GLOBAL MARKETING

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GLOBAL MARKETING

• Marketing Segmentation
• Market Attractiveness
• Positioning

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What is Market Segmentation?

• Process of dividing a potential market into
  distinct subsets of consumers with common needs
  or characteristics.
• Separating a heterogeneous market into smaller
  homogeneous units.

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Important Elements of Market Segmentation

• Each market segment has unique needs and wants
  and will have a unique demand curve.
• Each market segment requires its own marketing
  strategy and marketing plan.

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• Market segmentation produces increased costs to
  the firm in the short run.
• Increased costs are generally offset by
  increasing sales in the long run.

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The Segmentation Process
Needs-Based Segmentation
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The Segmentation Process
Needs-Based Segmentation
Segment Identification
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Segmentation Bases

• Demographic
• Age
• Sex
• Education
• Occupation
• Race
• Family life cycle

• Geographic
• Country
• Region
• County size
• SMSA population
• Density

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Segmentation Bases

• Psychographic
• Social class
• Personality
• Lifestyle
• Activities, interests, opinions (AIOs)

• Behavioralistic
• Decision unit
• Usage rate
• Readiness
• Benefits sought
• Occasion
• Brand loyalty

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The Segmentation Process
Needs-Based Segmentation
Segment Identification
Segment Attractiveness
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Market Attractiveness

• Market attractiveness represents the degree of
  market opportunity offered by a market segment
  and the ability of the firm to meet the segments
  needs within a competitive setting.
• Determining market attractiveness is a four-step
  process.

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Determining Market Attractiveness...

• First, pre-select criteria that will be used to
  evaluate market attractiveness and competitive
  position.

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Market Attractiveness Factors

• Market/customer
• Size (s, units)
• Market potential
• Market growth rate
• Product life cycle stage
• Differentiation potential
• Customer loyalty
• Price elasticity

• Economic/technological
• Investment intensity
• Industry capacity
• Level maturity of technology utilization
• Ability to pass through inflation effects
• Barriers to entry/exit
• Access to raw materials

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Market Attractiveness Factors

• Competitive
• Industry structure
• Competitive groupings
• Substitution threats
• Perceived differentiation among competitors
• Individual competitors strengths

• Environmental
• Regulatory climate
• Degree of social acceptance

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Competitive Position Factors

• Market Position
• Relative market share
• Rate of change in share
• Perceived actual or potential differentiation
• Breadth of current or planned product line
• Company image

• Economic/technological
• Relative cost position
• Capacity utilization
• Technological position
• Patented technology

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Competitive Position Factors

• Capabilities
• Management strength depth
• Financial
• RD/product development
• Manufacturing
• Marketing
• Salesforce

• Capabilities, cont
• Distribution system
• Labor relations
• Relations with regulators
• Interactions with other segments
• Market synergies
• Operating synergies

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Determining Market Attractiveness (continued)...

• Second, weight the market attractiveness and
  competitive position factors.
• What is the relative importance of each factor to
  your firm?
• Third, rate each segment on attractiveness and
  competitive position.

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Example of Weighting and Rating
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Determining Market Attractiveness (continued)...

• Fourth, evaluate the implications of alternative
  positions within the market attractiveness/competi
  tive position matrix for target market selection,
  strategic objectives, and resource allocation.
• Select segment(s) that offer best opportunity for
  profits.

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Competitive Position
Market Attractiveness
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The Segmentation Process
Needs-Based Segmentation
Segment Identification
Segment Attractiveness
Segment Positioning Strategy
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Positioning

• Match offerings of firm to the needs and wants of
  market segments.
• Effective positioning involves understanding
  customers perceptions about both the
  psychological and physical characteristics of
  offerings.
• Positioning starts with a product. But
  positioning is not what you do to a productits
  what you do to the mind of the customer. That is,
  you position the product in the mind of the
  customer.

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Positioning Strategy

• Learn the customers viewpoint. Create
  positioning statement based on unique customer
  needs.

Primary Needs
Articulated Needs
Exciting Needs
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Positioning Statements

• To communicate positioning, a marketing plan
  should include a positioning statement following
  the form
• To (target group and need) our (brand) is
  (concept) that (point of difference).

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Example

• To young, active soft-drink consumers who have
  little time for sleep, Mountain Dew is the soft
  drink that gives you more energy than any other
  brand because it has the highest level of
  caffeine. With Mountain Dew, you can stay alert
  and keep going even when you havent been able to
  get a good nights sleep.

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Points to Remember About Positioning

• Based on consumer perceptions of tangible and
  intangible characteristics of offering.
• The intensity of the brand will affect
  positioning.

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The Segmentation Process
Needs-Based Segmentation
Segment Identification
Segment Attractiveness
Segment Positioning Strategy
Positioning Acid Test
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Testing the Positioning Statement

• Test the positioning statement with target
  consumers--what do they think, how do they react
  to the statement?
• Assess need level the stronger the need, the
  higher the expected customer interest.
• Do you see this product as solving a problem or
  filling a need for you?

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Testing, continued...

• Communicability and believability if the scores
  on these dimensions are low, the positioning must
  be refined or revised.
• Are the benefits clear to you and believable?

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Testing, continued...

• Perceived value The higher the perceived vale,
  the higher the expected consumer interest.
• Is the price reasonable in relation to the
  value?

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Testing, continued...

• Gap level between the new product and existing
  products The greater the gap, the higher the
  expected consumer interest.
• Do other products currently meet this need and
  satisfy you?

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Needs-Based Segmentation
The Segmentation Process
Segment Identification
Segment Attractiveness
Segment Positioning Strategy
Positioning Acid Test
Strategy Implementation
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Segmentation Strategies

Mass Marketing
Mass Customization
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Multisegment Strategy

• Pursue two or more segments that are attractive
  and profitable, but not the whole market.

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Sequential Segment Strategy

• Multisegment approach, but rather than pursuing
  all the attractive segments simultaneously,
  pursue the most attractive first when cash flow
  from that segment is positive, then pursue the
  next most attractive segment, and so on.

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Single-Segment Strategy

• Focus on just one attractive segment.

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Niche Segment Strategy

• Focus on a smaller group within a segment.
• Requires a further customization of marketing
  strategy.

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Mass Customization Strategy

• Focus on all niches within a segment by
  customizing strategies to each subsegment.