INTERNATIONAL MARKETING MANAGEMENT SESSION 7: CUSTOMER BEHAVIOR AND MARKET SEGMENTATION 1

2 WHY STUDY CUSTOMER BEHAVIOR? To Assess Opportunities for Introducing New Products/Brands To Determine How to Segment Markets Internationally To Decide How to Position New Products/Brands

3 UNDERSTANDING THE PRODUCT MARKET Identifying Set of Competing Products Understanding Customer Usage Patterns Identifying Desired Benefits

4 COUNTRY A (U.S.) Soft Drinks Canned Soda Bottled Waters Iced Teas Alternative Beverages ColaGinger AleDiet Soda Fruit Juices/ Smoothies Energy Drinks

5 COUNTRY X Soft Drinks Lemon/ Lime Orange Other (e.g. Black Currant) Freshly Squeezed Fruit Juices Bottled & Canned Drinks Colas Flavored Mineral Waters BeerMilk Herbal Drinks

Daily Life Rhythms Usage Scenarios Cultural Conventions and Practices Environmental/Technological Sophistication (Access to Computers/Internet) CUSTOMER USAGE PATTERNS 6

GLOBAL INTERNET LANGUAGES (Dec 2001) 7 Language Internet Access (Millions) % of Total Total Population (Millions) % of Total English % % Non-English % 5, % European Languages a % 1, % Asian Language b % 329 a Includes: Czech, Dutch, Finnish, French, German, Greek, Hungarian, Italian, Polish, Portuguese, Romanian, Russian, Danish, Icelandic, Norwegian, Swedish, Slovak, Slovenian, Spanish, Turkish b Includes: Arabic, Chinese, Hebrew, Japanese, Korean, Malay, Thai Source: a Includes: Czech, Dutch, Finnish, French, German, Greek, Hungarian, Italian, Polish, Portuguese, Romanian, Russian, Danish, Icelandic, Norwegian, Swedish, Slovak, Slovenian, Spanish, Turkish b Includes: Arabic, Chinese, Hebrew, Japanese, Korean, Malay, Thai Source:

8 DESIRED CUSTOMER BENEFITS Product Symbolism Price Sensitivity Role Perceptions and Expectations Socio-Cultural Values

9 CHANGING DYNAMICS OF CONSUMER BEHAVIOR Massive Waves of Migration and Diaspora Increased Interlinkages and Communication Between Markets Worldwide q Consumer mobility q Pan-regional and global media (Satellite TV, Internet) Global Marketing of Products/Brands and Service

 Decline of National Consumer Cultures/ Rise of Glocalism  Cultural Diversity and Pluralism  Growth of Cross-Border Segmentation 10 IMPLICATIONS

INTERNATIONAL SEGMENTATION STRATEGIES Country Segments Macro-Country Segments Cross-National Segments q Regional q Global 11

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SUMMARY Cultural patterns are not static, but evolving, as:  Markets become more integrated  Consumers become exposed to ideas, products and lifestyles from other cultures Segmentation across countries is more complex than within a country, and also needs to consider cross-national groups. Cross-national segmentation based on:  Demographics, e.g. high income, children, teenagers  Specific interests (e.g. “green” consumers, animal rights, gardening)  Attitudes (e.g. worldmindedness) 13