Copyright Atomic Dog Publishing, 2002 International Marketing Segmentation, Targeting, and Positioning Dana-Nicoleta Lascu Chapter 7

Copyright Atomic Dog Publishing, 2002 Chapter Objectives Identify the rationale for adopting a target marketing strategy in international markets Identify the requirements necessary for effective international market segmentation Introduce the concept of country attractiveness analysis and offer a blueprint for conducting the analysis Identify the bases for consumer segmentation and offer company application examples Describe the three targeting strategies used by companies worldwide Describe the six positioning strategies that international companies can use to position their brands in the minds of target consumers

Copyright Atomic Dog Publishing, 2002 International Target Marketing Identify consumer segments with similar traits Select segments company can serve efficiently Develop products tailored to each segment Offer products to the target market:  Communicate traits that differentiate the product

Copyright Atomic Dog Publishing, 2002 International Segmentation The process of identifying countries and/or consumers that are similar with regard to key traits, such as product-related needs and wants, that would respond well to a product and related marketing mix. MUST BE performed at country level AND at consumer level.

Copyright Atomic Dog Publishing, 2002 Requirements for Effective International Segmentation Measurability Substantiality Stability over time Accessibility Actionability Differential response

Copyright Atomic Dog Publishing, 2002 International Macro-Segmentation Market potential – indicators:  Gross domestic product (GDP) per capita  Industrial and agricultural sector statistics  Market size and potential  Consumer buying power  Investment figures (FDI, other trade statistics)

Copyright Atomic Dog Publishing, 2002 International Macro-Segmentation, continued Political, legal and financial environment of country  Ethnic conflict  History of war engagement  Antiforeigner sentiment  Recent nationalization activities  Legal ambiguity  Trade barriers  Exchange rate controls

Copyright Atomic Dog Publishing, 2002 International Macro-Segmentation, continued Marketing support infrastructure  Availability and reliability of distribution and logistics providers  Availability of competent partners for strategic alliances  Quality of telecommunication and transportation infrastructure  Availability of other service providers: - Marketing research firms - Financial firms - Management consulting firms…

Copyright Atomic Dog Publishing, 2002 International Macro-Segmentation, continued Strength of brand – brand franchise Degree of market fit with company policies, goals, and resources

Copyright Atomic Dog Publishing, 2002 Micro-Segmentation Basis for Segmentation  Demographic -Age -Occupation -Education -Income -Ethnicity -Race -Nationality -Life-cycle stage -Social class -Urbanization

Copyright Atomic Dog Publishing, 2002 Micro-Segmentation, continued Basis for Segmentation  Psychographic: lifestyles, values, attitudes, interests, opinions - Hofstede dimensions: Power-distance Masculinity-femininity Uncertainty avoidance Individualism-collectivism - Global segments: Global teenagers Global elite

Copyright Atomic Dog Publishing, 2002 Micro-Segmentation, continued Basis for Segmentation  Benefit Segmentation  Geographic

Copyright Atomic Dog Publishing, 2002 Micro-Segmentation, continued Basis for Segmentation  Usage -Nonusers -Occasional users -Medium users -Heavy users  User Status -User of competitors’ products -Ex-users -Potential users -First-time users -Regular users

Copyright Atomic Dog Publishing, 2002 Country Screening and Selection Assign importance score to each country screening criteria Evaluate country performance on each of the screening criteria Calculate country attractiveness score

Copyright Atomic Dog Publishing, 2002 Target Market Decisions Differentiated  Identify or create market segments desiring different product benefits and target each segment with a different brand and different marketing strategies  Example: Procter & Gamble

Copyright Atomic Dog Publishing, 2002 Target Market Decisions, continued Concentrated  Select only one market segment and target it with a single brand  Example: Mont Blanc pens

Copyright Atomic Dog Publishing, 2002 Target Market Decisions, continued Undifferentiated  Aim the product at the market with a single strategy regardless of the number of market segments  Example: powder milk, beans

Copyright Atomic Dog Publishing, 2002 Positioning the Brand 1)Identify competitors 2)Determine how they are perceived by consumers 3)Determine positioning in consumer’s minds 4)Analyze customers 5)Select positioning 6)Monitor position

Copyright Atomic Dog Publishing, 2002 Positioning the Brand, continued Attribute/Benefit Price/Quality Uses or Application Product User Product Class Competition

Copyright Atomic Dog Publishing, 2002 Chapter Summary Rationales and requirements for adopting target marketing strategies in international markets Country attractiveness Bases for consumer segmentation and company application examples The international targeting strategies The positioning strategies