Segmentation, Targeting and Positioning in International Markets

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Segmentation, Targeting and Positioning in
International Markets
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Developing an international marketing strategy

• Segmenting
• Targeting
• Positioning

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Reasons for Global Market Segmentation

• Country Screening
• Global Market Research
• Entry Decisions
• Positioning Strategy
• Marketing Mix Policy

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Type Of Segmentation

• Grouping Countries
• Segments within and across Foreign Markets

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Bases for Country Segmentation

• Demographics
• Socioeconomic Variables
• stages of economic development
• Per capita income
• Culture
• Political Conditions
• Behavior-Based Segmentation
• Life Style

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GLOBAL INCOME AND POPULATION 1995
of World Population
of World GNP
Market
GNP (billion)
GNP Per Capita
Population (million)
World (Total) 25,097 4,678 100
5,815 100 Triad (Total) 19,119
24,203 76 790 14 North
America 7,253 24,903 29 291
5 Japan 4,247 33,748
17 126 2 EU 7,619
20,435 30 373 6 Other High
Income 844 34,415 3 25
lt1 Upper Middle Income 2,239
4,397 9 509 9 Lower Middle
Income 2,403 1,001 10 2,401
41 Low Income 491 300
2 1,640 28 Unavailable Data
N/A N/A N/A 450 8
Not including Mexico
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Country Income Segmentation
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GLOBAL INCOME AND POPULATION 1995
Purchasing Power Parity Compared
of world GNP with PPP
of world GNP
GNP Per Capita
GNP Per Capita with PPP
GNP with PPP
Market
GNP
(billion)
World (Total) 25,097 30,783 100
100 4,678 5,863 Triad (Total)
19,119 16,992 76 55 24,203
21,511 North America 7,253 7,246
29 24 24,903 24,877 Japan
4,247 2,849 17 9 33,748
22,636 EU 7,619 6,898 30
22 20,435 18,502 Other High Income 844
631 3 2 34,415 35,904 Upper
Middle Income 2,239 3,504 9 11
4,397 7,604 Lower Middle Income
2,403 7,480 10 24 1,001
3,126 Low Income 491 2,176 2 7
300 1,370
Not including Mexico
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Standard of Living
Number of people per
Life Expectancy
Schooling (av. years)
Doctor
TV
Phone
McDonalds
China 70 5 724 37.5 76.9 384,000,000 Hong
Kong 77 7 933 4.0 1.6 95,000 Japan 79 11 609 1.6
1.9 130,000 U.S. 76 12 404 1.2 1.3 28,000 Russia
60 275 150,000,000
Sources WEFA, AsiaWeek, McDonalds, The New York
Times
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Successful Economic Union Requirements
? Economic Compatibility ? Political
Compatibility ? Geographic Proximity ? Social
Compatibility Weakness in some must be balanced
by strengths in others
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Market Groups

• Patterns of Multinational Cooperation
• Regional Cooperation Groups
• Free-Trade Area
• Customs Union
• Common Market
• Political Union

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New Multinational Market Groups or Trading Blocks
of the 21st Century
l European Union l European Economic Area (EC
and EFTA) l North American Free Trade Area l
Southern Cone-Mercosur l Asean Free Trade Area
(AFTA) l Commonwealth of Independent States
(CIS) l Central European Free Trade Area
(CEFTA)
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European Trade Areas
European Community (EC) European Free Trade Area
(EFTA)
Belgium Italy Austria Liechtenstein Denmark Luxe
mbourg Finland Norway France The
Netherlands Iceland Sweden Germany Portugal Sw
itzerland Greece Spain Ireland United
Kingdom EC Countries and EC Countries and
Austria Austria Poland Finland Finland Sweden
Hungary Iceland Norway Sweden
European Unity (EU) European Economic Area (EEA)
Five founding members. Awaiting
membership. Seeking membership.
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A Comparison of the EU and NAFTA
Population GNP GNP (millions) (
trillions) (per capita)
EU 363.3 7.79 21,442 NAFTA 372.0 6.94 18,662
U.S. 1992.
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Common Traits of Big Emerging Markets
l Are physically large. l Have significant
populations. l Represent considerable markets
for a wide range of products. l Have strong
rates of growth or the potential for significant
growth. l Have undertaken significant programs
or economic reform. l Are of major political
importance within their regions. l Are "Regional
Economic Drivers". l Will engender further
expansion in neighboring markets as they grow.
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Big Emerging Markets
Population GDP GDP Trade (millions) (
billions) (per capita) ( billions)
AsiaChina 1,188.0 435.6 367
135.9Indonesia 191.2 126.4 661 63.0India
870.0 238.3 274 42.2South Korea 43.7 296.8 6,79
9 150.6 Latin AmericaMexico 89.5 333.3 3,722 85.9
Argentina 33.1 228.8 6,912 21.2 Brazil
156.8 409.2 2,609 55.8 AfricaSouth
Africa 39.8 114.8 2,882 17.1 Europe Poland 38.4 8
3.6 2,178 35.6Turkey 58.8 156.0 2,747 38.9 Possib
le AdditionsColombia 33.4 43.5 1,303 12.3Thailan
d 57.8 104.0 1,801 65.1Venezuela 20.3 60.4 2,984
25.2Vietnam 69.5 17.5 252 3.2
Imports and exports. SOURCES "Big emerging
Markets," Business America, Special Issue 1994,
pp. 59-65 and for additional information, see
"Indicators of Market Size for 115 Countries,"
Crossborder Monitor, August 31,1994.
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• Think and Feel Country Clusters

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• Plot of Concentration Versus Category Growth
  Chocolate Industry

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• Chocolate Market
• Two-Cluster Solution

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• Chocolate Market
• Three-Cluster Solution

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Properties of a Market Segment

• Properties
• Measurable
• Sizable
• Accessible
• Actionable
• Competitive Intensity
• Growth Potential

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Bases for Global Segments

• Geographic
• Demographic
• Psychographic
• Behavior
• Benefits

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Average Monthly Expenditures for Chinese
Households National and Urban Areas - 1994
National Urban Areas
Food (includes eating out) 22.10 38.00 Savings 1
1.40 17.00 Clothing 5.60 9.00 Child's
Education 4.70 7.00 Home (includes Rent
Utilities) 4.30 8.20 Daily Goods other than
Food 3.50 4.80 Medical Expenses
Drugs 2.30 4.00 Entertainment 1.30 3.20
SOURCE Gallup China.
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YRs Cross-Cultural Consumer Characterizations
(4Cs)
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Global Scan Segmentation Study
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• Life Style
• Exhibit Typology of European Car Market

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Roper Starch Worldwide Global Study
40,000 consumers in 40 countries

• Shopping Styles
• Deal Makers (29) - love the buying process
• Price Seekers (27) - place primary value on the
  product that they are buying
• Brand Loyalists (23) - purchase name brands and
  remain true to them
• Luxury Innovators (21) - seek new, prestigious
  brands

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How the World Shops
Source How the World Shops, Advertising Age,
June 5, 1995, p.3.
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How the World Shops
Source How the World Shops, Advertising Age,
June 5, 1995, p.3.
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How the World Shops
Source How the World Shops, Advertising Age,
June 5, 1995, p.3.
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International Positioning Strategies

• Global Positioning and Segmentation Strategies
• Universal Segment / Uniform Positioning Theme
• Universal Segment / Different Positioning Themes
• Different Segment / Different Positioning Themes

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• Global Positioning Segmentation Strategies