1. John Wiley & Sons, Inc c 19981 GLOBAL SEGMENTATION AND POSITIONING Chapter Seven

2. John Wiley & Sons, Inc c 19982 7. Global Segmentation and Positioning Overview 1. Reasons for International Market Segmentation 2. International Market Segmentation Approaches 3. Bases for Country Segmentation 4. Country Segmentation Tools 5. Issues in International Market Segmentation 6. International Positioning Strategies

3. John Wiley & Sons, Inc c 19983 Overview

4. John Wiley & Sons, Inc c 19984 1. Reasons for International Market Segmentation properties –Measurable, Sizable, Accessible, Actionable, Competitive Intensity, Growth Potential Country Screening Global Market Research Entry Decisions Positioning Strategy Marketing Mix Policy –Exhibit 7-1 “Think” and “Feel” Country Clusters

5. John Wiley & Sons, Inc c 19985 2. International Market Segmentation Approaches Exhibit 7-2 Macro-Level Country Approaches Exhibit Two- and Three- Segment Solutions Exhibit 7-4 Different Segment Scenarios Target Market Strategies –Universal Segment –Diverse Segment –Mixture of Universal and Diverse Segments –Exhibit 7-5 What Matters to Young Europeans

6. John Wiley & Sons, Inc c 19986 3. Bases for Country Segmentation Demographics Socioeconomic Variables –stages of economic development 1. Traditional Societies 2. Preconditions for take-off 3. The take off 4. The drive to maturity 5. High mass-consumption

7. John Wiley & Sons, Inc c 19987 3. Bases for Country Segmentation (cont) caveats in using per capita income Monetization of transactions within a country Gray and Black Market sections of the country Income disparities Exhibit 7-6 Latin-American Markets: Many Latin Households have Lots of Spending Money

8. John Wiley & Sons, Inc c 19988 3. Bases for Country Segmentation (cont) Culture –1. Individualism vs Collectivism (IND) –2. Power Distance (PD) –3. Uncertainty Avoidance (UA) –4. Masculinity - Feminism (MA) Exhibit 7-7 Culture Based Clustering of Euroconsumers Political Conditions

9. John Wiley & Sons, Inc c 19989 3. Bases for Country Segmentation (cont) Behavior-Based Segmentation –Exhibit 7-8 European Market Classification as of December 31,1994 –Exhibit 7-9 Segment Assignments Based on New Product Penetration Patterns Life Style –Exhibit 7-10 Frame 2 International Typology

10. John Wiley & Sons, Inc c 199810 4. Country Segmentation Tools Cluster Analysis –Exhibit 7-11 Principles of Cluster Analysis –Exhibit 7-12 Plot of Concentration Versus Category Growth: Chocolate Industry –Exhibit 7-13 Cluster Analysis - Two Cluster Solution, Three Cluster Solution Regression

11. John Wiley & Sons, Inc c 199811 5. Issues in International Market Segmentation Technical Issues –Poor Quality Data –“Noisy” Variables –Presence of Outliers Managerial Issues –Stability of Segments Over Time –Managerial Usefulness

12. John Wiley & Sons, Inc c 199812 6. International Positioning Strategies Exhibit 7-14 Global Positioning and Segmentation Strategies –Universal Segment / Uniform Positioning Theme –Universal Segment / Different Positioning Themes –Different Segment / Different Positioning Themes

13. John Wiley & Sons, Inc c 199813 Summary 1. Keep things simple. 2. Consider several levels of aggregation, not just one. 3. Two ways to fine tune an existing segmentation scheme. 4. Pursue “creative” ways to segment your market.