International Marketing

Sixth Edition
International Student Version

Masaaki Kotabe • Kristiaan Helsen

Chapter 7
Segmentation and Positioning

Copyright © 2013 John Wiley & Sons, Inc.

 Chapter Overview

1. Reasons for International Market Segmentation

2. International Market Segmentation Approaches
3. Segmentation Scenarios
4. Bases for International Market Segmentation
5. International Positioning Strategies
6. Global, Foreign, and Local Consumer Culture Positioning
Appendix

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 Introduction

• Variation in customer needs is the primary motive for

market segmentation.
• Most companies will identify and target the most
attractive market segments that they can effectively
serve.
• In global marketing, market segmentation becomes
especially critical because of wide divergence in cross-
border consumer needs and lifestyles.
• Once the management has chosen its target segments,
management needs to determine a competitive
positioning strategy for its products.

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 1. Reasons for International Market Segmentation

• Segments ideally should possess the following set of

properties:
– Identifiable
– Sizable
– Accessible
– Stability
– Responsive
– Actionable

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 1. Reasons for International Market Segmentation

• Country Screening
• Global Market Research
• Entry Decisions
• Positioning Strategy
• Resource Allocation (Exhibit 7-1)
• Marketing Mix Policy
– Balance between standardization and customization

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Exhibit 7-1: Market Clustering Approach for Instant
Coffee

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2. International Market Segmentation Approaches

• International segmentation procedures:

– Country-as-segments or aggregate segmentation
(See Exhibits 7-2 and 7-3.)
– Disaggregate international consumer segmentation
– Two-stage international segmentation
• Standard country segmentation classifies prospect
countries on a single dimension (e.g., per capita GNP) or
on multiple dimensions—cultural, socioeconomic, and
political criteria available from secondary data sources.
• For numerous country traits, use data reduction such as
factor analysis.

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 Exhibit 7-2: BCG Growth Share Segmentation

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 Exhibit 7-3: Johnnie Walker Market Classification
for 1997-1998

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 3. Segmentation Scenarios

• Universal or global segments

• Regional segments
• Unique (diverse) segments

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 Exhibit 7-4: Different Segment Scenarios

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 4. Bases for International Market Segmentation

• Demographics
– Demographic variables are among the most popular
criteria (Exhibit 7-5).
• Socioeconomic Variables
– Caveats in using per capita income as an economic
development indicator:
• Monetization of transactions within a country
• Gray and Black Market sections of the economy
• Income disparities
– Purchasing Power Parity (PPP) criteria
– Human development index (HDI) classification
– Socioeconomic Strata (SES) Analysis (Exhibit 7-6)

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 Exhibit 7-5: Benefit Segments of Toothpaste
Market in the U.S.A., China, and Mexico

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 4. Bases for International Market Segmentation

• Behavior-based segmentation (Exhibit 7-6)

– Brand loyalty
– Usage rate
– Product penetration
– Benefits

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 Exhibit 7-6: Hakuhodo Lifestyle Segmentation:
Seven Global Clusters

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 Exhibit 7-6: Hakuhodo Lifestyle Segmentation:
Seven Global Clusters (continued)

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 4. Bases for International Market Segmentation

• Lifestyles
– Roper Consulting’s Valuescope Model. 30,000 interviews
around the world.
• Achievers
• Traditionals
• Survivors
• Nurturers
• Hedonists
• Social-Rationals
• Self-Directeds

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 5. International Positioning Strategies

• The formulation of a positioning strategy (local or

global) includes the following steps:
1. Identify the relevant set of competing products or
brands.
2. Determine current perceptions held by consumers
about your product/brand and the competition.
3. Develop possible positioning themes.
4. Screen the positioning alternatives and select the most
appealing one.
5. Develop a marketing mix strategy.
6. Over time, monitor the effectiveness of your positioning
strategy and if needed, conduct an audit.
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 5. International Positioning Strategies

• Uniform versus Localized Positioning Strategies

• Universal Positioning Appeals
– Positioning themes:
• Specific product features/attributes
• Product benefit, solutions for problems
• user category
• user application
• heritage
• lifestyle

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 Exhibit 7-8: Global Positioning and Segmentation
Strategies

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 6. Global, Foreign, and Local Consumer Culture
Positioning
• Global consumer culture positioning (GCCP)
– Brand as a symbol of a given global consumer culture
• Local consumer culture positioning (LCCP)
– Brand as an intrinsic part of the local culture.
• Foreign consumer culture positioning (FCCP)
– Brand mystique built around a specific foreign culture

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 Appendix: Segmentation Tools

• Segmentation techniques and tools:

– Cluster Analysis: Collection of statistical procedures for

dividing objects into groups (clusters). The grouping is
done in such a manner that members belonging to the
same group are very similar to one another but quite
distinct from members of other groups.

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 Appendix: Segmentation Tools

– Regression Analysis: In regression, one assumes that there

exists a relationship between a response variable, Y, and
one or more so-called predictor variables, X1, X2 and so
on.
– For each of the parameter estimates, the regression
analysis will also produce standard error.
– The higher the R2 value, the better the ability of the
regression model to predict the data.
(See Exhibits 7-9 through 7-11.)

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 Exhibit 7-9: Principles of Cluster Analysis

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Exhibit 7-10: Plot of Concentration versus Category
Growth Chocolate Market

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 Exhibit 7-11: Cluster Analysis

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