global Marketing Concentrated Global Marketing Differentiated Global Marketing 5.) Positioning positioning by attribute or benefit positioning by quality/price positioning by use or user positioning by competition global consumer culture positioning (GCCP) foreign consumer culture positioning (FCCP) local consumer culture positioning (LCCP) based on measurable charactereristics such as income, population, age distribution, gender, education, occupation Demographic changes can create opportunities for marketing innovations identifies specific segments of potential customers with homogeneuous attributes purpose --> to enable the marketer to create marketing mixes to meet the needs of segments Importance of Market Segmentation helps marketers to define customer needs and wants more precisely
eg. Coca Cola --> products based on consumer preferences Geographic Segmentation segmenting by: region, market size, market density or climate
eg. snowblowers, skiers, clothing and air conditioning system Demographic Trends fewer married couples
smaller family size
longer life expectancy
changing role of women
higher incomes
higher living standards new borns, infants, young children, teens, young adults
one global segment --> global teens (12-19) Global Teens share interest in fashion, music, youthful lifestyle
do not have confirmed to cultural norms --> rebelling
attractive size (about 1.3 billion)
multibillion purchasing power market consists of those who are willing and able to buy
70 % of world GNP comes from Triad --> 15 % lives in Triad
income: housing, clothing, automobiles and food
many industrialized countries are small despite high per capita income
eg. Sweden --> high per capita income, small population --> saturation sensible approach for many hospitality companies
lipstick for women, facial shaving products for men
changed !!! products have had to change the way they segment their market Do people use and buy the product?
How often do they buy it?
How much do they use it? divides buyers into groups based on: knowledge
responses usage rate: heavy, medium, light, non user
user status: potential users, non users, ex users, regulars, first timers, users of competitors products
80/20 principle
eg. fast food industry, airlines frequent flyer program, supermarkets dividing a market into groups according to the different benefits that consumers seek from the product find the major benefit people look for in the product class
the kinds of people who look for each benefit
the major brands that deliver each benefit
keeping a finger on the pulse of ethnic communities is one of the most challenging and most important tasks of a multicultural marketer eg US --> Hispanic , African and Asian Americans (1/3 of population)
in the past --> ethnic groups where expected to conform to a homogenized, anglo centric ideal
until 70's ethnic food only in some stores
Prector & Gamble, Allstate innsurance, Bank of America and Reebok have developed mulitcultural marketing initiatives to better understand and serve the wants and preferences of US minority groups

psychographic segmentation demographic --> skeleton
psychographics --> meat
dividing population on the basis of: Personality, Values, Lifestyle
lifestyle includes needs, motives, perceptions, attitudes
what does the consumer want and need? Target Market = group of people for which an organization designs, implements, and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges advantage of global segmentation segment in a single country might be small --> narrow segment can be served profitably if segment exist in several countries India = huge country market
75% live in rural areas
decision for marketers --> target urban areas (25%) SUV models
growth in the US slows
fastest growing sector in the autoindustry of China strong competition --> avoid segment
price or quality disadvantages --> possibility for a market newcomer first: market for small-displacement dirt bike
than: targeted casual riders whose psychographic profiles were different than that of hard core Harley Davidson Rider Acer failed to make headway in the US market dominated by strong names like Dell Can and should a company target that market?
negative impacts: regulatories, cultural barriers
specific issues eg. distribution system in India takes 3 to 5 years
is the segment compatible with the companies overall goals, brand image? Minivan?
former CEO Helmut Planke "We do not have a van because a van as it is in the market today does not fulfill any of the BMW group brand values." Framework for Selecting Target Markets What are the key drivers of this marketing model? Are enabling conditions in place for this marketing model? What is the cost of entry?
What is the cost of waiting? Is the risk/control trade-off appropriate? marketing model drivers key elements, factors required for a business to take root and grow in particular country market environment
success through establishing or leveraging a brand name? enabling conditions structural market characteristics whose presence or absence can determine wether the marketing model can succeed challenge in India: refrigiration is not widely available in shops and supermarkets
solution: reformulation of KitKat and Dairy Milk important to weigh estimated costs associated with entering and serving the market with potential short and long term revenue streams First Mover Advantage wisdom: first company who enter the market has the best chance of becoming the market leader

eg. Coca Cola --> established during World War II First Mover Disadvantage substantial investments in marketing only to find out that late arriving competitor reaps some of the benefits late entrants --> success by benchmarking established companies and then outmaneuvring them Are the current and potential product offerings suitable for the country market or segment? Nestle and Cadbury 1st way: liquid chocolate confection to address the issue of Indians hot weather

2nd way: selling traditional chocolate by supplying coolers to merchants adopts mass market philosophy
one market without individual segments
eg. commodity products such as flour/sugar firm select market niche
concentrate on understanding needs, motives, satisfaction --> high specialized marketing mix serve two or more well defined market segments and develops a distinct marketing mix for each differentiating a brand in customers mind in relation to competitors in terms of attributes and benefits that the brand does and does not offer --> USP association with an attribute, product feature or customer benefit high price --> signal of quality
low price --> value low price and value strategy
"upscale" discounter how a product associates the brand with a user? "the make up that makeup artists" eg. Dove broke new grounds
research: 2% of women consider themselves beautiful
web community --> "Fresh Takes" a miniseries that has aired on MTV
identifies the brand as a symbol of a particular global culture or segment
effective strategy to communicate with global teens or cosmopolitan elites strong brand equity
reinforce consumers cosmopolitan self-image high tech products people speak the same language, share same mind-set high touch products emotional motives rather than rational ones associates the brand users, user occasion or product origins with a foreign country or culture based in Sweden
stores are decorated in national colors associates brand with local cultural meaning
reflects local culture's norms
associate the brand with small town American culture 6.) Summary hi-fliers social contact
seeker trendsetter poseurs 1. Global Market Segmentation 1.1 Importance of Market Segmentation
1.2 Forms of Market Segmentation Geographic
2. Assessing Market Potential, Choosing Target Markets
3. Product - Market Decision
4. Target Market Strategy
5. Positioning
6. Summary
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