International consumers: segmentation

Segmentation ‘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 buying behaviour’ ( Hassan and Katsanis 1992)

Part of a key marketing analysis process Segmentation Targeting Positioning

Segmentation methods/variables (Keegan and Schlegelmilch 2001) Demographic Psychographic Behavioural Benefits sought Geographic Cultural Usually linked into a profile

Demographic Age, gender, population size, income, education, lifecycle stage Beware! Not all statistics are presented in the same way. E.g. definitions of socio/economic groups differ

Demographic segmentation Age is commonly used to identify global segments E.g. global teenagers 12 to 19 linked to: Fashion Lifestyle Music Brand preferences

Psychographic segmentation Based on : Attitudes and values Lifestyle ( behaviour determined by attitudes and values) Data collected on activities, interests and opinions (AIO studies)

E.g. YUPPI Young Upwardly-mobile Person

E.g. DINKY Double income No kids

SINBAD Single No blokes and Desperate

Global Scan*:AIO study ( 18 countries in Triad regions) Strivers (26%): young, ambitious, materialistic, hedonistic Achievers (22%): older, affluent, successful, status conscious, quality focused Pressured (13%): women, family/life/financial problems Adapters (18%): older, content, value-centred, open about change Traditionals (16%): ’rooted to the past’, cling to country’s heritage and culture *Backer, Spielvogel and Bates

Behavioural segmentation Who buys it? How often? What for? Who for? Who doesn’t buy it? Who no longer buys it?

Benefit segmentation What added value do I get? E.g. Volvo offers safety Rolls Royce offers status Products are bundle of benefits not physical objects

Multiple-attribute segmentation E.g. A watch Segmentation variableStyle consciousFun oriented Benefit soughtSymbol of statusTime keeping/Games GenderMaleMale and female Age OccupationProfessionalsSchool students Income£30k+Parental Usage rateDaily Lifestyle Attitudes and values Fast moving, Leisure: Sports, cinema Materialistic, international School activities Video games, music Local culture orientation LocationGlobalMulti-domestic

Targeting 2 steps: Assessing the opportunity in each segment Selecting the target segment(s)

Assessing the opportunity – the criteria 1. Market: size and growth: In one country (China) Across the globe (the MTV generation) 2. The competition: How strong? (Coke v Pepsi –100% share in Russia) Are there gaps? What are their weaknesses? (Japanese 4-year PLC) 3. Compatibility and feasibility Resources? Organisational structure? Competitive advantage?

Positioning Defining a product/service/organisation in terms of its similarity/dissimilarity to competitors Aims to establish a unique positioning which meets needs of defined market segments (Ries and Trout 1981) ‘Positioning…is not what you do to a product…(it) is what you do to the mind of the prospect’ (Ries and Trout)

The positioning ‘Positioning strategy distinguishes a company’s service offers from those of its competitors’ (Palmer) ‘Positioning puts a firm in a sub- segment of its chosen market’ (Palmer)

BMW’s European positioning 1992