UNIT 3 - GLOBAL SEGMENTATION AND POSITIONING

STRATEGIES
A.

Introduction

S-T-P Framework: segmentation-targeting-positioning

Segmentation: identify possible segmentation variables (demographics, lifestyle, buying
behavior)
Targeting: decide which segment(s) to select
Positioning: decide what image to invoke and call for development of a marketing mix strategy
B.

Standardization vs. adaptation

Standardization:
+

lower prices - economies of scale in manufacturing, distribution and promotion costs

fund new product development programs to enhance competitive position

transfer of know-how and best practices

develop a global corporate and brand image

savings on global communication campaigns

lower prices that trade-off cultural influences will foster the development of
globalization of markets

easier to coordinate and control the international operations via uniform standards

Adaptation

Differences in customers patterns and buying behavior

Differences in competitive environment

Differences in Government relations and standard

Media and distribution channels varies

Need product modification: diff. customer preference; diff. usage conditions; diff. standards
and regulations; linguistic difference and calibration systems.
Adjustment in communication strategy: diff. in media infrastructure; variations in reach,
media availability, media regulations or costs

The question is NOT whether or not to standardize, is the matter of DEGREE

Need the balance off the benefits of degree of modification vs. the adaptation costs

Standardization or customization are not mutually exclusive strategies middle-of-theroad approach

B891/Gp 5/Oct1999/TUT2

C.

Reasons for international market segmentation

Customers differ in their needs, wants, preferences, perceptions and/or buying attitudes
Most companies will segment their market and pick the segment that look most

attractive
6 Principles from perspective of international marketer:
1. Measurable :

lack of reliable, accurate info.

2. Sizeable :

segment is consolidated across countries, become large enough

3. Accessible :

media and distribution infrastructure

4.Actionable
5.Differentiable
6. Competition :

if have been pre-empted by competition in one country

might still be up for grabs in other countries

D.

International market segmentation approaches

1.

Marco-level
Based on buyer behavior: buying power, education, lifestyle, demographics etc.
Rarely useful for international marketers : not clear which variables to include /
ignore
Unstable grouping : diff. groupings as a result of diff. variables included

2.

Criteria development preliminary screening micro-segmentation

Set criteria, thresholds on certain variables, examine the countries by screening the
thresholds, then do micro-segmentation
Focus on consumers in individual countries, know the commonalities and dissimilarities
across countries

International market segmentation scenarios

Universal segments

Segments transcend national boundaries

Global teenager, global elites and ethnic groups

Regional segments

Similarity in customer needs and preferences arise at regional level

Need to decide the extent you want to differentiate your marketing mix strategies:

Undifferentiated marketing strategy - economies of scale, suit high-tech companies

tailor-made marketing strategies - cope with minor variations in local market

conditions

B891/Gp 5/Oct1999/TUT2

Diverse segments

substantial gaps in customers needs between countries hard to derive cross-border

segments

need to be localized

e.g. food industry : intrinsic taste preferences

B891/Gp 5/Oct1999/TUT2

E.

Bases for global market segmentation

Major segmentation variables:

Demographics: teenagers a global customer group

Socioeconomic variables

Lifestyle and behavior-based variables

F.

Global positioning strategies

Kotler - positioning : act of designing the companys offer and image so that it occupies a
distinct and valued place in the target customers minds
Global marketer what extent a uniform positioning strategy could be used
Uniform positioning strategy : target customer are very similar in shared values and buying
patterns worldwide

B891/Gp 5/Oct1999/TUT2