chapter 7kotabe & helsen's global marketing management, third edition, 2004 1 global...

Chapter 7 Kotabe & Helsen's Global Marketing Management, Third Edition, 2004

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Global Marketing ManagementGlobal Marketing Management

Masaaki Kotabe & Kristiaan HelsenMasaaki Kotabe & Kristiaan HelsenThird EditionThird Edition

John Wiley & Sons, Inc., 2004John Wiley & Sons, Inc., 2004


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Chapter 7Chapter 7

Global Segmentation and Global Segmentation and PositioningPositioning


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Chapter OverviewChapter Overview

1. Reasons for International Market 1. Reasons for International Market SegmentationSegmentation

2. International Market Segmentation 2. International Market Segmentation ApproachesApproaches

3. Segmentation Scenarios3. Segmentation Scenarios

4. Bases for Country Segmentation4. Bases for Country Segmentation

5. International Positioning Strategies5. International Positioning Strategies


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Chapter Overview (contd.)Chapter Overview (contd.)

6. Global, Foreign, and Local Consumer 6. Global, Foreign, and Local Consumer

Culture PositioningCulture Positioning

7. Appendix7. Appendix


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IntroductionIntroduction

Variation in customer needs is the primary motive Variation in customer needs is the primary motive for market segmentation.for market segmentation.

Most companies will identify and target the most Most companies will identify and target the most attractive market segments that they can attractive market segments that they can effectively serve.effectively serve.

In global marketing, market segmentation In global marketing, market segmentation becomes especially critical because of wide becomes especially critical because of wide divergence in cross-border consumer needs and divergence in cross-border consumer needs and lifestyles.lifestyles.


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Introduction (contd.)Introduction (contd.)

Once the management has chosen its target Once the management has chosen its target segments, management needs to determine a segments, management needs to determine a competitive positioning strategy for its products.competitive positioning strategy for its products.


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1. Reasons for International Market 1. Reasons for International Market SegmentationSegmentation

Segments ideally should possess the following set Segments ideally should possess the following set of propertiesof properties::– IdentifiableIdentifiable– SizableSizable– AccessibleAccessible– StableStable– ResponsiveResponsive– ActionableActionable


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1. Reasons for International Market 1. Reasons for International Market Segmentation (contd.)Segmentation (contd.)

Country ScreeningCountry Screening Global Market ResearchGlobal Market Research Entry DecisionsEntry Decisions Positioning StrategyPositioning Strategy Resource AllocationResource Allocation Marketing Mix PolicyMarketing Mix Policy

– Balance between standardization and Balance between standardization and customizationcustomization


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2. International Market Segmentation 2. International Market Segmentation Approaches Approaches

International segmentation procedures:International segmentation procedures:– Country-ad-segments or aggregate Country-ad-segments or aggregate

segmentationsegmentation– Disaggregate international consumer Disaggregate international consumer

segmentationsegmentation– Two-stage international segmentationTwo-stage international segmentation

The standard country segmentation procedure The standard country segmentation procedure classifies prospect countries on a single dimensionclassifies prospect countries on a single dimension


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2. International Market Segmentation 2. International Market Segmentation Approaches (contd.)Approaches (contd.)

(e.g., per capita GNP) or on a set of multiple(e.g., per capita GNP) or on a set of multiple

socioeconomic, political, and cultural criteria socioeconomic, political, and cultural criteria available from secondary data sources.available from secondary data sources.

When there are numerous country traits, use When there are numerous country traits, use smaller set of dimensions using data reduction smaller set of dimensions using data reduction techniques such as factor analysis.techniques such as factor analysis.


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3. Segmentation Scenarios3. Segmentation Scenarios

Universal or global segmentsUniversal or global segments Regional segmentsRegional segments Unique (diverse) segmentsUnique (diverse) segments


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4. Bases for Country Segmentation4. Bases for Country Segmentation

DemographicsDemographics– Demographics variables are among the most Demographics variables are among the most

popular criteria.popular criteria. Socioeconomic Variables Socioeconomic Variables

– Caveats in using per capita income as an Caveats in using per capita income as an economic development indicator:economic development indicator:

» Monetization of transactions within a Monetization of transactions within a countrycountry


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4. Bases for Country Segmentation 4. Bases for Country Segmentation (contd.)(contd.)

