Global Marketing Management A European Perspective Global Segmentation, Targeting and Positioning Warren J. Keegan Bodo B. Schlegelmilch

Overview Global Market Segmentation Global Targeting criteria: geographic, demographic, psychographic, behaviour, and benefit segmentation Global Targeting Selecting a Global Target Market Strategy Global Product Positioning High-Tech or High-Touch Positioning Summary

Learning Objectives To understand the objectives and usefulness of global market segmentation To know the approaches to global market segmentation using different segmentation criteria to define target groups To learn different ways of positioning products in global markets

Global Market Segmentation ... is the process of dividing the world market into distinct subsets of customers that have similar needs (eg country groups or individual interest groups).

Criteria for Global Market Segmentation Geographic segmentation geographic subsets Demographic segmentation eg age, gender, income, occupation Psychographic segmentation Behaviour segmentation Benefit segmentation

Psychographic Segmentation ... is based on attitudes, values and lifestyle ... is measured through extensive item batteries which cover activities, interests and opinions (AIO-studies) lifestyle surveys, eg by the Research Institute of Social Change (RISC) the Centre de Communication Avancé (CCA) and the Values and Life Styles (VALS) by SRI International

Psychographic Profiles of Porsche’s American Customers Description Category % of all owners Top Guns Driven and ambitious; care about power and control; expect to be noticed 27% Old money; a car—even an expensive one—is just a car, not an extension of one’s personality Elitists 24% Ownership is what counts; a car is a trophy, a reward for working hard; being noticed doesn’t matter Proud Patrons 23% Cosmopolitan jet setters and thrill seekers; car heightens excitement Bon Vivants 17% Car represents a form of escape; don’t care about impressing others; may even feel guilty about owning car Fantasists 9% Source: ALEX III Taylor, „Porsche Slices up its Buyers“, Fortune, 16 January 1995, p. 24

Backer Spielvogel & Bates’ Global Scan (BSB Global Scan ) ... encompasses 18 countries, mostly in the Triad The researchers studied consumer attitudes and values, media viewership/readership, buying patterns, product use. 5 global psychographic segments represent 95% of the adult populations in the countries surveyed.

The Target Groups of BSB’s Global Scan

D’arcy Massius Benton & Bowles’ Euroconsumer Study ... focuses on Europe ... identified four lifestyle groups: The first two groups represent the elite, the latter two mainstream European consumers. Successful idealists Affluent materialists Comfortable belongers Disaffected survivors

Europanel’s Eurostyles Source: adapted from Josef Mazanec, “Exporting Eurostyles to the USA,” International Journal of Contemporary Hospitality Management, 5,4 (1993): p.4

Behaviour and Benefit Segmentation Behaviour segmentation Focus on whether and how much people buy or use a product; eg usage rates: heavy , medium, and light users, and nonusers eg user status: potential users, nonusers, ex-users, regulars, first timers, and users of competitors’ products Benefit segmentation Today, consumers basic needs are fulfilled. Therefore, consumers seek additional value from purchase decisions; eg cars: in addition to movement buyers seek personal safety, image, superior engine power (speed) etc.

Global Targeting After markets have been segmented, targeting aims at evaluating and comparing the indentified segments in order to select one or more as prospect(s) with the highest potential.

Criteria for Targeting As in single-country targeting, the most important criteria are: Current size of the segment and anticipated growth potential Competitive intensity and potential competition Compatibility with the company’s overall objectives and the feasibility of successfully reaching a designated target

Selecting a Global Target Market Strategy standardised global marketing i.e. mass marketing, the same marketing mix for a broad market of potential buyers; e.g. Revlon concentrated global marketing targeted at a single segment of the global market, e.g. Winterhalter (German dishwashers for hotels) differentiated global marketing 2 or more different segments; e.g. VW (cars for various target groups: Porsche, Skoda, VW Golf etc.)

Global Product Positioning is the location of a product in the mind of the consumer is partly controlled by the marketer (marketing mix) and partly not! is visualised by a “positioning map” 2 dimensions or multidimensional (MDS)

Positioning Map of American Fast-Food-Restaurants in the Mind of Consumers Source: adapted from James H. Myers, Segmentation and Positioning for Strategic Marketing Decisions (American Marketing Association, Chicago, 1996), S. 187

High-Tech Positioning Positioning stragtegy for products which are purchased on concrete product features; buyers typically already possess or wish to acquire considerable technical information Suitable for technical products, such as computers or chemicals, special-interest products, such as sporting goods, products that can be demonstrated easily.; eg polaroid cameras

High-Touch Positioning The emphasis lies more on the product’s image; specialised information appears of minor relevance Suitable for products that solve a common problem; e.g., soft drinks global village products, such as cosmetics or fashion products that use universal themes; e.g. „heroism“ in Levis ads (jeans)

Summary Before a company expands to foreign markets it must analyse the global environment. Global market segmentation aims at identifying similarities and differences of potential customers. Global targeting: The market segments are evaluated and compared and an appropriate targeting strategy is developed. To reach the targeted market segment(s) a positioning strategy must be chosen; in a global context high-tech or high-touch positioning are promising.