Segmenting Global Markets:

Look Before You Leap

By: V. Kumar and Anish Nagpal

I am a citizen, not of Athens or Greece,

but of the world.
-Socrates

Before implementing a global market

segmentation strategy, its critical to
understand both local and global issues

Global Marketing: emphasizes 4 activities

Cost efficiencies
Opportunities to transfer products, ideas, etc.
Emergence of global customers
Better links between national marketing
infrastructures

What is GMS?

Global marketing segmentation (GMS) is

the process of identifying specific
segments of potential customers, across
countries with similar attributes who are
likely to exhibit similar buying power.
The goal of GMS is to break down the
world market for a product or service into
different groups of consumers that differ in
their response to the firms marketing mix
program.

Targeted segments in GMS should

possess these properties:

Measurability: Easy to define and measure

Size: Large enough to go after

Accessibility: Easy to reach via the media

Actionability: Effective marketing programs

should be easy to develop
Competitive intensity: Should not be
preempted by the firms competition
Growth potential: High return on investment
should be attainable

How to Implement GMS

Six step process

1.
2.
3.
4.

Identify the purpose.

Select segmentation criteria.
Collect relevant information.
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.

Categories for Selecting

Demographics:
Measurable
characteristics
Segmentation
Criteria

of population.
Culture: Religion, education, and
language.
Geography: World region, economic stage
of development, and population.
Environment: Political, legal, and business
environments.

4 Critical Equivalencies

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.

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.

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.

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.

Think Globally, Act Locally

Segmentation allows global marketers to take

advantage of standardization while addressing the
needs and expectations of a specific target group.
To be successful, GMS needs to achieve a balance
between the local and global concerns of the
customers.