» Gray and Black Market sections of the Gray and Black Market sections of the economyeconomy

» Income disparitiesIncome disparities– Purchasing Power Parity (PPP) criteriaPurchasing Power Parity (PPP) criteria– Socioeconomic Strata (SES) AnalysisSocioeconomic Strata (SES) Analysis– Human development index (HDI) classificationHuman development index (HDI) classification

Behavior-Based SegmentationBehavior-Based Segmentation


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4. Bases for Country Segmentation 4. Bases for Country Segmentation (contd.)(contd.)

LifestylesLifestyles– Global Values Segments; the survey Global Values Segments; the survey

investigated investigated 1000 consumers in 35 countries1000 consumers in 35 countries (source: (source: Robert Starch WorldwideRobert Starch Worldwide):):» Strivers (23 percent)Strivers (23 percent)» Devouts (22 percent)Devouts (22 percent)» Altruists (18 percent)Altruists (18 percent)» Intimates (15 percent)Intimates (15 percent)» Fun Seekers (12 percent)Fun Seekers (12 percent)» Creatives (10 percent)Creatives (10 percent)


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5. International Positioning Strategies5. International Positioning Strategies

The formulation of a positioning strategy (local or The formulation of a positioning strategy (local or global) includes the following steps:global) includes the following steps:

1. Identify the relevant set of competing 1. Identify the relevant set of competing products or brands.products or brands.2. Determine current perceptions held by 2. Determine current perceptions held by consumers about your product/brand and the consumers about your product/brand and the competition.competition.3. Develop possible positioning themes.3. Develop possible positioning themes.4. Screen the positioning alternatives and select 4. Screen the positioning alternatives and select the most appealing one.the most appealing one.


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5. International Positioning Strategies 5. International Positioning Strategies (contd.)(contd.)

5. Develop a marketing mix strategy.5. Develop a marketing mix strategy.

6. Over time, monitor the effectiveness of your 6. Over time, monitor the effectiveness of your positioning strategy and if needed, conduct an positioning strategy and if needed, conduct an audit.audit.

Uniform vs. Localized Positioning StrategiesUniform vs. Localized Positioning Strategies Universal Positioning AppealsUniversal Positioning Appeals

– Positioning themes:Positioning themes:» Specific product features/attributesSpecific product features/attributes» Product benefit, solutions for problemsProduct benefit, solutions for problems


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5. International Positioning Strategies 5. International Positioning Strategies (contd.)(contd.)

» User applicationUser application» LifestylesLifestyles


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6. Global, Foreign, and Local Consumer 6. Global, Foreign, and Local Consumer Culture PositioningCulture Positioning

Global consumer culture positioning (GCCP)Global consumer culture positioning (GCCP)– Brand as a symbol of a given global consumer Brand as a symbol of a given global consumer

cultureculture Local consumer culture positioning (LCCP)Local consumer culture positioning (LCCP)

– Brand as an intrinsic part of the local culture.Brand as an intrinsic part of the local culture. Foreign consumer culture positioning (FCCP)Foreign consumer culture positioning (FCCP)

– Brand mystique built around a specific foreign Brand mystique built around a specific foreign cultureculture


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7. Appendix7. Appendix

Segmentation techniques and toolsSegmentation techniques and tools::– Cluster AnalysisCluster Analysis: Collection of statistical : Collection of statistical

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

– Regression AnalysisRegression Analysis: In regression, one : In regression, one assumes that there exists a relationship between assumes that there exists a relationship between a response variable, Y, and one or more so-a response variable, Y, and one or more so-called predictor variables, X1, X2 and so on.called predictor variables, X1, X2 and so on.


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7. Appendix (contd.)7. Appendix (contd.)

– For each of the parameter estimates, the For each of the parameter estimates, the regression analysis will also produce standard regression analysis will also produce standard error.error.

– The higher the The higher the R2R2 value, the better the ability value, the better the ability of the regression model to predict the data.of the regression model to predict the data.

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