Segmentation, Targeting, and Positioning

1. Segmentation, Targeting, and Positioning Global Marketing Chapter 7

2. Market Segmentation • Represents an effort to identify and categorize groups of customers and countries according to common characteristics

3. Targeting • The process of evaluating segments and focusing marketing efforts on a country, region, or group of people that has significant potential to respond • Focus on the segments that can be reached most effectively, efficiently, and profitably

4. Positioning • Positioning is required to differentiate the product or brand in the minds of the target market.

5. Global Market Segmentation • Defined as the process of identifying specific segments—whether they be country groups or individual consumer groups—of potential customers with homogeneous attributes who are likely to exhibit similar responses to a company’s marketing mix.

6. Conventional Wisdom Assumes heterogeneity between countries Assumes homogeneity within a country Focuses on macro level of cultural differences Relies on clustering of national markets Less emphasis on within-country segments Unconventional Wisdom Assumes emergence of segments that transcend national boundaries Recognizes existence of within-country differences Emphasizes micro-level differences Segments micro markets within and between countries Contrasting Views of Global Segmentation

7. Global Market Segmentation • Demographics • Psychographics • Behavioral characteristics • Benefits sought Skiing became a sport in Norway where it was invented 4,000 years ago.

8. Income Population Age distribution Gender Education Occupation What are the trends? Demographic Segmentation

9. THAILAND-Demographic facts Nationality: --Thai.
 Population (2009 est.): 67.0 million.
 Labor force (2009 est.): 38.4 million.
 Annual population growth rate (2009 est.): 0.5%.
 Ethnic groups: Thai 89%, other 11%.
 Religions: Buddhist 93%-94%, Muslim 5%-6%, Christian 1%, Hindu, Brahmin, other.
 Languages: Thai (official language) 
 Education: Years compulsory--9. Literacy--94.9% male, 90.5% female.
 Life expectancy--70.51 years male, 75.27 years female.

10. Thailand-Economy Agriculture (12% of GDP): Products--rice, tapioca, rubber, corn, sugarcane, coconuts, soybeans. Industry Types--tourism, textiles, garments, agricultural processing, cement, integrated circuits, jewelry, electronics, petrochemical etc. Merchandise exports--$188.8 billion. Major markets--ASEAN, EU, China, U.S., Japan, and Hong Kong. Merchandise imports--$175.5 billion. Major suppliers--Japan, ASEAN, China, the Middle East, EU, and U.S.


11. Per Capita Income

12. 10 Most Populous Countries

13. Psychographic Segmentation • Grouping people according to attitudes, values, and lifestyles Porsche example from SRI International • Top Guns (27%): Ambition, power, control • Elitists (24%): Old money, car is just a car • Proud Patrons (23%): Car is reward for hard work • Bon Vivants (17%): Car is for excitement, adventure • Fantasists (9%): Car is form of escape

14. Behavior Segmentation • Focus on whether people purchase a product or not, how much, and how often they use it • User status • Law of disproportionality/Pareto’s Law–80% of a company’s revenues are accounted for by 20% of the customers

15. Benefit Segmentation • Benefit segmentation focuses on the value equation • Value=Benefits/Price • Based on understanding the problem a product solves, the benefit it offers, or the issue it addresses

16. Target Marketing Strategies

17. Standardized/Undifferentiated Marketing • Focus is on common (not different) needs of consumers. • Product and marketing program are geared to the largest number of buyers. • Uses mass advertising and distribution and aims to give the product a a superior image .

18. Differentiated/ Multi segment Marketing • Firm targets several market segments and designs separate offers for each. • The goal is to have higher sales and a stronger position with each market segment. • This approach increases the costs of doing business.

19. P& G Shampoo brands

20. Concentrated Marketing • The focus is acquiring a large share of one or a few segments of niches. • Generally, there are fewer competitors. • The Internet is ideal for targeting small niche markets. • There is some risk in focusing on only one market.

21. Concentrated global marketing Niche marketing Single segment of global market Look for global depth rather than national breadth Ex.: Chanel, Body Shop Differentiated global marketing Multi-segment targeting Two or more distinct markets Wider market coverage Ex.: P&G markets Old Spice and Hugo Boss for Men Target Market Strategy Options

22. Positioning • Locating a brand in consumers’ minds over and against competitors in terms of attributes and benefits that the brand does and does not offer • Attribute or Benefit • Quality and Price • Use or User • Competition

23. Positioning Map

24. Product vs. Brand Positioning

25. Positioning Strategies • Global consumer culture positioning • Identifies the brand as a symbol of a particular global culture or segment • High-touch and high-tech products • Foreign consumer culture positioning • Associates the brand’s users, use occasions, or product origins with a foreign country or culture Beer is associated with this German’s culture; the symbol on his shirt is not German!

27. Positioning Strategies • Local consumer culture positioning • Identifies with local cultural meanings • Consumed by local people • Locally produced for local people • Used frequently for food, personal, and household nondurables • Ex.: Budweiser is identified with small-town America

28. Looking Ahead to Chapter 8 • Importing, Exporting, and Sourcing