Global Market Segmentation:

Methodologies and challenges

 Introduction
Factors which are driving the globalization of markets
include:
• Decreased protectionism
• Rapid technological change and high R&D costs
• Increased convergence in consumer lifestyles and
behaviour
• Greater integration of world economy
• Innovation in communication systems
• Enhanced capablilty to learn about and co-ordinate
world wide oppurtunities
• An important implication of these developments is
that, in many industries, global market
oppurtunities and competitive pressures should be
a critical focus when dveloping a corporate startegy
• This does not mean that globally integrated
strategies are always appropriate and in some
operational contexts it may be necessary to adopt
multi-domestic or regional policies to respond to
powerful market forces.
Bases for segmentating global markets
• Kotler(1991) has identified three characteristics of useful
market segments: accessibility; substance; and
measurability.
• Frank et al (1972) have developed a classification scheme
which provides a solid foundation for discussing bases
for segmenting global markets. In their framework,
segmentation is undertaken by distinguishing between
“countries” and “decision-makers”.
• Various other segmentation criteria will now be
discussed:
 Country Criteria
• In cases where countries are relatively homogenous and
share common common characteristics, country criteria
are useful.
• A common approach, that has a long history, is to classify
countries using economic growth and development
criteria. For eg. Rostow(1960) distinguished stages of
economic development ranging from “traditional” to
“mass consumption”.
• Liander identifies 5 country groups from “very under-
developed countries” to “most highly developed
countries”.