GLOBAL SEGMENTATION AND POSITIONING

Objectives Discuss the international market segmentation process. Analyse the various international market segmentation approaches. Describe the bases for country segmentation. Understand the managerial implications of international positioning strategies.

1. Reasons for Global Market Segmentation Country Screening Global Market Research Entry Decisions Positioning Strategy Marketing Mix Policy

Requirements for effective market segmentation Measurable, Sizable, Accessible, Actionable, Competitive Intensity, Growth Potential

Global segmentation process 1. Identify purpose 2. Select segmentation criteria 3. Collect relevant information 4. Segment countries/consumers according to criteria 3. Re-evealuate the fit of the segment after implementation of the intended program 4. Update/reassign segment membership

International Market Segmentation Approaches Using Using a single dimension Using Using multiple criteria

Macro-level segmentation Classifying countries into distinct segments

Example: segmentation on the basis of quality of life Cost of living Economy Freedom Health Infrastructure Recreation culture and entertainment

Micro-segmentation 1. Criteria development 2. Preliminary Screening 3. Micro-segmentation

Different Segment Scenarios

3. Bases for Country Segmentation Demographics Geography Socioeconomic Variables stages stages of economic development

3. Bases for Country Segmentation (cont) caveats in using per capita income Monetisation of transactions within a country Gray Gray and Black Market sections of the country Income Income disparities

3. Bases for Country Segmentation (cont) Culture 1. Individualism vs Collectivism (IND) 2. Power Distance (PD) 3. Uncertainty Avoidance (UA) 4. Masculinity - Feminism (MA)

3. Bases for Country Segmentation (cont) Political Conditions free market mixed market centrally planned

3. Bases for Country Segmentation (cont) Behavior-Based Based Segmentation brand loyalty usage rate penetration benefits

ased on average sales per capita plus advertising (above average;

3. Bases for Country Segmentation (cont) LifeStyle looks at attitudes, opinions and values popular in advertising many typologies general general /product specific

Example Typology of the European Car Market

International Positioning Strategies

Light Popular price Premium quality Heavy

Light Premium quality

Light 2 6 Stella F G E Fosters 5 Miller 3 Bud Carling 4 Premium quality 7 7 1

Possible problems in global positioning Different maps (positions of brands) Different competing brands Different evaluations of what, for example, constitutes premium quality or heavy beer Different dimension may be used to evaluate the brand Different definitions of the product category Different segments across countries

EXAMPLE Positioning of cars in USA and Japan

Global Positioning & Segmentation Strategies

Competitive analysis

Objectives How to define global competitive advantage How to analyse global competition

Why the companies / industries of some countries are more competitive than that of others?

The Competitive Advantage of Nations (the Diamond Model) Firm Strategy, Structure and Rivalry actor onditions Demand Conditions Related & Supporting Industries

Bases of a firm s competitive advantage

M. Porter s Five Forces Model Threat of New Entrants Bargaining Power of Suppliers Industry Competitors Intensity of Rivalry Threat of Substitutes Bargaining Power of Buyers